485BPOS 1 d304294d485bpos.txt PRIMELITE ANNUITY POST-EFFECTIVE AMENDMENT NO. 9 As filed with the Securities and Exchange Commission on April 6, 2017 Registration Statement Nos. 333-152258 811-21262 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------ FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 PRE-EFFECTIVE AMENDMENT NO. [ ] POST-EFFECTIVE AMENDMENT NO. 9 [X] AND REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 AMENDMENT NO. 199 [X]
(Check Appropriate box or boxes.) BRIGHTHOUSE SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES (Exact name of Registrant) BRIGHTHOUSE LIFE INSURANCE COMPANY (Name of Depositor) 11225 NORTH COMMUNITY HOUSE ROAD CHARLOTTE, NC 28277 (Address of Depositor's Principal Executive Offices) Depositor's Telephone Number, including area code: (212) 578-9500 ERIC T. STEIGERWALT BRIGHTHOUSE LIFE INSURANCE COMPANY 11225 NORTH COMMUNITY HOUSE ROAD CHARLOTTE, NC 28277 (Name and Address of Agent for Service) ------------ Approximate Date of Proposed Public Offering: On May 1, 2017 or as soon thereafter as practicable It is proposed that this filing will become effective (check appropriate box): [ ] immediately upon filing pursuant to paragraph (b) of Rule 485. [X] on May 1, 2017 pursuant to paragraph (b) of Rule 485. [ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485. [ ] on (date) pursuant to paragraph (a)(1) of Rule 485. If appropriate, check the following box: [ ] this post-effective amendment designates a new effective date for a previously filed post-effective amendment. Title of Securities Being Registered: Individual Variable Annuity Contracts -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- This registration statement incorporates by reference the prospectus dated May 1, 2010 (the "Prospectus") filed in Post-Effective Amendment No. 2/Amendment No. 126 to the registration statement on Form N-4 (File Nos. 333- 152258/811-21262) filed on April 8, 2010. This registration statement also incorporates by reference the Supplement dated May 1, 2011 to the Prospectus filed in Post-Effective Amendment No. 3/Amendment No. 138 to the registration statement on Form N-4 (File Nos. 333- 152258/811-21262) filed on April 7, 2011. This registration statement also incorporates by reference the Supplement dated April 30, 2012 to the Prospectus filed in Post-Effective Amendment No. 4/Amendment No. 150 to the registration statement on Form N-4 (File Nos. 333- 152258/811-21262) filed on April 6, 2012. This registration statement also incorporates by reference the Supplement dated April 29, 2013 to the Prospectus filed in Post-Effective Amendment No. 5/Amendment No. 158 to the registration statement on Form N-4 (File Nos. 333- 152258/811-21262) filed on April 5, 2013. This registration statement also incorporates by reference the Supplement dated April 28, 2014 to the Prospectus filed in Post-Effective Amendment No. 6/Amendment No. 166 to the registration statement on Form N-4 (File Nos. 333- 152258/811-21262) filed on April 4, 2014 This registration statement also incorporates by reference the Supplement dated May 1, 2015 to the Prospectus filed in Post-Effective Amendment No. 7/Amendment No. 178 to the registration statement on Form N-4 (File Nos. 333- 152258/811-21262) filed on April 9, 2015 This registration statement also incorporates by reference the Supplement dated May 1, 2016 to the Prospectus filed in Post-Effective Amendment No. 8/Amendment No. 189 to the registration statement on Form N-4 (File Nos. 333- 152258/811-21262) filed on April 7, 2016 PRIMELITE(SM) ANNUITY ISSUED BY BRIGHTHOUSE LIFE INSURANCE COMPANY BRIGHTHOUSE SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES SUPPLEMENT DATED MAY 1, 2017 TO THE PROSPECTUS DATED MAY 1, 2010 This supplement updates certain information contained in your last prospectus dated May 1, 2010 for PrimElite(SM) Annuity (the "Contract") issued by Brighthouse Life Insurance Company ("We", "Us", or "the Company"). We no longer offer the Contract to new purchasers. We do continue to accept purchase payments from Contract Owners. You should read and retain this supplement with your Contract. You can choose to have your premium ("Purchase Payments") accumulate on a variable and/or, subject to availability, fixed basis in one or more of our funding options. Your Contract Value before the Maturity Date and the amount of monthly income afterwards will vary daily to reflect the investment experience of the Variable Funding Options you select. You bear the investment risk of investing in the Variable Funding Options. The Variable Funding Options available under all Contracts are: AIM VARIABLE INSURANCE FUNDS (INVESCO VARIABLE INSURANCE FUNDS) -- SERIES II Invesco V.I. Equity and Income Fund AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Bond Fund American Funds Global Growth Fund American Funds Global Small Capitalization Fund American Funds Growth Fund American Funds Growth-Income Fund BRIGHTHOUSE FUNDS TRUST I Clarion Global Real Estate Portfolio -- Class B Invesco Comstock Portfolio -- Class B MFS(R) Research International Portfolio -- Class B T. Rowe Price Large Cap Value Portfolio -- Class E BRIGHTHOUSE FUNDS TRUST II BlackRock Ultra-Short Term Bond Portfolio -- Class E Brighthouse/Wellington Core Equity Opportunities Portfolio -- Class B MFS(R) Total Return Portfolio -- Class F T. Rowe Price Large Cap Growth Portfolio -- Class B Western Asset Management Strategic Bond Opportunities Portfolio -- Class A Western Asset Management U.S. Government Portfolio -- Class A FIDELITY(R) VARIABLE INSURANCE PRODUCTS -- SERVICE CLASS 2 Equity-Income Portfolio Mid Cap Portfolio FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST -- CLASS 2 Franklin Income VIP Fund Franklin Mutual Shares VIP Fund LEGG MASON PARTNERS VARIABLE EQUITY TRUST ClearBridge Variable Aggressive Growth Portfolio -- Class I ClearBridge Variable Appreciation Portfolio -- Class I ClearBridge Variable Dividend Strategy Portfolio -- Class II ClearBridge Variable Large Cap Growth Portfolio -- Class I ClearBridge Variable Large Cap Value Portfolio -- Class I ClearBridge Variable Mid Cap Portfolio -- Class I ClearBridge Variable Small Cap Growth Portfolio -- Class I QS Variable Conservative Growth -- Class I QS Variable Growth -- Class I QS Variable Moderate Growth -- Class I LEGG MASON PARTNERS VARIABLE INCOME TRUST -- CLASS I Western Asset Core Plus VIT Portfolio PIONEER VARIABLE CONTRACTS TRUST -- CLASS II Pioneer Mid Cap Value VCT Portfolio TRUST FOR ADVISED PORTFOLIOS 1919 Variable Socially Responsive Balanced Fund Certain Variable Funding Options have been subject to a name change or reorganization. Please see "Appendix B - Additional Information Regarding Underlying Funds" for more information. The Financial Industry Regulatory Authority (FINRA) provides background information about broker-dealers and their registered representatives through FINRA BrokerCheck. You may contact the FINRA BrokerCheck Hotline at 1-800-289-9999, or log on to www.finra.org. An investor brochure that includes information describing FINRA BrokerCheck is available through the Hotline or on-line. You can receive additional information about your Contract by requesting a copy of the Statement of Additional Information ("SAI") dated May 1, 2017. We filed the SAI with the Securities and Exchange Commission ("SEC"), and it is incorporated by reference into this prospectus. To request a copy, write to us at P.O. Box 10366, Des Moines, IA 50306-0366, call 888-556-5412 or access the SEC's website (http://www.sec.gov). Please see Appendix C for the SAI's table of contents. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OF ANY BANK, AND ARE NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. 1 FEE TABLE -------------------------------------------------------------------------------- The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering the Contract. The first table describes the fees and expenses that you will pay at the time that you buy the Contract, surrender the Contract, or transfer Contract Value between Variable Funding Options. Expenses shown do not include premium taxes of up to 3.5% (see "Charges and Deductions -- Premium Tax") or other taxes, which may be applicable. CONTRACT OWNER TRANSACTION EXPENSES WITHDRAWAL CHARGE (as a percentage of the Purchase Payments withdrawn)
YEARS SINCE PURCHASE PAYMENT MADE WITHDRAWAL CHARGE -------------------------------------------- ------------------ GREATER THAN OR EQUAL TO BUT LESS THAN -------------------------- --------------- 0 1 8% 1 2 7% 2 3 6% 3 4 5% 4 5 4% 5 6 3% 6 7 2% 7 8 1% 8+ 0%
VARIABLE LIQUIDITY BENEFIT CHARGE......................................................... 8%(1) (as a percentage of the present value of the remaining Annuity Payments that are surrendered. The interest rate used to calculate this present value is 1% higher than the Assumed (Daily) Net Investment Factor used to calculate The Annuity Payments)
The next table describes the fees and expenses that you will pay periodically during the time that you own the Contract, not including Underlying Fund fees and expenses. CONTRACT ADMINISTRATIVE CHARGES ANNUAL CONTRACT ADMINISTRATIVE CHARGE........ $30
------------ (1) The withdrawal charge declines to zero after the Purchase Payment has been in the Contract for 8 years. The charge is as follows:
YEARS SINCE INITIAL PURCHASE PAYMENT WITHDRAWAL CHARGE -------------------------------------------- ------------------ GREATER THAN OR EQUAL TO BUT LESS THAN -------------------------- --------------- 0 years 1 years 8% 1 years 2 years 7% 2 years 3 years 6% 3 years 4 years 5% 4 years 5 years 4% 5 years 6 years 3% 6 years 7 years 2% 7 years 8 years 1% 8 + years 0%
2 ANNUAL SEPARATE ACCOUNT CHARGES: (as a percentage of the average daily net assets of the Separate Account) Mortality & Expense Risk Charge.............. 1.25%(2) Administrative Expense Charge................ 0.15% Total Annual Separate Account Charges........ 1.40%
------------ (2) We are waiving the following amounts of the Mortality and Expense Risk Charge: 0.15% or, if greater, an amount, if any, equal to the fund expenses that are in excess of 0.68% for the Subaccount investing in the Western Asset Management U.S. Government Portfolio, an amount equal to the Underlying Fund expenses that are in excess of 1.16% for the Subaccount investing in the BlackRock Capital Appreciation Portfolio, an amount equal to the Underlying Fund expenses that are in excess of 1.10% for the Subaccount investing in the Brighthouse Small Cap Value Portfolio, an amount equal to the Underlying Fund expenses that are in excess of 1.10% for the Subaccount investing in the MFS(R) Research International Portfolio, an amount equal to the Underlying Fund expenses that are in excess of 1.16% for the Subaccount investing in the Brighthouse/Wellington Core Equity Opportunities Portfolio, an amount equal to the Underlying Fund expenses that are in excess of 0.92% for the Subaccount investing in the T. Rowe Price Large Cap Growth Portfolio, an amount equal to the Underlying Fund expenses that are in excess of 0.50% for the Subaccount investing in the BlackRock Ultra-Short Term Bond Portfolio, an amount equal to the Underlying Fund expenses that are in excess of 1.03% for the Subaccount investing in the Invesco Comstock Portfolio - Class B, an amount equal to the Underlying Fund expenses that are in excess of 0.80% for the Subaccount investing in the T. Rowe Price Large Cap Value Portfolio - Class E, and an amount equal to the Underlying Fund expenses that are in excess of 1.10% for the Subaccount investing in the Clarion Global Real Estate Portfolio - Class B. UNDERLYING FUND EXPENSES AS OF DECEMBER 31, 2016 (UNLESS OTHERWISE INDICATED): The first table below shows the range (minimum and maximum) of the total annual operating expenses charged by all of the Underlying Funds, before any fee waivers or expense reimbursements. Certain Underlying Funds may impose a redemption fee in the future. The second table shows each Underlying Fund's management fee, distribution and/or service (12b-1) fees if applicable, and other expenses. More detail concerning each Underlying Fund's fees and expenses is contained in the prospectus for each Underlying Fund. Current prospectuses for the Underlying Funds can be obtained by calling 888-556-5412. MINIMUM AND MAXIMUM TOTAL ANNUAL UNDERLYING FUND OPERATING EXPENSES
MINIMUM MAXIMUM --------- -------- Total Annual Underlying Fund Operating Expenses (expenses that are deducted from Underlying Fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses) 0.50% 1.28%
UNDERLYING FUND FEES AND EXPENSES (as a percentage of average daily net assets) The following table is a summary. For more complete information on Underlying Fund fees and expenses, please refer to the prospectus for each Underlying Fund.
DISTRIBUTION AND/OR MANAGEMENT SERVICE OTHER UNDERLYING FUND FEE (12B-1) FEES EXPENSES --------------------------------------------- ------------ -------------- ---------- AIM VARIABLE INSURANCE FUNDS (INVESCO VARIABLE INSURANCE FUNDS) -- SERIES II Invesco V.I. Equity and Income Fund......... 0.38% 0.25% 0.20% AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Bond Fund.................... 0.36% 0.25% 0.02% American Funds Global Growth Fund........... 0.53% 0.25% 0.03% American Funds Global Small Capitalization Fund........................ 0.70% 0.25% 0.04% American Funds Growth Fund.................. 0.33% 0.25% 0.02% American Funds Growth-Income Fund........... 0.27% 0.25% 0.02% BRIGHTHOUSE FUNDS TRUST I Brighthouse Small Cap Value Portfolio -- Class B++.................................. 0.75% 0.25% 0.04% TOTAL FEE WAIVER NET TOTAL ACQUIRED ANNUAL AND/OR ANNUAL FUND FEES OPERATING EXPENSE OPERATING UNDERLYING FUND AND EXPENSES EXPENSES REIMBURSEMENT EXPENSES --------------------------------------------- -------------- ----------- --------------- ---------- AIM VARIABLE INSURANCE FUNDS (INVESCO VARIABLE INSURANCE FUNDS) -- SERIES II Invesco V.I. Equity and Income Fund......... 0.01% 0.84% 0.01% 0.83% AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Bond Fund.................... -- 0.63% -- 0.63% American Funds Global Growth Fund........... -- 0.81% -- 0.81% American Funds Global Small Capitalization Fund........................ -- 0.99% -- 0.99% American Funds Growth Fund.................. -- 0.60% -- 0.60% American Funds Growth-Income Fund........... -- 0.54% -- 0.54% BRIGHTHOUSE FUNDS TRUST I Brighthouse Small Cap Value Portfolio -- Class B++.................................. 0.06% 1.10% 0.01% 1.09%
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DISTRIBUTION AND/OR MANAGEMENT SERVICE OTHER UNDERLYING FUND FEE (12B-1) FEES EXPENSES ------------------------------------------------- ------------ -------------- ---------- Brighthouse/Wellington Large Cap Research Portfolio -- Class E++................ 0.56% 0.15% 0.03% Clarion Global Real Estate Portfolio -- Class B........................................ 0.61% 0.25% 0.04% Invesco Comstock Portfolio -- Class B........... 0.57% 0.25% 0.02% MFS(R) Research International Portfolio -- Class B........................................ 0.70% 0.25% 0.04% Oppenheimer Global Equity Portfolio -- Class B++...................................... 0.66% 0.25% 0.05% T. Rowe Price Large Cap Value Portfolio -- Class E........................................ 0.57% 0.15% 0.02% BRIGHTHOUSE FUNDS TRUST II BlackRock Bond Income Portfolio -- Class E++...................................... 0.33% 0.15% 0.04% BlackRock Capital Appreciation Portfolio -- Class E++......................... 0.70% 0.15% 0.02% BlackRock Ultra-Short Term Bond Portfolio -- Class E........................... 0.35% 0.15% 0.03% Brighthouse/Wellington Core Equity Opportunities Portfolio -- Class B............. 0.70% 0.25% 0.02% Frontier Mid Cap Growth Portfolio -- Class D++...................................... 0.72% 0.10% 0.03% Jennison Growth Portfolio -- Class B++.......... 0.60% 0.25% 0.02% MFS(R) Total Return Portfolio -- Class F........ 0.56% 0.20% 0.05% T. Rowe Price Large Cap Growth Portfolio -- Class B........................... 0.60% 0.25% 0.02% Western Asset Management Strategic Bond Opportunities Portfolio -- Class A............. 0.57% -- 0.03% Western Asset Management U.S. Government Portfolio -- Class A........... 0.47% -- 0.03% FIDELITY(R) VARIABLE INSURANCE PRODUCTS -- SERVICE CLASS 2 Equity-Income Portfolio......................... 0.45% 0.25% 0.09% Mid Cap Portfolio............................... 0.55% 0.25% 0.08% FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST -- CLASS 2 Franklin Income VIP Fund........................ 0.45% 0.25% 0.02% Franklin Mutual Shares VIP Fund................. 0.69% 0.25% 0.03% LEGG MASON PARTNERS VARIABLE EQUITY TRUST ClearBridge Variable Aggressive Growth Portfolio -- Class I........................... 0.75% -- 0.05% ClearBridge Variable Appreciation Portfolio -- Class I........................... 0.70% -- 0.05% ClearBridge Variable Dividend Strategy Portfolio -- Class I++......................... 0.75% -- 0.07% ClearBridge Variable Dividend Strategy Portfolio -- Class II.......................... 0.75% 0.25% 0.07% ClearBridge Variable Large Cap Growth Portfolio -- Class I........................... 0.75% -- 0.11% ClearBridge Variable Large Cap Value Portfolio -- Class I........................... 0.65% -- 0.07% ClearBridge Variable Mid Cap Portfolio -- Class I........................................ 0.75% -- 0.12% ClearBridge Variable Small Cap Growth Portfolio -- Class I........................... 0.75% -- 0.08% QS Variable Conservative Growth -- Class I........................................ -- -- 0.13% QS Variable Growth -- Class I................... -- -- 0.11% QS Variable Moderate Growth -- Class I.......... -- -- 0.23% TOTAL FEE WAIVER NET TOTAL ACQUIRED ANNUAL AND/OR ANNUAL FUND FEES OPERATING EXPENSE OPERATING UNDERLYING FUND AND EXPENSES EXPENSES REIMBURSEMENT EXPENSES ------------------------------------------------- -------------- ----------- --------------- ----------- Brighthouse/Wellington Large Cap Research Portfolio -- Class E++................ -- 0.74% 0.04% 0.70% Clarion Global Real Estate Portfolio -- Class B........................................ -- 0.90% -- 0.90% Invesco Comstock Portfolio -- Class B........... -- 0.84% 0.02% 0.82% MFS(R) Research International Portfolio -- Class B........................................ -- 0.99% 0.06% 0.93% Oppenheimer Global Equity Portfolio -- Class B++...................................... -- 0.96% 0.10% 0.86% T. Rowe Price Large Cap Value Portfolio -- Class E........................................ -- 0.74% 0.03% 0.71% BRIGHTHOUSE FUNDS TRUST II BlackRock Bond Income Portfolio -- Class E++...................................... -- 0.52% -- 0.52% BlackRock Capital Appreciation Portfolio -- Class E++......................... -- 0.87% 0.09% 0.78% BlackRock Ultra-Short Term Bond Portfolio -- Class E........................... -- 0.53% 0.02% 0.51% Brighthouse/Wellington Core Equity Opportunities Portfolio -- Class B............. -- 0.97% 0.11% 0.86% Frontier Mid Cap Growth Portfolio -- Class D++...................................... -- 0.85% 0.02% 0.83% Jennison Growth Portfolio -- Class B++.......... -- 0.87% 0.08% 0.79% MFS(R) Total Return Portfolio -- Class F........ -- 0.81% -- 0.81% T. Rowe Price Large Cap Growth Portfolio -- Class B........................... -- 0.87% 0.02% 0.85% Western Asset Management Strategic Bond Opportunities Portfolio -- Class A............. 0.01% 0.61% 0.05% 0.56% Western Asset Management U.S. Government Portfolio -- Class A........... -- 0.50% 0.01% 0.49% FIDELITY(R) VARIABLE INSURANCE PRODUCTS -- SERVICE CLASS 2 Equity-Income Portfolio......................... 0.05% 0.84% -- 0.84% Mid Cap Portfolio............................... -- 0.88% -- 0.88% FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST -- CLASS 2 Franklin Income VIP Fund........................ 0.02% 0.74% 0.03% 0.71% Franklin Mutual Shares VIP Fund................. -- 0.97% -- 0.97% LEGG MASON PARTNERS VARIABLE EQUITY TRUST ClearBridge Variable Aggressive Growth Portfolio -- Class I........................... -- 0.80% -- 0.80% ClearBridge Variable Appreciation Portfolio -- Class I........................... -- 0.75% -- 0.75% ClearBridge Variable Dividend Strategy Portfolio -- Class I++......................... -- 0.82% -- 0.82% ClearBridge Variable Dividend Strategy Portfolio -- Class II.......................... -- 1.07% -- 1.07% ClearBridge Variable Large Cap Growth Portfolio -- Class I........................... -- 0.86% 0.06% 0.80% ClearBridge Variable Large Cap Value Portfolio -- Class I........................... -- 0.72% -- 0.72% ClearBridge Variable Mid Cap Portfolio -- Class I........................................ -- 0.87% -- 0.87% ClearBridge Variable Small Cap Growth Portfolio -- Class I........................... -- 0.83% -- 0.83% QS Variable Conservative Growth -- Class I........................................ 0.69% 0.82% -- 0.82% QS Variable Growth -- Class I................... 0.79% 0.90% -- 0.90% QS Variable Moderate Growth -- Class I.......... 0.75% 0.98% 0.03% 0.95%
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DISTRIBUTION AND/OR MANAGEMENT SERVICE OTHER UNDERLYING FUND FEE (12B-1) FEES EXPENSES ---------------------------------------------- ------------ -------------- ---------- LEGG MASON PARTNERS VARIABLE INCOME TRUST -- CLASS I Western Asset Core Plus VIT Portfolio........ 0.45% -- 0.06% PIONEER VARIABLE CONTRACTS TRUST -- CLASS II Pioneer Mid Cap Value VCT Portfolio.......... 0.65% 0.25% 0.06% TRUST FOR ADVISED PORTFOLIOS 1919 Variable Socially Responsive Balanced Fund............................... 0.65% -- 0.63% TOTAL FEE WAIVER NET TOTAL ACQUIRED ANNUAL AND/OR ANNUAL FUND FEES OPERATING EXPENSE OPERATING UNDERLYING FUND AND EXPENSES EXPENSES REIMBURSEMENT EXPENSES ---------------------------------------------- -------------- ----------- --------------- ----------- LEGG MASON PARTNERS VARIABLE INCOME TRUST -- CLASS I Western Asset Core Plus VIT Portfolio........ -- 0.51% -- 0.51% PIONEER VARIABLE CONTRACTS TRUST -- CLASS II Pioneer Mid Cap Value VCT Portfolio.......... -- 0.96% -- 0.96% TRUST FOR ADVISED PORTFOLIOS 1919 Variable Socially Responsive Balanced Fund............................... -- 1.28% 0.39% 0.89%
++ Closed to new investments except under dollar cost averaging and rebalancing programs in existence at the time of closing. The information shown in the table above was provided by the Underlying Funds. Certain Underlying Funds and their investment adviser have entered into expense reimbursement and/or fee waiver arrangements that will continue from May 1, 2017 through April 30, 2018. These arrangements can be terminated with respect to these Underlying Funds only with the approval of the Underlying Fund's board of directors or trustees. Please see the Underlying Funds' prospectuses for additional information regarding these arrangements. Certain Underlying Funds that have "Acquired Fund Fees and Expenses" are "funds of funds." A fund of funds invests substantially all of its assets in other underlying funds. Because the Underlying Fund invests in other funds, it will bear its pro rata portion of the operating expenses of those underlying funds, including the management fee. CONDENSED FINANCIAL INFORMATION -------------------------------------------------------------------------------- See Appendix A. THE ANNUITY CONTRACT -------------------------------------------------------------------------------- THE VARIABLE FUNDING OPTIONS PAYMENTS WE RECEIVE. Effective March 6, 2017, MetLife Advisers, LLC changed its name to Brighthouse Investment Advisers, LLC. Each Underlying Fund has different investment objectives and risks. THE UNDERLYING FUND PROSPECTUSES CONTAIN MORE DETAILED INFORMATION ON EACH UNDERLYING FUND'S INVESTMENT STRATEGY, INVESTMENT ADVISERS AND ITS FEES. YOU MAY OBTAIN AN UNDERLYING FUND PROSPECTUS BY CALLING 888-556-5412 OR THROUGH YOUR REGISTERED REPRESENTATIVE. YOU SHOULD READ THE PROSPECTUSES FOR THE UNDERLYING FUNDS CAREFULLY. We do not guarantee the investment results of the Underlying Funds. The current Underlying Funds are listed below, along with their investment adviser and any subadviser:
UNDERLYING FUND INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER --------------------------------------- ------------------------------------- -------------------------------- AIM VARIABLE INSURANCE FUNDS (INVESCO VARIABLE INSURANCE FUNDS) -- SERIES II Invesco V.I. Equity and Income Fund Seeks both capital appreciation and Invesco Advisers, Inc. current income. AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Bond Fund Seeks as high a level of current Capital Research and Management income as is consistent with the Company preservation of capital. American Funds Global Growth Fund Seeks long-term growth of capital. Capital Research and Management Company
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UNDERLYING FUND INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER ------------------------------------------ ---------------------------------------- -------------------------------------- American Funds Global Small Seeks long-term growth of capital. Capital Research and Management Capitalization Fund Company American Funds Growth Fund Seeks growth of capital. Capital Research and Management Company American Funds Growth-Income Seeks long-term growth of capital and Capital Research and Management Fund income. Company BRIGHTHOUSE FUNDS TRUST I Brighthouse Small Cap Value Seeks long-term capital appreciation. Brighthouse Investment Advisers, LLC Portfolio -- Class B++ Subadvisers: Delaware Investments Fund Advisers; Wells Capital Management Incorporated Brighthouse/Wellington Large Cap Seeks long-term capital appreciation. Brighthouse Investment Advisers, LLC Research Portfolio -- Class E++ Subadviser: Wellington Management Company LLP Clarion Global Real Estate Seeks total return through investment Brighthouse Investment Advisers, LLC Portfolio -- Class B in real estate securities, emphasizing Subadviser: CBRE Clarion Securities both capital appreciation and current LLC income. Invesco Comstock Portfolio -- Seeks capital growth and income. Brighthouse Investment Advisers, LLC Class B Subadviser: Invesco Advisers, Inc. MFS(R) Research International Seeks capital appreciation. Brighthouse Investment Advisers, LLC Portfolio -- Class B Subadviser: Massachusetts Financial Services Company Oppenheimer Global Equity Seeks capital appreciation. Brighthouse Investment Advisers, LLC Portfolio -- Class B++ Subadviser: OppenheimerFunds, Inc. T. Rowe Price Large Cap Value Seeks long-term capital appreciation Brighthouse Investment Advisers, LLC Portfolio -- Class E by investing in common stocks Subadviser: T. Rowe Price Associates, believed to be undervalued. Income Inc. is a secondary objective. BRIGHTHOUSE FUNDS TRUST II BlackRock Bond Income Portfolio -- Seeks a competitive total return Brighthouse Investment Advisers, LLC Class E++ primarily from investing in Subadviser: BlackRock Advisors, LLC fixed-income securities. BlackRock Capital Appreciation Seeks long-term growth of capital. Brighthouse Investment Advisers, LLC Portfolio -- Class E++ Subadviser: BlackRock Advisors, LLC BlackRock Ultra-Short Term Bond Seeks a high level of current income Brighthouse Investment Advisers, LLC Portfolio -- Class E consistent with preservation of Subadviser: BlackRock Advisors, LLC capital. Brighthouse/Wellington Core Equity Seeks to provide a growing stream of Brighthouse Investment Advisers, LLC Opportunities Portfolio -- Class B income over time and, secondarily, Subadviser: Wellington Management long-term capital appreciation and Company LLP current income. Frontier Mid Cap Growth Portfolio -- Seeks maximum capital appreciation. Brighthouse Investment Advisers, LLC Class D++ Subadviser: Frontier Capital Management Company, LLC Jennison Growth Portfolio -- Seeks long-term growth of capital. Brighthouse Investment Advisers, LLC Class B++ Subadviser: Jennison Associates LLC MFS(R) Total Return Portfolio -- Class F Seeks a favorable total return through Brighthouse Investment Advisers, LLC investment in a diversified portfolio. Subadviser: Massachusetts Financial Services Company
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UNDERLYING FUND INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER ------------------------------------- ----------------------------------------- -------------------------------------- T. Rowe Price Large Cap Growth Seeks long-term growth of capital. Brighthouse Investment Advisers, LLC Portfolio -- Class B Subadviser: T. Rowe Price Associates, Inc. Western Asset Management Strategic Seeks to maximize total return Brighthouse Investment Advisers, LLC Bond Opportunities Portfolio -- consistent with preservation of Subadviser: Western Asset Class A capital. Management Company Western Asset Management Seeks to maximize total return Brighthouse Investment Advisers, LLC U.S. Government Portfolio -- consistent with preservation of capital Subadviser: Western Asset Class A and maintenance of liquidity. Management Company FIDELITY(R) VARIABLE INSURANCE PRODUCTS -- SERVICE CLASS 2 Equity-Income Portfolio Seeks reasonable income. The fund Fidelity Management & Research will also consider the potential for Company capital appreciation. The fund's goal Subadviser: FMR Co., Inc. is to achieve a yield which exceeds the composite yield on the securities comprising the S&P 500(R) Index. Mid Cap Portfolio Seeks long-term growth of capital. Fidelity Management & Research Company Subadviser: FMR Co., Inc. FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST -- CLASS 2 Franklin Income VIP Fund Seeks to maximize income while Franklin Advisers, Inc. maintaining prospects for capital appreciation. Franklin Mutual Shares VIP Fund Seeks capital appreciation, with Franklin Mutual Advisers, LLC income as a secondary goal. LEGG MASON PARTNERS VARIABLE EQUITY TRUST ClearBridge Variable Aggressive Seeks capital appreciation. Legg Mason Partners Fund Advisor, Growth Portfolio -- Class I LLC Subadviser: ClearBridge Investments, LLC ClearBridge Variable Appreciation Seeks long-term capital appreciation. Legg Mason Partners Fund Advisor, Portfolio -- Class I LLC Subadviser: ClearBridge Investments, LLC ClearBridge Variable Dividend Seeks dividend income, growth of Legg Mason Partners Fund Advisor, Strategy Portfolio -- Class I++ dividend income and long-term LLC capital appreciation. Subadviser: ClearBridge Investments, LLC ClearBridge Variable Dividend Seeks dividend income, growth of Legg Mason Partners Fund Advisor, Strategy Portfolio -- Class II dividend income and long-term LLC capital appreciation. Subadviser: ClearBridge Investments, LLC ClearBridge Variable Large Cap Seeks long-term growth of capital. Legg Mason Partners Fund Advisor, Growth Portfolio -- Class I LLC Subadviser: ClearBridge Investments, LLC
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UNDERLYING FUND INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER --------------------------------------- ---------------------------------------- ------------------------------------- ClearBridge Variable Large Cap Value Seeks long-term growth of capital. Legg Mason Partners Fund Advisor, Portfolio -- Class I Current income is a secondary LLC objective. Subadviser: ClearBridge Investments, LLC ClearBridge Variable Mid Cap Seeks long-term growth of capital. Legg Mason Partners Fund Advisor, Portfolio -- Class I LLC Subadviser: ClearBridge Investments, LLC ClearBridge Variable Small Cap Seeks long-term growth of capital. Legg Mason Partners Fund Advisor, Growth Portfolio -- Class I LLC Subadviser: ClearBridge Investments, LLC QS Variable Conservative Growth -- Seeks a balance of growth of capital Legg Mason Partners Fund Advisor, Class I and income. LLC Subadviser: QS Investors, LLC QS Variable Growth -- Class I Seeks capital appreciation. Legg Mason Partners Fund Advisor, LLC Subadviser: QS Investors, LLC QS Variable Moderate Growth -- Seeks long-term growth of capital. Legg Mason Partners Fund Advisor, Class I LLC Subadviser: QS Investors, LLC LEGG MASON PARTNERS VARIABLE INCOME TRUST -- CLASS I Western Asset Core Plus VIT Portfolio Seeks to maximize total return, Legg Mason Partners Fund Advisor, consistent with prudent investment LLC management and liquidity needs, by Subadvisers: Western Asset investing to obtain an average Management Company; Western duration within 30% of the average Asset Management Company duration of the domestic bond market Limited; Western Asset Management as a whole. Company Ltd.; Western Asset Management Company Pte Ltd. PIONEER VARIABLE CONTRACTS TRUST -- CLASS II Pioneer Mid Cap Value VCT Portfolio Seeks capital appreciation by Pioneer Investment Management, Inc. investing in a diversified portfolio of securities consisting primarily of common stocks. TRUST FOR ADVISED PORTFOLIOS 1919 Variable Socially Responsive Seeks capital appreciation and 1919 Investment Counsel, LLC Balanced Fund retention of net investment income.
++ Closed to new investments except under dollar cost averaging and rebalancing programs in existence at the time of closing. Certain Variable Funding Options have been subject to a name change or reorganization. Please see "Appendix B - Additional Information Regarding Underlying Funds" for more information. FEDERAL TAX CONSIDERATIONS -------------------------------------------------------------------------------- The following general discussion of the federal income tax consequences related to your investment in this Contract is not intended to cover all situations, and is not meant to provide tax or legal advice. Because of the complexity of the law and the fact that the tax results will vary depending on many factors, you should consult your tax and/or legal 8 adviser regarding the tax implications of purchasing this Contract based upon your individual situation. For further tax information, an additional discussion of certain tax matters is contained in the SAI. We are not responsible for determining if your employer's plan or arrangement satisfies the requirements of the Code and/or the Employee Retirement Income Security Act of 1974 (ERISA). GENERAL TAXATION OF ANNUITIES Congress has recognized the value of saving for retirement by providing certain tax benefits, in the form of tax deferral, for premiums paid under an annuity and permitting tax-free transfers between the various investment options offered under the Contract. The Internal Revenue Code ("Code") governs how earnings on your investment in the Contract are ultimately taxed, depending upon the type of contract, qualified or non-qualified, and the manner in which the money is distributed, as briefly described below. Under current federal tax law, the taxable portion of distributions under variable annuity contracts and qualified plans (including IRAs) is not eligible for the reduced tax rate applicable to long-term capital gains and dividends. Earnings under annuity contracts, like interest payable on fixed investments (notes, bonds, etc.), continue to be taxed as ordinary income. Deferred annuities issued after October 21, 1988 by the same insurance company or an affiliate in the same calendar year to the same owner are combined for tax purposes. As a result, a greater portion of your withdrawals may be considered taxable income than you would otherwise expect. Although the law is not clear, the aggregation rule may also adversely affect the tax treatment of payments received under an income annuity where the owner has purchased more than one non-qualified annuity during the same calendar year from the same or an affiliated company after October 21, 1988, and is not receiving income payments from all annuities at the same time. Please consult your own tax adviser. STATE AND LOCAL TAXES. The rules for state and local income taxes may differ from the federal income tax rules. Purchasers and prospective purchasers of the Contract should consult their own tax advisers and the law of the applicable taxing jurisdiction to determine what rules and tax benefits apply to the Contract. PENALTY TAX FOR PREMATURE DISTRIBUTIONS. For both Qualified and Non-qualified Contracts, taxable distributions taken before the Contract Owner has reached the age of 59 1/2 will be subject to a 10% additional tax penalty unless the distribution is taken in a series of periodic distributions (after separation from service, for 401(a) and 403(b) plans), for life or life expectancy, or unless the distribution follows the death or disability of the Contract Owner. Other exceptions may be available in certain qualified plans. The 10% tax penalty is in addition to any other penalties that may apply under your Contract and the normal income taxes due on the distribution. TAX-FREE EXCHANGES. Code Section 1035 provides that, if certain conditions are met, no gain or loss is recognized when an annuity contract is received in exchange for a life insurance policy, endowment, or annuity contract. Since different annuity contracts have different expenses, fees and benefits, a tax-free exchange could result in your investment becoming subject to higher or lower fees and/or expenses. FEDERAL ESTATE TAXES. While no attempt is being made to discuss the federal estate tax implications of the Contract, you should keep in mind that the value of an annuity contract owned by a decedent and payable to a beneficiary by virtue of surviving the decedent is included in the decedent's gross estate. Depending on the terms of the annuity contract, the value of the annuity included in the gross estate may be the value of the lump sum payment payable to the designated beneficiary or the actuarial value of the payments to be received by the beneficiary. Consult an estate planning adviser for more information. GENERATION-SKIPPING TRANSFER TAX. Under certain circumstances, the Code may impose a "generation-skipping transfer tax" when all or part of an annuity contract is transferred to, or a death benefit is paid to, an individual two or more generations younger than the Contract Owner. Regulations issued under the Code may require us to deduct the tax from your Contract, or from any applicable payment, and pay it directly to the IRS. TYPES OF CONTRACTS: QUALIFIED AND NON-QUALIFIED QUALIFIED ANNUITY CONTRACTS If you purchase your Contract with proceeds of an eligible rollover distribution from any qualified employee pension plan or retirement savings plan or individual retirement annuity (IRA), your Contract is referred to as a Qualified Contract. Some examples of Qualified Contracts are: IRAs (including Roth IRAs), tax-sheltered annuities established by public school systems or certain tax-exempt organizations under Code Section 403(b), corporate sponsored pension, retirement savings, and profit-sharing plans (including 401(k) plans), and certain other qualified deferred 9 compensation plans. Another type of Qualified Contract is a Roth IRA, under which after-tax contributions accumulate until maturity, when amounts (including earnings) may be withdrawn tax-free. The rights and benefits under a Qualified Contract may be limited by the terms of the retirement plan, regardless of the terms and conditions of the Contract. Plan participants making contributions to Qualified Contracts will be subject to the required minimum distribution rules as provided by the Code and described below. All qualified plans (including IRAs) receive tax-deferral under the Code. Although there are no additional tax benefits to funding your qualified plan or IRA with an annuity, it does offer you additional insurance benefits, such as the availability of a guaranteed income for life. The Contract has not been submitted to the IRS for approval as to form as a valid IRA. Such approval would not constitute an IRS approval or endorsement of any funding options under the contract. IRS approval as to form is not required to constitute a valid IRA. Disqualification of the Contract as an IRA could result in the immediate taxation of amounts held in the Contract and other adverse tax consequences. TAXATION OF QUALIFIED ANNUITY CONTRACTS Under a qualified annuity, since amounts paid into the Contract generally have not yet been taxed, the full amount of any distributions (including the amount attributable to Purchase Payments), whether paid in the form of lump sum withdrawals or Annuity Payments, are generally taxed at ordinary income tax rates unless the distribution is transferred to an eligible rollover account or contract. There are special rules which govern the taxation of Qualified Contracts, including withdrawal restrictions, requirements for mandatory distributions, and contribution limits. Amounts rolled over to the Contract from other qualified funding vehicles generally are not subject to current taxation. MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS Federal tax law requires that minimum annual distributions begin by April 1st of the calendar year following the calendar year in which an IRA owner attains age 70 1/2. Participants in qualified plans and 403(b) annuities may defer minimum distributions until the later of April 1st of the calendar year following the calendar year in which they attain age 70 1/2 or the year of retirement (except for participants who own more than 5% of the plan sponsor). If you own more than one individual retirement annuity and/or account, you may satisfy the minimum distribution rules on an aggregate basis (i.e. determine the total amount of required distributions from all IRAs and take the required amount from any one or more IRAs). A similar aggregate approach is available to meet your 403(b) minimum distribution requirements if you have multiple 403(b) annuities. It is important that you consult your tax adviser as to the impact of these regulations on your personal situation. Income tax regulations regarding minimum distribution requirements affect both deferred and income annuities. Under these rules, the value of all benefits under a deferred annuity (including death benefits in excess of cash value, and, if available in your Contract, the Enhanced Stepped-Up Provision, as well as any living benefits such as GMAB, GMWB, and Principal Protection guarantees) must be added to the Contract Value in computing the amount required to be distributed over the applicable period. We will provide you with additional information as to the amount of your interest in the Contract that is subject to required minimum distributions under this rule and either compute the required amount for you or offer to do so at your request. These rules are not entirely clear and you should consult your personal tax adviser as to how these rules affect your Contract. MINIMUM DISTRIBUTIONS FOR BENEFICIARIES UPON THE CONTRACT OWNER'S DEATH. Upon the death of the Contract Owner and/or Annuitant of a Qualified Contract, the funds remaining in the Contract must be completely withdrawn by the end of the fifth calendar year following the date of death, or alternatively, minimum distributions may be taken over the life expectancy of the individual beneficiaries (or in the case of certain trusts that are contract beneficiaries, over the life expectancy of the individuals who are the beneficiaries of the trust), provided such distributions are payable at least annually and begin within one year from the date of death. Special rules apply where the beneficiary is the surviving spouse, which allow the spouse to assume the Contract and defer the minimum distribution requirements. NOTE TO PARTICIPANTS IN QUALIFIED PLANS INCLUDING 401, 403(B), 408 OR 457, AND IRA OWNERS. While annual plan contribution limits may be increased from time to time by Congress and the IRS for federal income tax purposes, these limits must be adopted by each state for any higher limits to be effective at a state income tax level. In other words, the permissible contribution limits for federal and state income tax purposes may be different. Therefore, in certain states, a portion of the contributions may not be excludible or deductible from state income taxes. Please consult your employer or tax adviser regarding this issue. 10 INDIVIDUAL RETIREMENT ANNUITIES To the extent of earned income for the year and not exceeding the applicable limit for the taxable year, an individual may make contributions, which in some cases may be deductible, to an individual retirement annuity (IRA). The applicable limit is $5,500 in 2017, and it may be indexed for inflation in subsequent years. Additional "catch-up contributions" of $1,000 may be made to an IRA by individuals age 50 or over. There are certain limits on the deductible amount based on the adjusted gross income of the individual and spouse and on their participation in a retirement plan. If an individual is married and the spouse is not employed, the individual may establish IRAs for the individual and spouse. Purchase Payments may then be made annually into IRAs for both spouses in the maximum amount of 100% of earned income up to a combined limit based on the individual limits outlined above. Deductible contributions to an IRA and Roth IRA for the year must be aggregated for purposes of the individual Code Section 408A limits and the Code Section 219 limits (age 50+ catch-up). Partial or full distributions are treated as ordinary income, except that amounts contributed after 1986 on a non-deductible basis are not includable in income when distributed. An additional tax of 10% will apply to any taxable distribution from the IRA that is received by the participant before the age of 59 1/2 except by reason of death, disability or as part of a series of payments for life or life expectancy. Distributions must commence by April 1st of the calendar year after the close of the calendar year in which the individual attains the age of 70 1/2. Certain other mandatory distribution rules apply on the death of the individual. The individual must maintain personal and tax return records of any non-deductible contributions and distributions. Section 408(k) of the Code provides for the purchase of a Simplified Employee Pension (SEP) plan. A SEP is funded through an IRA and can accept an annual employer contribution limited to the lesser of $54,000 or 25% of pay for each participant in 2017. ROTH IRAS Section 408A of the Code permits certain individuals to contribute to a Roth IRA. Eligibility to make contributions is based upon income, and the applicable limits vary based on marital status and/or whether the contribution is a rollover contribution from another IRA or an annual contribution. Contributions to a Roth IRA, which are subject to certain limitations (similar to the annual limits for traditional IRAs), are not deductible and must be made in cash or as a rollover or transfer from another Roth IRA or other IRA. A conversion of a "traditional" IRA to a Roth IRA may be subject to tax and other special rules apply. You should consult a tax adviser before combining any converted amounts with other Roth IRA contributions, including any other conversion amounts from other tax years. Qualified distributions from a Roth IRA are tax-free. A qualified distribution requires that the Roth IRA has been held for at least 5 years, and the distribution is made after age 59 1/2, on death or disability of the owner, or for a limited amount ($10,000) for a qualified first time home purchase for the owner or certain relatives. Income tax and a 10% penalty tax may apply to distributions made (1) before age 59 1/2 (subject to certain exceptions) or (2) during five taxable years starting with the year in which the first contribution is made to the Roth IRA. TSAS (TAX-SHELTERED ANNUITIES -- ERISA AND NON-ERISA) GENERAL. TSAs fall under (section)403(b) of the Code, which provides certain tax benefits to eligible employees of public school systems and organizations that are tax exempt under (section)501(c)(3) of the Code. In general contributions to (section)403(b) arrangements are subject to limitations under (section)415(c) of the Code (the lesser of 100% of includable compensation or the applicable limit for the year). Under IRS regulations adopted in 2007, employers must meet certain requirements in order for their employees' annuity contracts that fund these programs to retain a tax deferred status under (section)403(b). Prior to the 2007 rules, transfers of one annuity contract to another would not result in a loss of tax deferred status under (section)403(b) under certain conditions (so-called "90-24 transfers"). The 2007 regulations have the following effect regarding transfers: (1) a newly issued contract funded by a transfer which is completed after September 24, 2007, is subject to the employer requirements referred to above; (2) additional purchase payments made after September 24, 2007, to a contract that was funded by a 90-24 transfer on or before September 24, 2007, may subject the contract to this new employer requirement. If your Contract was issued previously in a 90-24 transfer completed on or before September 24, 2007, we urge you to consult with your tax adviser prior to making additional purchase payments (if permitted). 11 WITHDRAWALS AND INCOME PAYMENTS. If you are under 59 1/2, you cannot withdraw money from your TSA Contract unless the withdrawal: o Relates to Purchase Payments made prior to 1989 (and pre-1989 earnings on those Purchase Payments); o Is directly transferred to another permissible investment under (section)403(b) arrangements; o Relates to amounts that are not salary reduction elective deferrals; o Occurs after you die, leave your job or become disabled (as defined by the Code); or o Is for financial hardship (but only to the extent of Purchase Payments) if your plan allows it. DESIGNATED ROTH ACCOUNT FOR 403(B) PLANS. Employers that established and maintain a TSA/403(b) plan ("the Plan") may also establish a Qualified Roth Contribution Program under Section 402A of the Code ("Designated Roth Accounts") to accept after-tax contributions as part of the TSA plan. In accordance with our administrative procedures, we may permit these contributions to be made as purchase payments to a Section 403(b) Contract under the following conditions: (1) The employer maintaining the plan has demonstrated to our satisfaction that Designated Roth Accounts are permitted under the Plan. (2) In accordance with our administrative procedures, the amount of elective deferrals has been irrevocably designated as an after-tax contribution to the Designated Roth Account. (3) All state regulatory approvals have been obtained to permit the Contract to accept such after-tax elective deferral contributions (and, where permitted under the Qualified Roth Contribution Program and the Contract, rollovers and trustee-to-trustee transfers from other Designated Roth Accounts). (4) In accordance with our procedures and in a form satisfactory to us, we may accept rollovers from other funding vehicles under any Qualified Roth Contribution Program of the same type in which the employee participates as well as trustee-to-trustee transfers from other funding vehicles under the same Qualified Roth Contribution Program for which the participant is making elective deferral contributions to the Contract. (5) No other contribution types (including employer contributions, matching contributions, etc.) will be allowed as designated Roth contributions, unless they become permitted under the Code. (6) If permitted under the federal tax law, we may permit both pre-tax contributions under a 403(b) plan as well as after-tax contributions under the Plan's Qualified Roth Contribution Program to be made under the same Contract as well as rollover contributions and contributions by trustee-to-trustee transfers. In such cases, we will account separately for the designated Roth contributions and the earnings thereon from the contributions and earnings made under the pre-tax TSA plan (whether made as elective deferrals, rollover contributions or trustee-to-trustee transfers). As between the pre-tax or traditional Plan and the Qualified Roth Contribution Program, we will allocate any living benefits or death benefits provided under the Contract on a reasonable basis, as permitted under the tax law. (7) We may refuse to accept contributions made as rollovers and trustee-to-trustee transfers, unless we are furnished with a breakdown as between participant contributions and earnings at the time of the contribution. The Contract does not accommodate separate accounting for Roth and non-Roth accounts. Compliance with IRS regulations regarding such accounting must be provided by or arranged for by the Qualified Plan Administrator. Both you and your employer should consult your respective tax and legal advisers prior to making or permitting contributions to be made to a Qualified Roth Contribution Program. The following general tax rules are based on our understanding of the Code and regulations, and are subject to change and to different interpretation as well as additional guidance in respect to areas not previously addressed: The employer must permit contributions under a pre-tax 403(b) plan in order to permit contributions to be irrevocably designated and made part of a Qualified Roth Contribution Program. 12 Elective deferral contributions to the Designated Roth Account must be aggregated with all other elective deferral contributions made by a taxpayer for purposes of the individual Code Section 402(g) limits and the Code Section 414(v) limits (relating to age 50 and over catch-up contributions) as well as contribution limits that apply under the Plan. In general, the same tax law rules with respect to restricted monies, triggering events and permitted distributions will apply to the Designated Roth Accounts under the Plan as apply to the traditional pre-tax accounts under the plan (e.g., death or disability of participant, severance from employment, attainment of age 59 1/2 and hardship withdrawals only with respect to contributions (if permitted under the Plan)). If the amounts have been held under any Designated Roth Account of a participant for at least five years and are made on account of death, disability or after attainment of age 59 1/2, then any withdrawal, distribution or payment of these amounts is generally free of federal income tax ("Qualified Distributions"). Unlike Roth IRAs, withdrawals, distributions and payments that do not meet the five year rule will generally be taxed on a pro-rated basis with respect to earnings and after-tax contributions. The 10% penalty tax will generally apply on the same basis as a traditional pre-tax account under the Plan. Additionally, rollover distributions may only be made tax-free into another Designated Roth Account or into a Roth IRA. Some states may not permit contributions to be made to a Qualified Roth Contribution Program or may require additional conforming legislation for these rules to become effective. Recently enacted legislation allows (but does not require) 403(b) plans that offer designated Roth accounts to permit participants to roll their non-Roth account assets into a designated Roth account under the same plan, provided the non-Roth assets are distributable under the plan and otherwise eligible for rollover. LOANS. If your Plan and TSA Contract permit loans, such loans will be made only from any Fixed Interest Account balance and only up to certain limits. In that case, we credit your Fixed Interest Account balance up to the amount of the outstanding loan balance with a rate of interest that is less than the interest rate we charge for the loan. The Code and applicable income tax regulations limit the amount that may be borrowed from your Contract and all your employer plans in the aggregate and also require that loans be repaid, at a minimum, in scheduled level payments over a proscribed term. Your Plan and Contract will indicate whether loans are permitted. The terms of the loan are governed by the Contract and loan agreement. Failure to satisfy loan limits under the Code or to make any scheduled payments according to the terms of your loan agreement and Federal tax law could have adverse tax consequences. Consult a tax adviser and read your loan agreement and Contract prior to taking any loan. NON-QUALIFIED ANNUITY CONTRACTS If you purchase the Contract on an individual basis with after-tax dollars and not under one of the programs described above, your Contract is referred to as non-qualified. As the owner of a non-qualified annuity, you do not receive any tax benefit (deduction or deferral of income) on Purchase Payments, but you will not be taxed on increases in the value of your Contract until a distribution occurs -- either as a withdrawal made prior to the Maturity Date or in the form of periodic Annuity Payments. As a general rule, there is income in the Contract (earnings) to the extent the Contract Value exceeds your investment in the Contract. The investment in the Contract equals the total Purchase Payments less any amount received previously which was excludible from gross income. Generally, different tax rules apply to Annuity Payments than to withdrawals and payments received before the annuity starting date. When a withdrawal is made, you are taxed on the amount of the withdrawal that is considered earnings under federal tax laws. Similarly, when you receive an Annuity Payment, part of each periodic payment is considered a return of your Purchase Payments and will not be taxed, but the remaining portion of the Annuity Payment (i.e., any earnings) will be considered ordinary income for federal income tax purposes. Annuity Payments are subject to an "excludable amount" or "exclusion ratio" which determines how much of each payment is treated as: o a non-taxable return of your Purchase Payment; or o a taxable payment of earnings. 13 We generally will tell you how much of each Annuity Payment is a non-taxable return of your Purchase Payments. However, it is possible that the IRS could conclude that the taxable portion of Annuity Payments under a non-qualified contract is an amount greater (or less) than the taxable amount determined by us and reported by us to you and the IRS. Generally, once the total amount treated as a non-taxable return of your Purchase Payments equals your Purchase Payments, then all remaining payments are fully taxable. We will withhold a portion of the taxable amount of your Annuity Payment for income taxes, unless you elect otherwise. The amount we withhold is determined by the Code. Federal law imposes a 3.8% Medicare tax on the lesser of: (1) the taxpayer's "net investment income" (from non-qualified annuities, interest, dividends and other investments, offset by specified allowable deductions); or (2) the taxpayer's modified adjusted gross income in excess of a specified income threshold ($250,000 for married couples filing jointly [and qualifying widows, $125,000 for married couples filing separately, and $200,000 for single filers). "Net investment income" does not include distributions from tax-qualified plans (i.e., arrangements described in Code Sections 401(a), 403(a), 403(b), 408, 408A or 457(b)), but such income will increase modified adjusted gross income. You should consult your tax adviser regarding the applicability of this tax to income you would receive under this annuity contract. Code Section 72(s) requires that non-qualified annuity contracts meet minimum mandatory distribution requirements upon the death of the Contract Owner, including the death of either of the Joint Owners. If these requirements are not met, the Contract will not be treated as an annuity contract for federal income tax purposes and earnings under the Contract will be taxable currently, not when distributed. The distribution required depends, among other things, upon whether an annuity option is elected or whether the succeeding Contract Owner is the surviving spouse. We will administer contracts in accordance with these rules and we will notify you when you should begin receiving payments. There is a more complete discussion of these rules in the SAI. If a non-qualified annuity is owned by a non-natural person (e.g., a corporation), increases in the value of the Contract attributable to Purchase Payments made after February 28, 1986 are includable in income annually and taxed at ordinary income tax rates. Furthermore, for contracts issued after April 22, 1987, if the Contract is transferred to another person or entity without adequate consideration, all deferred increases in value will be treated as income for federal income tax purposes at the time of the transfer. If a non-natural person, such as a trust, is the owner of a non-qualified Contract, the distribution on death rules under the Code may require payment to begin earlier than expected and may impact the usefulness of the living (if any) and/or death benefits. Naming a non-natural person, such as a trust or estate, as a Beneficiary under the Contract will generally eliminate the Beneficiary's ability to "stretch" or a spousal beneficiary's ability to continue the Contract and the living (if any) and/or death benefits. PARTIAL WITHDRAWALS. If you make a partial withdrawal of your Contract Value, the distribution generally will be taxed as first coming from earnings (income in the Contract) and then from your Purchase Payments. These withdrawn earnings are includable in your taxable income. (See "Penalty Tax for Premature Distributions" below.) Any direct or indirect borrowing against the value of the Contract or pledging of the Contract as security for a loan will be treated as a cash distribution under the tax law, and will have tax consequences in the year taken. PARTIAL ANNUITIZATIONS (IF AVAILABLE WITH YOUR CONTRACT). Starting in 2011, if your Contract allows and you elect to apply less than your entire Contract Value to a Payment Option provided under the Contract ("partial annuitization"), an exclusion ratio will apply to the Annuity Payments you receive, provided the payout period is for 10 years or more, or for the life of one or more individuals. Your after-tax Purchase Payments in the Contract will be allocated pro rata between the annuitized portion of the contract and the portion that remains deferred. Consult your own independent tax adviser before you partially annuitize your Contract. DIVERSIFICATION REQUIREMENTS FOR VARIABLE ANNUITIES The Code requires that any non-qualified variable annuity contracts based on a Separate Account must meet specific diversification standards. Non-qualified variable annuity contracts shall not be treated as an annuity for federal income tax purposes if investments made in the account are not adequately diversified. Final tax regulations define how Separate Accounts must be diversified. The Company constantly monitors the diversification of investments and believes that its accounts are adequately diversified. The consequence of any failure to diversify is essentially the loss to the Contract Owner of tax-deferred treatment, requiring the current inclusion of a proportionate share of the income and gains from the Separate Account assets in the income of each Contract Owner. The Company intends to administer all contracts subject to this provision of law in a manner that will maintain adequate diversification. 14 OWNERSHIP OF THE INVESTMENTS In certain circumstances, owners of variable annuity contracts have been considered to be the owners of the assets of the underlying Separate Account for federal income tax purposes due to their ability to exercise investment control over those assets. When this is the case, the Contract Owners have been currently taxed on income and gains attributable to the Separate Account assets. There is little guidance in this area, and some features of the Contract, such as the number of funds available and the flexibility of the Contract Owner to allocate premium payments and transfer amounts among the funding options, have not been addressed in public rulings. While we believe that the Contract does not give the Contract Owner investment control over Separate Account assets, we reserve the right to modify the Contract as necessary to prevent a Contract Owner from being treated as the owner of the Separate Account assets supporting the Contract. TAXATION OF DEATH BENEFIT PROCEEDS Amounts may be distributed from a Non-qualified Contract because of the death of an owner or Annuitant. Generally, such amounts are includable in the income of the recipient as follows: (i) if distributed in a lump sum, they are taxed in the same manner as a full surrender of the Contract; or (ii) if distributed under a payment option, they are taxed in the same way as Annuity Payments. OTHER TAX CONSIDERATIONS TREATMENT OF CHARGES FOR OPTIONAL BENEFITS The Contract may provide one or more optional enhanced death benefits or other minimum guaranteed benefit that in some cases may exceed the greater of purchase price or the Contract Value. PUERTO RICO TAX CONSIDERATIONS The Puerto Rico Internal Revenue Code of 2011 (the "2011 PR Code") taxes distributions from non-qualified annuity contracts differently than in the U.S. Distributions that are not in the form of an annuity (including partial surrenders and period certain payments) are treated under the 2011 PR Code first as a return of investment. Therefore, a substantial portion of the amounts distributed generally will be excluded from gross income for Puerto Rico tax purposes until the cumulative amount paid exceeds your tax basis. The amount of income on annuity distributions (payable over your lifetime) is calculated differently under the 2011 PR Code. Since the U.S. source income generated by a Puerto Rico bona fide resident is subject to U.S. income tax and the Internal Revenue Service issued guidance in 2004 which indicated that the income from an annuity contract issued by a U.S. life insurer would be considered U.S. source income, the timing of recognition of income from an annuity contract could vary between the two jurisdictions. Although the 2011 PR Code provides a credit against the Puerto Rico income tax for U.S. income taxes paid, an individual may not get full credit because of the timing differences. You should consult with a personal tax adviser regarding the tax consequences of purchasing an annuity contract and/or any proposed distribution, particularly a partial distribution or election to annuitize. NON-RESIDENT ALIENS Distributions to non resident aliens ("NRAs") are subject to special and complex tax and withholding rules under the Code with respect to U.S. source income, some of which are based upon the particular facts and circumstances of the Contract Owner, the beneficiary and the transaction itself. As stated above, the IRS has taken the position that income from the Contract received by NRAs is considered U.S. source income. In addition, Annuity Payments to NRAs in many countries are exempt from U.S. tax (or subject to lower rates) based upon a tax treaty, provided that the Contract Owner complies with the applicable requirements. NRAs should seek guidance from a tax adviser regarding their personal situation. TAX CREDITS AND DEDUCTIONS The Company may be entitled to certain tax benefits related to the assets of the Separate Account. These tax benefits, which may include foreign tax credits and corporate dividend received deductions, are not passed back to the Separate Account or to Contract Owners since the Company is the owner of the assets from which the tax benefits are derived. 15 TRANSFERS -------------------------------------------------------------------------------- The following paragraphs in RESTRICTIONS ON FREQUENT TRANSFERS section have been modified: Our policies and procedures may result in transfer restrictions being applied to deter frequent transfers. Currently, when we detect transfer activity in the Monitored Portfolios that exceeds our current transfer limits, we require future transfer requests to or from any Monitored Portfolio under that Contract to be submitted in writing with an original signature. A first occurrence will result in a warning letter; the second occurrence will result in imposition of this restriction for a six-month period; a second third occurrence will result in the permanent imposition of the restriction. Some of the Contracts are on a different administrative system for purposes of monitoring for deterring frequent transfers. These are Contracts with a certain status or rider, as described below. For these Contracts, we apply different frequent transfer criteria restrictions (the "Alternative Frequent Transfer Criteria Restrictions") when we detect transfer activity in the Monitored Portfolios that exceeds our current transfer limits. Under the Alternative Frequent Transfer Criteria, we currently monitor transfer activity to determine if, for each of the Monitored Portfolios, in a three-month period there were two or more "round-trips" of a certain dollar amount or greater. A round-trip is defined as a transfer in followed by a transfer out within the next 10 calendar days, or a transfer out followed by a transfer in within the next 10 calendar days. In the case of a Contract that has been restricted previously, a single round-trip of a certain dollar amount or greater will trigger the transfer restrictions described below. These Contracts with a certain status or rider are: (1) Contracts with a GMAB rider, (2) Contracts that offer loans, (3) "stretched" Tax-Sheltered Annuities, (4) decedent Contracts, and (5) Contracts where the Contract Date differs from the rider effective date. For the Contracts to which we apply the Alternative Frequent Transfer Criteria Restrictions, when we detect transfer activity in the Monitored Portfolios that exceeds our current transfer limits, we will exercise our contractual right to restrict your number of transfers to one every six months. In addition, we also reserve the right, but do not have the obligation, to further restrict the right to request transfers by any third party who has been authorized to initiate transfers on behalf of multiple Contract Owners. We may, among other things: reject the transfer instructions of any agent acting under a power of attorney on behalf of more than one Owner, or reject the transfer or exchange instructions of individual Owners who have executed pre-authorized transfer forms which are submitted by third parties on behalf of more than one Owner. For the Contracts to which we apply the Alternative Frequent Transfer Restrictions, a first occurrence will result in a warning letter; any additional occurrence thereafter will result in imposition of the Alternative Frequent Transfer Restrictions for a six-month period. RESTRICTIONS ON LARGE TRANSFERS. Large transfers may increase brokerage and administrative costs of the Underlying Funds and may disrupt portfolio management strategy, requiring an Underlying Fund to maintain a high cash position and possibly resulting in lost investment opportunities and forced liquidations. We do not monitor for large transfers to or from Underlying Funds except where the portfolio manager of a particular Underlying Fund has brought large transfer activity to our attention for investigation on a case-by-case basis. For example, some portfolio managers have asked us to monitor for "block transfers" where transfer requests have been submitted on behalf of multiple Contract Owners by a third party such as an investment adviser. When we detect such large trades, we may impose restrictions similar to those described above where future transfer requests from that third party must be submitted in writing with an original signature. A first occurrence will result in a warning letter; a second occurrence will result in the imposition of this restriction for a six-month period; a second third occurrence will result in the permanent imposition of the restriction. Large transfers under Contracts to which we apply our Alternative Frequent Transfer Criteria Restrictions will be subject to the above-described restrictions applicable to such Contracts. For those Contracts, a first occurrence will result in a warning letter; any additional occurrence thereafter will result in imposition of the Alternative Frequent Transfer Restrictions for a six-month period. OTHER INFORMATION -------------------------------------------------------------------------------- THE INSURANCE COMPANY Brighthouse Life Insurance Company (the Company) is a stock life insurance company originally chartered in Connecticut in 1863 and currently subject to the laws of the State of Delaware. Prior March 6, 2017, the Company was known as MetLife Insurance Company USA. The Company is licensed to conduct business in all states of the United States, except New York, and in the District of Columbia, Puerto Rico, Guam, the U.S. and British Virgin Islands 16 and the Bahamas. The Company is a subsidiary of, and controlled by, MetLife, Inc., a publicly-traded company (see "Planned Separation from MetLife, Inc." below). MetLife, Inc., through its subsidiaries and affiliates, is a leading provider of insurance and financial services to individuals and institutional customers. The Company's executive offices are located at 11225 North Community House Road, Charlotte, NC 28277. PLANNED SEPARATION FROM METLIFE, INC. In January 2016, MetLife announced its plan to pursue the separation of a substantial portion of its U.S. retail business. In preparation for the planned separation, in August 2016 MetLife formed a new, wholly-owned Delaware holding company, Brighthouse Financial, Inc. (Brighthouse Financial), which filed a registration statement on Form 10 (the Form 10) with the U.S. Securities and Exchange Commission (the SEC) in October 2016, as amended in December 2016, reflecting MetLife's current initiative to conduct the separation in the form of a spin-off. To effect the separation, first, MetLife expects to undertake the restructuring described in more detail in the Form 10. The restructuring would result in future Brighthouse Financial subsidiaries, including the Company, being wholly-owned subsidiaries of Brighthouse Financial. Following the restructuring, MetLife, Inc. would distribute at least 80.1% of Brighthouse Financial's common stock to MetLife's shareholders (the Distribution), and Brighthouse Financial would become a separate, publicly traded company. The separation remains subject to certain conditions including, among others, obtaining final approval from the MetLife board of directors, receipt of a favorable IRS ruling and an opinion from MetLife's tax advisor regarding certain U.S. federal income tax matters, receipt of the approval of state insurance and other regulatory authorities and an SEC declaration of the effectiveness of the Form 10. Following the Distribution, if it occurs, the Company will be a wholly-owned subsidiary of, and ultimately controlled by, Brighthouse Financial. MetLife currently plans to dispose of its remaining shares of Brighthouse Financial common stock as soon as practicable following the Distribution, but in no event later than five years after the Distribution. For more information about Brighthouse Financial and the Distribution, please see the most recent amendment to Brighthouse Financial's Form 10 (SEC File No. 001-37905), available via the SEC's EDGAR system on its website at https://www.sec.gov/edgar/searchedgar/companysearch.html. No assurances can be given regarding the final form the Distribution (or any alternative separation transaction) may take or the specific terms thereof, or that the Distribution (or any other form of separation) will in fact occur. However, any separation transaction will not affect the terms or conditions of your variable contract. The Company will remain fully responsible for its contractual obligations to variable contract owners, and you should carefully consider the potential impact of any separation transaction that may occur on the the Company's financial strength and claims-paying ability. THE SEPARATE ACCOUNT Prior to March 6, 2017, the Separate Account was known as MetLife of CT Separate Account Eleven for Variable Annuities. DISTRIBUTOR We have entered into a distribution agreement with our affiliate, Brighthouse Securities, LLC (Distributor), 11225 North Community House Road, Charlotte, NC 28277, for the distribution of the contracts. Prior to March 6, 2017, the distributor of the contracts was MetLife Investors Distribution Company. Distributor is a member of the Financial Industry Regulatory Authority (FINRA). FINRA provides background information about broker-dealers and their registered representatives through FINRA BrokerCheck. You may contact the FINRA BrokerCheck Hotline at 1-800-289-9999, or log on to www.finra.org. An investor brochure that includes information describing FINRA BrokerCheck is available through the Hotline or on-line. Distributor, and in certain cases, we, have entered into selling agreements with other selling firms for the sale of the contracts. We pay compensation to Distributor for sales of the contracts by selling firms. We also pay amounts to Distributor that may be used for its operating and other expenses, including sales distribution expenses. All of the Investment Portfolios make payments to Distributor under their distribution plans in consideration of services provided and expenses incurred by Distributor in distributing shares of the Investment Portfolios. (See the Investment Portfolio prospectuses for more information.) These payments range up to 0.55% of Separate Account assets invested in the particular Investment Portfolio. 17 FINANCIAL STATEMENTS The financial statements of the Company and the financial statements of the Separate Account have been included in the SAI. 18 APPENDIX A -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION FOR BRIGHTHOUSE SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES (FORMERLY METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES AND FORMERLY METLIFE OF CT SEPARATE ACCOUNT PF/PF II FOR VARIABLE ANNUITIES) ACCUMULATION UNIT VALUES (IN DOLLARS) The following Accumulation Unit Value information should be read in conjunction with the Separate Account's audited financial statement and notes, which are included in the Statement of Additional Information.
PRIMELITE -- SEPARATE ACCOUNT CHARGES 1.40% UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR ----------------------------------------------------------------------- ------ --------------- --------------- ---------------- AB Variable Products Series Fund, Inc. AllianceBernstein Large-Cap Growth Subaccount (Class B) (1/02)........ 2008 1.469 1.351 -- 2007 1.312 1.469 459,784 AIM Variable Insurance Funds AIM V.I. Capital Appreciation Subaccount (Series II) (1/02)........... 2007 1.360 1.450 -- AIM V.I. Core Equity Subaccount (Series II) (4/06).................... 2007 1.080 1.156 -- AIM Variable Insurance Funds (Invesco Variable Insurance Funds) Invesco V.I. American Franchise Subaccount (Series II) (9/00)......... 2008 0.563 0.538 -- 2007 0.490 0.563 76,407,415 Invesco V.I. Equity and Income Subaccount (Series II) (5/03).......... 2016 2.131 2.413 2,680,168 2015 2.218 2.131 3,196,831 2014 2.068 2.218 3,551,510 2013 1.679 2.068 4,131,454 2012 1.515 1.679 5,078,889 2011 1.557 1.515 6,112,288 2010 1.409 1.557 8,326,112 2009 1.167 1.409 10,410,741 2008 1.530 1.167 12,449,400 2007 1.501 1.530 14,766,358 Invesco V.I. Growth and Income Subaccount (Series II) (9/00).......... 2014 1.873 1.885 -- 2013 1.420 1.873 10,852,948 2012 1.260 1.420 13,016,440 2011 1.307 1.260 16,161,101 2010 1.181 1.307 21,378,328 2009 0.965 1.181 27,795,551 2008 1.444 0.965 36,727,731 2007 1.428 1.444 48,124,979 American Funds Insurance Series(R) American Funds Bond Subaccount (Class 2) (4/08)....................... 2016 1.779 1.806 905,033 2015 1.799 1.779 994,471 2014 1.733 1.799 1,164,235 2013 1.796 1.733 1,189,961 2012 1.728 1.796 1,443,810 2011 1.652 1.728 1,596,994 2010 1.574 1.652 1,307,008 2009 1.417 1.574 1,110,550 2008 1.583 1.417 712,558 American Funds Global Growth Subaccount (Class 2) (4/08).............. 2016 3.032 3.009 399,328 2015 2.876 3.032 437,152 2014 2.850 2.876 419,712 2013 2.237 2.850 475,189 2012 1.851 2.237 572,167 2011 2.061 1.851 750,716 2010 1.870 2.061 927,340 2009 1.333 1.870 859,359 2008 2.108 1.333 699,667
A-1
PRIMELITE -- SEPARATE ACCOUNT CHARGES 1.40% (CONTINUED) UNIT VALUE AT BEGINNING OF PORTFOLIO NAME YEAR YEAR ------------------------------------------------------------------------------ ------ --------------- American Funds Global Small Capitalization Subaccount (Class 2) (4/08)....... 2016 3.639 2015 3.680 2014 3.655 2013 2.889 2012 2.479 2011 3.110 2010 2.576 2009 1.620 2008 3.199 American Funds Growth Subaccount (Class 2) (4/08)............................ 2016 2.695 2015 2.558 2014 2.390 2013 1.863 2012 1.603 2011 1.698 2010 1.451 2009 1.055 2008 1.825 American Funds Growth-Income Subaccount (Class 2) (4/08)..................... 2016 2.352 2015 2.351 2014 2.155 2013 1.637 2012 1.413 2011 1.460 2010 1.328 2009 1.026 2008 1.603 Fidelity(R) Variable Insurance Products Fidelity VIP Equity-Income Subaccount (Service Class 2) (1/02)............... 2016 1.877 2015 1.988 2014 1.858 2013 1.474 2012 1.277 2011 1.287 2010 1.136 2009 0.887 2008 1.572 2007 1.575 Fidelity VIP Mid Cap Subaccount (Service Class 2) (1/02)..................... 2016 3.197 2015 3.295 2014 3.152 2013 2.352 2012 2.083 2011 2.369 2010 1.868 2009 1.356 2008 2.277 2007 2.002 Franklin Templeton Variable Insurance Products Trust FTVIPT Franklin Income VIP Subaccount (Class 2) (4/08)....................... 2016 5.679 2015 6.197 2014 6.007 2013 5.346 2012 4.813 2011 4.767 2010 4.290 2009 3.209 2008 4.605 FTVIPT Franklin Mutual Shares VIP Subaccount (Class 2) (1/02)................ 2016 1.908 2015 2.035 2014 1.927 2013 1.523 2012 1.352 2011 1.386 2010 1.264 2009 1.017 2008 1.640 2007 1.607 NUMBER OF UNITS UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME END OF YEAR END OF YEAR ------------------------------------------------------------------------------ --------------- ---------------- American Funds Global Small Capitalization Subaccount (Class 2) (4/08)....... 3.663 112,470 3.639 133,195 3.680 197,556 3.655 237,299 2.889 254,365 2.479 393,547 3.110 532,061 2.576 383,766 1.620 254,786 American Funds Growth Subaccount (Class 2) (4/08)............................ 2.910 622,191 2.695 708,570 2.558 898,378 2.390 1,109,391 1.863 1,179,333 1.603 1,536,169 1.698 1,531,089 1.451 1,419,563 1.055 1,231,791 American Funds Growth-Income Subaccount (Class 2) (4/08)..................... 2.586 349,807 2.352 369,889 2.351 473,173 2.155 594,714 1.637 601,450 1.413 819,423 1.460 790,411 1.328 804,338 1.026 773,175 Fidelity(R) Variable Insurance Products Fidelity VIP Equity-Income Subaccount (Service Class 2) (1/02)............... 2.179 491,385 1.877 561,329 1.988 616,757 1.858 751,885 1.474 872,756 1.277 971,815 1.287 1,207,872 1.136 1,581,375 0.887 1,977,584 1.572 2,024,780 Fidelity VIP Mid Cap Subaccount (Service Class 2) (1/02)..................... 3.528 1,068,376 3.197 1,277,494 3.295 1,495,524 3.152 1,678,038 2.352 2,059,080 2.083 2,714,832 2.369 3,491,885 1.868 4,287,049 1.356 4,797,179 2.277 5,071,442 Franklin Templeton Variable Insurance Products Trust FTVIPT Franklin Income VIP Subaccount (Class 2) (4/08)....................... 6.386 380,783 5.679 444,625 6.197 491,211 6.007 523,597 5.346 577,163 4.813 563,384 4.767 564,913 4.290 442,434 3.209 125,023 FTVIPT Franklin Mutual Shares VIP Subaccount (Class 2) (1/02)................ 2.183 1,241,842 1.908 1,392,785 2.035 1,525,391 1.927 1,666,867 1.523 2,191,081 1.352 2,623,659 1.386 3,459,223 1.264 4,496,552 1.017 5,508,039 1.640 6,498,843
A-2
PRIMELITE -- SEPARATE ACCOUNT CHARGES 1.40% (CONTINUED) UNIT VALUE AT BEGINNING OF PORTFOLIO NAME YEAR YEAR --------------------------------------------------------------------------------- ------ --------------- FTVIPT Templeton Growth Securities Subaccount (Class 2) (1/02).................. 2011 1.377 2010 1.301 2009 1.006 2008 1.769 2007 1.753 Legg Mason Partners Investment Series LMPIS Growth and Income Subaccount (5/00)....................................... 2007 0.975 LMPIS Premier Selections All Cap Growth Subaccount (5/00)....................... 2007 0.954 Legg Mason Partners Variable Equity Trust LMPVET Batterymarch Variable Global Equity Subaccount (2/04).................... 2010 0.878 2009 0.736 2008 1.273 2007 1.230 LMPVET ClearBridge Variable Aggressive Growth Subaccount (Class I) (5/00)....... 2016 2.080 2015 2.146 2014 1.808 2013 1.241 2012 1.060 2011 1.049 2010 0.851 2009 0.641 2008 1.091 2007 1.090 LMPVET ClearBridge Variable All Cap Value Subaccount (Class I) (5/01)........... 2014 1.553 2013 1.191 2012 1.051 2011 1.136 2010 0.988 2009 0.775 2008 1.239 2007 1.240 LMPVET ClearBridge Variable Appreciation Subaccount (Class I) (7/98)............ 2016 2.165 2015 2.161 2014 1.974 2013 1.540 2012 1.347 2011 1.331 2010 1.199 2009 0.995 2008 1.428 2007 1.336 LMPVET ClearBridge Variable Appreciation Subaccount (Class II) (11/07).......... 2009 0.815 2008 1.172 2007 1.174 LMPVET ClearBridge Variable Capital Subaccount (2/04)........................... 2011 1.029 2010 0.926 2009 0.669 2008 1.173 2007 1.168 LMPVET ClearBridge Variable Dividend Strategy Subaccount (5/00)................. 2011 0.765 2010 0.694 2009 0.576 2008 0.818 2007 0.779 LMPVET ClearBridge Variable Dividend Strategy Subaccount (Class I) (5/11)....... 2016 1.683 2015 1.784 2014 1.592 2013 1.282 2012 1.138 2011 1.157 NUMBER OF UNITS UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME END OF YEAR END OF YEAR --------------------------------------------------------------------------------- --------------- ---------------- FTVIPT Templeton Growth Securities Subaccount (Class 2) (1/02).................. 1.537 -- 1.377 2,163,588 1.301 3,005,134 1.006 3,710,949 1.769 4,181,782 Legg Mason Partners Investment Series LMPIS Growth and Income Subaccount (5/00)....................................... 1.020 -- LMPIS Premier Selections All Cap Growth Subaccount (5/00)....................... 1.016 12 Legg Mason Partners Variable Equity Trust LMPVET Batterymarch Variable Global Equity Subaccount (2/04).................... 0.930 -- 0.878 552,407 0.736 503,326 1.273 349,777 LMPVET ClearBridge Variable Aggressive Growth Subaccount (Class I) (5/00)....... 2.075 29,840,075 2.080 33,337,064 2.146 37,353,336 1.808 44,411,235 1.241 54,098,687 1.060 66,325,439 1.049 87,485,853 0.851 111,036,387 0.641 137,751,229 1.091 170,325,688 LMPVET ClearBridge Variable All Cap Value Subaccount (Class I) (5/01)........... 1.562 -- 1.553 19,845,723 1.191 23,981,304 1.051 30,584,438 1.136 40,250,726 0.988 52,464,658 0.775 66,116,400 1.239 83,872,913 LMPVET ClearBridge Variable Appreciation Subaccount (Class I) (7/98)............ 2.343 38,921,770 2.165 43,724,241 2.161 49,762,010 1.974 57,627,472 1.540 68,494,201 1.347 85,367,192 1.331 106,943,793 1.199 129,632,219 0.995 157,833,138 1.428 203,841,979 LMPVET ClearBridge Variable Appreciation Subaccount (Class II) (11/07).......... 0.804 -- 0.815 145,510 1.172 307,300 LMPVET ClearBridge Variable Capital Subaccount (2/04)........................... 1.088 -- 1.029 251,562 0.926 299,995 0.669 221,489 1.173 470,844 LMPVET ClearBridge Variable Dividend Strategy Subaccount (5/00)................. 0.832 -- 0.765 22,228,896 0.694 27,813,641 0.576 33,263,521 0.818 41,077,999 LMPVET ClearBridge Variable Dividend Strategy Subaccount (Class I) (5/11)....... 1.909 5,791,103 1.683 6,686,761 1.784 7,425,064 1.592 8,573,894 1.282 10,370,652 1.138 12,544,647
A-3
PRIMELITE -- SEPARATE ACCOUNT CHARGES 1.40% (CONTINUED) UNIT VALUE AT BEGINNING OF PORTFOLIO NAME YEAR YEAR ---------------------------------------------------------------------------------- ------ --------------- LMPVET ClearBridge Variable Dividend Strategy Subaccount (Class II) (2/04)....... 2016 1.560 2015 1.655 2014 1.479 2013 1.193 2012 1.061 2011 0.999 2010 0.904 2009 0.747 2008 1.165 2007 1.121 LMPVET ClearBridge Variable Large Cap Growth Subaccount (Class I) (5/01)......... 2016 1.938 2015 1.790 2014 1.592 2013 1.171 2012 0.987 2011 1.008 2010 0.930 2009 0.663 2008 1.072 2007 1.032 LMPVET ClearBridge Variable Large Cap Value Subaccount (Class I) (4/07).......... 2016 1.691 2015 1.766 2014 1.603 2013 1.228 2012 1.069 2011 1.033 2010 0.957 2009 0.779 2008 1.228 2007 1.250 LMPVET ClearBridge Variable Mid Cap Subaccount (Class I) (5/01).................. 2016 2.209 2015 2.190 2014 2.054 2013 1.516 2012 1.304 2011 1.377 2010 1.139 2009 0.850 2008 1.331 2007 1.260 LMPVET ClearBridge Variable Small Cap Growth Subaccount (Class I) (4/07)......... 2016 2.336 2015 2.477 2014 2.414 2013 1.665 2012 1.414 2011 1.414 2010 1.145 2009 0.813 2008 1.391 2007 1.349 LMPVET Global Currents Variable International All Cap Opportunity Subaccount (7/98)........................................................................... 2011 0.833 2010 0.815 2009 0.642 2008 1.151 2007 1.098 LMPVET Multiple Discipline Subaccount-Large Cap Growth and Value (2/04).......... 2007 1.133 LMPVET QS Variable Conservative Growth Subaccount (7/98)......................... 2016 1.845 2015 1.894 2014 1.831 2013 1.610 2012 1.443 2011 1.447 2010 1.283 2009 0.983 2008 1.372 2007 1.348 NUMBER OF UNITS UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME END OF YEAR END OF YEAR ---------------------------------------------------------------------------------- --------------- ---------------- LMPVET ClearBridge Variable Dividend Strategy Subaccount (Class II) (2/04)....... 1.765 832,480 1.560 933,072 1.655 1,001,992 1.479 1,043,071 1.193 1,095,144 1.061 1,166,319 0.999 965,960 0.904 1,433,341 0.747 1,380,628 1.165 1,083,851 LMPVET ClearBridge Variable Large Cap Growth Subaccount (Class I) (5/01)......... 2.052 1,099,593 1.938 1,229,343 1.790 1,426,191 1.592 1,651,912 1.171 2,003,453 0.987 2,324,117 1.008 3,135,331 0.930 3,927,312 0.663 4,929,925 1.072 6,539,357 LMPVET ClearBridge Variable Large Cap Value Subaccount (Class I) (4/07).......... 1.884 13,521,291 1.691 14,946,371 1.766 17,143,305 1.603 20,090,639 1.228 24,065,433 1.069 29,090,503 1.033 36,112,044 0.957 42,567,336 0.779 50,578,326 1.228 64,818,739 LMPVET ClearBridge Variable Mid Cap Subaccount (Class I) (5/01).................. 2.382 1,570,552 2.209 1,845,661 2.190 2,066,584 2.054 2,574,489 1.516 3,047,175 1.304 3,850,119 1.377 5,344,690 1.139 7,060,688 0.850 8,811,533 1.331 11,247,265 LMPVET ClearBridge Variable Small Cap Growth Subaccount (Class I) (4/07)......... 2.437 1,606,713 2.336 1,843,849 2.477 2,060,036 2.414 2,299,318 1.665 2,665,463 1.414 3,234,934 1.414 3,989,098 1.145 5,189,392 0.813 6,462,942 1.391 7,755,207 LMPVET Global Currents Variable International All Cap Opportunity Subaccount (7/98)........................................................................... 0.897 -- 0.833 22,456,154 0.815 26,536,503 0.642 32,115,354 1.151 39,347,365 LMPVET Multiple Discipline Subaccount-Large Cap Growth and Value (2/04).......... 1.156 -- LMPVET QS Variable Conservative Growth Subaccount (7/98)......................... 1.955 15,059,597 1.845 17,416,855 1.894 20,327,300 1.831 23,578,622 1.610 28,071,204 1.443 34,035,943 1.447 41,703,530 1.283 51,647,471 0.983 66,448,993 1.372 85,684,137
A-4
PRIMELITE -- SEPARATE ACCOUNT CHARGES 1.40% (CONTINUED) UNIT VALUE AT BEGINNING OF PORTFOLIO NAME YEAR YEAR ------------------------------------------------------------------------------ ------ --------------- LMPVET QS Variable Growth Subaccount (7/98).................................. 2016 1.601 2015 1.660 2014 1.609 2013 1.289 2012 1.128 2011 1.171 2010 1.027 2009 0.786 2008 1.274 2007 1.250 LMPVET QS Variable Moderate Growth Subaccount (6/98)......................... 2016 1.626 2015 1.679 2014 1.623 2013 1.351 2012 1.196 2011 1.220 2010 1.076 2009 0.821 2008 1.238 2007 1.209 Legg Mason Partners Variable Income Trust LMPVIT Government Subaccount (Class I) (5/00)................................ 2008 1.288 2007 1.274 LMPVIT Western Asset Core Plus VIT Subaccount (7/98)......................... 2016 1.853 2015 1.856 2014 1.889 2013 1.754 2012 1.509 2011 1.494 2010 1.299 2009 0.824 2008 1.193 2007 1.207 LMPVIT Western Asset Variable Adjustable Rate Income Subaccount (2/04)....... 2011 1.000 2010 0.929 2009 0.802 2008 1.032 2007 1.033 LMPVIT Western Asset Variable Money Market Subaccount (7/98)................. 2010 1.198 2009 1.212 2008 1.198 2007 1.158 Legg Mason Partners Variable Portfolios III, Inc. LMPVPIII Large Cap Value Subaccount (7/98)................................... 2007 1.198 Legg Mason Partners Variable Portfolios V LMPVPV Small Cap Growth Opportunities Subaccount (Class I) (5/01)............ 2007 1.285 Met Investors Series Trust MIST Clarion Global Real Estate Subaccount (Class B) (4/14).................. 2016 1.811 2015 1.862 2014 1.752 MIST Invesco Comstock Subaccount (Class B) (5/09)............................ 2016 2.044 2015 2.204 2014 2.045 2013 1.532 2012 1.311 2011 1.349 2010 1.191 2009 0.953 MIST Lord Abbett Bond Debenture Subaccount (Class A) (4/06).................. 2016 1.986 2015 2.053 2014 1.980 2013 1.857 2012 1.663 2011 1.609 2010 1.442 2009 1.066 2008 1.325 2007 1.258 NUMBER OF UNITS UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME END OF YEAR END OF YEAR ------------------------------------------------------------------------------ --------------- ---------------- LMPVET QS Variable Growth Subaccount (7/98).................................. 1.713 10,563,201 1.601 11,767,160 1.660 13,067,172 1.609 14,835,114 1.289 17,358,725 1.128 21,314,723 1.171 25,242,678 1.027 29,185,819 0.786 33,857,739 1.274 41,407,750 LMPVET QS Variable Moderate Growth Subaccount (6/98)......................... 1.732 14,180,644 1.626 15,393,100 1.679 18,002,824 1.623 20,752,056 1.351 24,773,643 1.196 30,200,813 1.220 37,397,834 1.076 44,404,544 0.821 51,864,295 1.238 63,079,568 Legg Mason Partners Variable Income Trust LMPVIT Government Subaccount (Class I) (5/00)................................ 1.248 -- 1.288 13,191,259 LMPVIT Western Asset Core Plus VIT Subaccount (7/98)......................... 1.910 5,504,963 1.853 6,170,235 1.856 7,198,465 1.889 8,055,680 1.754 9,544,473 1.509 11,661,742 1.494 15,300,230 1.299 18,979,005 0.824 24,407,035 1.193 33,049,793 LMPVIT Western Asset Variable Adjustable Rate Income Subaccount (2/04)....... 0.989 -- 1.000 108,567 0.929 132,464 0.802 154,166 1.032 226,478 LMPVIT Western Asset Variable Money Market Subaccount (7/98)................. 1.193 -- 1.198 25,340,437 1.212 37,694,443 1.198 32,859,913 Legg Mason Partners Variable Portfolios III, Inc. LMPVPIII Large Cap Value Subaccount (7/98)................................... 1.260 -- Legg Mason Partners Variable Portfolios V LMPVPV Small Cap Growth Opportunities Subaccount (Class I) (5/01)............ 1.372 -- Met Investors Series Trust MIST Clarion Global Real Estate Subaccount (Class B) (4/14).................. 1.801 697,053 1.811 956,577 1.862 1,073,415 MIST Invesco Comstock Subaccount (Class B) (5/09)............................ 2.364 2,382,082 2.044 2,750,662 2.204 3,005,635 2.045 1,883,040 1.532 2,502,811 1.311 3,036,603 1.349 3,988,999 1.191 4,860,142 MIST Lord Abbett Bond Debenture Subaccount (Class A) (4/06).................. 2.048 -- 1.986 464,997 2.053 578,824 1.980 654,966 1.857 713,779 1.663 883,205 1.609 1,211,073 1.442 1,528,932 1.066 1,765,743 1.325 1,178,236
A-5
PRIMELITE -- SEPARATE ACCOUNT CHARGES 1.40% (CONTINUED) UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR -------------------------------------------------------------------------- ------ --------------- --------------- ---------------- MIST Met/AIM Capital Appreciation Subaccount (Class E) (4/07) *.......... 2009 0.845 0.804 -- 2008 1.497 0.845 141,640 2007 1.432 1.497 224,886 MIST Met/Templeton Growth Subaccount (Class B) (5/10).................... 2013 1.082 1.151 -- 2012 0.898 1.082 2,243,900 2011 0.978 0.898 2,581,236 2010 0.933 0.978 493,590 MIST Met/Wellington Large Cap Research Subaccount (Class A) (4/06)....... 2007 1.100 1.154 -- MIST Met/Wellington Large Cap Research Subaccount (Class E) (4/07)....... 2016 1.572 1.679 10,249,829 2015 1.527 1.572 11,689,752 2014 1.363 1.527 13,357,824 2013 1.030 1.363 15,628,909 2012 0.920 1.030 18,419,815 2011 0.931 0.920 22,207,018 2010 0.839 0.931 27,200,549 2009 0.714 0.839 32,496,370 2008 1.154 0.714 38,431,603 2007 1.144 1.154 47,573,495 MIST MetLife Small Cap Value Subaccount (Class B) (4/07) *............... 2016 2.442 3.160 191,478 2015 2.618 2.442 234,574 2014 2.610 2.618 308,331 2013 1.998 2.610 350,812 2012 1.718 1.998 468,544 2011 1.914 1.718 566,959 2010 1.619 1.914 830,128 2009 1.298 1.619 1,133,524 2008 1.876 1.298 1,426,003 2007 2.052 1.876 2,049,772 MIST MFS(R) Research International Subaccount (Class B) (4/07) *......... 2016 1.829 1.788 4,990,031 2015 1.888 1.829 5,495,037 2014 2.058 1.888 6,168,966 2013 1.750 2.058 6,961,589 2012 1.521 1.750 8,267,232 2011 1.727 1.521 10,243,266 2010 1.572 1.727 1,846,627 2009 1.212 1.572 2,503,505 2008 2.132 1.212 3,184,906 2007 2.028 2.132 3,229,538 MIST Oppenheimer Capital Appreciation Subaccount (Class B) (4/06)........ 2012 0.901 1.014 -- 2011 0.927 0.901 862,935 2010 0.859 0.927 1,178,645 2009 0.606 0.859 1,300,952 2008 1.137 0.606 1,448,170 2007 1.009 1.137 1,680,369 MIST Oppenheimer Global Equity Subaccount (Class B) (4/13)............... 2016 1.200 1.186 1,219,995 2015 1.171 1.200 1,346,162 2014 1.163 1.171 1,540,058 2013 1.015 1.163 1,898,470 MIST Pioneer Fund Subaccount (Class B) (5/09)............................ 2016 1.302 1.310 -- 2015 1.324 1.302 89,014 2014 1.210 1.324 100,039 2013 0.925 1.210 111,507 2012 0.850 0.925 116,388 2011 0.906 0.850 131,075 2010 0.792 0.906 77,167 2009 0.646 0.792 57,902 MIST Pioneer Strategic Income Subaccount (Class A) (4/06)................ 2016 1.747 1.792 -- 2015 1.795 1.747 2,909,221 2014 1.741 1.795 3,511,290 2013 1.739 1.741 3,877,179 2012 1.580 1.739 4,324,898 2011 1.546 1.580 4,883,235 2010 1.397 1.546 5,516,928 2009 1.065 1.397 6,407,167 2008 1.210 1.065 8,291,450 2007 1.150 1.210 6,674,160
A-6
PRIMELITE -- SEPARATE ACCOUNT CHARGES 1.40% (CONTINUED) UNIT VALUE AT BEGINNING OF PORTFOLIO NAME YEAR YEAR -------------------------------------------------------------------------------- ------ --------------- MIST T. Rowe Price Large Cap Value Subaccount (Class B) (4/06)................. 2014 1.354 2013 1.026 2012 0.882 2011 0.932 2010 0.808 2009 0.692 2008 1.102 2007 1.077 MIST T. Rowe Price Large Cap Value Subaccount (Class E) (4/14)................. 2016 1.440 2015 1.513 2014 1.385 Metropolitan Series Fund MSF BlackRock Bond Income Subaccount (Class E) (4/06).......................... 2016 1.351 2015 1.364 2014 1.294 2013 1.324 2012 1.250 2011 1.192 2010 1.117 2009 1.036 2008 1.090 2007 1.042 MSF BlackRock Capital Appreciation Subaccount (Class E) (5/09)................. 2016 1.837 2015 1.756 2014 1.637 2013 1.239 2012 1.100 2011 1.227 2010 1.040 2009 0.826 MSF BlackRock Ultra-Short Term Bond Subaccount (Class E) (5/10)................ 2016 1.102 2015 1.117 2014 1.133 2013 1.149 2012 1.165 2011 1.182 2010 1.193 MSF Capital Guardian U.S. Equity Subaccount (Class B) (4/07) *................. 2009 0.636 2008 1.083 2007 1.144 MSF Frontier Mid Cap Growth Subaccount (Class D) (4/06)........................ 2016 1.721 2015 1.698 2014 1.550 2013 1.185 2012 1.084 2011 1.135 2010 0.999 2009 0.679 2008 1.269 2007 1.069 MSF Jennison Growth Subaccount (Class B) (4/08)................................ 2016 0.958 2015 0.879 2014 0.820 2013 0.608 2012 0.534 2011 0.540 2010 0.492 2009 0.357 2008 0.539 MSF Met/Wellington Core Equity Opportunities Subaccount (Class B) (5/11)....... 2016 1.538 2015 1.527 2014 1.403 2013 1.067 2012 0.961 2011 1.085 NUMBER OF UNITS UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME END OF YEAR END OF YEAR -------------------------------------------------------------------------------- --------------- ---------------- MIST T. Rowe Price Large Cap Value Subaccount (Class B) (4/06)................. 1.383 -- 1.354 402,353 1.026 513,256 0.882 604,479 0.932 711,491 0.808 801,547 0.692 656,303 1.102 290,789 MIST T. Rowe Price Large Cap Value Subaccount (Class E) (4/14)................. 1.648 14,183,770 1.440 16,326,413 1.513 18,825,459 Metropolitan Series Fund MSF BlackRock Bond Income Subaccount (Class E) (4/06).......................... 1.372 338,458 1.351 397,576 1.364 461,750 1.294 536,258 1.324 707,531 1.250 943,649 1.192 1,366,006 1.117 1,439,722 1.036 1,708,006 1.090 1,009,195 MSF BlackRock Capital Appreciation Subaccount (Class E) (5/09)................. 1.811 7,991 1.837 8,363 1.756 8,737 1.637 12,197 1.239 20,487 1.100 23,880 1.227 24,945 1.040 25,855 MSF BlackRock Ultra-Short Term Bond Subaccount (Class E) (5/10)................ 1.089 5,983,143 1.102 6,691,212 1.117 7,861,804 1.133 9,099,047 1.149 11,255,690 1.165 15,040,724 1.182 17,413,446 MSF Capital Guardian U.S. Equity Subaccount (Class B) (4/07) *................. 0.629 -- 0.636 351,682 1.083 582,788 MSF Frontier Mid Cap Growth Subaccount (Class D) (4/06)........................ 1.786 10,928,103 1.721 12,517,300 1.698 14,316,283 1.550 16,538,114 1.185 19,312,119 1.084 23,160,518 1.135 27,976,596 0.999 32,961,349 0.679 38,984,731 1.269 48,289,454 MSF Jennison Growth Subaccount (Class B) (4/08)................................ 0.944 15,085,608 0.958 17,401,444 0.879 20,677,445 0.820 23,965,190 0.608 28,397,109 0.534 32,773,268 0.540 40,704,917 0.492 49,469,051 0.357 61,226,255 MSF Met/Wellington Core Equity Opportunities Subaccount (Class B) (5/11)....... 1.624 319,626 1.538 29,889 1.527 44,858 1.403 56,907 1.067 121,043 0.961 197,230
A-7
PRIMELITE -- SEPARATE ACCOUNT CHARGES 1.40% (CONTINUED) UNIT VALUE AT BEGINNING OF PORTFOLIO NAME YEAR YEAR ---------------------------------------------------------------------------------- ------ --------------- MSF MFS(R) Total Return Subaccount (Class F) (4/06).............................. 2016 2.083 2015 2.120 2014 1.983 2013 1.693 2012 1.542 2011 1.530 2010 1.412 2009 1.210 2008 1.580 2007 1.538 MSF T. Rowe Price Large Cap Growth Subaccount (Class B) (4/06) *................. 2016 1.950 2015 1.789 2014 1.667 2013 1.218 2012 1.041 2011 1.070 2010 0.930 2009 0.659 2008 1.152 2007 1.070 MSF Western Asset Management U.S. Government Subaccount (Class A) (4/06) *....... 2016 1.160 2015 1.168 2014 1.150 2013 1.174 2012 1.150 2011 1.103 2010 1.056 2009 1.025 2008 1.041 2007 1.011 Pioneer Variable Contracts Trust Pioneer Fund VCT Subaccount (Class II) (1/02).................................... 2011 1.398 2010 1.225 2009 0.995 2008 1.537 2007 1.487 Pioneer VCT Mid Cap Value Subaccount (Class II) (1/02)........................... 2016 2.312 2015 2.504 2014 2.212 2013 1.690 2012 1.546 2011 1.665 2010 1.432 2009 1.160 2008 1.775 2007 1.709 Putnam Variable Trust Putnam VT International Equity Subaccount (Class IB) (1/02)...................... 2007 1.882 Putnam VT Small Cap Value Subaccount (Class IB) (1/02)........................... 2007 1.949 Trust for Advised Portfolios 1919 Variable Socially Responsive Balanced Subaccount (5/00)..................... 2014 1.201 2013 1.026 2012 0.940 2011 0.953 2010 0.862 2009 0.711 2008 0.964 2007 0.882 Universal Institutional Funds, Inc. UIF U.S. Real Estate Subaccount (Class I) (5/05)................................. 2014 1.560 2013 1.550 2012 1.357 2011 1.299 2010 1.014 2009 0.801 2008 1.308 2007 1.600 NUMBER OF UNITS UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME END OF YEAR END OF YEAR ---------------------------------------------------------------------------------- --------------- ---------------- MSF MFS(R) Total Return Subaccount (Class F) (4/06).............................. 2.239 12,293,714 2.083 13,729,370 2.120 15,484,409 1.983 17,697,315 1.693 20,990,448 1.542 25,809,784 1.530 32,648,581 1.412 40,128,628 1.210 51,551,438 1.580 68,826,361 MSF T. Rowe Price Large Cap Growth Subaccount (Class B) (4/06) *................. 1.952 378,999 1.950 428,882 1.789 372,245 1.667 392,437 1.218 465,167 1.041 536,411 1.070 625,067 0.930 846,967 0.659 1,060,720 1.152 826,357 MSF Western Asset Management U.S. Government Subaccount (Class A) (4/06) *....... 1.161 4,237,328 1.160 4,213,811 1.168 5,198,173 1.150 5,860,485 1.174 7,167,281 1.150 7,917,289 1.103 9,650,508 1.056 11,719,225 1.025 14,838,744 1.041 1,579,280 Pioneer Variable Contracts Trust Pioneer Fund VCT Subaccount (Class II) (1/02).................................... 1.496 -- 1.398 178,011 1.225 260,239 0.995 312,479 1.537 422,947 Pioneer VCT Mid Cap Value Subaccount (Class II) (1/02)........................... 2.650 449,332 2.312 526,358 2.504 612,663 2.212 826,432 1.690 1,009,123 1.546 1,237,896 1.665 1,574,332 1.432 2,016,798 1.160 2,604,041 1.775 3,368,551 Putnam Variable Trust Putnam VT International Equity Subaccount (Class IB) (1/02)...................... 2.038 -- Putnam VT Small Cap Value Subaccount (Class IB) (1/02)........................... 2.082 -- Trust for Advised Portfolios 1919 Variable Socially Responsive Balanced Subaccount (5/00)..................... 1.294 3,380,110 1.201 3,742,650 1.026 4,423,958 0.940 5,416,182 0.953 6,716,313 0.862 8,978,480 0.711 11,226,419 0.964 13,688,523 Universal Institutional Funds, Inc. UIF U.S. Real Estate Subaccount (Class I) (5/05)................................. 1.740 -- 1.560 1,238,569 1.550 1,707,556 1.357 2,213,212 1.299 3,215,539 1.014 4,137,492 0.801 4,728,452 1.308 6,030,325
A-8
PRIMELITE -- SEPARATE ACCOUNT CHARGES 1.40% (CONTINUED) UNIT VALUE AT NUMBER OF UNITS BEGINNING OF UNIT VALUE AT OUTSTANDING AT PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR ----------------------------------------------------------- ------ --------------- --------------- ---------------- Van Kampen Life Investment Trust Invesco V.I. Comstock Subaccount (Class II) (9/00)........ 2009 0.950 0.922 -- 2008 1.500 0.950 43,586,396 2007 1.558 1.500 57,037,303
------------ * We are currently waiving a portion of the Mortality and Expense Risk charge for this Subaccount. Please see "Fee Table - Annual Separate Account Charges" for more information. The date next to each funding option name reflects the date money first came into the funding option through the Separate Account. Funding options not listed above had no amounts allocated to them or were not available as of December 31, 2016. Number of Units Outstanding at the end of the year may include units for Contracts in payout phase. Variable Funding Option mergers and substitutions that occurred between January 1, 2005 and December 31, 2016 are displayed below. Please see Appendix B for more information on Variable Funding Option mergers, substitutions and other changes. Effective on or about 05/01/2006, AIM Variable Insurance Fund-AIM VI Premier Equity Fund merged into AIM Variable Insurance Fund-AIM VI Core Equity Fund and is no longer available as a funding option. Effective on or about 05/01/2006, Oppenheimer Variable Account Funds-Oppenheimer Capital Appreciation Fund/VA was replaced by Met Investors Series Trust-Oppenheimer Capital Appreciation Portfolio and is no longer available as a funding option. Effective on or about 05/01/2006, Oppenheimer Variable Account Funds-Oppenheimer Main Street Fund/VA was replaced by Met Investors Series Trust-Lord Abbett Growth and Income Portfolio and is no longer available as a funding option. Effective on or about 05/01/2006, The Travelers Series Trust-Convertible Securities Portfolio merged into Met Investors Series Trust-Lord Abbett Bond Debenture Portfolio and is no longer available as a funding option. Effective on or about 05/01/2006, The Travelers Series Trust-Mercury Large Cap Core Portfolio merged into Met Investors Series Trust-Mercury Large-Cap Core Portfolio and is no longer available as a funding option. Effective on or about 05/01/2006, The Travelers Series Trust-MFS(R) Mid Cap Growth Portfolio merged into Metropolitan Series Fund, Inc.-BlackRock Aggressive Growth Portfolio and is no longer available as a funding option. Effective on or about 05/01/2006, The Travelers Series Trust-MFS(R) Total Return Portfolio merged into Metropolitan Series Fund, Inc.-MFS(R) Total Return Portfolio and is no longer available as a funding option. Effective on or about 05/01/2006, The Travelers Series Trust-Pioneer Strategic Income Portfolio merged into Met Investors Series Trust-Pioneer Strategic Income Portfolio and is no longer available as a funding option. Effective on or about 05/01/2006, The Travelers Series Trust-Travelers Managed Income Portfolio merged into Metropolitan Series Fund, Inc.-BlackRock Bond Income Portfolio and is no longer available as a funding option. Effective on or about 05/01/2006, The Travelers Series Trust-U.S. Government Securities Portfolio merged into Metropolitan Series Fund, Inc.-Western Asset Management U.S. Government Portfolio and is no longer available as a funding option. Effective on or about 05/01/2006, Variable Insurance Products Fund-VIP Growth Portfolio was replaced by Metropolitan Series Fund, Inc.-T. Rowe Price Large Cap Growth Portfolio and is no longer available as a funding option. Effective on or about 04/30/2007, AIM Variable Insurance Funds-AIM V.I. Capital Appreciation Fund was replaced by Met Investors Series Trust-Met/AIM Capital Appreciation Portfolio Class E and is no longer available as a funding option. A-9 Effective on or about 04/30/2007, AIM Variable Insurance Funds-AIM V.I. Core Equity Fund was replaced by Metropolitan Series Fund, Inc.-Capital Guardian U.S. Equity Portfolio and is no longer available as a funding option. Effective on or about 04/30/2007, Legg Mason Partners Investment Series-Legg Mason Partners Variable Growth and Income Portfolio merged into Legg Mason Partners Variable Equity Trust-Legg Mason Partners Variable Appreciation Portfolio and is no longer available as a funding option. Effective on or about 04/30/2007, Legg Mason Partners Investment Series-Legg Mason Partners Variable Premier Selections All Cap Growth Portfolio merged into Legg Mason Partners Variable Equity Trust-Legg Mason Partners Variable Aggressive Growth Portfolio and is no longer available as a funding option. Effective on or about 04/30/2007, Legg Mason Partners Variable Portfolios V-Legg Mason Partners Variable Small Cap Growth Opportunities Portfolio merged into Legg Mason Partners Variable Equity Trust-Legg Mason Partners Variable Small Cap Growth Portfolio and is no longer available as a funding option. Effective on or about 04/30/2007, Legg Mason Partners Variable Portfolios III, Inc.-Legg Mason Partners Variable Large Cap Value Portfolio merged into Legg Mason Partners Variable Equity Trust-Legg Mason Partners Variable Investors Portfolio and is no longer available as a funding option. Effective on or about 04/30/2007, Met Investors Series Trust-BlackRock Large-Cap Core Portfolio - Class A was exchanged for Met Investors Series Trust-BlackRock Large-Cap Core Portfolio - Class E and is no longer available as a funding option. Effective on or about 04/30/2007, Putnam Variable Trust-Putnam VT International Equity Fund was replaced by Met Investors Series Trust-MFS(R) Research International Portfolio and is no longer available as a funding option. Effective on or about 04/30/2007, Putnam Variable Trust-Putnam VT Small Cap Value Fund was replaced by Met Investors Series Trust-Third Avenue Small Cap Value Portfolio and is no longer available as a funding option. Effective on or about 11/12/2007, Legg Mason Partners Variable Equity Trust-Legg Mason Partners Variable Multiple Discipline Portfolio - Large Cap Growth and Value merged into Legg Mason Partners Variable Equity Trust-Legg Mason Partners Variable Appreciation Portfolio and is no longer available as a funding option. Effective on or about 4/28/2008, AllianceBernstein Variable Product Series Fund, Inc.-Large Cap Growth Portfolio was replaced by Metropolitan Series Fund, Inc.-T. Rowe Price Large Cap Growth Portfolio and is no longer available as a funding option. Effective on or about 4/28/2008, Legg Mason Partners Variable Income Trust-Legg Mason Partners Variable Government Portfolio was replaced by Metropolitan Series Fund, Inc.-Western Asset Management U.S. Government Portfolio and is no longer available as a funding option. Effective on or about 4/28/2008, Van Kampen Life Investment Trust-Van Kampen Life Investment Trust Strategic Growth Portfolio was replaced by Metropolitan Series Fund, Inc.-Jennison Growth Portfolio and is no longer available as a funding option. Effective on or about 05/01/2009, Van Kampen Life Investment Trust-Comstock Portfolio was replaced by Met Investors Series Trust-Van Kampen Comstock Portfolio and is no longer available as a funding option. Effective on or about 05/01/2009, Metropolitan Series Fund, Inc.-Capital Guardian U.S. Equity Portfolio merged into Met Investors Series Trust-Pioneer Fund Portfolio and is no longer available as a funding option. Effective on or about 05/01/2009, Met Investors Series Trust-Met/AIM Capital Appreciation Portfolio merged into Metropolitan Series Fund, Inc.-BlackRock Legacy Large Cap Growth Portfolio and is no longer available as a funding option. Effective on or about 05/01/2009, Legg Mason Partners Variable Equity Trust-Legg Mason Partners Variable Appreciation Portfolio - Class II was exchanged for Legg Mason Partners Variable Equity Trust-Legg Mason Partners Variable Appreciation Portfolio - Class I and is no longer available as a funding option. Effective on or about 05/03/2010, Legg Mason Partners Variable Equity Trust-Legg Mason Batterymarch Variable Global Equity Portfolio was replaced by Met Investors Series Trust-Met/Templeton Growth Portfolio - Class B and is no longer available as a funding option. A-10 Effective on or about 05/03/2010, Legg Mason Partners Variable Income Trust-Legg Mason Partners Variable Money Market Portfolio was replaced by Metropolitan Series Fund, Inc.-BlackRock Money Market Portfolio - Class E and is no longer available as a funding option. Effective on or about 04/29/2011, Legg Mason Partners Variable Income Trust-Legg Mason Western Asset Variable Adjustable Rate Income Portfolio liquidated its assets and is no longer available as a funding option. Effective on or about 05/2/2011, Legg Mason Partners Variable Equity Trust-Legg Mason ClearBridge Variable Capital Portfolio was replaced by Metropolitan Series Fund, Inc.-Davis Venture Value Portfolio - Class A and is no longer available as a funding option. Effective on or about 05/2/2011, Legg Mason Partners Variable Equity Trust-Legg Mason Global Currents Variable International All Cap Opportunity Portfolio was replaced by Met Investors Series Trust-MFS(R) Research International Portfolio - Class B and is no longer available as a funding option. Effective on or about 05/2/2011, Pioneer Variable Contracts Trust-Pioneer Fund VCT Portfolio was replaced by Met Investors Series Trust-Pioneer Fund Portfolio and is no longer available as a funding option. Effective on or about 05/2/2011, Franklin Templeton Variable Insurance Products Trust-Templeton Growth Securities Fund was replaced by Met Investors Series Trust-Met/Templeton Growth Portfolio and is no longer available as a funding option. Effective on or about 05/2/2011, Legg Mason Partners Variable Equity Trust-Legg Mason ClearBridge Variable Dividend Strategy Portfolio merged into Legg Mason Partners Variable Equity Trust-Legg Mason ClearBridge Variable Equity Income Builder Portfolio - Class I and is no longer available as a funding option. Effective on or about 04/30/2012, Met Investors Series Trust-Oppenheimer Capital Appreciation Portfolio merged into Metropolitan Series Fund-Jennison Growth Portfolio and is no longer available as a funding option. Effective on or about 04/29/2013, Met Investors Series Trust-Met/Templeton Growth Portfolio merged into Met Investors Series Trust-Oppenheimer Global Equity Portfolio and is no longer available as a funding option. Effective on or about 4/28/2014, The Universal Institutional Funds, Inc.-U.S. Real Estate Portfolio - Class I was replaced by Met Investors Series Trust-Clarion Global Real Estate Portfolio - Class B and is no longer available as a funding option. Effective on or about 4/28/2014, AIM Variable Insurance Funds (Invesco Variable Insurance Funds)-Invesco V.I. Growth and Income Fund - Series II was replaced by Met Investors Series Trust-Invesco Comstock Portfolio - Class B and is no longer available as a funding option. Effective on or about 4/28/2014, Legg Mason Partners Variable Equity Trust-ClearBridge Variable All Cap Value Portfolio - Class I was replaced by Met Investors Series Trust-T. Rowe Price Large Cap Value Portfolio - Class E and is no longer available as a funding option. Effective on or about 4/28/2014, Met Investors Series Trust-T. Rowe Price Large Cap Value Portfolio - Class B was exchanged for Met Investors Series Trust-T. Rowe Price Large Cap Value Portfolio - Class E and is no longer available as a funding option. Effective on or about 11/07/2014, Legg Mason Partners Variable Equity Trust-Legg Mason Investment Counsel Variable Social Awareness Portfolio was reorganized into the Trust for Advised Portfolios-1919 Variable Socially Responsive Balanced Fund. Effective on or about 4/29/2016, Met Investors Series Trust-Lord Abbett Bond Debenture Portfolio merged into Metropolitan Series Fund-Western Asset Management Strategic Bond Opportunities Portfolio and is no longer available as a funding option. Effective on or about 4/29/2016, Met Investors Series Trust-Pioneer Strategic Income Portfolio merged into Metropolitan Series Fund-Western Asset Management Strategic Bond Opportunities Portfolio and is no longer available as a funding option. Effective on or about 4/29/2016, Met Investors Series Trust-Pioneer Fund Portfolio merged into Metropolitan Series Fund-Met/Wellington Core Equity Opportunities Portfolio and is no longer available as a funding option. A-11 THIS PAGE INTENTIONALLY LEFT BLANK. APPENDIX B -------------------------------------------------------------------------------- ADDITIONAL INFORMATION REGARDING UNDERLYING FUNDS Certain Underlying Funds and Trusts were subject to name changes. The chart below identifies the former name and new name of each of these Underlying Funds, and the former name and the new name of the trust of which the Underlying Fund is a part. UNDERLYING FUND NAME CHANGES The following former Underlying Funds and Trusts were renamed.
FORMER NAME NEW NAME ----------------------------------------------------- ---------------------------------------------------- MET INVESTORS SERIES TRUST BRIGHTHOUSE FUNDS TRUST I Met/Wellington Large Cap Research Portfolio Brighthouse/Wellington Large Cap Research Portfolio MetLife Small Cap Value Portfolio Brighthouse Small Cap Value Portfolio METROPOLITAN SERIES FUND BRIGHTHOUSE FUNDS TRUST II Met/Wellington Core Equity Opportunities Portfolio Brighthouse/Wellington Core Equity Opportunities Portfolio
B-1 APPENDIX C -------------------------------------------------------------------------------- CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION The Statement of Additional Information contains more specific information and financial statements relating to the Separate Account and Brighthouse Life Insurance Company. A list of the contents of the Statement of Additional Information is set forth below: THE INSURANCE COMPANY PRINCIPAL UNDERWRITER PRINCIPAL UNDERWRITING AND DISTRIBUTION AGREEMENT VALUATION OF ASSETS Funding Options The Contract Value Accumulation Unit Value Annuity Unit Value Calculation Of Money Market Yield FEDERAL TAX CONSIDERATIONS Mandatory Distributions for Qualified Plans Nonqualified Annuity Contracts Individual Retirement Annuities Simple Plan IRA Form Roth IRAs Qualified Pension and Profit Sharing Plans Section-403(b) Plans Federal Income Tax Withholding INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM CUSTODIAN CONDENSED FINANCIAL INFORMATION FINANCIAL STATEMENTS -------------------------------------------------------------------------------- A copy of the Brighthouse Life Insurance Company Statement of Additional Information dated May 1, 2017 is available without charge. To request a copy, please clip this coupon on the line above, enter your name and address in the spaces provided below, and mail to Brighthouse Life Insurance Company, P.O. Box 10366, Des Moines, IA 50306-0366. Name: Address: BLIC-Book-18 C-1 C-2 PRIMELITE STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 2017 FOR BRIGHTHOUSE SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES ISSUED BY BRIGHTHOUSE LIFE INSURANCE COMPANY This Statement of Additional Information ("SAI") contains information in addition to the information described in the Prospectus for the variable annuity contracts (the "Contracts") offered by Brighthouse Life Insurance Company (the "Company", "we" or "our"). This SAI is not a prospectus but relates to, and should be read in conjunction with the Prospectus dated May 1, 2010 (as supplemented). A copy of the Individual Variable Annuity Contract Prospectus may be obtained by writing to Brighthouse Life Insurance Company, Annuity Investor Services, P.O. Box 103666, Des Moines, IA 50306-0366 or by accessing the Securities and Exchange Commission's website at http://www.sec.gov. ------------------ BLIC-Book-18 TABLE OF CONTENTS
PAGE ----- THE INSURANCE COMPANY.................................... 2 PRINCIPAL UNDERWRITER.................................... 3 PRINCIPAL UNDERWRITING AND DISTRIBUTION AGREEMENT........ 3 VALUATION OF ASSETS...................................... 3 Funding Options....................................... 3 The Contract Value.................................... 4 Accumulation Unit Value............................... 4 Annuity Unit Value.................................... 4 Calculation Of Money Market Yield..................... 4 FEDERAL TAX CONSIDERATIONS............................... 5 Mandatory Distributions for Qualified Plans........... 5 Nonqualified Annuity Contracts........................ 5 Individual Retirement Annuities....................... 6 Simple Plan IRA Form.................................. 6 Roth IRAs............................................. 6 Qualified Pension and Profit-Sharing Plans............ 6 Section-403(b) Plans.................................. 7 Federal Income Tax Withholding........................ 7 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM............ 8 CUSTODIAN................................................ 8 FINANCIAL STATEMENTS..................................... 9
THE INSURANCE COMPANY Brighthouse Life Insurance Company (BLIC or the Company), prior to March 6, 2017 known as MetLife Insurance Company USA, is a stock life insurance company originally chartered in Connecticut in 1863 and currently subject to the laws of the State of Delaware. BLIC is licensed to conduct business in all states of the United States, except New York, and in the District of Columbia, Puerto Rico, Guam, the U.S. and British Virgin Islands and the Bahamas. BLIC currently is a direct, wholly-owned subsidiary of MetLife, Inc., (MetLife) a publicly-traded company (see "Planned Separation from MetLife, Inc." below). MetLife, through its subsidiaries and affiliates, is a leading provider of insurance and financial services to individuals and institutional customers. BLIC's principal executive offices are located at 11225 North Community House Road, Charlotte, NC 28277. Brighthouse Life Insurance Company History MetLife Insurance Company USA: From the close of business on November 14, 2014 to March 6, 2017, BLIC was called MetLife Insurance Company USA (MetLife USA). MetLife USA was established following the close of business on November 14, 2014, when MetLife Investors USA Insurance Company, a wholly-owned subsidiary of MetLife Insurance Company of Connecticut, MetLife Investors Insurance Company and Exeter Reassurance Company, Ltd. were merged into MetLife Insurance Company of Connecticut, and MetLife Insurance Company of Connecticut was then renamed MetLife Insurance Company USA. Simultaneously, MetLife Insurance Company USA changed its domicile from Connecticut to the state of Delaware. As a result of this merger, MetLife USA assumed legal ownership of all of the assets of these predecessor companies, including assets held in the separate accounts, and became responsible for administering the contracts and paying any benefits due under all contracts issued by each of its corporate predecessors. These predecessor companies that issued contracts on and prior to November 14, 2014 were the following: - MetLife Insurance Company of Connecticut: MetLife Insurance Company of Connecticut (MICC), originally chartered in Connecticut in 1863, was known as Travelers Insurance Company prior to May 1, 2006. MICC changed its name to MetLife Insurance Company USA and its state of domicile to Delaware after November 14, 2014 as described under "MetLife Insurance Company USA" above. - MetLife Life and Annuity Company of Connecticut: MetLife Life and Annuity Company of Connecticut (MLAC), originally chartered in Connecticut in 1973, was known as Travelers Life and Annuity Company prior to May 1, 2006. On or about December 7, 2007, MLAC merged with and into MICC. - MetLife Investors USA Insurance Company: MetLife Investors USA Insurance Company (MLI USA), originally chartered in Delaware in 1960, was known as Security First Life Insurance Company prior to January 8, 2001. MLI USA was merged into BLIC after the close of business on November 14, 2014, as described under "MetLIfe Insurance Company USA" above. - MetLife Investors Insurance Company: MetLife Investors Insurance Company (MLI), originally chartered in Missouri in 1981, was known as Cova Financial Services Life Insurance Company prior to February 12, 2001. MLI was merged into BLIC after the close of business on November 14, 2014, as described under "MetLIfe Insurance Company USA" above. - MetLife Investors Insurance Company of California: MetLife Investors Insurance Company of California (MLI-CA), originally chartered in California in 1972, was known as Cova Financial Life Insurance Company prior to February 12, 2001. On November 9, 2006 MLI-CA merged with and into MLI. PLANNED SEPARATION FROM METLIFE, INC. In January 2016, MetLife announced its plan to pursue the separation of a substantial portion of its U.S. retail business. In preparation for the planned separation, in August 2016 MetLife formed a new, wholly-owned Delaware holding company, Brighthouse Financial, Inc. (Brighthouse Financial), which filed a registration statement on Form 10 (the Form 10) with the U.S. Securities and Exchange Commission (the SEC) in October 2016, as amended in December 2016, reflecting MetLife's current initiative to conduct the separation in the form of a spin-off. To effect the separation, first, MetLife expects to undertake the restructuring described in more detail in the Form 10. The restructuring would result in future Brighthouse Financial subsidiaries, including BLIC, being wholly-owned subsidiaries of Brighthouse Financial. Following the restructuring, MetLife, Inc. would distribute at least 80.1% of Brighthouse Financial's common stock to MetLife's shareholders (the Distribution), and Brighthouse Financial would become a separate, publicly traded company. The separation remains subject to certain conditions including, among others, obtaining final approval from the MetLife board of directors, receipt of a favorable IRS ruling and an opinion 2 from MetLife's tax advisor regarding certain U.S. federal income tax matters, receipt of the approval of state insurance and other regulatory authorities and an SEC declaration of the effectiveness of the Form 10. Following the Distribution, if it occurs, BLIC will be a wholly-owned subsidiary of, and ultimately controlled by, Brighthouse Financial. MetLife currently plans to dispose of its remaining shares of Brighthouse Financial common stock as soon as practicable following the Distribution, but in no event later than five years after the Distribution. For more information about Brighthouse Financial and the Distribution, please see the most recent amendment to Brighthouse Financial's Form 10 (SEC File No. 001-37905), available via the SEC's EDGAR system on its website at https://www.sec.gov/edgar/searchedgar/companysearch.html. No assurances can be given regarding the final form the Distribution (or any alternative separation transaction) may take or the specific terms thereof, or that the Distribution (or any other form of separation) will in fact occur. However, any separation transaction will not affect the terms or conditions of your variable contract. BLIC will remain fully responsible for its contractual obligations to variable contract owners, and you should carefully consider the potential impact of any separation transaction that may occur on BLIC's financial strength and claims-paying ability. PRINCIPAL UNDERWRITER Brighthouse Securities, LLC (Brighthouse Securities) serves as principal underwriter for the Separate Account and the Contracts. The offering is continuous. Brighthouse Securities' principal executive offices are located at 11225 North Community House Road, Charlotte, NC 28277. Brighthouse Securities is affiliated with the Company and the Separate Account. PRINCIPAL UNDERWRITING AND DISTRIBUTION AGREEMENT Information about the distribution of the Contracts is contained in the prospectus (see "Other Information -- Distribution of the Variable Annuity Contracts"). Additional information is provided below. Under the terms of the Principal Underwriting and Distribution Agreement among the Separate Account, Brighthouse Securities and the Company, Brighthouse Securities acts as agent for the distribution of the Contracts and as principal underwriter for the Contracts. The Company reimburses Brighthouse Securities for certain sales and overhead expenses connected with sales functions. MetLife Investors Distribution Company (MLIDC) served as principal underwriter and distributor prior to March 6, 2017. The following table shows the amount of commissions paid to and the amount of commissions retained by MLIDC over the past three years: UNDERWRITING COMMISSIONS ------------------------
UNDERWRITING COMMISSIONS PAID AMOUNT OF UNDERWRITING TO THE DISTRIBUTOR BY THE COMMISSIONS RETAINED BY THE YEAR COMPANY DISTRIBUTOR ------------ ------------------------------- ---------------------------- 2016........$568,161,672 $0 2015........$568,720,128 $0 2014........$ 43,885,979 $0
REDUCTION OR ELIMINATION OF THE WITHDRAWAL CHARGE. We may reduce or eliminate the withdrawal charge under the Contract when certain sales or administration of the Contract result in savings or reduced expenses and/or risks. We will not reduce or eliminate the withdrawal charge where such reduction or elimination would be unfairly discriminatory to any person. VALUATION OF ASSETS FUNDING OPTIONS. The value of the assets of each Funding Option is determined at 4:00 p.m. eastern time on each business day, unless we need to close earlier due to an emergency. A business day is any day the New York Stock Exchange is open. It is expected that the Exchange will be closed on Saturdays and Sundays and on the observed holidays of New Year's Day, Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Each security traded on a national securities exchange is valued 3 at the last reported sale price on the business day. If there has been no sale on that day, then the value of the security is taken to be the mean between the reported bid and asked prices on the business day or on the basis of quotations received from a reputable broker or any other recognized source. THE CONTRACT VALUE. The value of an Accumulation Unit on any business day is determined by multiplying the value on the preceding business day by the net investment factor for the valuation period just ended. The net investment factor is used to measure the investment performance of a Funding Option from one valuation period to the next. The net investment factor for a Funding Option for any valuation period is equal to the sum of 1.000000 plus the net investment rate (the gross investment rate less any applicable Funding Option deductions during the valuation period relating to the mortality and expense risk charge and the administrative expense charge). The gross investment rate of a Funding Option is equal to (a) minus (b), divided by (c) where: (a) = investment income plus capital gains and losses (whether realized or unrealized); (b) = any deduction for applicable taxes (presently zero); and (c) = the value of the assets of the funding option at the beginning of the valuation period. The gross investment rate may be either positive or negative. A Funding Option's investment income includes any distribution whose ex-dividend date occurs during the valuation period. ACCUMULATION UNIT VALUE. The value of the Accumulation Unit for each Funding Option was initially established at $1.00. The value of an Accumulation Unit on any business day is determined by multiplying the value on the preceding business day by the net investment factor for the valuation period just ended. The net investment factor is calculated for each Funding Option and takes into account the investment performance, expenses and the deduction of certain expenses. ANNUITY UNIT VALUE. The initial Annuity Unit value applicable to each Funding Option was established at $1.00. An Annuity Unit value as of any business day is equal to (a) the value of the Annuity Unit on the preceding business day, multiplied by (b) the corresponding net investment factor for the business day just ended, divided by (c) the assumed net investment factor for the valuation period. (For example, the assumed net investment factor based on an annual assumed net investment rate of 3.0% for a valuation period of one day is 1.000081 and, for a period of two days, is 1.000081 - 1.000081.) CALCULATION OF MONEY MARKET YIELD From time to time, we may quote in advertisements and sales literature the adjusted and unadjusted effective yield for a money market Subaccount for a 7-day period, as described below. On a Contract-specific basis, the effective yield is computed at each month-end according to the following formula: Effective Yield = ((Base Return + 1) to the power of (365 / 7)) -1 Where: Base Return = (AUV Change - Contract Charge Adjustment) / Prior AUV. AUV Change = Current AUV - Prior AUV. Contract Charge Adjustment = Average AUV * Period Charge. Average AUV = (Current AUV + Prior AUV) / 2. Period Charge = Annual Contract Fee * (7/365). Prior AUV = Unit value as of 7 days prior. Current AUV = Unit value as of the reporting period (last day of the month). We may also quote the effective yield of a money market Subaccount for the same 7-day period, determined on an unadjusted basis (which does not deduct Contract-level charges), according to the same formula but where: --- Base Return = AUV Change / Prior AUV Because of the charges and deductions imposed under the Contract, the yield for the Subaccount will be lower than the yield for the corresponding Underlying Fund. The yields on amounts held in the Subaccount normally will fluctuate on a daily basis. Therefore, the disclosed yield for any given past period is not an indication or representation of future yields or rates of return. The actual yield for the Subaccount is affected by changes in interest rates on money 4 market securities, average portfolio maturity of the Underlying Fund, the types and qualities of portfolio securities held by the Underlying Fund, and the Underlying Fund's operating expenses. Yields on amounts held in the Subaccount may also be presented for periods other than a 7-day period. FEDERAL TAX CONSIDERATIONS The following description of the federal income tax consequences under this Contract is general in nature and is therefore not exhaustive and is not intended to cover all situations. Because of the complexity of the law and the fact that the tax results will vary according to the factual status of the individual involved, a person contemplating purchase of an annuity contract and by a Contract Owner or beneficiary who may make elections under a Contract should consult with a qualified tax or legal adviser. MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS Federal tax law requires that minimum annual distributions begin by April 1st of the calendar year following the later of calendar year in which a participant under a qualified plan or a Section 403(b) annuity attains age 701/2 or retires. Minimum annual distributions under an IRA must begin by April 1st of the calendar year in which the Contract Owner attains 701/2 regardless of when he or she retires. Distributions must also begin or be continued according to the minimum distribution rules under the Code following the death of the Contract Owner or the annuitant. It is important that you consult your tax adviser as to the impact of these regulations on your personal situation. NONQUALIFIED ANNUITY CONTRACTS Individuals may purchase tax-deferred annuities without any contribution limits. The purchase payments receive no tax benefit, deduction or deferral, but taxes on the increases in the value of the contract are generally deferred until distribution and transfers between the various investment options are not subject to tax. Generally, if an annuity contract is owned by other than an individual (or an entity such as a trust or other "look-through" entity which owns for an individual's benefit), the owner will be taxed each year on the increase in the value of the contract. An exception applies for purchase payments made before March 1, 1986. The benefits of tax deferral of income earned under a non-qualified annuity should be compared with the relative federal tax rates on income from other types of investments (dividends and capital gains, taxable at 15% or less) relative to the ordinary income treatment received on annuity income and interest received on fixed instruments (notes, bonds, etc.). If two or more annuity contracts are purchased from the same insurer within the same calendar year, such annuity contract will be aggregated for federal income tax purposes. As a result, distributions from any of them will be taxed based upon the amount of income in all of the same calendar year series of annuities. This will generally have the effect of causing taxes to be paid sooner on the deferred gain in the contracts. Those receiving partial distributions made before the maturity date will generally be taxed on an income-first basis to the extent of income in the contract. If you are exchanging another annuity contract for this annuity, certain pre-August-14, 1982 deposits into an annuity contract that have been placed in the contract by means of a tax-deferred exchange under Section-1035 of the Code may be withdrawn first without income tax liability. This information on deposits must be provided to the Company by the other insurance company at the time of the exchange. There is income in the contract generally to the extent the cash value exceeds the investment in the contract. The investment in the contract is equal to the amount of premiums paid less any amount received previously which was excludable from gross income. Any direct or indirect borrowing against the value of the contract or pledging of the contract as security for a loan will be treated as a cash distribution under the tax law. In order to be treated as an annuity contract for federal income tax purposes, Section-72(s) of the Code requires any non-qualified contract to contain certain provisions specifying how your interest in the contract will be distributed in the event of the death of an owner of the contract. Specifically, Section-72(s) requires that (a) if an owner dies on or after the annuity starting date, but prior to the time the entire interest in the contract has been distributed, the entire interest in the contract will be distributed at least as rapidly as under the method of distribution being used as of the date of such owner's death; and (b) if any owner dies prior to the annuity starting date, the entire interest in the contract will be distributed within five years after the date of such owner's death. These requirements will be considered satisfied as to any portion of an owner's interest which is payable to or for the benefit of a designated beneficiary and which is distributed over the life of such designated beneficiary or over a period not extending beyond the life expectancy of that beneficiary, provided that such distributions begin within one year of the owner's death. The designated beneficiary refers to a natural person designated by the owner as a beneficiary and to whom ownership of 5 the contract passes by reason of death. However, if the designated beneficiary is the surviving spouse of the deceased owner, the contract may be continued with the surviving spouse as the successor-owner. Under current federal tax rules, a same-sex spouse is treated as a non-spouse beneficiary. Contracts will be administered by the Company in accordance with these rules and the Company will make a notification when payments should be commenced. Special rules apply regarding distribution requirements when an annuity is owned by a trust or other entity for the benefit of one or more individuals. INDIVIDUAL RETIREMENT ANNUITIES To the extent of earned income for the year and not exceeding the applicable limit for the taxable year, an individual may make contributions, which in some cases may be deductible, to an individual retirement annuity (IRA). The applicable limit is $5,500 for 2017, plus $1,000 for an owner age 50 or over, and may be indexed for inflation in later years. Additional "catch-up" contributions may be made to an IRA by individuals age 50 or over. There are certain limits on the deductible amount based on the adjusted gross income of the individual and spouse and based on their participation in a retirement plan. If an individual is married and the spouse does not have earned income, the individual may establish IRAs for the individual and spouse. Purchase payments may then be made annually into IRAs for both spouses in the maximum amount of 100% of earned income up to a combined limit based on the individual limits outlined above. The Code provides for the purchase of a Simplified Employee Pension (SEP) plan. A SEP is funded through an IRA with an annual employer contribution limit of up to $54,000 for 2017 for each participant. The Internal Revenue Services has not reviewed the contract for qualifications as an IRA, and has not addressed in a ruling of general applicability whether a death benefit provision such as the optional enhanced death benefit in the contract comports with IRA qualification requirements. SIMPLE PLAN IRA FORM Employers may establish a savings incentive match plan for employees ("SIMPLE plan") under which employees can make elective salary reduction contributions to an IRA based on a percentage of compensation of up to the applicable limit for the taxable year. The applicable limit is $12,500 in 2017 (which may be indexed for inflation for future years). (Alternatively, the employer can establish a SIMPLE cash or deferred arrangement under IRS Section 401(k)). Under a SIMPLE plan IRA, the employer must either make a matching contribution or a non-elective contribution based on the prescribed formulas for all eligible employees. Early withdrawals are subject to the 10% early withdrawal penalty generally applicable to IRAs, except that an early withdrawal by an employee under a SIMPLE plan IRA, within the first two years of participation, shall be subject to a 25% early withdrawal tax. ROTH IRAS Section-408A of the Code permits certain individuals to contribute to a Roth IRA. Eligibility to make contributions is based upon income, and the applicable limits vary based on marital status and/or whether the contribution is a rollover contribution from another IRA or an annual contribution. Contributions to a Roth IRA, which are subject to certain limitations (similar to the annual limits for the traditional IRA's), are not deductible and must be made in cash or as a rollover or transfer from another Roth IRA or other IRA. A conversion of a "traditional" IRA to a Roth IRA may be subject to tax and other special rules apply. You should consult a tax adviser before combining any converted amounts with other Roth IRA contributions, including any other conversion amounts from other tax years. Qualified distributions from a Roth IRA are tax-free. A qualified distribution requires that the Roth IRA has been held for at least 5-years, and the distribution is made after age 591/2, on death or disability of the owner, or for a limited amount ($10,000) for a qualified first time home purchase for the owner or certain relatives. Income tax and a 10% penalty tax may apply to distributions made (1)-before age-591/2 (subject to certain exceptions) or (2)-during five taxable years starting with the year in which the first contribution is made to any Roth IRA of the individual. QUALIFIED PENSION AND PROFIT-SHARING PLANS Like most other contributions made under a qualified pension or profit-sharing plan, purchase payments made by an employer are not currently taxable to the participant and increases in the value of a contract are not subject to taxation until received by a participant or beneficiary. Distributions are generally taxable to the participant or beneficiary as ordinary income in the year of receipt. Any distribution that is considered the participant's "investment in the contract" is treated as a return of capital and is not taxable. Under a qualified plan, the investment in the contract may be zero. 6 The annual limit that applies to the amounts that may be contributed to a defined contribution plan for 2017 is $54,000. The limit on employee salary reduction deferrals (commonly referred to as "401(k) contributions") is $18,000 in 2017. The annual limit may be indexed for inflation in future years. Additional "catch-up contributions" may be made by individuals age 50 or over. Amounts attributable to salary reduction contributions under Code Section 401(k) and income thereon may not be withdrawn prior to severance from employment, death, total and permanent disability, attainment of age 591/2, or in the case of hardship. SECTION-403(B) PLANS Under Code section-403(b), payments made by public school systems and certain tax exempt organizations to purchase annuity contracts for their employees are excludable from the gross income of the employee, subject to certain limitations. However, these payments may be subject to FICA (Social Security) taxes. A qualified contract issued as a tax-sheltered annuity under section-403(b) will be amended as necessary to conform to the requirements of the Code. The annual limits under Code Section-403(b) for employee salary reduction deferrals are increased under the same rules applicable to 401(k) plans ($18,000 in 2017). Code section-403(b)(11) restricts this distribution under Code section-403(b) annuity contracts of: (1) elective contributions made in years beginning after December-31, 1998; (2) earnings on those contributions; and (3) earnings in such years on amounts held as of the close of the last year beginning before January-1, 1989. Distribution of those amounts may only occur upon death of the employee, attainment of age-591/2, separation from service, disability, or financial hardship. In addition, income attributable to elective contributions may not be distributed in the case of hardship. FEDERAL INCOME TAX WITHHOLDING The portion of a distribution, which is taxable income to the recipient, will be subject to federal income tax withholding as follows: 1. ELIGIBLE ROLLOVER DISTRIBUTION FROM SECTION 403(B) PLANS OR ARRANGEMENTS, FROM QUALIFIED PENSION AND PROFIT-SHARING PLANS, OR FROM 457 PLANS SPONSORED BY GOVERNMENTAL ENTITIES There is a mandatory 20% tax withholding for plan distributions that are eligible for rollover to an IRA or to another qualified retirement plan (including a 457 plan sponsored by a governmental entity) but that are not directly rolled over. A distribution made directly to a participant or beneficiary may avoid this result if: (a) a periodic settlement distribution is elected based upon a life or life expectancy calculation, or (b) a term-for-years settlement distribution is elected for a period of ten years or more, payable at least annually, or (c) a minimum required distribution as defined under the tax law is taken after the attainment of the age of 701/2 or as otherwise required by law, or (d) the distribution is a hardship distribution. A distribution including a rollover that is not a direct rollover will be subject to the 20% withholding, and the 10% additional tax penalty on premature withdrawals may apply to any amount not added back in the rollover. The 20% withholding may be recovered when the participant or beneficiary files a personal income tax return for the year if a rollover was completed within 60-days of receipt of the funds, except to the extent that the participant or spousal beneficiary is otherwise underwithheld or short on estimated taxes for that year. 2. OTHER NON-PERIODIC DISTRIBUTIONS (FULL OR PARTIAL REDEMPTIONS) To the extent not subject to 20% mandatory withholding as described in 1. above, the portion of a non-periodic distribution, which constitutes taxable income, will be subject to federal income tax withholding, if the aggregate distributions exceed $200 for the year, unless the recipient elects not to have taxes withheld. If no such election is made, 10% of the taxable portion of the distribution will be withheld as federal income tax; provided that the recipient may elect any other percentage. Election forms will be provided at the time distributions are requested. This form of withholding applies to all annuity programs. 3. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD GREATER THAN ONE YEAR) 7 The portion of a periodic distribution, which constitutes taxable income, will be subject to federal income tax withholding under the wage withholding tables as if the recipient were married claiming three exemptions. A recipient may elect not to have income taxes withheld or have income taxes withheld at a different rate by providing a completed election form. Election forms will be provided at the time distributions are requested. This form of withholding applies to all annuity programs. Recipients who elect not to have withholding made are liable for payment of federal income tax on the taxable portion of the distribution. Recipients may also be subject to penalties under the estimated tax payment rules if withholding and estimated tax payments are not sufficient to cover tax liabilities. Recipients who do not provide a social security number or other taxpayer identification number will not be permitted to elect out of withholding. Additionally, U.S. citizens residing outside of the country, or U.S. legal residents temporarily residing outside the country, are subject to different withholding rules and generally cannot elect out of withholding. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The financial statements and financial highlights comprising each of the Subaccounts of Brighthouse Separate Account Eleven for Variable Annuities (formerly MetLife of CT Separate Account Eleven for Variable Annuities) included in this Statement of Additional Information, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein. Such financial statements and financial highlights are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The consolidated financial statements and related financial statement schedules of Brighthouse Life Insurance Company (formerly MetLife Insurance Company USA) and subsidiaries included in this Statement of Additional Information, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein. Such financial statements and financial statement schedules are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The principal business address of Deloitte & Touche LLP is 30 Rockefeller Plaza, New York, New York 10112-0015. CUSTODIAN Brighthouse Life Insurance Company, 11225 North Community House Road, Charlotte, NC 28277, is the custodian of the assets of the Separate Account. The custodian has custody of all cash of the Separate Account and handles the collection of proceeds of shares of the underlying funds bought and sold by the Separate Account. 8 FINANCIAL STATEMENTS The financial statements and financial highlights comprising each of the Subaccounts of the Separate Account and the consolidated financial statements of the Company are included herein. The financial statements of the Company should be considered only as bearing upon the ability of the Company to meet its obligations under the contract. 9 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Contract Owners of MetLife of CT Separate Account Eleven for Variable Annuities and Board of Directors of MetLife Insurance Company USA We have audited the accompanying statements of assets and liabilities of MetLife of CT Separate Account Eleven for Variable Annuities (the "Separate Account") of MetLife Insurance Company USA (the "Company") comprising each of the individual Subaccounts listed in Note 2.A as of December 31, 2016, the related statements of operations for the year then ended, the statements of changes in net assets for the respective stated periods in the two years then ended, and the financial highlights in Note 8 for the respective stated periods in the five years then ended. These financial statements and financial highlights are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Separate Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Separate Account's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of investments owned as of December 31, 2016, by correspondence with the custodian or mutual fund companies. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Subaccounts constituting the Separate Account of the Company as of December 31, 2016, the results of their operations for the year then ended, the changes in their net assets for the respective stated periods in the two years then ended, and the financial highlights for the respective stated periods in the five years then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ DELOITTE & TOUCHE LLP Certified Public Accountants Tampa, Florida March 24, 2017 This page is intentionally left blank. METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 2016
AB GLOBAL THEMATIC ALGER CAPITAL AMERICAN FUNDS AMERICAN FUNDS GROWTH APPRECIATION BOND GLOBAL GROWTH SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------- -------------------- -------------------- ------------------- ASSETS: Investments at fair value.............. $ 395,223 $ 2,393,355 $ 4,872,465 $ 94,479,493 Due from MetLife Insurance Company USA.......................... -- -- -- -- ------------------- -------------------- -------------------- ------------------- Total Assets...................... 395,223 2,393,355 4,872,465 94,479,493 ------------------- -------------------- -------------------- ------------------- LIABILITIES: Due to MetLife Insurance Company USA.......................... -- 1 1 7 ------------------- -------------------- -------------------- ------------------- Total Liabilities................. -- 1 1 7 ------------------- -------------------- -------------------- ------------------- NET ASSETS................................ $ 395,223 $ 2,393,354 $ 4,872,464 $ 94,479,486 =================== ==================== ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units..... $ 395,223 $ 2,393,354 $ 4,872,464 $ 94,283,664 Net assets from contracts in payout.... -- -- -- 195,822 ------------------- -------------------- -------------------- ------------------- Total Net Assets.................. $ 395,223 $ 2,393,354 $ 4,872,464 $ 94,479,486 =================== ==================== ==================== ===================
The accompanying notes are an integral part of these financial statements. 1 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
AMERICAN FUNDS GLOBAL SMALL AMERICAN FUNDS AMERICAN FUNDS DELAWARE VIP SMALL CAPITALIZATION GROWTH GROWTH-INCOME CAP VALUE SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value............ $ 1,744,805 $ 227,525,841 $ 193,185,216 $ 11,287,261 Due from MetLife Insurance Company USA........................ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.................... 1,744,805 227,525,841 193,185,216 11,287,261 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 1 10 13 -- -------------------- -------------------- -------------------- -------------------- Total Liabilities............... 1 10 13 -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.............................. $ 1,744,804 $ 227,525,831 $ 193,185,203 $ 11,287,261 ==================== ==================== ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 1,740,612 $ 227,158,129 $ 192,632,502 $ 11,287,261 Net assets from contracts in payout.. 4,192 367,702 552,701 -- -------------------- -------------------- -------------------- -------------------- Total Net Assets................ $ 1,744,804 $ 227,525,831 $ 193,185,203 $ 11,287,261 ==================== ==================== ==================== ==================== DEUTSCHE II GOVERNMENT & DEUTSCHE II DREYFUS SOCIALLY FIDELITY VIP AGENCY SECURITIES SMALL MID CAP VALUE RESPONSIBLE GROWTH CONTRAFUND SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- --------------------- ASSETS: Investments at fair value............ $ 2,265,392 $ 4,233,446 $ 503,432 $ 200,953,173 Due from MetLife Insurance Company USA........................ -- -- -- -- -------------------- -------------------- -------------------- --------------------- Total Assets.................... 2,265,392 4,233,446 503,432 200,953,173 -------------------- -------------------- -------------------- --------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 2 6 1 12 -------------------- -------------------- -------------------- --------------------- Total Liabilities............... 2 6 1 12 -------------------- -------------------- -------------------- --------------------- NET ASSETS.............................. $ 2,265,390 $ 4,233,440 $ 503,431 $ 200,953,161 ==================== ==================== ==================== ===================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 2,265,390 $ 4,233,440 $ 503,431 $ 200,641,163 Net assets from contracts in payout.. -- -- -- 311,998 -------------------- -------------------- -------------------- --------------------- Total Net Assets................ $ 2,265,390 $ 4,233,440 $ 503,431 $ 200,953,161 ==================== ==================== ==================== ===================== FIDELITY VIP DYNAMIC CAPITAL FIDELITY VIP APPRECIATION EQUITY-INCOME SUBACCOUNT SUBACCOUNT -------------------- -------------------- ASSETS: Investments at fair value............ $ 1,801,249 $ 233,851,524 Due from MetLife Insurance Company USA........................ -- 4 -------------------- -------------------- Total Assets.................... 1,801,249 233,851,528 -------------------- -------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 2 -- -------------------- -------------------- Total Liabilities............... 2 -- -------------------- -------------------- NET ASSETS.............................. $ 1,801,247 $ 233,851,528 ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 1,801,247 $ 233,453,191 Net assets from contracts in payout.. -- 398,337 -------------------- -------------------- Total Net Assets................ $ 1,801,247 $ 233,851,528 ==================== ====================
The accompanying notes are an integral part of these financial statements. 2 The accompanying notes are an integral part of these financial statements. 3 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
FIDELITY VIP FIDELITY VIP FIDELITY VIP FIDELITY VIP FREEDOM 2020 FREEDOM 2025 FREEDOM 2030 FREEDOM 2040 SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value............ $ 425,860 $ 335,285 $ 561,345 $ 62,157 Due from MetLife Insurance Company USA........................ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.................... 425,860 335,285 561,345 62,157 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 5 4 5 5 -------------------- -------------------- -------------------- -------------------- Total Liabilities............... 5 4 5 5 -------------------- -------------------- -------------------- -------------------- NET ASSETS.............................. $ 425,855 $ 335,281 $ 561,340 $ 62,152 ==================== ==================== ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 425,855 $ 335,281 $ 561,340 $ 62,152 Net assets from contracts in payout.. -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Net Assets................ $ 425,855 $ 335,281 $ 561,340 $ 62,152 ==================== ==================== ==================== ==================== FIDELITY VIP FIDELITY VIP FIDELITY VIP HIGH FREEDOM 2050 FUNDSMANAGER 60% INCOME FIDELITY VIP MID CAP SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------- ------------------- -------------------- -------------------- ASSETS: Investments at fair value............ $ 47,806 $ 593,192,632 $ 19,469,817 $ 245,490,770 Due from MetLife Insurance Company USA........................ -- -- -- -- ------------------- ------------------- -------------------- -------------------- Total Assets.................... 47,806 593,192,632 19,469,817 245,490,770 ------------------- ------------------- -------------------- -------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 3 11 2 12 ------------------- ------------------- -------------------- -------------------- Total Liabilities............... 3 11 2 12 ------------------- ------------------- -------------------- -------------------- NET ASSETS.............................. $ 47,803 $ 593,192,621 $ 19,469,815 $ 245,490,758 =================== =================== ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 47,803 $ 593,192,621 $ 19,442,114 $ 244,873,788 Net assets from contracts in payout.. -- -- 27,701 616,970 ------------------- ------------------- -------------------- -------------------- Total Net Assets................ $ 47,803 $ 593,192,621 $ 19,469,815 $ 245,490,758 =================== =================== ==================== ==================== FTVIPT FRANKLIN FTVIPT FRANKLIN INCOME VIP MUTUAL SHARES VIP SUBACCOUNT SUBACCOUNT -------------------- -------------------- ASSETS: Investments at fair value............ $ 19,714,291 $ 14,806,916 Due from MetLife Insurance Company USA........................ -- -- -------------------- -------------------- Total Assets.................... 19,714,291 14,806,916 -------------------- -------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 6 -- -------------------- -------------------- Total Liabilities............... 6 -- -------------------- -------------------- NET ASSETS.............................. $ 19,714,285 $ 14,806,916 ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 19,695,625 $ 14,792,507 Net assets from contracts in payout.. 18,660 14,409 -------------------- -------------------- Total Net Assets................ $ 19,714,285 $ 14,806,916 ==================== ====================
The accompanying notes are an integral part of these financial statements. 4 The accompanying notes are an integral part of these financial statements. 5 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
FTVIPT FRANKLIN FTVIPT TEMPLETON FTVIPT FRANKLIN SMALL-MID CAP DEVELOPING FTVIPT TEMPLETON RISING DIVIDENDS VIP GROWTH VIP MARKETS VIP FOREIGN VIP SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- --------------------- -------------------- --------------------- ASSETS: Investments at fair value............ $ 14,124,271 $ 23,462,689 $ 14,638,051 $ 55,454,726 Due from MetLife Insurance Company USA........................ -- -- -- -- -------------------- --------------------- -------------------- --------------------- Total Assets.................... 14,124,271 23,462,689 14,638,051 55,454,726 -------------------- --------------------- -------------------- --------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 124 8 -- 11 -------------------- --------------------- -------------------- --------------------- Total Liabilities............... 124 8 -- 11 -------------------- --------------------- -------------------- --------------------- NET ASSETS.............................. $ 14,124,147 $ 23,462,681 $ 14,638,051 $ 55,454,715 ==================== ===================== ==================== ===================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 14,124,147 $ 23,439,019 $ 14,636,801 $ 55,355,034 Net assets from contracts in payout.. -- 23,662 1,250 99,681 -------------------- --------------------- -------------------- --------------------- Total Net Assets................ $ 14,124,147 $ 23,462,681 $ 14,638,051 $ 55,454,715 ==================== ===================== ==================== ===================== INVESCO V.I. INVESCO V.I. INVESCO V.I. INVESCO V.I. COMSTOCK DIVERSIFIED DIVIDEND EQUITY AND INCOME GOVERNMENT SECURITIES SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT --------------------- -------------------- -------------------- --------------------- ASSETS: Investments at fair value............ $ 5,383,721 $ 1,252,866 $ 49,784,834 $ 7,417,832 Due from MetLife Insurance Company USA........................ -- -- -- -- --------------------- -------------------- -------------------- --------------------- Total Assets.................... 5,383,721 1,252,866 49,784,834 7,417,832 --------------------- -------------------- -------------------- --------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 1 3 -- 2 --------------------- -------------------- -------------------- --------------------- Total Liabilities............... 1 3 -- 2 --------------------- -------------------- -------------------- --------------------- NET ASSETS.............................. $ 5,383,720 $ 1,252,863 $ 49,784,834 $ 7,417,830 ===================== ==================== ==================== ===================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 5,312,656 $ 1,228,449 $ 49,733,494 $ 7,308,487 Net assets from contracts in payout.. 71,064 24,414 51,340 109,343 --------------------- -------------------- -------------------- --------------------- Total Net Assets................ $ 5,383,720 $ 1,252,863 $ 49,784,834 $ 7,417,830 ===================== ==================== ==================== ===================== INVESCO V.I. INVESCO V.I. MANAGED VOLATILITY S&P 500 INDEX SUBACCOUNT SUBACCOUNT -------------------- --------------------- ASSETS: Investments at fair value............ $ 1,233,409 $ 1,905,677 Due from MetLife Insurance Company USA........................ -- -- -------------------- --------------------- Total Assets.................... 1,233,409 1,905,677 -------------------- --------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 3 1 -------------------- --------------------- Total Liabilities............... 3 1 -------------------- --------------------- NET ASSETS.............................. $ 1,233,406 $ 1,905,676 ==================== ===================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 1,233,406 $ 1,879,693 Net assets from contracts in payout.. -- 25,983 -------------------- --------------------- Total Net Assets................ $ 1,233,406 $ 1,905,676 ==================== =====================
The accompanying notes are an integral part of these financial statements. 6 The accompanying notes are an integral part of these financial statements. 7 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
LMPVET JANUS ASPEN JANUS ASPEN JANUS ASPEN CLEARBRIDGE VARIABLE ENTERPRISE GLOBAL RESEARCH OVERSEAS AGGRESSIVE GROWTH SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------- -------------------- ------------------- -------------------- ASSETS: Investments at fair value............ $ 12,288,725 $ 675,744 $ 28,762,285 $ 328,523,989 Due from MetLife Insurance Company USA........................ -- 20 -- -- ------------------- -------------------- ------------------- -------------------- Total Assets..................... 12,288,725 675,764 28,762,285 328,523,989 ------------------- -------------------- ------------------- -------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 6 -- -- 10 ------------------- -------------------- ------------------- -------------------- Total Liabilities................ 6 -- -- 10 ------------------- -------------------- ------------------- -------------------- NET ASSETS.............................. $ 12,288,719 $ 675,764 $ 28,762,285 $ 328,523,979 =================== ==================== =================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 12,237,169 $ 675,764 $ 28,712,146 $ 327,889,151 Net assets from contracts in payout.. 51,550 -- 50,139 634,828 ------------------- -------------------- ------------------- -------------------- Total Net Assets................. $ 12,288,719 $ 675,764 $ 28,762,285 $ 328,523,979 =================== ==================== =================== ==================== LMPVET LMPVET LMPVET LMPVET CLEARBRIDGE VARIABLE CLEARBRIDGE VARIABLE CLEARBRIDGE VARIABLE CLEARBRIDGE VARIABLE APPRECIATION DIVIDEND STRATEGY LARGE CAP GROWTH LARGE CAP VALUE SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value............ $ 245,202,998 $ 90,118,546 $ 89,099,811 $ 114,104,973 Due from MetLife Insurance Company USA........................ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets..................... 245,202,998 90,118,546 89,099,811 114,104,973 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 5 14 14 12 -------------------- -------------------- -------------------- -------------------- Total Liabilities................ 5 14 14 12 -------------------- -------------------- -------------------- -------------------- NET ASSETS.............................. $ 245,202,993 $ 90,118,532 $ 89,099,797 $ 114,104,961 ==================== ==================== ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 244,780,925 $ 89,585,647 $ 88,607,740 $ 113,438,899 Net assets from contracts in payout.. 422,068 532,885 492,057 666,062 -------------------- -------------------- -------------------- -------------------- Total Net Assets................. $ 245,202,993 $ 90,118,532 $ 89,099,797 $ 114,104,961 ==================== ==================== ==================== ==================== LMPVET LMPVET CLEARBRIDGE VARIABLE CLEARBRIDGE VARIABLE MID CAP SMALL CAP GROWTH SUBACCOUNT SUBACCOUNT -------------------- -------------------- ASSETS: Investments at fair value............ $ 32,071,795 $ 44,384,626 Due from MetLife Insurance Company USA........................ -- -- -------------------- -------------------- Total Assets..................... 32,071,795 44,384,626 -------------------- -------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 7 8 -------------------- -------------------- Total Liabilities................ 7 8 -------------------- -------------------- NET ASSETS.............................. $ 32,071,788 $ 44,384,618 ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 31,867,231 $ 44,215,760 Net assets from contracts in payout.. 204,557 168,858 -------------------- -------------------- Total Net Assets................. $ 32,071,788 $ 44,384,618 ==================== ====================
The accompanying notes are an integral part of these financial statements. 8 The accompanying notes are an integral part of these financial statements. 9 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
LMPVET LMPVET QS VARIABLE LMPVET QS VARIABLE LMPVIT WESTERN CONSERVATIVE GROWTH QS VARIABLE GROWTH MODERATE GROWTH ASSET CORE PLUS SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 44,206,329 $ 20,311,235 $ 30,093,588 $ 60,157,963 Due from MetLife Insurance Company USA........................ -- -- -- -- -------------------- -------------------- ------------------- ------------------- Total Assets..................... 44,206,329 20,311,235 30,093,588 60,157,963 -------------------- -------------------- ------------------- ------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ -- 1 1 8 -------------------- -------------------- ------------------- ------------------- Total Liabilities................ -- 1 1 8 -------------------- -------------------- ------------------- ------------------- NET ASSETS.............................. $ 44,206,329 $ 20,311,234 $ 30,093,587 $ 60,157,955 ==================== ==================== =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 43,959,254 $ 20,305,173 $ 30,082,119 $ 59,843,376 Net assets from contracts in payout.. 247,075 6,061 11,468 314,579 -------------------- -------------------- ------------------- ------------------- Total Net Assets................. $ 44,206,329 $ 20,311,234 $ 30,093,587 $ 60,157,955 ==================== ==================== =================== =================== LMPVIT WESTERN MIST AMERICAN MIST AMERICAN MIST AMERICAN ASSET VARIABLE GLOBAL FUNDS BALANCED FUNDS GROWTH FUNDS MODERATE HIGH YIELD BOND ALLOCATION ALLOCATION ALLOCATION SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT --------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 5,438,690 $ 5,393,633 $ 3,801,167 $ 2,886,201 Due from MetLife Insurance Company USA........................ -- -- -- -- --------------------- ------------------- ------------------- ------------------- Total Assets..................... 5,438,690 5,393,633 3,801,167 2,886,201 --------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 4 -- -- -- --------------------- ------------------- ------------------- ------------------- Total Liabilities................ 4 -- -- -- --------------------- ------------------- ------------------- ------------------- NET ASSETS.............................. $ 5,438,686 $ 5,393,633 $ 3,801,167 $ 2,886,201 ===================== =================== =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 5,322,786 $ 5,393,633 $ 3,801,167 $ 2,886,201 Net assets from contracts in payout.. 115,900 -- -- -- --------------------- ------------------- ------------------- ------------------- Total Net Assets................. $ 5,438,686 $ 5,393,633 $ 3,801,167 $ 2,886,201 ===================== =================== =================== =================== MIST BLACKROCK MIST CLARION GLOBAL HIGH YIELD REAL ESTATE SUBACCOUNT SUBACCOUNT ------------------- ------------------- ASSETS: Investments at fair value............ $ 82,544,601 $ 58,508,427 Due from MetLife Insurance Company USA........................ -- -- ------------------- ------------------- Total Assets..................... 82,544,601 58,508,427 ------------------- ------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 13 10 ------------------- ------------------- Total Liabilities................ 13 10 ------------------- ------------------- NET ASSETS.............................. $ 82,544,588 $ 58,508,417 =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 82,510,065 $ 58,397,309 Net assets from contracts in payout.. 34,523 111,108 ------------------- ------------------- Total Net Assets................. $ 82,544,588 $ 58,508,417 =================== ===================
The accompanying notes are an integral part of these financial statements. 10 The accompanying notes are an integral part of these financial statements. 11 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
MIST HARRIS MIST CLEARBRIDGE OAKMARK MIST INVESCO MIST INVESCO AGGRESSIVE GROWTH INTERNATIONAL COMSTOCK MID CAP VALUE SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- ------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 478,123,959 $ 53,763,109 $ 182,714,532 $ 40,718,459 Due from MetLife Insurance Company USA........................ -- -- -- -- -------------------- ------------------- ------------------- ------------------- Total Assets..................... 478,123,959 53,763,109 182,714,532 40,718,459 -------------------- ------------------- ------------------- ------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 17 12 13 11 -------------------- ------------------- ------------------- ------------------- Total Liabilities................ 17 12 13 11 -------------------- ------------------- ------------------- ------------------- NET ASSETS.............................. $ 478,123,942 $ 53,763,097 $ 182,714,519 $ 40,718,448 ==================== =================== =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 476,889,594 $ 53,684,147 $ 181,935,240 $ 40,589,918 Net assets from contracts in payout.. 1,234,348 78,950 779,279 128,530 -------------------- ------------------- ------------------- ------------------- Total Net Assets................. $ 478,123,942 $ 53,763,097 $ 182,714,519 $ 40,718,448 ==================== =================== =================== =================== MIST MET/ABERDEEN MIST INVESCO MIST JPMORGAN MIST LOOMIS SAYLES EMERGING MARKETS SMALL CAP GROWTH SMALL CAP VALUE GLOBAL MARKETS EQUITY SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------- ------------------- -------------------- ------------------- ASSETS: Investments at fair value............ $ 12,959,924 $ 11,768,564 $ 125,927,261 $ 37,203,676 Due from MetLife Insurance Company USA........................ -- -- -- -- ------------------- ------------------- -------------------- ------------------- Total Assets..................... 12,959,924 11,768,564 125,927,261 37,203,676 ------------------- ------------------- -------------------- ------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 10 13 3 14 ------------------- ------------------- -------------------- ------------------- Total Liabilities................ 10 13 3 14 ------------------- ------------------- -------------------- ------------------- NET ASSETS.............................. $ 12,959,914 $ 11,768,551 $ 125,927,258 $ 37,203,662 =================== =================== ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 12,943,044 $ 11,761,524 $ 125,637,159 $ 37,143,043 Net assets from contracts in payout.. 16,870 7,027 290,099 60,619 ------------------- ------------------- -------------------- ------------------- Total Net Assets................. $ 12,959,914 $ 11,768,551 $ 125,927,258 $ 37,203,662 =================== =================== ==================== =================== MIST MET/EATON MIST MET/WELLINGTON VANCE FLOATING RATE LARGE CAP RESEARCH SUBACCOUNT SUBACCOUNT -------------------- ------------------- ASSETS: Investments at fair value............ $ 2,754,485 $ 36,808,979 Due from MetLife Insurance Company USA........................ -- -- -------------------- ------------------- Total Assets..................... 2,754,485 36,808,979 -------------------- ------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 2 8 -------------------- ------------------- Total Liabilities................ 2 8 -------------------- ------------------- NET ASSETS.............................. $ 2,754,483 $ 36,808,971 ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 2,745,997 $ 36,726,435 Net assets from contracts in payout.. 8,486 82,536 -------------------- ------------------- Total Net Assets................. $ 2,754,483 $ 36,808,971 ==================== ===================
The accompanying notes are an integral part of these financial statements. 12 The accompanying notes are an integral part of these financial statements. 13 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
MIST METLIFE MIST METLIFE MULTI-INDEX MIST METLIFE MIST MFS RESEARCH ASSET ALLOCATION 100 TARGETED RISK SMALL CAP VALUE INTERNATIONAL SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- ------------------- -------------------- ------------------- ASSETS: Investments at fair value............ $ 58,009,559 $ 117,266 $ 112,212,007 $ 53,978,705 Due from MetLife Insurance Company USA........................ -- -- -- -- -------------------- ------------------- -------------------- ------------------- Total Assets..................... 58,009,559 117,266 112,212,007 53,978,705 -------------------- ------------------- -------------------- ------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 19 -- 10 11 -------------------- ------------------- -------------------- ------------------- Total Liabilities................ 19 -- 10 11 -------------------- ------------------- -------------------- ------------------- NET ASSETS.............................. $ 58,009,540 $ 117,266 $ 112,211,997 $ 53,978,694 ==================== =================== ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 58,009,540 $ 117,266 $ 112,007,262 $ 53,776,001 Net assets from contracts in payout.. -- -- 204,735 202,693 -------------------- ------------------- -------------------- ------------------- Total Net Assets................. $ 58,009,540 $ 117,266 $ 112,211,997 $ 53,978,694 ==================== =================== ==================== =================== MIST MORGAN MIST PIMCO STANLEY MID CAP MIST OPPENHEIMER INFLATION PROTECTED MIST PIMCO TOTAL GROWTH GLOBAL EQUITY BOND RETURN SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------- ------------------- -------------------- ------------------- ASSETS: Investments at fair value............ $ 7,516,058 $ 285,997,844 $ 48,063,869 $ 175,865,012 Due from MetLife Insurance Company USA........................ -- -- -- -- ------------------- ------------------- -------------------- ------------------- Total Assets..................... 7,516,058 285,997,844 48,063,869 175,865,012 ------------------- ------------------- -------------------- ------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 4 34 10 10 ------------------- ------------------- -------------------- ------------------- Total Liabilities................ 4 34 10 10 ------------------- ------------------- -------------------- ------------------- NET ASSETS.............................. $ 7,516,054 $ 285,997,810 $ 48,063,859 $ 175,865,002 =================== =================== ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 7,498,540 $ 285,715,823 $ 47,870,985 $ 175,130,334 Net assets from contracts in payout.. 17,514 281,987 192,874 734,668 ------------------- ------------------- -------------------- ------------------- Total Net Assets................. $ 7,516,054 $ 285,997,810 $ 48,063,859 $ 175,865,002 =================== =================== ==================== =================== MIST PYRAMIS MIST SSGA GROWTH MANAGED RISK AND INCOME ETF SUBACCOUNT SUBACCOUNT ------------------- ------------------- ASSETS: Investments at fair value............ $ 28,372 $ 104,433,234 Due from MetLife Insurance Company USA........................ -- -- ------------------- ------------------- Total Assets..................... 28,372 104,433,234 ------------------- ------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 1 -- ------------------- ------------------- Total Liabilities................ 1 -- ------------------- ------------------- NET ASSETS.............................. $ 28,371 $ 104,433,234 =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 28,371 $ 104,433,234 Net assets from contracts in payout.. -- -- ------------------- ------------------- Total Net Assets................. $ 28,371 $ 104,433,234 =================== ===================
The accompanying notes are an integral part of these financial statements. 14 The accompanying notes are an integral part of these financial statements. 15 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
MIST SSGA GROWTH MIST T. ROWE PRICE MIST T. ROWE PRICE MORGAN STANLEY ETF LARGE CAP VALUE MID CAP GROWTH MULTI CAP GROWTH SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------- ------------------- -------------------- ------------------- ASSETS: Investments at fair value............ $ 136,076,601 $ 366,992,853 $ 1,310,451 $ 678,522 Due from MetLife Insurance Company USA........................ -- 1,405 -- -- ------------------- ------------------- -------------------- ------------------- Total Assets..................... 136,076,601 366,994,258 1,310,451 678,522 ------------------- ------------------- -------------------- ------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 30 -- 2 2 ------------------- ------------------- -------------------- ------------------- Total Liabilities................ 30 -- 2 2 ------------------- ------------------- -------------------- ------------------- NET ASSETS.............................. $ 136,076,571 $ 366,994,258 $ 1,310,449 $ 678,520 =================== =================== ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 136,076,571 $ 366,196,313 $ 1,310,449 $ 678,520 Net assets from contracts in payout.. -- 797,945 -- -- ------------------- ------------------- -------------------- ------------------- Total Net Assets................. $ 136,076,571 $ 366,994,258 $ 1,310,449 $ 678,520 =================== =================== ==================== =================== MSF BARCLAYS AGGREGATE BOND MSF BLACKROCK BOND MSF BLACKROCK MSF BLACKROCK INDEX INCOME CAPITAL APPRECIATION LARGE CAP VALUE SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- ------------------- ASSETS: Investments at fair value............ $ 62,459,481 $ 132,434,563 $ 162,582,133 $ 10,606,908 Due from MetLife Insurance Company USA........................ -- -- -- -- -------------------- -------------------- -------------------- ------------------- Total Assets..................... 62,459,481 132,434,563 162,582,133 10,606,908 -------------------- -------------------- -------------------- ------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ -- 22 16 4 -------------------- -------------------- -------------------- ------------------- Total Liabilities................ -- 22 16 4 -------------------- -------------------- -------------------- ------------------- NET ASSETS.............................. $ 62,459,481 $ 132,434,541 $ 162,582,117 $ 10,606,904 ==================== ==================== ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 62,386,299 $ 131,876,470 $ 161,616,915 $ 10,606,904 Net assets from contracts in payout.. 73,182 558,071 965,202 -- -------------------- -------------------- -------------------- ------------------- Total Net Assets................. $ 62,459,481 $ 132,434,541 $ 162,582,117 $ 10,606,904 ==================== ==================== ==================== =================== MSF BLACKROCK ULTRA-SHORT MSF FRONTIER TERM BOND MID CAP GROWTH SUBACCOUNT SUBACCOUNT ------------------- -------------------- ASSETS: Investments at fair value............ $ 213,922,355 $ 71,558,949 Due from MetLife Insurance Company USA........................ -- -- ------------------- -------------------- Total Assets..................... 213,922,355 71,558,949 ------------------- -------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 21 13 ------------------- -------------------- Total Liabilities................ 21 13 ------------------- -------------------- NET ASSETS.............................. $ 213,922,334 $ 71,558,936 =================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 213,097,099 $ 71,307,568 Net assets from contracts in payout.. 825,235 251,368 ------------------- -------------------- Total Net Assets................. $ 213,922,334 $ 71,558,936 =================== ====================
The accompanying notes are an integral part of these financial statements. 16 The accompanying notes are an integral part of these financial statements. 17 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
MSF MET/DIMENSIONAL MSF JENNISON MSF LOOMIS SAYLES MSF MET/ARTISAN INTERNATIONAL SMALL GROWTH SMALL CAP CORE MID CAP VALUE COMPANY SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value............ $ 330,843,375 $ 695,462 $ 1,708,961 $ 543,802 Due from MetLife Insurance Company USA........................ -- -- 1 -- -------------------- -------------------- -------------------- -------------------- Total Assets.................... 330,843,375 695,462 1,708,962 543,802 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 9 -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities............... 9 -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.............................. $ 330,843,366 $ 695,462 $ 1,708,962 $ 543,802 ==================== ==================== ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 330,606,822 $ 695,462 $ 1,691,885 $ 543,802 Net assets from contracts in payout.. 236,544 -- 17,077 -- -------------------- -------------------- -------------------- -------------------- Total Net Assets................ $ 330,843,366 $ 695,462 $ 1,708,962 $ 543,802 ==================== ==================== ==================== ==================== MSF MET/WELLINGTON MSF MET/WELLINGTON CORE EQUITY MSF METLIFE MSF METLIFE BALANCED OPPORTUNITIES ASSET ALLOCATION 20 ASSET ALLOCATION 40 SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value............ $ 230,965,589 $ 118,746,499 $ 20,218,994 $ 68,509,141 Due from MetLife Insurance Company USA........................ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.................... 230,965,589 118,746,499 20,218,994 68,509,141 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 4 97 9 8 -------------------- -------------------- -------------------- -------------------- Total Liabilities............... 4 97 9 8 -------------------- -------------------- -------------------- -------------------- NET ASSETS.............................. $ 230,965,585 $ 118,746,402 $ 20,218,985 $ 68,509,133 ==================== ==================== ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 230,380,557 $ 118,329,333 $ 20,218,985 $ 68,480,485 Net assets from contracts in payout.. 585,028 417,071 -- 28,648 -------------------- -------------------- -------------------- -------------------- Total Net Assets................ $ 230,965,585 $ 118,746,402 $ 20,218,985 $ 68,509,133 ==================== ==================== ==================== ==================== MSF METLIFE MSF METLIFE ASSET ALLOCATION 60 ASSET ALLOCATION 80 SUBACCOUNT SUBACCOUNT -------------------- ------------------- ASSETS: Investments at fair value............ $ 452,209,486 $ 574,285,826 Due from MetLife Insurance Company USA........................ -- -- -------------------- ------------------- Total Assets.................... 452,209,486 574,285,826 -------------------- ------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 9 7 -------------------- ------------------- Total Liabilities............... 9 7 -------------------- ------------------- NET ASSETS.............................. $ 452,209,477 $ 574,285,819 ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 452,129,270 $ 574,239,465 Net assets from contracts in payout.. 80,207 46,354 -------------------- ------------------- Total Net Assets................ $ 452,209,477 $ 574,285,819 ==================== ===================
The accompanying notes are an integral part of these financial statements. 18 The accompanying notes are an integral part of these financial statements. 19 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
MSF METLIFE MID MSF METLIFE STOCK MSF MFS TOTAL CAP STOCK INDEX INDEX RETURN MSF MFS VALUE SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------- -------------------- ------------------- ------------------- ASSETS: Investments at fair value............ $ 17,822,009 $ 818,490,383 $ 347,116,251 $ 126,985,781 Due from MetLife Insurance Company USA........................ -- -- -- -- ------------------- -------------------- ------------------- ------------------- Total Assets..................... 17,822,009 818,490,383 347,116,251 126,985,781 ------------------- -------------------- ------------------- ------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ -- 29 36 31 ------------------- -------------------- ------------------- ------------------- Total Liabilities................ -- 29 36 31 ------------------- -------------------- ------------------- ------------------- NET ASSETS.............................. $ 17,822,009 $ 818,490,354 $ 347,116,215 $ 126,985,750 =================== ==================== =================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 17,822,009 $ 815,022,416 $ 345,611,721 $ 126,672,740 Net assets from contracts in payout.. -- 3,467,938 1,504,494 313,010 ------------------- -------------------- ------------------- ------------------- Total Net Assets................. $ 17,822,009 $ 818,490,354 $ 347,116,215 $ 126,985,750 =================== ==================== =================== =================== MSF MSCI MSF NEUBERGER MSF RUSSELL 2000 MSF T. ROWE PRICE EAFE INDEX BERMAN GENESIS INDEX LARGE CAP GROWTH SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------- ------------------- -------------------- ------------------- ASSETS: Investments at fair value............ $ 46,547,113 $ 61,097,183 $ 110,619,177 $ 52,673,914 Due from MetLife Insurance Company USA........................ -- 118 -- -- ------------------- ------------------- -------------------- ------------------- Total Assets..................... 46,547,113 61,097,301 110,619,177 52,673,914 ------------------- ------------------- -------------------- ------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ -- -- -- 16 ------------------- ------------------- -------------------- ------------------- Total Liabilities................ -- -- -- 16 ------------------- ------------------- -------------------- ------------------- NET ASSETS.............................. $ 46,547,113 $ 61,097,301 $ 110,619,177 $ 52,673,898 =================== =================== ==================== =================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 46,515,949 $ 61,067,762 $ 110,578,672 $ 52,249,307 Net assets from contracts in payout.. 31,164 29,539 40,505 424,591 ------------------- ------------------- -------------------- ------------------- Total Net Assets................. $ 46,547,113 $ 61,097,301 $ 110,619,177 $ 52,673,898 =================== =================== ==================== =================== MSF WESTERN ASSET MSF T. ROWE PRICE MANAGEMENT STRATEGIC SMALL CAP GROWTH BOND OPPORTUNITIES SUBACCOUNT SUBACCOUNT ------------------- -------------------- ASSETS: Investments at fair value............ $ 108,651,175 $ 170,890,835 Due from MetLife Insurance Company USA........................ -- -- ------------------- -------------------- Total Assets..................... 108,651,175 170,890,835 ------------------- -------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 8 463 ------------------- -------------------- Total Liabilities................ 8 463 ------------------- -------------------- NET ASSETS.............................. $ 108,651,167 $ 170,890,372 =================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 108,595,607 $ 170,289,043 Net assets from contracts in payout.. 55,560 601,329 ------------------- -------------------- Total Net Assets................. $ 108,651,167 $ 170,890,372 =================== ====================
The accompanying notes are an integral part of these financial statements. 20 The accompanying notes are an integral part of these financial statements. 21 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF ASSETS AND LIABILITIES -- (CONCLUDED) DECEMBER 31, 2016
MSF WESTERN ASSET TAP 1919 VARIABLE MANAGEMENT PIONEER VCT PIONEER VCT SOCIALLY RESPONSIVE U.S. GOVERNMENT MID CAP VALUE REAL ESTATE SHARES BALANCED SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value............ $ 75,272,266 $ 19,478,492 $ 7,545,092 $ 34,122,088 Due from MetLife Insurance Company USA........................ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.................... 75,272,266 19,478,492 7,545,092 34,122,088 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 6 4 5 5 -------------------- -------------------- -------------------- -------------------- Total Liabilities............... 6 4 5 5 -------------------- -------------------- -------------------- -------------------- NET ASSETS.............................. $ 75,272,260 $ 19,478,488 $ 7,545,087 $ 34,122,083 ==================== ==================== ==================== ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 75,149,760 $ 19,478,488 $ 7,545,087 $ 34,103,121 Net assets from contracts in payout.. 122,500 -- -- 18,962 -------------------- -------------------- -------------------- -------------------- Total Net Assets................ $ 75,272,260 $ 19,478,488 $ 7,545,087 $ 34,122,083 ==================== ==================== ==================== ==================== UIF GROWTH SUBACCOUNT -------------------- ASSETS: Investments at fair value............ $ 5,650,498 Due from MetLife Insurance Company USA........................ -- -------------------- Total Assets.................... 5,650,498 -------------------- LIABILITIES: Due to MetLife Insurance Company USA........................ 2 -------------------- Total Liabilities............... 2 -------------------- NET ASSETS.............................. $ 5,650,496 ==================== CONTRACT OWNERS' EQUITY Net assets from accumulation units... $ 5,609,941 Net assets from contracts in payout.. 40,555 -------------------- Total Net Assets................ $ 5,650,496 ====================
The accompanying notes are an integral part of these financial statements. 22 The accompanying notes are an integral part of these financial statements. 23 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2016
AB GLOBAL THEMATIC ALGER CAPITAL AMERICAN FUNDS AMERICAN FUNDS GROWTH APPRECIATION BOND GLOBAL GROWTH SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................. $ -- $ -- $ 83,545 $ 889,090 -------------------- -------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk and other charges....................... 6,262 45,683 75,072 1,529,686 Administrative charges................ 613 3,844 7,886 133,566 -------------------- -------------------- ------------------- ------------------- Total expenses...................... 6,875 49,527 82,958 1,663,252 -------------------- -------------------- ------------------- ------------------- Net investment income (loss)..... (6,875) (49,527) 587 (774,162) -------------------- -------------------- ------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... -- 19,586 17,667 8,610,777 Realized gains (losses) on sale of investments......................... 13,664 49,969 20,589 2,584,286 -------------------- -------------------- ------------------- ------------------- Net realized gains (losses)...... 13,664 69,555 38,256 11,195,063 -------------------- -------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments...................... (16,584) (81,229) 32,331 (11,775,058) -------------------- -------------------- ------------------- ------------------- Net realized and change in unrealized gains (losses) on investments......................... (2,920) (11,674) 70,587 (579,995) -------------------- -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations........... $ (9,795) $ (61,201) $ 71,174 $ (1,354,157) ==================== ==================== =================== =================== AMERICAN FUNDS GLOBAL SMALL AMERICAN FUNDS AMERICAN FUNDS DELAWARE VIP SMALL CAPITALIZATION GROWTH GROWTH-INCOME CAP VALUE SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................. $ 4,344 $ 1,718,185 $ 2,769,750 $ 95,831 -------------------- ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 27,381 3,661,751 3,215,517 63,125 Administrative charges................ 2,801 312,467 277,881 21 -------------------- ------------------- ------------------- -------------------- Total expenses...................... 30,182 3,974,218 3,493,398 63,146 -------------------- ------------------- ------------------- -------------------- Net investment income (loss)..... (25,838) (2,256,033) (723,648) 32,685 -------------------- ------------------- ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... 356,791 20,604,783 21,685,116 883,054 Realized gains (losses) on sale of investments......................... 32,286 4,455,804 4,429,316 137,658 -------------------- ------------------- ------------------- -------------------- Net realized gains (losses)...... 389,077 25,060,587 26,114,432 1,020,712 -------------------- ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments...................... (368,768) (6,491,721) (7,878,308) 1,640,505 -------------------- ------------------- ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments......................... 20,309 18,568,866 18,236,124 2,661,217 -------------------- ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ (5,529) $ 16,312,833 $ 17,512,476 $ 2,693,902 ==================== =================== =================== ==================== DEUTSCHE II GOVERNMENT & DEUTSCHE II AGENCY SECURITIES SMALL MID CAP VALUE SUBACCOUNT SUBACCOUNT -------------------- -------------------- INVESTMENT INCOME: Dividends............................. $ 66,934 $ 10,103 -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 44,640 76,216 Administrative charges................ 3,629 6,237 -------------------- -------------------- Total expenses...................... 48,269 82,453 -------------------- -------------------- Net investment income (loss)..... 18,665 (72,350) -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... -- 460,521 Realized gains (losses) on sale of investments......................... (28,583) 28,909 -------------------- -------------------- Net realized gains (losses)...... (28,583) 489,430 -------------------- -------------------- Change in unrealized gains (losses) on investments...................... (16,337) 135,984 -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments......................... (44,920) 625,414 -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ (26,255) $ 553,064 ==================== ====================
The accompanying notes are an integral part of these financial statements. 24 The accompanying notes are an integral part of these financial statements. 25 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016
FIDELITY VIP DREYFUS SOCIALLY FIDELITY VIP DYNAMIC CAPITAL RESPONSIBLE GROWTH CONTRAFUND APPRECIATION SUBACCOUNT SUBACCOUNT SUBACCOUNT --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends.............................. $ 4,867 $ 1,240,183 $ 12,809 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 9,161 2,733,827 24,539 Administrative charges................. 703 123,536 1,582 --------------------- -------------------- -------------------- Total expenses...................... 9,864 2,857,363 26,121 --------------------- -------------------- -------------------- Net investment income (loss)...... (4,997) (1,617,180) (13,312) --------------------- -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............ 46,624 16,720,548 79,052 Realized gains (losses) on sale of investments......................... 3,330 3,486,563 38,326 --------------------- -------------------- -------------------- Net realized gains (losses)....... 49,954 20,207,111 117,378 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments...................... (7,556) (6,717,554) (84,225) --------------------- -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments......................... 42,398 13,489,557 33,153 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 37,401 $ 11,872,377 $ 19,841 ===================== ==================== ==================== FIDELITY VIP FIDELITY VIP FIDELITY VIP EQUITY-INCOME FREEDOM 2020 FREEDOM 2025 SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends.............................. $ 5,022,758 $ 5,410 $ 4,260 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 2,778,369 2,579 2,177 Administrative charges................. 8,163 -- -- -------------------- -------------------- -------------------- Total expenses...................... 2,786,532 2,579 2,177 -------------------- -------------------- -------------------- Net investment income (loss)...... 2,236,226 2,831 2,083 -------------------- -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............ 14,318,166 2,727 6,919 Realized gains (losses) on sale of investments......................... (567,750) 2,044 (1,633) -------------------- -------------------- -------------------- Net realized gains (losses)....... 13,750,416 4,771 5,286 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments...................... 18,349,428 5,657 5,096 -------------------- -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments......................... 32,099,844 10,428 10,382 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 34,336,070 $ 13,259 $ 12,465 ==================== ==================== ==================== FIDELITY VIP FIDELITY VIP FIDELITY VIP FREEDOM 2030 FREEDOM 2040 FREEDOM 2050 SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends.............................. $ 6,674 $ 683 $ 528 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 2,714 420 160 Administrative charges................. -- -- -- -------------------- -------------------- -------------------- Total expenses...................... 2,714 420 160 -------------------- -------------------- -------------------- Net investment income (loss)...... 3,960 263 368 -------------------- -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............ 17,635 801 235 Realized gains (losses) on sale of investments......................... (87) 481 (175) -------------------- -------------------- -------------------- Net realized gains (losses)....... 17,548 1,282 60 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments...................... 8,465 2,218 594 -------------------- -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments......................... 26,013 3,500 654 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 29,973 $ 3,763 $ 1,022 ==================== ==================== ==================== FIDELITY VIP FUNDSMANAGER 60% SUBACCOUNT -------------------- INVESTMENT INCOME: Dividends.............................. $ 7,417,045 -------------------- EXPENSES: Mortality and expense risk and other charges....................... 11,559,518 Administrative charges................. -- -------------------- Total expenses...................... 11,559,518 -------------------- Net investment income (loss)...... (4,142,473) -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............ 19,570,871 Realized gains (losses) on sale of investments......................... (747,272) -------------------- Net realized gains (losses)....... 18,823,599 -------------------- Change in unrealized gains (losses) on investments...................... 4,233,070 -------------------- Net realized and change in unrealized gains (losses) on investments......................... 23,056,669 -------------------- Net increase (decrease) in net assets resulting from operations........... $ 18,914,196 ====================
The accompanying notes are an integral part of these financial statements. 26 The accompanying notes are an integral part of these financial statements. 27 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016
FIDELITY VIP HIGH FTVIPT FRANKLIN FTVIPT FRANKLIN INCOME FIDELITY VIP MID CAP INCOME VIP MUTUAL SHARES VIP SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................. $ 1,003,573 $ 735,165 $ 1,012,554 $ 287,729 -------------------- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 237,539 3,092,802 332,403 217,581 Administrative charges................ 10 123,556 30,382 22,174 -------------------- -------------------- -------------------- -------------------- Total expenses...................... 237,549 3,216,358 362,785 239,755 -------------------- -------------------- -------------------- -------------------- Net investment income (loss)..... 766,024 (2,481,193) 649,769 47,974 -------------------- -------------------- -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... -- 15,205,282 -- 1,185,312 Realized gains (losses) on sale of investments......................... (314,092) 977,453 (88,627) 362,661 -------------------- -------------------- -------------------- -------------------- Net realized gains (losses)...... (314,092) 16,182,735 (88,627) 1,547,973 -------------------- -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments...................... 1,912,243 9,899,299 1,713,083 313,182 -------------------- -------------------- -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments......................... 1,598,151 26,082,034 1,624,456 1,861,155 -------------------- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 2,364,175 $ 23,600,841 $ 2,274,225 $ 1,909,129 ==================== ==================== ==================== ==================== FTVIPT FRANKLIN FTVIPT TEMPLETON FTVIPT FRANKLIN SMALL-MID CAP DEVELOPING FTVIPT TEMPLETON RISING DIVIDENDS VIP GROWTH VIP MARKETS VIP FOREIGN VIP SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................. $ 203,626 $ -- $ 118,758 $ 1,087,359 -------------------- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 258,322 395,218 171,139 917,500 Administrative charges................ 21,624 27,650 285 65,669 -------------------- -------------------- -------------------- -------------------- Total expenses...................... 279,946 422,868 171,424 983,169 -------------------- -------------------- -------------------- -------------------- Net investment income (loss)..... (76,320) (422,868) (52,666) 104,190 -------------------- -------------------- -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... 1,751,367 2,863,374 -- 973,925 Realized gains (losses) on sale of investments......................... 752,942 (844,258) (1,044,768) (929,100) -------------------- -------------------- -------------------- -------------------- Net realized gains (losses)...... 2,504,309 2,019,116 (1,044,768) 44,825 -------------------- -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments...................... (470,433) (1,038,951) 3,249,765 2,708,456 -------------------- -------------------- -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments......................... 2,033,876 980,165 2,204,997 2,753,281 -------------------- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 1,957,556 $ 557,297 $ 2,152,331 $ 2,857,471 ==================== ==================== ==================== ==================== INVESCO V.I. INVESCO V.I. COMSTOCK DIVERSIFIED DIVIDEND SUBACCOUNT SUBACCOUNT -------------------- -------------------- INVESTMENT INCOME: Dividends............................. $ 81,950 $ 15,637 -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 78,598 26,851 Administrative charges................ 7,758 1,955 -------------------- -------------------- Total expenses...................... 86,356 28,806 -------------------- -------------------- Net investment income (loss)..... (4,406) (13,169) -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... 408,902 -- Realized gains (losses) on sale of investments......................... 250,143 123,701 -------------------- -------------------- Net realized gains (losses)...... 659,045 123,701 -------------------- -------------------- Change in unrealized gains (losses) on investments...................... 90,333 34,098 -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments......................... 749,378 157,799 -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 744,972 $ 144,630 ==================== ====================
The accompanying notes are an integral part of these financial statements. 28 The accompanying notes are an integral part of these financial statements. 29 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016
INVESCO V.I. INVESCO V.I. INVESCO V.I. EQUITY AND INCOME GOVERNMENT SECURITIES MANAGED VOLATILITY SUBACCOUNT SUBACCOUNT SUBACCOUNT --------------------- ---------------------- --------------------- INVESTMENT INCOME: Dividends.............................. $ 785,144 $ 143,121 $ 22,530 --------------------- ---------------------- --------------------- EXPENSES: Mortality and expense risk and other charges....................... 720,160 133,091 22,760 Administrative charges................. 72,682 12,340 1,820 --------------------- ---------------------- --------------------- Total expenses...................... 792,842 145,431 24,580 --------------------- ---------------------- --------------------- Net investment income (loss)...... (7,698) (2,310) (2,050) --------------------- ---------------------- --------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............ 1,517,515 -- 36,303 Realized gains (losses) on sale of investments......................... 1,441,430 (2,698) (97,199) --------------------- ---------------------- --------------------- Net realized gains (losses)....... 2,958,945 (2,698) (60,896) --------------------- ---------------------- --------------------- Change in unrealized gains (losses) on investments...................... 2,852,056 (27,188) 158,819 --------------------- ---------------------- --------------------- Net realized and change in unrealized gains (losses) on investments......................... 5,811,001 (29,886) 97,923 --------------------- ---------------------- --------------------- Net increase (decrease) in net assets resulting from operations........... $ 5,803,303 $ (32,196) $ 95,873 ===================== ====================== ===================== INVESCO V.I. JANUS ASPEN JANUS ASPEN S&P 500 INDEX ENTERPRISE GLOBAL RESEARCH SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends.............................. $ 30,158 $ 2,917 $ 6,576 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 42,121 160,929 3,498 Administrative charges................. 3,082 12,668 12 -------------------- -------------------- -------------------- Total expenses...................... 45,203 173,597 3,510 -------------------- -------------------- -------------------- Net investment income (loss)...... (15,045) (170,680) 3,066 -------------------- -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............ 157,177 1,017,725 -- Realized gains (losses) on sale of investments......................... 168,104 592,836 43,500 -------------------- -------------------- -------------------- Net realized gains (losses)....... 325,281 1,610,561 43,500 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments...................... (136,521) (213,763) (39,056) -------------------- -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments......................... 188,760 1,396,798 4,444 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 173,715 $ 1,226,118 $ 7,510 ==================== ==================== ==================== LMPVET LMPVET JANUS ASPEN CLEARBRIDGE VARIABLE CLEARBRIDGE VARIABLE OVERSEAS AGGRESSIVE GROWTH APPRECIATION SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends.............................. $ 1,388,952 $ 2,073,990 $ 3,150,994 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk and other charges....................... 384,051 4,813,028 3,541,732 Administrative charges................. 4,544 390,224 346,687 -------------------- -------------------- --------------------- Total expenses...................... 388,595 5,203,252 3,888,419 -------------------- -------------------- --------------------- Net investment income (loss)...... 1,000,357 (3,129,262) (737,425) -------------------- -------------------- --------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............ 961,884 16,833,203 5,359,922 Realized gains (losses) on sale of investments......................... (2,562,956) 14,895,990 12,219,018 -------------------- -------------------- --------------------- Net realized gains (losses)....... (1,601,072) 31,729,193 17,578,940 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments...................... (2,110,590) (31,339,196) 2,307,392 -------------------- -------------------- --------------------- Net realized and change in unrealized gains (losses) on investments......................... (3,711,662) 389,997 19,886,332 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations........... $ (2,711,305) $ (2,739,265) $ 19,148,907 ==================== ==================== ===================== LMPVET CLEARBRIDGE VARIABLE DIVIDEND STRATEGY SUBACCOUNT -------------------- INVESTMENT INCOME: Dividends.............................. $ 1,282,632 -------------------- EXPENSES: Mortality and expense risk and other charges....................... 1,521,217 Administrative charges................. 132,964 -------------------- Total expenses...................... 1,654,181 -------------------- Net investment income (loss)...... (371,549) -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............ -- Realized gains (losses) on sale of investments......................... 3,402,946 -------------------- Net realized gains (losses)....... 3,402,946 -------------------- Change in unrealized gains (losses) on investments...................... 7,801,497 -------------------- Net realized and change in unrealized gains (losses) on investments......................... 11,204,443 -------------------- Net increase (decrease) in net assets resulting from operations........... $ 10,832,894 ====================
The accompanying notes are an integral part of these financial statements. 30 The accompanying notes are an integral part of these financial statements. 31 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016
LMPVET LMPVET LMPVET LMPVET CLEARBRIDGE VARIABLE CLEARBRIDGE VARIABLE CLEARBRIDGE VARIABLE CLEARBRIDGE VARIABLE LARGE CAP GROWTH LARGE CAP VALUE MID CAP SMALL CAP GROWTH SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 451,524 $ 1,675,234 $ 269,750 $ -- -------------------- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 1,326,008 1,451,442 491,902 645,775 Administrative charges............... 104,519 132,246 46,603 47,284 -------------------- -------------------- -------------------- -------------------- Total expenses..................... 1,430,527 1,583,688 538,505 693,059 -------------------- -------------------- -------------------- -------------------- Net investment income (loss)..... (979,003) 91,546 (268,755) (693,059) -------------------- -------------------- -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 7,235,513 2,273,388 762,150 1,774,322 Realized gains (losses) on sale of investments........................ 2,915,844 1,943,755 935,753 1,224,231 -------------------- -------------------- -------------------- -------------------- Net realized gains (losses)...... 10,151,357 4,217,143 1,697,903 2,998,553 -------------------- -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments..................... (4,229,733) 7,747,711 754,862 (704,843) -------------------- -------------------- -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments........................ 5,921,624 11,964,854 2,452,765 2,293,710 -------------------- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ 4,942,621 $ 12,056,400 $ 2,184,010 $ 1,600,651 ==================== ==================== ==================== ==================== LMPVET LMPVET QS VARIABLE LMPVET QS VARIABLE LMPVIT WESTERN CONSERVATIVE GROWTH QS VARIABLE GROWTH MODERATE GROWTH ASSET CORE PLUS SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 1,048,279 $ 286,270 $ 607,313 $ 1,379,333 -------------------- ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 605,960 254,207 379,225 957,965 Administrative charges............... 68,914 30,373 44,733 94,689 -------------------- ------------------- ------------------- ------------------- Total expenses..................... 674,874 284,580 423,958 1,052,654 -------------------- ------------------- ------------------- ------------------- Net investment income (loss)..... 373,405 1,690 183,355 326,679 -------------------- ------------------- ------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- 764,134 396,626 -- Realized gains (losses) on sale of investments........................ 1,505,502 109,431 627,149 (1,254,653) -------------------- ------------------- ------------------- ------------------- Net realized gains (losses)...... 1,505,502 873,565 1,023,775 (1,254,653) -------------------- ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments..................... 700,199 470,828 641,325 2,869,774 -------------------- ------------------- ------------------- ------------------- Net realized and change in unrealized gains (losses) on investments........................ 2,205,701 1,344,393 1,665,100 1,615,121 -------------------- ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 2,579,106 $ 1,346,083 $ 1,848,455 $ 1,941,800 ==================== =================== =================== =================== LMPVIT WESTERN MIST AMERICAN ASSET VARIABLE GLOBAL FUNDS BALANCED HIGH YIELD BOND ALLOCATION SUBACCOUNT SUBACCOUNT --------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 332,102 $ 91,740 --------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 92,294 38,477 Administrative charges............... 8,285 334 --------------------- -------------------- Total expenses..................... 100,579 38,811 --------------------- -------------------- Net investment income (loss)..... 231,523 52,929 --------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- 477,492 Realized gains (losses) on sale of investments........................ (216,758) (184,398) --------------------- -------------------- Net realized gains (losses)...... (216,758) 293,094 --------------------- -------------------- Change in unrealized gains (losses) on investments..................... 688,455 (5,926) --------------------- -------------------- Net realized and change in unrealized gains (losses) on investments........................ 471,697 287,168 --------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ 703,220 $ 340,097 ===================== ====================
The accompanying notes are an integral part of these financial statements. 32 The accompanying notes are an integral part of these financial statements. 33 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016
MIST AMERICAN MIST AMERICAN FUNDS GROWTH FUNDS MODERATE MIST BLACKROCK MIST CLARION GLOBAL ALLOCATION ALLOCATION HIGH YIELD REAL ESTATE SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------- ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 45,063 $ 52,394 $ 5,544,938 $ 1,442,009 ------------------- ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 25,713 23,229 1,128,275 880,634 Administrative charges............... 584 352 64,839 51,883 ------------------- ------------------- ------------------- -------------------- Total expenses..................... 26,297 23,581 1,193,114 932,517 ------------------- ------------------- ------------------- -------------------- Net investment income (loss).... 18,766 28,813 4,351,824 509,492 ------------------- ------------------- ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 350,921 177,977 -- -- Realized gains (losses) on sale of investments........................ (25,823) (23,710) (1,836,768) (421,289) ------------------- ------------------- ------------------- -------------------- Net realized gains (losses)..... 325,098 154,267 (1,836,768) (421,289) ------------------- ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments..................... (73,852) (29,232) 7,257,359 (223,617) ------------------- ------------------- ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments........................ 251,246 125,035 5,420,591 (644,906) ------------------- ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ 270,012 $ 153,848 $ 9,772,415 $ (135,414) =================== =================== =================== ==================== MIST HARRIS MIST CLEARBRIDGE OAKMARK MIST INVESCO MIST INVESCO AGGRESSIVE GROWTH INTERNATIONAL COMSTOCK MID CAP VALUE SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------- -------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 3,226,254 $ 1,273,533 $ 4,428,057 $ 263,745 ------------------- -------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 6,001,031 777,646 2,677,912 660,299 Administrative charges............... 77,336 53,095 247,070 55,242 ------------------- -------------------- ------------------- -------------------- Total expenses..................... 6,078,367 830,741 2,924,982 715,541 ------------------- -------------------- ------------------- -------------------- Net investment income (loss).... (2,852,113) 442,792 1,503,075 (451,796) ------------------- -------------------- ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- 3,568,372 13,490,575 1,848,213 Realized gains (losses) on sale of investments........................ 3,694,060 (2,516,804) 6,497,721 (380,943) ------------------- -------------------- ------------------- -------------------- Net realized gains (losses)..... 3,694,060 1,051,568 19,988,296 1,467,270 ------------------- -------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments..................... 5,754,234 1,714,616 3,303,101 3,924,305 ------------------- -------------------- ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments........................ 9,448,294 2,766,184 23,291,397 5,391,575 ------------------- -------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ 6,596,181 $ 3,208,976 $ 24,794,472 $ 4,939,779 =================== ==================== =================== ==================== MIST INVESCO MIST JPMORGAN SMALL CAP GROWTH SMALL CAP VALUE SUBACCOUNT SUBACCOUNT ------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ -- $ 190,702 ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 203,258 155,642 Administrative charges............... 11,408 7,388 ------------------- -------------------- Total expenses..................... 214,666 163,030 ------------------- -------------------- Net investment income (loss).... (214,666) 27,672 ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 2,330,580 685,771 Realized gains (losses) on sale of investments........................ (580,504) 127,738 ------------------- -------------------- Net realized gains (losses)..... 1,750,076 813,509 ------------------- -------------------- Change in unrealized gains (losses) on investments..................... (350,031) 1,860,272 ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments........................ 1,400,045 2,673,781 ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ 1,185,379 $ 2,701,453 =================== ====================
The accompanying notes are an integral part of these financial statements. 34 The accompanying notes are an integral part of these financial statements. 35 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016
MIST MET/ABERDEEN MIST LOOMIS SAYLES EMERGING MARKETS MIST MET/EATON MIST MET/WELLINGTON GLOBAL MARKETS EQUITY VANCE FLOATING RATE LARGE CAP RESEARCH SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------- -------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 2,513,769 $ 415,981 $ 134,165 $ 862,976 ------------------- -------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 1,627,514 688,893 52,503 534,208 Administrative charges............... 905 56,989 4,578 49,638 ------------------- -------------------- ------------------- -------------------- Total expenses..................... 1,628,419 745,882 57,081 583,846 ------------------- -------------------- ------------------- -------------------- Net investment income (loss).... 885,350 (329,901) 77,084 279,130 ------------------- -------------------- ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 4,138,313 -- -- 2,524,001 Realized gains (losses) on sale of investments........................ 3,836,808 (1,105,970) (73,348) 1,366,673 ------------------- -------------------- ------------------- -------------------- Net realized gains (losses)..... 7,975,121 (1,105,970) (73,348) 3,890,674 ------------------- -------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments..................... (4,101,375) 5,198,875 209,981 (1,821,494) ------------------- -------------------- ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments........................ 3,873,746 4,092,905 136,633 2,069,180 ------------------- -------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ 4,759,096 $ 3,763,004 $ 213,717 $ 2,348,310 =================== ==================== =================== ==================== MIST METLIFE MIST METLIFE MULTI-INDEX MIST METLIFE MIST MFS RESEARCH ASSET ALLOCATION 100 TARGETED RISK SMALL CAP VALUE INTERNATIONAL SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- ------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 1,273,109 $ 700 $ 1,072,277 $ 1,140,775 -------------------- ------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 681,696 522 1,407,545 802,525 Administrative charges............... 3,557 -- 63,818 64,466 -------------------- ------------------- -------------------- ------------------- Total expenses..................... 685,253 522 1,471,363 866,991 -------------------- ------------------- -------------------- ------------------- Net investment income (loss).... 587,856 178 (399,086) 273,784 -------------------- ------------------- -------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 7,262,909 -- 2,709,213 -- Realized gains (losses) on sale of investments........................ 534,457 (112) (2,165,634) (1,291,342) -------------------- ------------------- -------------------- ------------------- Net realized gains (losses)..... 7,797,366 (112) 543,579 (1,291,342) -------------------- ------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments..................... (4,254,460) 1,773 26,380,882 (539,602) -------------------- ------------------- -------------------- ------------------- Net realized and change in unrealized gains (losses) on investments........................ 3,542,906 1,661 26,924,461 (1,830,944) -------------------- ------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 4,130,762 $ 1,839 $ 26,525,375 $ (1,557,160) ==================== =================== ==================== =================== MIST MORGAN STANLEY MID CAP MIST OPPENHEIMER GROWTH GLOBAL EQUITY SUBACCOUNT SUBACCOUNT -------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ -- $ 3,225,083 -------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 141,143 3,890,702 Administrative charges............... 12,079 125,759 -------------------- ------------------- Total expenses..................... 153,222 4,016,461 -------------------- ------------------- Net investment income (loss).... (153,222) (791,378) -------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- 14,519,476 Realized gains (losses) on sale of investments........................ 403,405 5,405,747 -------------------- ------------------- Net realized gains (losses)..... 403,405 19,925,223 -------------------- ------------------- Change in unrealized gains (losses) on investments..................... (1,164,910) (23,598,695) -------------------- ------------------- Net realized and change in unrealized gains (losses) on investments........................ (761,505) (3,673,472) -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ (914,727) $ (4,464,850) ==================== ===================
The accompanying notes are an integral part of these financial statements. 36 The accompanying notes are an integral part of these financial statements. 37 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016
MIST PIMCO INFLATION PROTECTED MIST PIMCO TOTAL MIST PYRAMIS MIST SSGA GROWTH BOND RETURN MANAGED RISK AND INCOME ETF SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ -- $ 4,896,928 $ 179 $ 2,496,847 -------------------- ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 764,484 2,946,247 182 1,332,756 Administrative charges............... 48,225 208,993 -- -- -------------------- ------------------- ------------------- ------------------- Total expenses..................... 812,709 3,155,240 182 1,332,756 -------------------- ------------------- ------------------- ------------------- Net investment income (loss)..... (812,709) 1,741,688 (3) 1,164,091 -------------------- ------------------- ------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- -- 60 6,058,525 Realized gains (losses) on sale of investments........................ (1,067,016) (64,987) -- 416,992 -------------------- ------------------- ------------------- ------------------- Net realized gains (losses)...... (1,067,016) (64,987) 60 6,475,517 -------------------- ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments..................... 3,655,250 398,523 858 (3,010,974) -------------------- ------------------- ------------------- ------------------- Net realized and change in unrealized gains (losses) on investments........................ 2,588,234 333,536 918 3,464,543 -------------------- ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 1,775,525 $ 2,075,224 $ 915 $ 4,628,634 ==================== =================== =================== =================== MIST SSGA GROWTH MIST T. ROWE PRICE MIST T. ROWE PRICE MORGAN STANLEY ETF LARGE CAP VALUE MID CAP GROWTH MULTI CAP GROWTH SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------- ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 2,932,060 $ 10,201,346 $ -- $ -- ------------------- ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 1,706,299 5,158,587 23,686 15,037 Administrative charges............... -- 406,307 2,021 1,045 ------------------- ------------------- ------------------- ------------------- Total expenses..................... 1,706,299 5,564,894 25,707 16,082 ------------------- ------------------- ------------------- ------------------- Net investment income (loss)..... 1,225,761 4,636,452 (25,707) (16,082) ------------------- ------------------- ------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 8,796,179 41,610,469 199,405 120,519 Realized gains (losses) on sale of investments........................ 363,396 3,357,530 36,403 14,236 ------------------- ------------------- ------------------- ------------------- Net realized gains (losses)...... 9,159,575 44,967,999 235,808 134,755 ------------------- ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments..................... (3,023,203) (1,729,389) (182,386) (162,328) ------------------- ------------------- ------------------- ------------------- Net realized and change in unrealized gains (losses) on investments........................ 6,136,372 43,238,610 53,422 (27,573) ------------------- ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 7,362,133 $ 47,875,062 $ 27,715 $ (43,655) =================== =================== =================== =================== MSF BARCLAYS AGGREGATE BOND MSF BLACKROCK BOND INDEX INCOME SUBACCOUNT SUBACCOUNT ------------------ ------------------ INVESTMENT INCOME: Dividends............................ $ 1,841,772 $ 4,452,758 ------------------ ------------------ EXPENSES: Mortality and expense risk and other charges...................... 787,478 2,028,870 Administrative charges............... 16 138,562 ------------------ ------------------ Total expenses..................... 787,494 2,167,432 ------------------ ------------------ Net investment income (loss)..... 1,054,278 2,285,326 ------------------ ------------------ NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- -- Realized gains (losses) on sale of investments........................ 233,281 536,025 ------------------ ------------------ Net realized gains (losses)...... 233,281 536,025 ------------------ ------------------ Change in unrealized gains (losses) on investments..................... (406,120) (470,344) ------------------ ------------------ Net realized and change in unrealized gains (losses) on investments........................ (172,839) 65,681 ------------------ ------------------ Net increase (decrease) in net assets resulting from operations.......... $ 881,439 $ 2,351,007 ================== ==================
The accompanying notes are an integral part of these financial statements. 38 The accompanying notes are an integral part of these financial statements. 39 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016
MSF BLACKROCK MSF BLACKROCK MSF BLACKROCK ULTRA-SHORT MSF FRONTIER CAPITAL APPRECIATION LARGE CAP VALUE TERM BOND MID CAP GROWTH SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- ------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ -- $ 142,918 $ 118,630 $ -- -------------------- ------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 2,164,056 156,939 3,172,550 973,468 Administrative charges............... 170,089 12,175 245,307 89,470 -------------------- ------------------- -------------------- ------------------- Total expenses..................... 2,334,145 169,114 3,417,857 1,062,938 -------------------- ------------------- -------------------- ------------------- Net investment income (loss).... (2,334,145) (26,196) (3,299,227) (1,062,938) -------------------- ------------------- -------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 15,245,924 778,617 4,642 8,708,447 Realized gains (losses) on sale of investments........................ 7,894,951 (498,794) 48,030 1,444,913 -------------------- ------------------- -------------------- ------------------- Net realized gains (losses)..... 23,140,875 279,823 52,672 10,153,360 -------------------- ------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments..................... (23,625,455) 1,260,670 500,725 (6,486,884) -------------------- ------------------- -------------------- ------------------- Net realized and change in unrealized gains (losses) on investments........................ (484,580) 1,540,493 553,397 3,666,476 -------------------- ------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ (2,818,725) $ 1,514,297 $ (2,745,830) $ 2,603,538 ==================== =================== ==================== =================== MSF MET/DIMENSIONAL MSF JENNISON MSF LOOMIS SAYLES MSF MET/ARTISAN INTERNATIONAL SMALL GROWTH SMALL CAP CORE MID CAP VALUE COMPANY SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------- -------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 881,091 $ 364 $ 14,175 $ 23,550 ------------------- -------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 4,341,664 11,299 25,869 16,779 Administrative charges............... 74,378 883 2,435 1,344 ------------------- -------------------- ------------------- -------------------- Total expenses..................... 4,416,042 12,182 28,304 18,123 ------------------- -------------------- ------------------- -------------------- Net investment income (loss).... (3,534,951) (11,818) (14,129) 5,427 ------------------- -------------------- ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 44,284,430 50,385 186,203 77,192 Realized gains (losses) on sale of investments........................ 2,433,658 (11,367) 42,430 (188,641) ------------------- -------------------- ------------------- -------------------- Net realized gains (losses)..... 46,718,088 39,018 228,633 (111,449) ------------------- -------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments..................... (48,467,290) 64,978 92,465 112,177 ------------------- -------------------- ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments........................ (1,749,202) 103,996 321,098 728 ------------------- -------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ (5,284,153) $ 92,178 $ 306,969 $ 6,155 =================== ==================== =================== ==================== MSF MET/WELLINGTON MSF MET/WELLINGTON CORE EQUITY BALANCED OPPORTUNITIES SUBACCOUNT SUBACCOUNT ------------------- -------------------- INVESTMENT INCOME: Dividends............................ $ 6,472,097 $ 1,856,304 ------------------- -------------------- EXPENSES: Mortality and expense risk and other charges...................... 2,953,033 1,706,516 Administrative charges............... 13,625 134,686 ------------------- -------------------- Total expenses..................... 2,966,658 1,841,202 ------------------- -------------------- Net investment income (loss).... 3,505,439 15,102 ------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 10,914,824 5,504,416 Realized gains (losses) on sale of investments........................ 4,337,418 (1,710,958) ------------------- -------------------- Net realized gains (losses)..... 15,252,242 3,793,458 ------------------- -------------------- Change in unrealized gains (losses) on investments..................... (5,961,390) 1,354,198 ------------------- -------------------- Net realized and change in unrealized gains (losses) on investments........................ 9,290,852 5,147,656 ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.......... $ 12,796,291 $ 5,162,758 =================== ====================
The accompanying notes are an integral part of these financial statements. 40 The accompanying notes are an integral part of these financial statements. 41 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2016
MSF METLIFE MSF METLIFE MSF METLIFE MSF METLIFE ASSET ALLOCATION 20 ASSET ALLOCATION 40 ASSET ALLOCATION 60 ASSET ALLOCATION 80 SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 707,879 $ 2,535,392 $ 14,429,172 $ 16,623,435 -------------------- -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 322,074 943,072 6,413,914 8,884,336 Administrative charges............... 16,807 29,307 187,504 363,764 -------------------- -------------------- -------------------- ------------------- Total expenses..................... 338,881 972,379 6,601,418 9,248,100 -------------------- -------------------- -------------------- ------------------- Net investment income (loss).... 368,998 1,563,013 7,827,754 7,375,335 -------------------- -------------------- -------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 733,512 4,667,020 41,624,002 67,292,944 Realized gains (losses) on sale of investments........................ (220,437) (110,189) (561,726) 180,165 -------------------- -------------------- -------------------- ------------------- Net realized gains (losses)..... 513,075 4,556,831 41,062,276 67,473,109 -------------------- -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments..................... (218,711) (2,950,638) (24,270,212) (40,103,390) -------------------- -------------------- -------------------- ------------------- Net realized and change in unrealized gains (losses) on investments........................ 294,364 1,606,193 16,792,064 27,369,719 -------------------- -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 663,362 $ 3,169,206 $ 24,619,818 $ 34,745,054 ==================== ==================== ==================== =================== MSF METLIFE MID MSF METLIFE STOCK MSF MFS TOTAL CAP STOCK INDEX INDEX RETURN MSF MFS VALUE SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------- -------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 204,405 $ 15,939,766 $ 9,781,993 $ 2,806,765 ------------------- -------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 197,612 9,866,218 4,923,313 1,827,828 Administrative charges............... -- 122,941 350,166 117,897 ------------------- -------------------- ------------------- ------------------- Total expenses..................... 197,612 9,989,159 5,273,479 1,945,725 ------------------- -------------------- ------------------- ------------------- Net investment income (loss).... 6,793 5,950,607 4,508,514 861,040 ------------------- -------------------- ------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... 1,243,659 35,273,706 15,117,956 11,371,228 Realized gains (losses) on sale of investments........................ 245,791 25,743,678 8,478,682 336,787 ------------------- -------------------- ------------------- ------------------- Net realized gains (losses)..... 1,489,450 61,017,384 23,596,638 11,708,015 ------------------- -------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments..................... 1,349,924 11,351,356 (2,527,085) 2,304,669 ------------------- -------------------- ------------------- ------------------- Net realized and change in unrealized gains (losses) on investments........................ 2,839,374 72,368,740 21,069,553 14,012,684 ------------------- -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 2,846,167 $ 78,319,347 $ 25,578,067 $ 14,873,724 =================== ==================== =================== =================== MSF MSCI MSF NEUBERGER EAFE INDEX BERMAN GENESIS SUBACCOUNT SUBACCOUNT -------------------- ------------------- INVESTMENT INCOME: Dividends............................ $ 1,243,721 $ 249,725 -------------------- ------------------- EXPENSES: Mortality and expense risk and other charges...................... 550,737 774,214 Administrative charges............... 1,274 37,135 -------------------- ------------------- Total expenses..................... 552,011 811,349 -------------------- ------------------- Net investment income (loss).... 691,710 (561,624) -------------------- ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......... -- -- Realized gains (losses) on sale of investments........................ (1,605,838) 2,172,141 -------------------- ------------------- Net realized gains (losses)..... (1,605,838) 2,172,141 -------------------- ------------------- Change in unrealized gains (losses) on investments..................... 932,437 7,579,184 -------------------- ------------------- Net realized and change in unrealized gains (losses) on investments........................ (673,401) 9,751,325 -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.......... $ 18,309 $ 9,189,701 ==================== ===================
The accompanying notes are an integral part of these financial statements. 42 The accompanying notes are an integral part of these financial statements. 43 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF OPERATIONS -- (CONCLUDED) FOR THE YEAR ENDED DECEMBER 31, 2016
MSF WESTERN ASSET MSF RUSSELL 2000 MSF T. ROWE PRICE MSF T. ROWE PRICE MANAGEMENT STRATEGIC INDEX LARGE CAP GROWTH SMALL CAP GROWTH BOND OPPORTUNITIES SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................. $ 1,374,487 $ 1,451 $ 35,083 $ 2,775,806 -------------------- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 1,189,095 775,730 1,324,387 1,957,457 Administrative charges................ 3,907 60,205 37,279 166,954 -------------------- -------------------- -------------------- -------------------- Total expenses...................... 1,193,002 835,935 1,361,666 2,124,411 -------------------- -------------------- -------------------- -------------------- Net investment income (loss)..... 181,485 (834,484) (1,326,583) 651,395 -------------------- -------------------- -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... 5,787,880 6,665,185 14,083,341 -- Realized gains (losses) on sale of investments......................... 2,408,975 534,131 2,590,798 440,473 -------------------- -------------------- -------------------- -------------------- Net realized gains (losses)...... 8,196,855 7,199,316 16,674,139 440,473 -------------------- -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments...................... 10,191,577 (6,641,279) (5,240,914) 6,086,821 -------------------- -------------------- -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments......................... 18,388,432 558,037 11,433,225 6,527,294 -------------------- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 18,569,917 $ (276,447) $ 10,106,642 $ 7,178,689 ==================== ==================== ==================== ==================== MSF WESTERN ASSET TAP 1919 VARIABLE MANAGEMENT PIONEER VCT PIONEER VCT SOCIALLY RESPONSIVE U.S. GOVERNMENT MID CAP VALUE REAL ESTATE SHARES BALANCED SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT -------------------- -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................. $ 2,085,976 $ 91,995 $ 256,902 $ 318,577 -------------------- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk and other charges....................... 987,617 313,965 144,409 436,651 Administrative charges................ 64,846 28,792 11,930 11,640 -------------------- -------------------- -------------------- -------------------- Total expenses...................... 1,052,463 342,757 156,339 448,291 -------------------- -------------------- -------------------- -------------------- Net investment income (loss)..... 1,033,513 (250,762) 100,563 (129,714) -------------------- -------------------- -------------------- -------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... -- 1,229,407 1,489,228 2,129,957 Realized gains (losses) on sale of investments......................... 30,051 (307,912) (54,711) 372,039 -------------------- -------------------- -------------------- -------------------- Net realized gains (losses)...... 30,051 921,495 1,434,517 2,501,996 -------------------- -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments...................... (1,013,053) 1,831,176 (1,221,435) (732,681) -------------------- -------------------- -------------------- -------------------- Net realized and change in unrealized gains (losses) on investments......................... (983,002) 2,752,671 213,082 1,769,315 -------------------- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations........... $ 50,511 $ 2,501,909 $ 313,645 $ 1,639,601 ==================== ==================== ==================== ==================== UIF GROWTH SUBACCOUNT ------------------- INVESTMENT INCOME: Dividends............................. $ -- ------------------- EXPENSES: Mortality and expense risk and other charges....................... 97,061 Administrative charges................ 9,068 ------------------- Total expenses...................... 106,129 ------------------- Net investment income (loss)..... (106,129) ------------------- NET REALIZED AND CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions........... 983,392 Realized gains (losses) on sale of investments......................... 257,616 ------------------- Net realized gains (losses)...... 1,241,008 ------------------- Change in unrealized gains (losses) on investments...................... (1,342,478) ------------------- Net realized and change in unrealized gains (losses) on investments......................... (101,470) ------------------- Net increase (decrease) in net assets resulting from operations........... $ (207,599) ===================
The accompanying notes are an integral part of these financial statements. 44 The accompanying notes are an integral part of these financial statements. 45 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
AB GLOBAL THEMATIC GROWTH ALGER CAPITAL APPRECIATION SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (6,875) $ (9,890) $ (49,527) $ (60,126) Net realized gains (losses).... 13,664 135,908 69,555 572,104 Change in unrealized gains (losses) on investments...... (16,584) (96,118) (81,229) (379,406) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations........... (9,795) 29,900 (61,201) 132,572 ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... -- -- 22,393 102,197 Net transfers (including fixed account)..................... 12,850 (344,730) (152,392) (139,492) Contract charges............... (189) (198) (567) (678) Transfers for contract benefits and terminations............. (44,750) (79,683) (399,674) (479,076) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions.............. (32,089) (424,611) (530,240) (517,049) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets............. (41,884) (394,711) (591,441) (384,477) NET ASSETS: Beginning of year.............. 437,107 831,818 2,984,795 3,369,272 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 395,223 $ 437,107 $ 2,393,354 $ 2,984,795 ================ ================ ================ ================ AMERICAN FUNDS BOND AMERICAN FUNDS GLOBAL GROWTH SUBACCOUNT SUBACCOUNT ------------------------------------ ---------------------------------- 2016 2015 2016 2015 ----------------- ----------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 587 $ (2,247) $ (774,162) $ (834,547) Net realized gains (losses).... 38,256 152,650 11,195,063 17,535,529 Change in unrealized gains (losses) on investments...... 32,331 (210,580) (11,775,058) (10,317,902) ----------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 71,174 (60,177) (1,354,157) 6,383,080 ----------------- ----------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 32,769 26,731 447,176 748,732 Net transfers (including fixed account)..................... 1,086,356 381,695 (3,847,929) (1,511,896) Contract charges............... (2,269) (2,339) (16,804) (19,502) Transfers for contract benefits and terminations............. (1,340,007) (2,087,629) (12,967,239) (17,515,845) ----------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions.............. (223,151) (1,681,542) (16,384,796) (18,298,511) ----------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets............. (151,977) (1,741,719) (17,738,953) (11,915,431) NET ASSETS: Beginning of year.............. 5,024,441 6,766,160 112,218,439 124,133,870 ----------------- ----------------- ---------------- ---------------- End of year.................... $ 4,872,464 $ 5,024,441 $ 94,479,486 $ 112,218,439 ================= ================= ================ ================ AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION AMERICAN FUNDS GROWTH SUBACCOUNT SUBACCOUNT ---------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (25,838) $ (42,493) $ (2,256,033) $ (3,046,192) Net realized gains (losses).... 389,077 433,344 25,060,587 66,723,476 Change in unrealized gains (losses) on investments...... (368,768) (390,180) (6,491,721) (50,325,736) ---------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations........... (5,529) 671 16,312,833 13,351,548 ---------------- ---------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 9,540 7,274 974,927 1,760,413 Net transfers (including fixed account)..................... (204,149) (134,057) (4,169,845) (8,851,340) Contract charges............... (818) (987) (38,673) (43,239) Transfers for contract benefits and terminations............. (227,682) (493,767) (29,570,106) (35,672,902) ---------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions.............. (423,109) (621,537) (32,803,697) (42,807,068) ---------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets............. (428,638) (620,866) (16,490,864) (29,455,520) NET ASSETS: Beginning of year.............. 2,173,442 2,794,308 244,016,695 273,472,215 ---------------- ---------------- ---------------- ----------------- End of year.................... $ 1,744,804 $ 2,173,442 $ 227,525,831 $ 244,016,695 ================ ================ ================ ================= AMERICAN FUNDS GROWTH-INCOME SUBACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (723,648) $ (1,240,897) Net realized gains (losses).... 26,114,432 44,114,111 Change in unrealized gains (losses) on investments...... (7,878,308) (43,104,779) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 17,512,476 (231,565) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 578,798 1,101,499 Net transfers (including fixed account)..................... (3,955,067) (3,888,131) Contract charges............... (33,208) (37,145) Transfers for contract benefits and terminations............. (26,166,911) (34,275,236) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions.............. (29,576,388) (37,099,013) ---------------- ---------------- Net increase (decrease) in net assets............. (12,063,912) (37,330,578) NET ASSETS: Beginning of year.............. 205,249,115 242,579,693 ---------------- ---------------- End of year.................... $ 193,185,203 $ 205,249,115 ================ ================
(a) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 46 The accompanying notes are an integral part of these financial statements. 47 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
DEUTSCHE II GOVERNMENT & DELAWARE VIP SMALL CAP VALUE AGENCY SECURITIES SUBACCOUNT SUBACCOUNT ------------------------------------ ------------------------------------ 2016 2015 2016 2015 ----------------- ----------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)......................... $ 32,685 $ 7,458 $ 18,665 $ 11,936 Net realized gains (losses)...... 1,020,712 1,547,707 (28,583) (32,062) Change in unrealized gains (losses) on investments........ 1,640,505 (2,270,815) (16,337) (40,206) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations............. 2,693,902 (715,650) (26,255) (60,332) ----------------- ----------------- ----------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners........... 151,565 136,644 60 180 Net transfers (including fixed account)....................... (130,234) (436,617) 81,586 134,782 Contract charges................. (20) (20) (493) (506) Transfers for contract benefits and terminations............... (828,440) (1,484,756) (277,276) (404,274) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions................ (807,129) (1,784,749) (196,123) (269,818) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets............... 1,886,773 (2,500,399) (222,378) (330,150) NET ASSETS: Beginning of year................ 9,400,488 11,900,887 2,487,768 2,817,918 ----------------- ----------------- ----------------- ----------------- End of year...................... $ 11,287,261 $ 9,400,488 $ 2,265,390 $ 2,487,768 ================= ================= ================= ================= DREYFUS SOCIALLY RESPONSIBLE DEUTSCHE II SMALL MID CAP VALUE GROWTH SUBACCOUNT SUBACCOUNT ------------------------------------ ------------------------------------ 2016 2015 2016 2015 ----------------- ----------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)......................... $ (72,350) $ (104,699) $ (4,997) $ (7,686) Net realized gains (losses)...... 489,430 793,959 49,954 172,934 Change in unrealized gains (losses) on investments........ 135,984 (839,120) (7,556) (195,321) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations............. 553,064 (149,860) 37,401 (30,073) ----------------- ----------------- ----------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners........... 22,063 16,077 -- -- Net transfers (including fixed account)....................... (58,930) (477,055) 7,965 1,549 Contract charges................. (1,082) (1,250) (21) (153) Transfers for contract benefits and terminations............... (788,966) (1,182,636) (9,824) (258,356) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions................ (826,915) (1,644,864) (1,880) (256,960) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets............... (273,851) (1,794,724) 35,521 (287,033) NET ASSETS: Beginning of year................ 4,507,291 6,302,015 467,910 754,943 ----------------- ----------------- ----------------- ----------------- End of year...................... $ 4,233,440 $ 4,507,291 $ 503,431 $ 467,910 ================= ================= ================= ================= FIDELITY VIP DYNAMIC CAPITAL FIDELITY VIP CONTRAFUND APPRECIATION SUBACCOUNT SUBACCOUNT ------------------------------------ ------------------------------------ 2016 2015 2016 2015 ----------------- ----------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)......................... $ (1,617,180) $ (1,480,416) $ (13,312) $ (18,802) Net realized gains (losses)...... 20,207,111 28,609,290 117,378 308,268 Change in unrealized gains (losses) on investments........ (6,717,554) (28,979,360) (84,225) (291,917) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations............. 11,872,377 (1,850,486) 19,841 (2,451) ----------------- ----------------- ----------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners........... 4,152,152 4,993,524 10,142 275,291 Net transfers (including fixed account)....................... (6,081,375) (3,368,119) (79,970) (154,565) Contract charges................. (71,287) (77,251) (195) (211) Transfers for contract benefits and terminations............... (22,009,644) (27,572,533) (163,471) (315,660) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions................ (24,010,154) (26,024,379) (233,494) (195,145) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets............... (12,137,777) (27,874,865) (213,653) (197,596) NET ASSETS: Beginning of year................ 213,090,938 240,965,803 2,014,900 2,212,496 ----------------- ----------------- ----------------- ----------------- End of year...................... $ 200,953,161 $ 213,090,938 $ 1,801,247 $ 2,014,900 ================= ================= ================= ================= FIDELITY VIP EQUITY-INCOME SUBACCOUNT ----------------------------------- 2016 2015 ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)......................... $ 2,236,226 $ 4,386,215 Net realized gains (losses)...... 13,750,416 24,338,051 Change in unrealized gains (losses) on investments........ 18,349,428 (41,055,283) ----------------- ---------------- Net increase (decrease) in net assets resulting from operations............. 34,336,070 (12,331,017) ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners........... 3,420,806 3,338,924 Net transfers (including fixed account)....................... (4,877,175) (5,070,482) Contract charges................. (133,912) (139,530) Transfers for contract benefits and terminations............... (19,679,138) (22,645,035) ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions................ (21,269,419) (24,516,123) ----------------- ---------------- Net increase (decrease) in net assets............... 13,066,651 (36,847,140) NET ASSETS: Beginning of year................ 220,784,877 257,632,017 ----------------- ---------------- End of year...................... $ 233,851,528 $ 220,784,877 ================= ================
(a) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 48 The accompanying notes are an integral part of these financial statements. 49 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
FIDELITY VIP FREEDOM 2020 FIDELITY VIP FREEDOM 2025 SUBACCOUNT SUBACCOUNT ------------------------------------ ------------------------------------ 2016 2015 (a) 2016 2015 (a) ----------------- ----------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)......................... $ 2,831 $ 891 $ 2,083 $ 2,698 Net realized gains (losses)...... 4,771 263 5,286 679 Change in unrealized gains (losses) on investments........ 5,657 (1,734) 5,096 (5,947) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations............. 13,259 (580) 12,465 (2,570) ----------------- ----------------- ----------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners........... 31,858 2,552 64,251 121,251 Net transfers (including fixed account)....................... 317,874 67,817 151,990 63,785 Contract charges................. (368) (72) (952) (179) Transfers for contract benefits and terminations............... (6,481) (4) (74,756) (4) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions................ 342,883 70,293 140,533 184,853 ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets............... 356,142 69,713 152,998 182,283 NET ASSETS: Beginning of year................ 69,713 -- 182,283 -- ----------------- ----------------- ----------------- ----------------- End of year...................... $ 425,855 $ 69,713 $ 335,281 $ 182,283 ================= ================= ================= ================= FIDELITY VIP FREEDOM 2030 FIDELITY VIP FREEDOM 2040 SUBACCOUNT SUBACCOUNT ------------------------------------ ------------------------------------ 2016 2015 (a) 2016 2015 (a) ----------------- ----------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)......................... $ 3,960 $ 6,286 $ 263 $ 122 Net realized gains (losses)...... 17,548 1,866 1,282 59 Change in unrealized gains (losses) on investments........ 8,465 (12,604) 2,218 (211) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations............. 29,973 (4,452) 3,763 (30) ----------------- ----------------- ----------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners........... 51,862 20,857 63,305 10,208 Net transfers (including fixed account)....................... 50,533 412,870 2,275 (42) Contract charges................. (12) -- (126) (7) Transfers for contract benefits and terminations............... (211) (80) (17,193) (1) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions................ 102,172 433,647 48,261 10,158 ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets............... 132,145 429,195 52,024 10,128 NET ASSETS: Beginning of year................ 429,195 -- 10,128 -- ----------------- ----------------- ----------------- ----------------- End of year...................... $ 561,340 $ 429,195 $ 62,152 $ 10,128 ================= ================= ================= ================= FIDELITY VIP FREEDOM 2050 FIDELITY VIP FUNDSMANAGER 60% SUBACCOUNT SUBACCOUNT ------------------------------------ ------------------------------------ 2016 2015 (a) 2016 2015 ----------------- ----------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)......................... $ 368 $ 64 $ (4,142,473) $ (537,918) Net realized gains (losses)...... 60 47 18,823,599 9,139,660 Change in unrealized gains (losses) on investments........ 594 (142) 4,233,070 (22,750,620) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations............. 1,022 (31) 18,914,196 (14,148,878) ----------------- ----------------- ----------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners........... 28,869 5,320 54,407,292 506,225,069 Net transfers (including fixed account)....................... 15,509 (284) 589,491 2,069,423 Contract charges................. (23) (7) -- -- Transfers for contract benefits and terminations............... (2,571) (1) (17,726,786) (4,086,372) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions................ 41,784 5,028 37,269,997 504,208,120 ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets............... 42,806 4,997 56,184,193 490,059,242 NET ASSETS: Beginning of year................ 4,997 -- 537,008,428 46,949,186 ----------------- ----------------- ----------------- ----------------- End of year...................... $ 47,803 $ 4,997 $ 593,192,621 $ 537,008,428 ================= ================= ================= ================= FIDELITY VIP HIGH INCOME SUBACCOUNT ------------------------------------ 2016 2015 ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)......................... $ 766,024 $ 1,054,930 Net realized gains (losses)...... (314,092) (241,967) Change in unrealized gains (losses) on investments........ 1,912,243 (1,713,869) ----------------- ----------------- Net increase (decrease) in net assets resulting from operations............. 2,364,175 (900,906) ----------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners........... 227,896 243,023 Net transfers (including fixed account)....................... (217,142) (234,477) Contract charges................. (12,996) (13,570) Transfers for contract benefits and terminations............... (1,523,130) (2,364,647) ----------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions................ (1,525,372) (2,369,671) ----------------- ----------------- Net increase (decrease) in net assets............... 838,803 (3,270,577) NET ASSETS: Beginning of year................ 18,631,012 21,901,589 ----------------- ----------------- End of year...................... $ 19,469,815 $ 18,631,012 ================= =================
(a) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 50 The accompanying notes are an integral part of these financial statements. 51 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
FIDELITY VIP MID CAP FTVIPT FRANKLIN INCOME VIP SUBACCOUNT SUBACCOUNT ------------------------------------ ----------------------------------- 2016 2015 2016 2015 ----------------- ----------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (2,481,193) $ (3,080,436) $ 649,769 $ 708,337 Net realized gains (losses).... 16,182,735 38,510,111 (88,627) 269,862 Change in unrealized gains (losses) on investments...... 9,899,299 (42,318,036) 1,713,083 (3,116,578) ----------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 23,600,841 (6,888,361) 2,274,225 (2,138,379) ----------------- ----------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 6,166,021 7,358,339 8,102 18,094 Net transfers (including fixed account)..................... (5,707,434) (6,813,886) (716,576) (197,452) Contract charges............... (76,763) (83,792) (4,459) (4,990) Transfers for contract benefits and terminations............. (24,692,143) (31,692,582) (3,108,010) (4,492,841) ----------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (24,310,319) (31,231,921) (3,820,943) (4,677,189) ----------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (709,478) (38,120,282) (1,546,718) (6,815,568) NET ASSETS: Beginning of year.............. 246,200,236 284,320,518 21,261,003 28,076,571 ----------------- ----------------- ---------------- ---------------- End of year.................... $ 245,490,758 $ 246,200,236 $ 19,714,285 $ 21,261,003 ================= ================= ================ ================ FTVIPT FRANKLIN FTVIPT FRANKLIN RISING MUTUAL SHARES VIP DIVIDENDS VIP SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 47,974 $ 250,950 $ (76,320) $ (89,487) Net realized gains (losses).... 1,547,973 2,189,084 2,504,309 3,166,454 Change in unrealized gains (losses) on investments...... 313,182 (3,561,412) (470,433) (4,001,018) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 1,909,129 (1,121,378) 1,957,556 (924,051) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 13,174 47,146 136,318 61,549 Net transfers (including fixed account)..................... (716,816) 60,764 (606,606) (1,442,358) Contract charges............... (6,703) (7,596) (4,734) (5,285) Transfers for contract benefits and terminations............. (2,439,539) (3,853,404) (2,431,684) (2,912,812) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (3,149,884) (3,753,090) (2,906,706) (4,298,906) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (1,240,755) (4,874,468) (949,150) (5,222,957) NET ASSETS: Beginning of year.............. 16,047,671 20,922,139 15,073,297 20,296,254 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 14,806,916 $ 16,047,671 $ 14,124,147 $ 15,073,297 ================ ================ ================ ================ FTVIPT FRANKLIN SMALL-MID FTVIPT TEMPLETON DEVELOPING CAP GROWTH VIP MARKETS VIP SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (422,868) $ (528,877) $ (52,666) $ 142,690 Net realized gains (losses).... 2,019,116 7,536,394 (1,044,768) 1,518,314 Change in unrealized gains (losses) on investments...... (1,038,951) (8,019,904) 3,249,765 (5,316,939) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 557,297 (1,012,387) 2,152,331 (3,655,935) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 206,530 325,931 730,271 868,217 Net transfers (including fixed account)..................... (387,266) (836,350) (625,612) (1,021,780) Contract charges............... (7,884) (9,087) (7,749) (8,304) Transfers for contract benefits and terminations............. (2,911,027) (4,446,423) (1,417,336) (1,607,424) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (3,099,647) (4,965,929) (1,320,426) (1,769,291) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (2,542,350) (5,978,316) 831,905 (5,425,226) NET ASSETS: Beginning of year.............. 26,005,031 31,983,347 13,806,146 19,231,372 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 23,462,681 $ 26,005,031 $ 14,638,051 $ 13,806,146 ================ ================ ================ ================ FTVIPT TEMPLETON FOREIGN VIP SUBACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 104,190 $ 1,002,218 Net realized gains (losses).... 44,825 2,982,112 Change in unrealized gains (losses) on investments...... 2,708,456 (8,984,957) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 2,857,471 (5,000,627) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 662,355 825,372 Net transfers (including fixed account)..................... 8,619 (217,127) Contract charges............... (12,468) (14,303) Transfers for contract benefits and terminations............. (6,797,379) (9,016,088) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (6,138,873) (8,422,146) ---------------- ---------------- Net increase (decrease) in net assets.............. (3,281,402) (13,422,773) NET ASSETS: Beginning of year.............. 58,736,117 72,158,890 ---------------- ---------------- End of year.................... $ 55,454,715 $ 58,736,117 ================ ================
(a) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 52 The accompanying notes are an integral part of these financial statements. 53 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
INVESCO V.I. COMSTOCK INVESCO V.I. DIVERSIFIED DIVIDEND SUBACCOUNT SUBACCOUNT ------------------------------------- ------------------------------------- 2016 2015 2016 2015 ----------------- ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)...................... $ (4,406) $ 15,458 $ (13,169) $ (9,982) Net realized gains (losses).... 659,045 321,023 123,701 94,784 Change in unrealized gains (losses) on investments..... 90,333 (820,022) 34,098 (84,851) ----------------- ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations........... 744,972 (483,541) 144,630 (49) ----------------- ------------------ ----------------- ------------------ CONTRACT TRANSACTIONS: Purchase payments received from contract owners........ -- -- -- -- Net transfers (including fixed account).................... (364,888) (124,509) 61,697 18,927 Contract charges............... (675) (786) (99) (84) Transfers for contract benefits and terminations............ (507,628) (758,138) (237,705) (139,238) ----------------- ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from contract transactions.............. (873,191) (883,433) (176,107) (120,395) ----------------- ------------------ ----------------- ------------------ Net increase (decrease) in net assets............. (128,219) (1,366,974) (31,477) (120,444) NET ASSETS: Beginning of year.............. 5,511,939 6,878,913 1,284,340 1,404,784 ----------------- ------------------ ----------------- ------------------ End of year.................... $ 5,383,720 $ 5,511,939 $ 1,252,863 $ 1,284,340 ================= ================== ================= ================== INVESCO V.I. EQUITY AND INCOME INVESCO V.I. GOVERNMENT SECURITIES SUBACCOUNT SUBACCOUNT ------------------------------------- ------------------------------------- 2016 2015 2016 2015 ----------------- ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)...................... $ (7,698) $ 336,322 $ (2,310) $ 20,057 Net realized gains (losses).... 2,958,945 8,524,464 (2,698) (8,023) Change in unrealized gains (losses) on investments..... 2,852,056 (11,272,265) (27,188) (158,830) ----------------- ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations........... 5,803,303 (2,411,479) (32,196) (146,796) ----------------- ------------------ ----------------- ------------------ CONTRACT TRANSACTIONS: Purchase payments received from contract owners........ 118,778 362,098 3,750 -- Net transfers (including fixed account).................... (1,095,723) 65,063 56,467 (180,666) Contract charges............... (19,392) (21,642) (1,376) (1,532) Transfers for contract benefits and terminations............ (7,146,777) (11,549,113) (1,391,547) (1,481,453) ----------------- ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from contract transactions.............. (8,143,114) (11,143,594) (1,332,706) (1,663,651) ----------------- ------------------ ----------------- ------------------ Net increase (decrease) in net assets............. (2,339,811) (13,555,073) (1,364,902) (1,810,447) NET ASSETS: Beginning of year.............. 52,124,645 65,679,718 8,782,732 10,593,179 ----------------- ------------------ ----------------- ------------------ End of year.................... $ 49,784,834 $ 52,124,645 $ 7,417,830 $ 8,782,732 ================= ================== ================= ================== INVESCO V.I. MANAGED VOLATILITY INVESCO V.I. S&P 500 INDEX SUBACCOUNT SUBACCOUNT ------------------------------------- ------------------------------------- 2016 2015 2016 2015 ----------------- ------------------ ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)...................... $ (2,050) $ (9,969) $ (15,045) $ (15,489) Net realized gains (losses).... (60,896) 537,459 325,281 335,595 Change in unrealized gains (losses) on investments..... 158,819 (584,124) (136,521) (342,011) ----------------- ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from operations........... 95,873 (56,634) 173,715 (21,905) ----------------- ------------------ ----------------- ------------------ CONTRACT TRANSACTIONS: Purchase payments received from contract owners........ -- 6,793 2,415 31,646 Net transfers (including fixed account).................... 19,622 130,209 (1,034) 125,850 Contract charges............... (453) (557) (291) (360) Transfers for contract benefits and terminations............ (231,877) (362,562) (463,922) (316,733) ----------------- ------------------ ----------------- ------------------ Net increase (decrease) in net assets resulting from contract transactions.............. (212,708) (226,117) (462,832) (159,597) ----------------- ------------------ ----------------- ------------------ Net increase (decrease) in net assets............. (116,835) (282,751) (289,117) (181,502) NET ASSETS: Beginning of year.............. 1,350,241 1,632,992 2,194,793 2,376,295 ----------------- ------------------ ----------------- ------------------ End of year.................... $ 1,233,406 $ 1,350,241 $ 1,905,676 $ 2,194,793 ================= ================== ================= ================== JANUS ASPEN ENTERPRISE SUBACCOUNT ------------------------------------- 2016 2015 ----------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)...................... $ (170,680) $ (123,404) Net realized gains (losses).... 1,610,561 2,507,493 Change in unrealized gains (losses) on investments..... (213,763) (2,039,530) ----------------- ------------------ Net increase (decrease) in net assets resulting from operations........... 1,226,118 344,559 ----------------- ------------------ CONTRACT TRANSACTIONS: Purchase payments received from contract owners........ 258,654 217,405 Net transfers (including fixed account).................... 32,434 (320,879) Contract charges............... (1,703) (1,801) Transfers for contract benefits and terminations............ (1,512,489) (1,586,693) ----------------- ------------------ Net increase (decrease) in net assets resulting from contract transactions.............. (1,223,104) (1,691,968) ----------------- ------------------ Net increase (decrease) in net assets............. 3,014 (1,347,409) NET ASSETS: Beginning of year.............. 12,285,705 13,633,114 ----------------- ------------------ End of year.................... $ 12,288,719 $ 12,285,705 ================= ==================
(a) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 54 The accompanying notes are an integral part of these financial statements. 55 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
JANUS ASPEN GLOBAL RESEARCH JANUS ASPEN OVERSEAS SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 3,066 $ 150 $ 1,000,357 $ (312,663) Net realized gains (losses).... 43,500 58,484 (1,601,072) (351,373) Change in unrealized gains (losses) on investments...... (39,056) (79,664) (2,110,590) (3,136,630) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 7,510 (21,030) (2,711,305) (3,800,666) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 10,983 11,934 1,571,214 1,727,418 Net transfers (including fixed account)..................... 8,033 (69,443) (1,661,271) (1,387,460) Contract charges............... -- -- (16,412) (20,896) Transfers for contract benefits and terminations............. (154,576) (82,466) (2,361,206) (3,837,225) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (135,560) (139,975) (2,467,675) (3,518,163) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (128,050) (161,005) (5,178,980) (7,318,829) NET ASSETS: Beginning of year.............. 803,814 964,819 33,941,265 41,260,094 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 675,764 $ 803,814 $ 28,762,285 $ 33,941,265 ================ ================ ================ ================ LMPVET CLEARBRIDGE VARIABLE LMPVET CLEARBRIDGE VARIABLE AGGRESSIVE GROWTH APPRECIATION SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (3,129,262) $ (5,105,515) $ (737,425) $ (1,213,498) Net realized gains (losses).... 31,729,193 74,177,005 17,578,940 22,935,686 Change in unrealized gains (losses) on investments...... (31,339,196) (80,504,515) 2,307,392 (21,629,746) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ (2,739,265) (11,433,025) 19,148,907 92,442 ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 2,524,691 2,743,545 952,911 1,412,639 Net transfers (including fixed account)..................... (2,014,873) (8,738,495) (3,348,431) (5,615,222) Contract charges............... (168,878) (191,395) (138,920) (149,443) Transfers for contract benefits and terminations............. (37,305,304) (53,751,725) (30,510,890) (38,152,929) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (36,964,364) (59,938,070) (33,045,330) (42,504,955) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (39,703,629) (71,371,095) (13,896,423) (42,412,513) NET ASSETS: Beginning of year.............. 368,227,608 439,598,703 259,099,416 301,511,929 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 328,523,979 $ 368,227,608 $ 245,202,993 $ 259,099,416 ================ ================ ================ ================ LMPVET CLEARBRIDGE VARIABLE LMPVET CLEARBRIDGE VARIABLE DIVIDEND STRATEGY LARGE CAP GROWTH SUBACCOUNT SUBACCOUNT ------------------------------------ ---------------------------------- 2016 2015 2016 2015 ----------------- ----------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (371,549) $ (230,612) $ (979,003) $ (1,123,146) Net realized gains (losses).... 3,402,946 4,508,781 10,151,357 16,769,415 Change in unrealized gains (losses) on investments...... 7,801,497 (10,810,413) (4,229,733) (7,951,222) ----------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 10,832,894 (6,532,244) 4,942,621 7,695,047 ----------------- ----------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 122,668 173,543 664,303 684,747 Net transfers (including fixed account)..................... (123,865) (678,730) (1,163,190) (2,668,291) Contract charges............... (32,619) (35,376) (25,617) (27,382) Transfers for contract benefits and terminations............. (11,728,940) (16,087,004) (10,212,887) (12,721,146) ----------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (11,762,756) (16,627,567) (10,737,391) (14,732,072) ----------------- ----------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (929,862) (23,159,811) (5,794,770) (7,037,025) NET ASSETS: Beginning of year.............. 91,048,394 114,208,205 94,894,567 101,931,592 ----------------- ----------------- ---------------- ---------------- End of year.................... $ 90,118,532 $ 91,048,394 $ 89,099,797 $ 94,894,567 ================= ================= ================ ================ LMPVET CLEARBRIDGE VARIABLE LARGE CAP VALUE SUBACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 91,546 $ (31,145) Net realized gains (losses).... 4,217,143 8,285,880 Change in unrealized gains (losses) on investments...... 7,747,711 (13,487,092) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 12,056,400 (5,232,357) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 453,867 212,890 Net transfers (including fixed account)..................... (933,453) (1,270,398) Contract charges............... (47,799) (51,658) Transfers for contract benefits and terminations............. (11,476,323) (16,177,132) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (12,003,708) (17,286,298) ---------------- ---------------- Net increase (decrease) in net assets.............. 52,692 (22,518,655) NET ASSETS: Beginning of year.............. 114,052,269 136,570,924 ---------------- ---------------- End of year.................... $ 114,104,961 $ 114,052,269 ================ ================
(a) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 56 The accompanying notes are an integral part of these financial statements. 57 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
LMPVET CLEARBRIDGE VARIABLE LMPVET CLEARBRIDGE VARIABLE MID CAP SMALL CAP GROWTH SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (268,755) $ (613,720) $ (693,059) $ (859,708) Net realized gains (losses).... 1,697,903 4,051,386 2,998,553 4,008,511 Change in unrealized gains (losses) on investments...... 754,862 (3,086,201) (704,843) (6,390,593) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 2,184,010 351,465 1,600,651 (3,241,790) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 41,711 42,652 402,680 504,371 Net transfers (including fixed account)..................... 30,070 (662,093) (1,034,694) (1,022,803) Contract charges............... (10,221) (11,418) (14,785) (16,352) Transfers for contract benefits and terminations............. (3,541,140) (5,042,698) (5,191,448) (8,300,286) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (3,479,580) (5,673,557) (5,838,247) (8,835,070) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (1,295,570) (5,322,092) (4,237,596) (12,076,860) NET ASSETS: Beginning of year.............. 33,367,358 38,689,450 48,622,214 60,699,074 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 32,071,788 $ 33,367,358 $ 44,384,618 $ 48,622,214 ================ ================ ================ ================ LMPVET QS VARIABLE CONSERVATIVE GROWTH LMPVET QS VARIABLE GROWTH SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 373,405 $ 229,613 $ 1,690 $ (20,425) Net realized gains (losses).... 1,505,502 2,060,205 873,565 2,975,222 Change in unrealized gains (losses) on investments...... 700,199 (3,578,920) 470,828 (3,725,458) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 2,579,106 (1,289,102) 1,346,083 (770,661) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 119,836 76,280 65,741 79,870 Net transfers (including fixed account)..................... (942,073) (258,373) (275,082) (311,434) Contract charges............... (26,329) (29,425) (20,649) (22,416) Transfers for contract benefits and terminations............. (6,385,071) (8,757,020) (1,931,146) (2,121,628) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (7,233,637) (8,968,538) (2,161,136) (2,375,608) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (4,654,531) (10,257,640) (815,053) (3,146,269) NET ASSETS: Beginning of year.............. 48,860,860 59,118,500 21,126,287 24,272,556 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 44,206,329 $ 48,860,860 $ 20,311,234 $ 21,126,287 ================ ================ ================ ================ LMPVET QS VARIABLE MODERATE GROWTH LMPVIT WESTERN ASSET CORE PLUS SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 183,355 $ 79,676 $ 326,679 $ (148,494) Net realized gains (losses).... 1,023,775 1,249,406 (1,254,653) (2,068,486) Change in unrealized gains (losses) on investments...... 641,325 (2,343,956) 2,869,774 2,047,470 ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 1,848,455 (1,014,874) 1,941,800 (169,510) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 69,119 115,147 143,116 100,024 Net transfers (including fixed account)..................... (105,196) (421,924) 100,943 (610,917) Contract charges............... (25,949) (28,418) (20,301) (22,498) Transfers for contract benefits and terminations............. (2,683,965) (4,886,784) (8,312,837) (11,684,548) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (2,745,991) (5,221,979) (8,089,079) (12,217,939) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (897,536) (6,236,853) (6,147,279) (12,387,449) NET ASSETS: Beginning of year.............. 30,991,123 37,227,976 66,305,234 78,692,683 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 30,093,587 $ 30,991,123 $ 60,157,955 $ 66,305,234 ================ ================ ================ ================ LMPVIT WESTERN ASSET VARIABLE GLOBAL HIGH YIELD BOND SUBACCOUNT --------------------------------- 2016 2015 ---------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 231,523 $ 261,219 Net realized gains (losses).... (216,758) (136,878) Change in unrealized gains (losses) on investments...... 688,455 (600,622) ---------------- --------------- Net increase (decrease) in net assets resulting from operations............ 703,220 (476,281) ---------------- --------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... -- 1,410 Net transfers (including fixed account)..................... (209,241) (80,390) Contract charges............... (612) (793) Transfers for contract benefits and terminations............. (859,691) (1,232,932) ---------------- --------------- Net increase (decrease) in net assets resulting from contract transactions............... (1,069,544) (1,312,705) ---------------- --------------- Net increase (decrease) in net assets.............. (366,324) (1,788,986) NET ASSETS: Beginning of year.............. 5,805,010 7,593,996 ---------------- --------------- End of year.................... $ 5,438,686 $ 5,805,010 ================ ===============
(a) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 58 The accompanying notes are an integral part of these financial statements. 59 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
MIST AMERICAN FUNDS MIST AMERICAN FUNDS BALANCED ALLOCATION GROWTH ALLOCATION SUBACCOUNT SUBACCOUNT ---------------------------------- ------------------------------------ 2016 2015 2016 2015 ---------------- ---------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 52,929 $ 25,125 $ 18,766 $ 22,090 Net realized gains (losses)..... 293,094 269,885 325,098 249,431 Change in unrealized gains (losses) on investments....... (5,926) (353,258) (73,852) (328,674) ---------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 340,097 (58,248) 270,012 (57,153) ---------------- ---------------- ----------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 405,038 753,496 413,223 562,912 Net transfers (including fixed account)...................... 608,482 98,899 (5,154) (233,543) Contract charges................ (26) (30) (28) (184) Transfers for contract benefits and terminations.............. (788,300) (325,871) (426,670) (441,098) ---------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions............... 225,194 526,494 (18,629) (111,913) ---------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets.............. 565,291 468,246 251,383 (169,066) NET ASSETS: Beginning of year............... 4,828,342 4,360,096 3,549,784 3,718,850 ---------------- ---------------- ----------------- ----------------- End of year..................... $ 5,393,633 $ 4,828,342 $ 3,801,167 $ 3,549,784 ================ ================ ================= ================= MIST AMERICAN FUNDS MODERATE ALLOCATION MIST BLACKROCK HIGH YIELD SUBACCOUNT SUBACCOUNT ---------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 28,813 $ 20,099 $ 4,351,824 $ 6,205,064 Net realized gains (losses)..... 154,267 132,391 (1,836,768) (8,605) Change in unrealized gains (losses) on investments....... (29,232) (201,631) 7,257,359 (10,584,605) ---------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 153,848 (49,141) 9,772,415 (4,388,146) ---------------- ---------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 301,249 495,943 1,729,246 1,821,386 Net transfers (including fixed account)...................... (22,416) (207,480) (1,853,425) (4,016,353) Contract charges................ (166) (240) (30,499) (33,211) Transfers for contract benefits and terminations.............. (537,384) (112,395) (9,716,679) (15,379,033) ---------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions............... (258,717) 175,828 (9,871,357) (17,607,211) ---------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets.............. (104,869) 126,687 (98,942) (21,995,357) NET ASSETS: Beginning of year............... 2,991,070 2,864,383 82,643,530 104,638,887 ---------------- ---------------- ---------------- ----------------- End of year..................... $ 2,886,201 $ 2,991,070 $ 82,544,588 $ 82,643,530 ================ ================ ================ ================= MIST CLEARBRIDGE AGGRESSIVE MIST CLARION GLOBAL REAL ESTATE GROWTH SUBACCOUNT SUBACCOUNT ----------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 509,492 $ 1,800,965 $ (2,852,113) $ (4,931,207) Net realized gains (losses)..... (421,289) (160,564) 3,694,060 9,606,916 Change in unrealized gains (losses) on investments....... (223,617) (3,522,861) 5,754,234 (31,968,776) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ (135,414) (1,882,460) 6,596,181 (27,293,067) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 1,595,808 1,822,913 8,404,380 9,183,107 Net transfers (including fixed account)...................... (1,091,467) (1,906,462) (15,879,521) (12,850,036) Contract charges................ (22,098) (23,977) (291,976) (326,205) Transfers for contract benefits and terminations.............. (7,395,551) (10,299,851) (47,382,577) (56,710,818) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (6,913,308) (10,407,377) (55,149,694) (60,703,952) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (7,048,722) (12,289,837) (48,553,513) (87,997,019) NET ASSETS: Beginning of year............... 65,557,139 77,846,976 526,677,455 614,674,474 ---------------- ---------------- ---------------- ---------------- End of year..................... $ 58,508,417 $ 65,557,139 $ 478,123,942 $ 526,677,455 ================ ================ ================ ================ MIST HARRIS OAKMARK INTERNATIONAL SUBACCOUNT ----------------------------------- 2016 2015 ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 442,792 $ 1,081,309 Net realized gains (losses)..... 1,051,568 6,196,329 Change in unrealized gains (losses) on investments....... 1,714,616 (10,651,498) ----------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 3,208,976 (3,373,860) ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 967,832 980,475 Net transfers (including fixed account)...................... (2,855,212) 863,608 Contract charges................ (11,699) (13,626) Transfers for contract benefits and terminations.............. (5,869,209) (7,790,092) ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (7,768,288) (5,959,635) ----------------- ---------------- Net increase (decrease) in net assets.............. (4,559,312) (9,333,495) NET ASSETS: Beginning of year............... 58,322,409 67,655,904 ----------------- ---------------- End of year..................... $ 53,763,097 $ 58,322,409 ================= ================
(a) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 60 The accompanying notes are an integral part of these financial statements. 61 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
MIST INVESCO COMSTOCK MIST INVESCO MID CAP VALUE SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 1,503,075 $ 2,539,442 $ (451,796) $ (635,860) Net realized gains (losses).... 19,988,296 19,350,552 1,467,270 2,966,603 Change in unrealized gains (losses) on investments...... 3,303,101 (37,466,239) 3,924,305 (6,985,457) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 24,794,472 (15,576,245) 4,939,779 (4,654,714) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 582,046 760,889 133,519 242,899 Net transfers (including fixed account)..................... (3,828,116) (4,242,895) (91,063) (1,136,991) Contract charges............... (69,295) (76,476) (6,079) (7,256) Transfers for contract benefits and terminations............. (23,515,849) (29,675,080) (3,859,081) (7,253,517) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (26,831,214) (33,233,562) (3,822,704) (8,154,865) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (2,036,742) (48,809,807) 1,117,075 (12,809,579) NET ASSETS: Beginning of year.............. 184,751,261 233,561,068 39,601,373 52,410,952 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 182,714,519 $ 184,751,261 $ 40,718,448 $ 39,601,373 ================ ================ ================ ================ MIST INVESCO SMALL CAP GROWTH MIST JPMORGAN SMALL CAP VALUE SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (214,666) $ (233,167) $ 27,672 $ (24,038) Net realized gains (losses).... 1,750,076 3,865,529 813,509 1,488,404 Change in unrealized gains (losses) on investments...... (350,031) (4,152,179) 1,860,272 (2,470,809) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 1,185,379 (519,817) 2,701,453 (1,006,443) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 253,403 276,222 261,716 247,369 Net transfers (including fixed account)..................... (741,665) 1,781,571 (129,002) (869,606) Contract charges............... (2,972) (3,183) (2,866) (2,797) Transfers for contract benefits and terminations............. (1,281,619) (2,185,753) (1,026,639) (1,744,640) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (1,772,853) (131,143) (896,791) (2,369,674) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (587,474) (650,960) 1,804,662 (3,376,117) NET ASSETS: Beginning of year.............. 13,547,388 14,198,348 9,963,889 13,340,006 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 12,959,914 $ 13,547,388 $ 11,768,551 $ 9,963,889 ================ ================ ================ ================ MIST MET/ABERDEEN MIST LOOMIS SAYLES GLOBAL MARKETS EMERGING MARKETS EQUITY SUBACCOUNT SUBACCOUNT ----------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 885,350 $ 832,251 $ (329,901) $ 6,177 Net realized gains (losses).... 7,975,121 4,762,941 (1,105,970) (1,135,337) Change in unrealized gains (losses) on investments...... (4,101,375) (4,943,047) 5,198,875 (6,373,766) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 4,759,096 652,145 3,763,004 (7,502,926) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 2,339,059 2,443,866 160,473 231,208 Net transfers (including fixed account)..................... (2,373,591) (2,855,179) (1,781,990) 1,550,028 Contract charges............... (75,385) (82,364) (9,017) (9,791) Transfers for contract benefits and terminations............. (13,837,533) (14,377,761) (5,032,124) (7,586,019) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (13,947,450) (14,871,438) (6,662,658) (5,814,574) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (9,188,354) (14,219,293) (2,899,654) (13,317,500) NET ASSETS: Beginning of year.............. 135,115,612 149,334,905 40,103,316 53,420,816 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 125,927,258 $ 135,115,612 $ 37,203,662 $ 40,103,316 ================ ================ ================ ================ MIST MET/EATON VANCE FLOATING RATE SUBACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 77,084 $ 70,576 Net realized gains (losses).... (73,348) (42,525) Change in unrealized gains (losses) on investments...... 209,981 (139,928) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 213,717 (111,877) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 203 7,678 Net transfers (including fixed account)..................... (791,797) 27,384 Contract charges............... (69) (130) Transfers for contract benefits and terminations............. (304,901) (428,341) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (1,096,564) (393,409) ---------------- ---------------- Net increase (decrease) in net assets.............. (882,847) (505,286) NET ASSETS: Beginning of year.............. 3,637,330 4,142,616 ---------------- ---------------- End of year.................... $ 2,754,483 $ 3,637,330 ================ ================
(a) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 62 The accompanying notes are an integral part of these financial statements. 63 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
MIST MET/WELLINGTON LARGE CAP RESEARCH MIST METLIFE ASSET ALLOCATION 100 SUBACCOUNT SUBACCOUNT ---------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 279,130 $ (333,236) $ 587,856 $ 42,310 Net realized gains (losses).... 3,890,674 5,440,443 7,797,366 5,986,553 Change in unrealized gains (losses) on investments...... (1,821,494) (3,797,151) (4,254,460) (7,932,688) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 2,348,310 1,310,056 4,130,762 (1,903,825) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 137,931 175,089 2,393,098 2,685,137 Net transfers (including fixed account)..................... (1,362,827) (1,207,865) (2,033,832) (692,178) Contract charges............... (25,000) (27,027) (52,246) (55,229) Transfers for contract benefits and terminations............. (5,036,315) (5,767,799) (5,536,633) (4,756,899) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions.............. (6,286,211) (6,827,602) (5,229,613) (2,819,169) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets............. (3,937,901) (5,517,546) (1,098,851) (4,722,994) NET ASSETS: Beginning of year.............. 40,746,872 46,264,418 59,108,391 63,831,385 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 36,808,971 $ 40,746,872 $ 58,009,540 $ 59,108,391 ================ ================ ================ ================ MIST METLIFE MULTI-INDEX TARGETED RISK MIST METLIFE SMALL CAP VALUE SUBACCOUNT SUBACCOUNT ----------------------------------- ---------------------------------- 2016 2015 2016 2015 ----------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 178 $ 224 $ (399,086) $ (1,519,251) Net realized gains (losses).... (112) 808 543,579 40,701,939 Change in unrealized gains (losses) on investments...... 1,773 (1,787) 26,380,882 (46,437,528) ----------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations........... 1,839 (755) 26,525,375 (7,254,840) ----------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 23,270 19,599 1,541,331 1,904,906 Net transfers (including fixed account)..................... 68,506 861 (3,377,865) (2,914,553) Contract charges............... (45) (3) (43,727) (44,746) Transfers for contract benefits and terminations............. (8,209) (221) (10,244,889) (14,626,342) ----------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions.............. 83,522 20,236 (12,125,150) (15,680,735) ----------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets............. 85,361 19,481 14,400,225 (22,935,575) NET ASSETS: Beginning of year.............. 31,905 12,424 97,811,772 120,747,347 ----------------- ---------------- ---------------- ---------------- End of year.................... $ 117,266 $ 31,905 $ 112,211,997 $ 97,811,772 ================= ================ ================ ================ MIST MORGAN STANLEY MID CAP MIST MFS RESEARCH INTERNATIONAL GROWTH SUBACCOUNT SUBACCOUNT ---------------------------------- ------------------------------------ 2016 2015 2016 2015 ---------------- ---------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 273,784 $ 862,282 $ (153,222) $ (202,171) Net realized gains (losses).... (1,291,342) (107,034) 403,405 724,182 Change in unrealized gains (losses) on investments...... (539,602) (2,629,409) (1,164,910) (1,223,721) ---------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations........... (1,557,160) (1,874,161) (914,727) (701,710) ---------------- ---------------- ----------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 524,920 508,172 12,252 29,156 Net transfers (including fixed account)..................... (871,478) 1,397,495 (341,992) (133,677) Contract charges............... (27,528) (31,605) (1,091) (1,330) Transfers for contract benefits and terminations............. (7,095,512) (9,271,664) (883,834) (1,283,539) ---------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions.............. (7,469,598) (7,397,602) (1,214,665) (1,389,390) ---------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets............. (9,026,758) (9,271,763) (2,129,392) (2,091,100) NET ASSETS: Beginning of year.............. 63,005,452 72,277,215 9,645,446 11,736,546 ---------------- ---------------- ----------------- ----------------- End of year.................... $ 53,978,694 $ 63,005,452 $ 7,516,054 $ 9,645,446 ================ ================ ================= ================= MIST OPPENHEIMER GLOBAL EQUITY SUBACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (791,378) $ (808,711) Net realized gains (losses).... 19,925,223 19,253,564 Change in unrealized gains (losses) on investments...... (23,598,695) (7,961,424) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations........... (4,464,850) 10,483,429 ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 5,074,197 6,173,498 Net transfers (including fixed account)..................... (6,419,462) (6,330,514) Contract charges............... (117,721) (136,679) Transfers for contract benefits and terminations............. (31,683,831) (38,247,891) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions.............. (33,146,817) (38,541,586) ---------------- ---------------- Net increase (decrease) in net assets............. (37,611,667) (28,058,157) NET ASSETS: Beginning of year.............. 323,609,477 351,667,634 ---------------- ---------------- End of year.................... $ 285,997,810 $ 323,609,477 ================ ================
(a) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 64 The accompanying notes are an integral part of these financial statements. 65 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
MIST PIMCO INFLATION PROTECTED BOND MIST PIMCO TOTAL RETURN SUBACCOUNT SUBACCOUNT --------------------------------- --------------------------------- 2016 2015 2016 2015 --------------- ---------------- --------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (812,709) $ 2,028,568 $ 1,741,688 $ 8,042,023 Net realized gains (losses).... (1,067,016) (1,499,033) (64,987) 3,920,021 Change in unrealized gains (losses) on investments...... 3,655,250 (3,060,352) 398,523 (15,304,841) --------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 1,775,525 (2,530,817) 2,075,224 (3,342,797) --------------- ---------------- --------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 1,330,903 1,315,016 2,543,989 2,469,405 Net transfers (including fixed account)..................... (1,733,357) (3,098,875) (3,631,126) (7,014,522) Contract charges............... (12,414) (13,945) (47,717) (53,613) Transfers for contract benefits and terminations............. (5,181,312) (9,534,376) (25,744,712) (35,377,196) --------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (5,596,180) (11,332,180) (26,879,566) (39,975,926) --------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets.............. (3,820,655) (13,862,997) (24,804,342) (43,318,723) NET ASSETS: Beginning of year.............. 51,884,514 65,747,511 200,669,344 243,988,067 --------------- ---------------- --------------- ---------------- End of year.................... $ 48,063,859 $ 51,884,514 $ 175,865,002 $ 200,669,344 =============== ================ =============== ================ MIST SSGA GROWTH AND MIST PYRAMIS MANAGED RISK INCOME ETF SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (3) $ (4) $ 1,164,091 $ 1,244,376 Net realized gains (losses).... 60 539 6,475,517 8,080,443 Change in unrealized gains (losses) on investments...... 858 (1,073) (3,010,974) (12,866,922) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 915 (538) 4,628,634 (3,542,103) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 9,497 9,527 2,333,975 2,285,272 Net transfers (including fixed account)..................... 113 (2,667) (2,271,885) (1,663,381) Contract charges............... (2) -- (115,566) (124,667) Transfers for contract benefits and terminations............. (9) (4) (9,495,937) (10,363,431) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... 9,599 6,856 (9,549,413) (9,866,207) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. 10,514 6,318 (4,920,779) (13,408,310) NET ASSETS: Beginning of year.............. 17,857 11,539 109,354,013 122,762,323 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 28,371 $ 17,857 $ 104,433,234 $ 109,354,013 ================ ================ ================ ================ MIST T. ROWE PRICE LARGE CAP MIST SSGA GROWTH ETF VALUE SUBACCOUNT SUBACCOUNT --------------------------------- --------------------------------- 2016 2015 2016 2015 ---------------- --------------- ---------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 1,225,761 $ 1,152,160 $ 4,636,452 $ 160,602 Net realized gains (losses).... 9,159,575 10,196,188 44,967,999 9,171,343 Change in unrealized gains (losses) on investments...... (3,023,203) (16,379,555) (1,729,389) (29,857,732) ---------------- --------------- ---------------- --------------- Net increase (decrease) in net assets resulting from operations............ 7,362,133 (5,031,207) 47,875,062 (20,525,787) ---------------- --------------- ---------------- --------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 3,643,729 3,853,374 3,866,783 4,978,508 Net transfers (including fixed account)..................... (2,491,144) (2,301,036) (9,566,265) (5,362,714) Contract charges............... (142,588) (153,046) (134,324) (141,231) Transfers for contract benefits and terminations............. (11,662,235) (13,906,872) (42,029,707) (55,336,625) ---------------- --------------- ---------------- --------------- Net increase (decrease) in net assets resulting from contract transactions............... (10,652,238) (12,507,580) (47,863,513) (55,862,062) ---------------- --------------- ---------------- --------------- Net increase (decrease) in net assets.............. (3,290,105) (17,538,787) 11,549 (76,387,849) NET ASSETS: Beginning of year.............. 139,366,676 156,905,463 366,982,709 443,370,558 ---------------- --------------- ---------------- --------------- End of year.................... $ 136,076,571 $ 139,366,676 $ 366,994,258 $ 366,982,709 ================ =============== ================ =============== MIST T. ROWE PRICE MID CAP GROWTH SUBACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (25,707) $ (36,721) Net realized gains (losses).... 235,808 420,408 Change in unrealized gains (losses) on investments...... (182,386) (285,565) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 27,715 98,122 ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... -- 325 Net transfers (including fixed account)..................... (310,290) (149,633) Contract charges............... (320) (312) Transfers for contract benefits and terminations............. (276,847) (172,597) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (587,457) (322,217) ---------------- ---------------- Net increase (decrease) in net assets.............. (559,742) (224,095) NET ASSETS: Beginning of year.............. 1,870,191 2,094,286 ---------------- ---------------- End of year.................... $ 1,310,449 $ 1,870,191 ================ ================
(a) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 66 The accompanying notes are an integral part of these financial statements. 67 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
MSF BARCLAYS AGGREGATE BOND MORGAN STANLEY MULTI CAP GROWTH INDEX SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (16,082) $ (18,479) $ 1,054,278 $ 1,251,718 Net realized gains (losses).... 134,755 220,565 233,281 176,702 Change in unrealized gains (losses) on investments...... (162,328) (149,761) (406,120) (2,074,694) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ (43,655) 52,325 881,439 (646,274) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... -- -- 1,497,373 1,579,838 Net transfers (including fixed account)..................... 1,544 (23,059) (704,216) (650,845) Contract charges............... (68) (75) (39,779) (42,735) Transfers for contract benefits and terminations............. (69,948) (152,548) (7,193,321) (8,067,002) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (68,472) (175,682) (6,439,943) (7,180,744) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (112,127) (123,357) (5,558,504) (7,827,018) NET ASSETS: Beginning of year.............. 790,647 914,004 68,017,985 75,845,003 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 678,520 $ 790,647 $ 62,459,481 $ 68,017,985 ================ ================ ================ ================ MSF BLACKROCK CAPITAL MSF BLACKROCK BOND INCOME APPRECIATION SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 2,285,326 $ 3,537,244 $ (2,334,145) $ (2,725,470) Net realized gains (losses).... 536,025 2,788,529 23,140,875 49,054,923 Change in unrealized gains (losses) on investments...... (470,344) (7,771,371) (23,625,455) (36,646,800) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 2,351,007 (1,445,598) (2,818,725) 9,682,653 ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 995,994 1,279,839 1,024,030 1,180,713 Net transfers (including fixed account)..................... 1,853,235 (596,979) (3,625,731) (3,302,806) Contract charges............... (42,928) (47,715) (62,020) (69,490) Transfers for contract benefits and terminations............. (20,076,684) (23,003,199) (18,351,782) (22,546,437) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (17,270,383) (22,368,054) (21,015,503) (24,738,020) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (14,919,376) (23,813,652) (23,834,228) (15,055,367) NET ASSETS: Beginning of year.............. 147,353,917 171,167,569 186,416,345 201,471,712 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 132,434,541 $ 147,353,917 $ 162,582,117 $ 186,416,345 ================ ================ ================ ================ MSF BLACKROCK MSF BLACKROCK LARGE CAP VALUE ULTRA-SHORT TERM BOND SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (26,196) $ (21,404) $ (3,299,227) $ (3,866,728) Net realized gains (losses).... 279,823 685,618 52,672 -- Change in unrealized gains (losses) on investments...... 1,260,670 (1,538,797) 500,725 -- ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 1,514,297 (874,583) (2,745,830) (3,866,728) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 319,543 178,103 6,640,942 7,162,481 Net transfers (including fixed account)..................... (92,928) 26,416 39,666,696 88,449,377 Contract charges............... (2,355) (2,634) (108,280) (122,992) Transfers for contract benefits and terminations............. (1,460,780) (1,885,354) (64,130,165) (117,052,389) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (1,236,520) (1,683,469) (17,930,807) (21,563,523) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. 277,777 (2,558,052) (20,676,637) (25,430,251) NET ASSETS: Beginning of year.............. 10,329,127 12,887,179 234,598,971 260,029,222 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 10,606,904 $ 10,329,127 $ 213,922,334 $ 234,598,971 ================ ================ ================ ================ MSF FRONTIER MID CAP GROWTH SUBACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (1,062,938) $ (1,267,242) Net realized gains (losses).... 10,153,360 15,627,482 Change in unrealized gains (losses) on investments...... (6,486,884) (12,804,276) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 2,603,538 1,555,964 ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 497,508 464,259 Net transfers (including fixed account)..................... (2,125,269) (757,088) Contract charges............... (43,317) (48,084) Transfers for contract benefits and terminations............. (8,226,899) (10,811,423) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (9,897,977) (11,152,336) ---------------- ---------------- Net increase (decrease) in net assets.............. (7,294,439) (9,596,372) NET ASSETS: Beginning of year.............. 78,853,375 88,449,747 ---------------- ---------------- End of year.................... $ 71,558,936 $ 78,853,375 ================ ================
(a) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 68 The accompanying notes are an integral part of these financial statements. 69 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
MSF JENNISON GROWTH MSF LOOMIS SAYLES SMALL CAP CORE SUBACCOUNT SUBACCOUNT ---------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (3,534,951) $ (4,079,989) $ (11,818) $ (14,348) Net realized gains (losses)..... 46,718,088 67,121,004 39,018 99,823 Change in unrealized gains (losses) on investments....... (48,467,290) (29,066,135) 64,978 (109,964) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from operations............ (5,284,153) 33,974,880 92,178 (24,489) ---------------- ---------------- ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 4,518,932 4,660,876 340 845 Net transfers (including fixed account)...................... (7,572,104) (6,412,253) 109,059 (6,520) Contract charges................ (210,030) (229,901) (31) (34) Transfers for contract benefits and terminations.............. (31,594,437) (37,267,731) (143,370) (58,342) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (34,857,639) (39,249,009) (34,002) (64,051) ---------------- ---------------- ----------------- ---------------- Net increase (decrease) in net assets.............. (40,141,792) (5,274,129) 58,176 (88,540) NET ASSETS: Beginning of year............... 370,985,158 376,259,287 637,286 725,826 ---------------- ---------------- ----------------- ---------------- End of year..................... $ 330,843,366 $ 370,985,158 $ 695,462 $ 637,286 ================ ================ ================= ================ MSF MET/DIMENSIONAL INTERNATIONAL MSF MET/ARTISAN MID CAP VALUE SMALL COMPANY SUBACCOUNT SUBACCOUNT ---------------------------------- ------------------------------------ 2016 2015 2016 2015 ---------------- ---------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (14,129) $ (14,195) $ 5,427 $ (4,362) Net realized gains (losses)..... 228,633 320,054 (111,449) 223,437 Change in unrealized gains (losses) on investments....... 92,465 (501,074) 112,177 (183,760) ---------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 306,969 (195,215) 6,155 35,315 ---------------- ---------------- ----------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... -- -- 7,162 5,476 Net transfers (including fixed account)...................... 114,178 (36,833) (795,841) 256,896 Contract charges................ (149) (164) (24) (80) Transfers for contract benefits and terminations.............. (210,319) (230,925) (108,204) (251,864) ---------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions............... (96,290) (267,922) (896,907) 10,428 ---------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets.............. 210,679 (463,137) (890,752) 45,743 NET ASSETS: Beginning of year............... 1,498,283 1,961,420 1,434,554 1,388,811 ---------------- ---------------- ----------------- ----------------- End of year..................... $ 1,708,962 $ 1,498,283 $ 543,802 $ 1,434,554 ================ ================ ================= ================= MSF MET/WELLINGTON MSF MET/WELLINGTON BALANCED CORE EQUITY OPPORTUNITIES SUBACCOUNT SUBACCOUNT ---------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 3,505,439 $ 1,808,489 $ 15,102 $ (145,653) Net realized gains (losses)..... 15,252,242 49,554,376 3,793,458 31,153,170 Change in unrealized gains (losses) on investments....... (5,961,390) (47,869,315) 1,354,198 (30,653,946) ---------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 12,796,291 3,493,550 5,162,758 353,571 ---------------- ---------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 2,995,304 2,878,559 415,645 193,460 Net transfers (including fixed account)...................... (2,789,477) (374,264) 46,174,713 (1,846,975) Contract charges................ (137,127) (171,916) (69,436) (16,920) Transfers for contract benefits and terminations.............. (26,759,940) (24,110,151) (13,737,985) (13,992,312) ---------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions............... (26,691,240) (21,777,772) 32,782,937 (15,662,747) ---------------- ---------------- ---------------- ----------------- Net increase (decrease) in net assets.............. (13,894,949) (18,284,222) 37,945,695 (15,309,176) NET ASSETS: Beginning of year............... 244,860,534 263,144,756 80,800,707 96,109,883 ---------------- ---------------- ---------------- ----------------- End of year..................... $ 230,965,585 $ 244,860,534 $ 118,746,402 $ 80,800,707 ================ ================ ================ ================= MSF METLIFE ASSET ALLOCATION 20 SUBACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 368,998 $ 151,862 Net realized gains (losses)..... 513,075 844,042 Change in unrealized gains (losses) on investments....... (218,711) (1,501,646) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 663,362 (505,742) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 503,438 542,478 Net transfers (including fixed account)...................... (21,301) (1,182,099) Contract charges................ (7,653) (8,765) Transfers for contract benefits and terminations.............. (4,562,662) (4,815,670) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (4,088,178) (5,464,056) ---------------- ---------------- Net increase (decrease) in net assets.............. (3,424,816) (5,969,798) NET ASSETS: Beginning of year............... 23,643,801 29,613,599 ---------------- ---------------- End of year..................... $ 20,218,985 $ 23,643,801 ================ ================
(a) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 70 The accompanying notes are an integral part of these financial statements. 71 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
MSF METLIFE ASSET ALLOCATION 40 MSF METLIFE ASSET ALLOCATION 60 SUBACCOUNT SUBACCOUNT ------------------------------------ ----------------------------------- 2016 2015 2016 2015 ----------------- ----------------- ---------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,563,013 $ (905,977) $ 7,827,754 $ (4,816,035) Net realized gains (losses)..... 4,556,831 5,650,325 41,062,276 40,033,075 Change in unrealized gains (losses) on investments....... (2,950,638) (6,524,264) (24,270,212) (48,291,607) ----------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 3,169,206 (1,779,916) 24,619,818 (13,074,567) ----------------- ----------------- ---------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 1,646,111 2,376,522 10,614,246 13,441,515 Net transfers (including fixed account)...................... (1,050,062) (1,001,776) (8,214,538) (5,606,222) Contract charges................ (34,268) (37,646) (290,555) (315,904) Transfers for contract benefits and terminations.............. (10,100,352) (12,205,735) (54,521,198) (65,426,374) ----------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions............... (9,538,571) (10,868,635) (52,412,045) (57,906,985) ----------------- ----------------- ---------------- ----------------- Net increase (decrease) in net assets.............. (6,369,365) (12,648,551) (27,792,227) (70,981,552) NET ASSETS: Beginning of year............... 74,878,498 87,527,049 480,001,704 550,983,256 ----------------- ----------------- ---------------- ----------------- End of year..................... $ 68,509,133 $ 74,878,498 $ 452,209,477 $ 480,001,704 ================= ================= ================ ================= MSF METLIFE ASSET ALLOCATION 80 MSF METLIFE MID CAP STOCK INDEX SUBACCOUNT SUBACCOUNT ----------------------------------- ------------------------------------ 2016 2015 2016 2015 ----------------- ---------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 7,375,335 $ (8,209,117) $ 6,793 $ (11,568) Net realized gains (losses)..... 67,473,109 35,760,780 1,489,450 1,432,529 Change in unrealized gains (losses) on investments....... (40,103,390) (47,147,251) 1,349,924 (2,015,439) ----------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 34,745,054 (19,595,588) 2,846,167 (594,478) ----------------- ---------------- ----------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 15,043,435 14,238,008 1,053,483 986,880 Net transfers (including fixed account)...................... (8,127,733) (3,435,538) (30,049) 682,877 Contract charges................ (391,318) (415,622) (8,013) (7,606) Transfers for contract benefits and terminations.............. (49,523,112) (53,270,926) (1,309,033) (1,915,338) ----------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions............... (42,998,728) (42,884,078) (293,612) (253,187) ----------------- ---------------- ----------------- ----------------- Net increase (decrease) in net assets.............. (8,253,674) (62,479,666) 2,552,555 (847,665) NET ASSETS: Beginning of year............... 582,539,493 645,019,159 15,269,454 16,117,119 ----------------- ---------------- ----------------- ----------------- End of year..................... $ 574,285,819 $ 582,539,493 $ 17,822,009 $ 15,269,454 ================= ================ ================= ================= MSF METLIFE STOCK INDEX MSF MFS TOTAL RETURN SUBACCOUNT SUBACCOUNT ----------------------------------- ----------------------------------- 2016 2015 2016 2015 ---------------- ----------------- ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 5,950,607 $ 3,738,664 $ 4,508,514 $ 3,781,141 Net realized gains (losses)..... 61,017,384 87,112,358 23,596,638 11,277,233 Change in unrealized gains (losses) on investments....... 11,351,356 (91,658,276) (2,527,085) (21,847,358) ---------------- ----------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 78,319,347 (807,254) 25,578,067 (6,788,984) ---------------- ----------------- ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 12,498,041 13,065,466 4,117,633 4,739,381 Net transfers (including fixed account)...................... (20,415,166) (45,279,988) (5,826,167) (5,011,638) Contract charges................ (447,756) (480,768) (138,148) (150,142) Transfers for contract benefits and terminations.............. (77,423,014) (89,274,254) (43,812,952) (52,994,984) ---------------- ----------------- ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (85,787,895) (121,969,544) (45,659,634) (53,417,383) ---------------- ----------------- ----------------- ---------------- Net increase (decrease) in net assets.............. (7,468,548) (122,776,798) (20,081,567) (60,206,367) NET ASSETS: Beginning of year............... 825,958,902 948,735,700 367,197,782 427,404,149 ---------------- ----------------- ----------------- ---------------- End of year..................... $ 818,490,354 $ 825,958,902 $ 347,116,215 $ 367,197,782 ================ ================= ================= ================ MSF MFS VALUE SUBACCOUNT ----------------------------------- 2016 2015 ----------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 861,040 $ 1,519,323 Net realized gains (losses)..... 11,708,015 24,685,200 Change in unrealized gains (losses) on investments....... 2,304,669 (28,440,559) ----------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 14,873,724 (2,236,036) ----------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 1,288,553 1,431,532 Net transfers (including fixed account)...................... (1,320,315) (1,196,217) Contract charges................ (36,211) (37,578) Transfers for contract benefits and terminations.............. (14,678,360) (20,907,158) ----------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (14,746,333) (20,709,421) ----------------- ---------------- Net increase (decrease) in net assets.............. 127,391 (22,945,457) NET ASSETS: Beginning of year............... 126,858,359 149,803,816 ----------------- ---------------- End of year..................... $ 126,985,750 $ 126,858,359 ================= ================
(a) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 72 The accompanying notes are an integral part of these financial statements. 73 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
MSF MSCI EAFE INDEX MSF NEUBERGER BERMAN GENESIS SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 691,710 $ 1,132,624 $ (561,624) $ (665,270) Net realized gains (losses).... (1,605,838) (1,094,191) 2,172,141 2,610,190 Change in unrealized gains (losses) on investments...... 932,437 (1,058,975) 7,579,184 (2,245,912) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 18,309 (1,020,542) 9,189,701 (300,992) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 1,471,232 1,669,245 680,563 897,116 Net transfers (including fixed account)..................... (537,856) (829,921) (2,445,840) (1,584,040) Contract charges............... (25,078) (29,905) (27,399) (28,813) Transfers for contract benefits and terminations............. (4,511,503) (4,816,703) (6,014,590) (8,658,285) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (3,603,205) (4,007,284) (7,807,266) (9,374,022) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (3,584,896) (5,027,826) 1,382,435 (9,675,014) NET ASSETS: Beginning of year.............. 50,132,009 55,159,835 59,714,866 69,389,880 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 46,547,113 $ 50,132,009 $ 61,097,301 $ 59,714,866 ================ ================ ================ ================ MSF T. ROWE PRICE LARGE CAP MSF RUSSELL 2000 INDEX GROWTH SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 181,485 $ 16,168 $ (834,484) $ (934,826) Net realized gains (losses).... 8,196,855 9,509,106 7,199,316 13,336,229 Change in unrealized gains (losses) on investments...... 10,191,577 (15,257,920) (6,641,279) (7,346,939) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 18,569,917 (5,732,646) (276,447) 5,054,464 ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 1,972,621 2,132,061 889,130 794,379 Net transfers (including fixed account)..................... (1,589,531) (375,941) (968,588) 2,269,515 Contract charges............... (56,904) (60,456) (16,178) (17,995) Transfers for contract benefits and terminations............. (9,385,346) (9,542,787) (5,839,793) (8,875,970) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (9,059,160) (7,847,123) (5,935,429) (5,830,071) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. 9,510,757 (13,579,769) (6,211,876) (775,607) NET ASSETS: Beginning of year.............. 101,108,420 114,688,189 58,885,774 59,661,381 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 110,619,177 $ 101,108,420 $ 52,673,898 $ 58,885,774 ================ ================ ================ ================ MSF T. ROWE PRICE SMALL CAP MSF WESTERN ASSET MANAGEMENT GROWTH STRATEGIC BOND OPPORTUNITIES SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ (1,326,583) $ (1,533,844) $ 651,395 $ 1,191,809 Net realized gains (losses).... 16,674,139 15,664,305 440,473 192,717 Change in unrealized gains (losses) on investments...... (5,240,914) (12,417,243) 6,086,821 (2,592,005) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 10,106,642 1,713,218 7,178,689 (1,207,479) ---------------- ---------------- ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 2,617,681 2,424,047 730,921 95,918 Net transfers (including fixed account)..................... (3,400,052) (546,725) 149,135,642 (1,128,640) Contract charges............... (47,085) (50,239) (61,429) (5,492) Transfers for contract benefits and terminations............. (10,165,512) (12,140,351) (18,409,893) (5,107,602) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (10,994,968) (10,313,268) 131,395,241 (6,145,816) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in net assets.............. (888,326) (8,600,050) 138,573,930 (7,353,295) NET ASSETS: Beginning of year.............. 109,539,493 118,139,543 32,316,442 39,669,737 ---------------- ---------------- ---------------- ---------------- End of year.................... $ 108,651,167 $ 109,539,493 $ 170,890,372 $ 32,316,442 ================ ================ ================ ================ MSF WESTERN ASSET MANAGEMENT U.S. GOVERNMENT SUBACCOUNT ---------------------------------- 2016 2015 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)....................... $ 1,033,513 $ 898,999 Net realized gains (losses).... 30,051 125,482 Change in unrealized gains (losses) on investments...... (1,013,053) (1,636,137) ---------------- ---------------- Net increase (decrease) in net assets resulting from operations............ 50,511 (611,656) ---------------- ---------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners......... 1,824,684 1,215,122 Net transfers (including fixed account)..................... 3,917,148 (247,767) Contract charges............... (41,919) (46,193) Transfers for contract benefits and terminations............. (12,904,520) (15,979,722) ---------------- ---------------- Net increase (decrease) in net assets resulting from contract transactions............... (7,204,607) (15,058,560) ---------------- ---------------- Net increase (decrease) in net assets.............. (7,154,096) (15,670,216) NET ASSETS: Beginning of year.............. 82,426,356 98,096,572 ---------------- ---------------- End of year.................... $ 75,272,260 $ 82,426,356 ================ ================
(a) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 74 The accompanying notes are an integral part of these financial statements. 75 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA STATEMENTS OF CHANGES IN NET ASSETS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
PIONEER VCT MID CAP VALUE PIONEER VCT REAL ESTATE SHARES SUBACCOUNT SUBACCOUNT ------------------------------------ ------------------------------------ 2016 2015 2016 2015 ----------------- ----------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (250,762) $ (293,548) $ 100,563 $ 8,039 Net realized gains (losses)..... 921,495 3,015,323 1,434,517 1,174,152 Change in unrealized gains (losses) on investments....... 1,831,176 (4,629,877) (1,221,435) (982,751) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 2,501,909 (1,908,102) 313,645 199,440 ----------------- ----------------- ----------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 89,664 119,944 51,480 110,184 Net transfers (including fixed account)...................... (374,058) (564,899) 12,822 61,955 Contract charges................ (7,822) (8,841) (3,739) (4,039) Transfers for contract benefits and terminations.............. (3,245,210) (4,479,399) (1,261,343) (1,921,784) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions............... (3,537,426) (4,933,195) (1,200,780) (1,753,684) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets.............. (1,035,517) (6,841,297) (887,135) (1,554,244) NET ASSETS: Beginning of year............... 20,514,005 27,355,302 8,432,222 9,986,466 ----------------- ----------------- ----------------- ----------------- End of year..................... $ 19,478,488 $ 20,514,005 $ 7,545,087 $ 8,432,222 ================= ================= ================= ================= TAP 1919 VARIABLE SOCIALLY RESPONSIVE BALANCED UIF GROWTH SUBACCOUNT SUBACCOUNT -------------------------------------- ------------------------------------ 2016 2015 2016 2015 ---------------- ----------------- ----------------- ----------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (129,714) $ (39,347) $ (106,129) $ (118,628) Net realized gains (losses)..... 2,501,996 4,369,500 1,241,008 1,332,565 Change in unrealized gains (losses) on investments....... (732,681) (5,490,996) (1,342,478) (544,548) ---------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from operations............ 1,639,601 (1,160,843) (207,599) 669,389 ---------------- ----------------- ----------------- ----------------- CONTRACT TRANSACTIONS: Purchase payments received from contract owners.......... 404,719 509,627 -- -- Net transfers (including fixed account)...................... (673,150) (469,835) (177,905) (126,360) Contract charges................ (26,297) (28,330) (856) (833) Transfers for contract benefits and terminations.............. (3,729,158) (5,435,281) (629,924) (563,694) ---------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets resulting from contract transactions............... (4,023,886) (5,423,819) (808,685) (690,887) ---------------- ----------------- ----------------- ----------------- Net increase (decrease) in net assets.............. (2,384,285) (6,584,662) (1,016,284) (21,498) NET ASSETS: Beginning of year............... 36,506,368 43,091,030 6,666,780 6,688,278 ---------------- ----------------- ----------------- ----------------- End of year..................... $ 34,122,083 $ 36,506,368 $ 5,650,496 $ 6,666,780 ================ ================= ================= =================
(a) For the period May 1, 2015 to December 31, 2015. The accompanying notes are an integral part of these financial statements. 76 The accompanying notes are an integral part of these financial statements. 77 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS 1. ORGANIZATION MetLife of CT Separate Account Eleven for Variable Annuities (the "Separate Account"), a separate account of MetLife Insurance Company USA (the "Company"), was established by the Board of Directors of MetLife Insurance Company of Connecticut ("MICC") on November 14, 2002 to support operations of MICC with respect to certain variable annuity contracts (the "Contracts"). On November 14, 2014, MICC changed its name to MetLife Insurance Company USA and its state of domicile from Connecticut to Delaware. The Company is a direct wholly-owned subsidiary of MetLife, Inc., a Delaware corporation. The Separate Account is registered as a unit investment trust under the Investment Company Act of 1940, as amended, and exists in accordance with the regulations of the Delaware Department of Insurance. On January 12, 2016, MetLife, Inc. announced its plan to pursue the separation of a portion of its retail business, (the "Separation"). Additionally, on July 21, 2016, MetLife, Inc. announced that following the Separation, the separated business will be rebranded as "Brighthouse Financial." On October 5, 2016, Brighthouse Financial, Inc., a subsidiary of MetLife, Inc. ("Brighthouse"), filed a registration statement on Form 10 (the "Form 10") with the U.S. Securities and Exchange Commission ("SEC"), which included a description of how MetLife, Inc. currently plans to effectuate the Separation. On December 6, 2016, Brighthouse filed amendments to its registration statement on Form 10 with the SEC. The information statement filed as an exhibit to the Form 10 disclosed that MetLife, Inc. intends to include the Company, New England Life Insurance Company, First MetLife Investors Insurance Company and MetLife Advisers, LLC ("MetLife Advisers"), among other companies, in the proposed separated business. The ultimate form and timing of the Separation will be influenced by a number of factors, including regulatory considerations and economic conditions. MetLife continues to evaluate and pursue structural alternatives for the proposed Separation. MetLife expects that the life and annuity business sold through Metropolitan Life Insurance Company will not be a part of Brighthouse Financial. The Separation remains subject to certain conditions, including, among others, obtaining final approval from the MetLife, Inc. Board of Directors, receipt of a favorable ruling from the Internal Revenue Service and an opinion from MetLife's tax advisor regarding certain U.S. federal income tax matters, and an SEC declaration of the effectiveness of the Form 10. The Separate Account is divided into Subaccounts, each of which is treated as an individual accounting entity for financial reporting purposes. Each Subaccount invests in shares of the corresponding portfolio, series or fund (with the same name) of registered investment management companies (the "Trusts"), which are presented below: AIM Variable Insurance Funds (Invesco Variable Legg Mason Partners Variable Income Trust Insurance Funds) ("Invesco V.I.") ("LMPVIT") AB Variable Products Series Fund, Inc. ("AB") Met Investors Series Trust ("MIST")* American Funds Insurance Series ("American Funds") Metropolitan Series Fund ("MSF")* Delaware VIP Trust ("Delaware VIP") Morgan Stanley Variable Investment Series ("Morgan Deutsche Variable Series II ("Deutsche II") Stanley") Fidelity Variable Insurance Products ("Fidelity VIP") Pioneer Variable Contracts Trust ("Pioneer VCT") Franklin Templeton Variable Insurance Products Trust The Alger Portfolios ("Alger") ("FTVIPT") The Dreyfus Socially Responsible Growth Fund, Inc. Janus Aspen Series ("Janus Aspen") ("Dreyfus Socially Responsible Growth") Legg Mason Partners Variable Equity Trust The Universal Institutional Funds, Inc. ("UIF") ("LMPVET") Trust for Advised Portfolios ("TAP")
* See Note 5 for a discussion of additional information on related party transactions. The assets of each of the Subaccounts of the Separate Account are registered in the name of the Company. Under applicable insurance law, the assets and liabilities of the Separate Account are clearly identified and distinguished from the Company's other assets and liabilities. The portion of the Separate Account's assets applicable to the Contracts is not chargeable with liabilities arising out of any other business the Company may conduct. 78 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 2. LIST OF SUBACCOUNTS A. Purchase payments, less any applicable charges, applied to the Separate Account are invested in one or more Subaccounts in accordance with the selection made by the contract owner. The following Subaccounts had net assets as of December 31, 2016: AB Global Thematic Growth Subaccount LMPVET ClearBridge Variable Dividend Strategy Alger Capital Appreciation Subaccount Subaccount (a) American Funds Bond Subaccount LMPVET ClearBridge Variable Large Cap Growth American Funds Global Growth Subaccount Subaccount American Funds Global Small Capitalization LMPVET ClearBridge Variable Large Cap Value Subaccount Subaccount American Funds Growth Subaccount LMPVET ClearBridge Variable Mid Cap Subaccount American Funds Growth-Income Subaccount LMPVET ClearBridge Variable Small Cap Growth Delaware VIP Small Cap Value Subaccount Subaccount Deutsche II Government & Agency Securities LMPVET QS Variable Conservative Growth Subaccount Subaccount Deutsche II Small Mid Cap Value Subaccount LMPVET QS Variable Growth Subaccount Dreyfus Socially Responsible Growth Subaccount LMPVET QS Variable Moderate Growth Subaccount Fidelity VIP Contrafund Subaccount (a) LMPVIT Western Asset Core Plus Subaccount Fidelity VIP Dynamic Capital Appreciation LMPVIT Western Asset Variable Global High Yield Subaccount Bond Subaccount Fidelity VIP Equity-Income Subaccount (a) MIST American Funds Balanced Allocation Fidelity VIP Freedom 2020 Subaccount Subaccount Fidelity VIP Freedom 2025 Subaccount MIST American Funds Growth Allocation Subaccount Fidelity VIP Freedom 2030 Subaccount MIST American Funds Moderate Allocation Fidelity VIP Freedom 2040 Subaccount Subaccount Fidelity VIP Freedom 2050 Subaccount MIST BlackRock High Yield Subaccount (a) Fidelity VIP FundsManager 60% Subaccount MIST Clarion Global Real Estate Subaccount (a) Fidelity VIP High Income Subaccount MIST ClearBridge Aggressive Growth Subaccount (a) Fidelity VIP Mid Cap Subaccount MIST Harris Oakmark International Subaccount FTVIPT Franklin Income VIP Subaccount MIST Invesco Comstock Subaccount (a) FTVIPT Franklin Mutual Shares VIP Subaccount MIST Invesco Mid Cap Value Subaccount (a) FTVIPT Franklin Rising Dividends VIP Subaccount MIST Invesco Small Cap Growth Subaccount (a) FTVIPT Franklin Small-Mid Cap Growth VIP MIST JPMorgan Small Cap Value Subaccount Subaccount MIST Loomis Sayles Global Markets Subaccount FTVIPT Templeton Developing Markets VIP MIST Met/Aberdeen Emerging Markets Equity Subaccount Subaccount (a) FTVIPT Templeton Foreign VIP Subaccount MIST Met/Eaton Vance Floating Rate Subaccount Invesco V.I. Comstock Subaccount MIST Met/Wellington Large Cap Research Subaccount Invesco V.I. Diversified Dividend Subaccount MIST MetLife Asset Allocation 100 Subaccount Invesco V.I. Equity and Income Subaccount MIST MetLife Multi-Index Targeted Risk Subaccount Invesco V.I. Government Securities Subaccount (a) MIST MetLife Small Cap Value Subaccount (a) Invesco V.I. Managed Volatility Subaccount MIST MFS Research International Subaccount Invesco V.I. S&P 500 Index Subaccount MIST Morgan Stanley Mid Cap Growth Subaccount (a) Janus Aspen Enterprise Subaccount MIST Oppenheimer Global Equity Subaccount (a) Janus Aspen Global Research Subaccount MIST PIMCO Inflation Protected Bond Subaccount (a) Janus Aspen Overseas Subaccount MIST PIMCO Total Return Subaccount LMPVET ClearBridge Variable Aggressive Growth MIST Pyramis Managed Risk Subaccount Subaccount (a) MIST SSGA Growth and Income ETF Subaccount LMPVET ClearBridge Variable Appreciation MIST SSGA Growth ETF Subaccount Subaccount MIST T. Rowe Price Large Cap Value Subaccount (a)
79 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 2. LIST OF SUBACCOUNTS -- (CONCLUDED) MIST T. Rowe Price Mid Cap Growth Subaccount MSF MetLife Asset Allocation 80 Subaccount Morgan Stanley Multi Cap Growth Subaccount MSF MetLife Mid Cap Stock Index Subaccount (a) MSF Barclays Aggregate Bond Index Subaccount MSF MetLife Stock Index Subaccount (a) MSF BlackRock Bond Income Subaccount (a) MSF MFS Total Return Subaccount (a) MSF BlackRock Capital Appreciation Subaccount (a) MSF MFS Value Subaccount (a) MSF BlackRock Large Cap Value Subaccount MSF MSCI EAFE Index Subaccount MSF BlackRock Ultra-Short Term Bond Subaccount (a) MSF Neuberger Berman Genesis Subaccount (a) MSF Frontier Mid Cap Growth Subaccount (a) MSF Russell 2000 Index Subaccount MSF Jennison Growth Subaccount (a) MSF T. Rowe Price Large Cap Growth Subaccount (a) MSF Loomis Sayles Small Cap Core Subaccount MSF T. Rowe Price Small Cap Growth Subaccount MSF Met/Artisan Mid Cap Value Subaccount MSF Western Asset Management Strategic Bond MSF Met/Dimensional International Small Company Opportunities Subaccount (a) Subaccount MSF Western Asset Management U.S. Government MSF Met/Wellington Balanced Subaccount (a) Subaccount MSF Met/Wellington Core Equity Opportunities Pioneer VCT Mid Cap Value Subaccount Subaccount (a) Pioneer VCT Real Estate Shares Subaccount MSF MetLife Asset Allocation 20 Subaccount TAP 1919 Variable Socially Responsive Balanced MSF MetLife Asset Allocation 40 Subaccount Subaccount MSF MetLife Asset Allocation 60 Subaccount UIF Growth Subaccount
(a) This Subaccount invests in two or more share classes within the underlying portfolio, series or fund of the Trusts. B. The following Subaccounts had no net assets as of December 31, 2016: Fidelity VIP Government Money Market Subaccount MIST Met/Artisan International Subaccount* MIST AB Global Dynamic Allocation Subaccount* MIST Met/Franklin Low Duration Total Return MIST Allianz Global Investors Dynamic Multi-Asset Subaccount* Plus Subaccount* MIST Met/Templeton International Bond Subaccount* MIST AQR Global Risk Balanced Subaccount* MIST MetLife Balanced Plus Subaccount* MIST BlackRock Global Tactical Strategies MIST PanAgora Global Diversified Risk Subaccount* Subaccount* MIST Pyramis Government Income Subaccount* MIST Goldman Sachs Mid Cap Value Subaccount* MIST Schroders Global Multi-Asset Subaccount* MIST Invesco Balanced-Risk Allocation Subaccount* MIST TCW Core Fixed Income Subaccount* MIST JPMorgan Core Bond Subaccount* MSF Baillie Gifford International Stock Subaccount* MIST JPMorgan Global Active Allocation Subaccount* MSF Van Eck Global Natural Resources Subaccount*
* These Subaccounts commenced on April 29, 2016 3. PORTFOLIO CHANGES The following Subaccounts ceased operations during the year ended December 31, 2016: MIST Lord Abbett Bond Debenture Subaccount MIST Pioneer Strategic Income Subaccount MIST Pioneer Fund Subaccount Wells Fargo VT Small Cap Value Subaccount
80 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 3. PORTFOLIO CHANGES -- (CONCLUDED) The operations of the Subaccounts were affected by the following changes that occurred during the year ended December 31, 2016: NAME CHANGES: Former Name New Name ClearBridge Variable Mid Cap Core Portfolio ClearBridge Variable Mid Cap Portfolio (MIST) MFS Emerging Markets Equity Portfolio (MIST) Met/Aberdeen Emerging Markets Equity Portfolio (MIST) WMC Large Cap Research Portfolio (MIST) Met/Wellington Large Cap Research Portfolio (MSF) BlackRock Money Market Portfolio (MSF) BlackRock Ultra-Short Term Bond Portfolio (MSF) WMC Balanced Portfolio (MSF) Met/Wellington Balanced Portfolio (MSF) WMC Core Equity Opportunities Portfolio (MSF) Met/Wellington Core Equity Opportunities Portfolio QS Legg Mason Variable Conservative Growth QS Variable Conservative Growth QS Legg Mason Variable Growth QS Variable Growth QS Legg Mason Variable Moderate Growth QS Variable Moderate Growth
MERGERS: Former Portfolio New Portfolio (MIST) Lord Abbett Bond Debenture (MSF) Western Asset Management Strategic Bond Portfolio Opportunities Portfolio (MIST) Pioneer Fund Portfolio (MSF) Met/Wellington Core Equity Opportunities Portfolio (MIST) Pioneer Strategic Income Portfolio (MSF) Western Asset Management Strategic Bond Opportunities Portfolio
LIQUIDATION: Former Portfolio Wells Fargo VT Small Cap Value Fund 4. SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") applicable for variable life separate accounts registered as unit investment trusts, which follow the accounting and reporting guidance in Financial Accounting Standards Board ("FASB") ACCOUNTING STANDARDS CODIFICATION TOPIC 946. SECURITY TRANSACTIONS Security transactions are recorded on a trade date basis. Realized gains and losses on the sales of investments are computed on the basis of the average cost of the investment sold. Income from dividends and realized gain distributions are recorded on the ex-distribution date. 81 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 4. SIGNIFICANT ACCOUNTING POLICIES -- (CONCLUDED) SECURITY VALUATION A Subaccount's investment in shares of a portfolio, series or fund of the Trusts is valued at fair value based on the closing net asset value ("NAV") or price per share as determined by the Trusts as of the end of the year. All changes in fair value are recorded as changes in unrealized gains (losses) on investments in the statements of operations of the applicable Subaccounts. The Separate Account defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Each Subaccount invests in shares of open-end mutual funds which calculate a daily NAV based on the fair value of the underlying securities in their portfolios. As a result, and as required by law, shares of open-end mutual funds are purchased and redeemed at their quoted daily NAV as reported by the Trusts at the close of each business day. FEDERAL INCOME TAXES The operations of the Separate Account form a part of the total operations of the Company and are not taxed separately. The Company is taxed as a life insurance company under the provisions of the Internal Revenue Code ("IRC"). Under the current provisions of the IRC, the Company does not expect to incur federal income taxes on the earnings of the Separate Account to the extent the earnings are credited under the Contracts. Accordingly, no charge is currently being made to the Separate Account for federal income taxes. The Company will periodically review the status of this policy in the event of changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the Contracts. ANNUITY PAYOUTS Net assets allocated to Contracts in the payout period are computed according to industry standard mortality tables. The assumed investment return is between 3.0 and 5.0 percent. The mortality risk is fully borne by the Company and may result in additional amounts being transferred into the Separate Account by the Company to cover greater longevity of annuitants than expected. Conversely, if amounts allocated exceed amounts required, transfers may be made to the Company. PURCHASE PAYMENTS Purchase payments received from contract owners by the Company are credited as accumulation units as of the end of the valuation period in which received, as provided in the prospectus of the Contracts, and are reported as contract transactions on the statements of changes in net assets of the applicable Subaccounts. NET TRANSFERS Funds transferred by the contract owner into or out of Subaccounts within the Separate Account or into or out of the fixed account, which is part of the Company's general account, are recorded on a net basis as net transfers in the statements of changes in net assets of the applicable Subaccounts. USE OF ESTIMATES The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported herein. Actual results could differ from these estimates. ADOPTION OF NEW ACCOUNTING PRONOUNCEMENT In March 2015, the FASB issued new guidance to improve fair value measurement guidance (ASU 2015-07, Fair Value Measurement (Topic 820): Disclosure for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent)), effective for fiscal years beginning after December 15, 2015 and interim periods within those years. The objective of this update is to address the diversity in practice related to how certain investments measured at NAV with redemption dates in the future (including periodic redemption dates) are categorized within the fair value hierarchy. The amendments in the ASU remove the requirement to categorize within the fair value hierarchy all investments for which the fair value is measured using the NAV per share practical expedient. Effective January 1, 2016, the Separate Account adopted this guidance. The adoption resulted in removal of the related disclosures in Note 4. 82 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. EXPENSES AND RELATED PARTY TRANSACTIONS The following annual Separate Account charges paid to the Company are asset-based charges and assessed through a daily reduction in unit values, and are recorded as expenses in the accompanying statements of operations of the applicable Subaccounts: Mortality and Expense Risk -- The mortality risk assumed by the Company is the risk that those insured may die sooner than anticipated and therefore, the Company will pay an aggregate amount of death benefits greater than anticipated. The expense risk assumed is that expenses incurred in issuing and administering the Contracts will exceed the amounts realized from the administrative charges assessed against the Contracts. In addition, the charge compensates the Company for the risk that the investor may live longer than estimated and the Company would be obligated to pay more in income payments than anticipated. Administrative -- The Company has responsibility for the administration of the Contracts and the Separate Account. Generally, the administrative charge is related to the maintenance, including distribution, of each contract and the Separate Account. Enhanced Stepped-Up Provision -- For an additional charge, the total death benefit payable may be increased based on the earnings in the Contracts. Guaranteed Minimum Withdrawal Benefit -- For an additional charge, the Company will guarantee the periodic return on the investment. Guaranteed Minimum Withdrawal Benefit for Life -- For an additional charge, the Company will guarantee payments for life after certain conditions are met. Guaranteed Minimum Accumulation Benefit -- For an additional charge, the Company will guarantee that the contract value will not be less than a guaranteed minimum amount at the end of a specified number of years. Variable Annuitization Floor Benefit -- For an additional charge, the Company will guarantee a minimum variable annuity payment regardless of the performance of the variable funding options selected. Principal Protection -- For an additional charge, the Company will guarantee the principal (sum of purchase payments adjusted proportionally for any withdrawals). Preservation and Growth -- For an additional charge, the Company will guarantee at a future date your Account Value will not be less than your Purchase Payment. The table below represents the range of effective annual rates for each respective charge for the year ended December 31, 2016: ------------------------------------------------------------------------------------------------------------------------------- Mortality and Expense Risk 0.70% - 1.90% ------------------------------------------------------------------------------------------------------------------------------- Administrative 0.10% - 0.15% ------------------------------------------------------------------------------------------------------------------------------- Enhanced Stepped-Up Provision 0.15% - 0.25% ------------------------------------------------------------------------------------------------------------------------------- Guaranteed Minimum Withdrawal Benefit 0.25% - 1.00% ------------------------------------------------------------------------------------------------------------------------------- Guaranteed Minimum Withdrawal Benefit for Life 0.65% - 1.50% ------------------------------------------------------------------------------------------------------------------------------- Guaranteed Minimum Accumulation Benefit 0.40% - 0.50% ------------------------------------------------------------------------------------------------------------------------------- Variable Annuitization Floor Benefit 0.00% - 3.00% ------------------------------------------------------------------------------------------------------------------------------- Principal Protection 1.25% - 2.50% ------------------------------------------------------------------------------------------------------------------------------- Preservation and Growth 1.15% - 1.80% -------------------------------------------------------------------------------------------------------------------------------
The above referenced charges may not necessarily correspond to the costs associated with providing the services or benefits indicated by the designation of the charge or associated with a particular contract. Additionally, there may be certain Subaccounts that have expense rates which fall outside of the range above due to expense waivers or additional charges being applied. 83 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 5. EXPENSES AND RELATED PARTY TRANSACTIONS -- (CONCLUDED) Depending on the product and contract, a contract administrative charge may be assessed on a semi-annual or annual basis ranging from $15 to $50 for Contracts with account values of less than $40,000 to $100,000. For certain contracts, a contract administrative charge is imposed regardless of contract values. In addition, most Contracts impose a surrender charge which ranges from 0% to 9% if the contract is partially or fully surrendered within the specified surrender charge period. These charges are paid to the Company, assessed through the redemption of units, and are recorded as contract charges in the accompanying statements of changes in net assets of the applicable Subaccounts. The MIST and MSF Trusts currently offer shares of their portfolios only to separate accounts established by the Company and other affiliated life insurance companies, and are managed by MetLife Advisers, an affiliate of the Company. MetLife Advisers is also the investment adviser to the portfolios of the MIST and MSF Trusts. 84 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. STATEMENTS OF INVESTMENTS
FOR THE YEAR ENDED AS OF DECEMBER 31, 2016 DECEMBER 31, 2016 ------------------------------ ------------------------------ COST OF PROCEEDS SHARES COST ($) PURCHASES ($) FROM SALES ($) ------------- ------------- ------------- -------------- AB Global Thematic Growth Subaccount........................ 18,365 290,240 11,923 50,887 Alger Capital Appreciation Subaccount....................... 37,106 2,138,415 57,975 618,156 American Funds Bond Subaccount.............................. 456,651 4,922,246 1,296,118 1,501,015 American Funds Global Growth Subaccount..................... 3,961,404 84,480,470 11,177,858 19,726,040 American Funds Global Small Capitalization Subaccount....... 88,479 1,729,411 459,779 551,934 American Funds Growth Subaccount............................ 3,399,968 197,748,441 26,018,800 40,473,771 American Funds Growth-Income Subaccount..................... 4,390,573 168,937,240 28,180,773 36,795,707 Delaware VIP Small Cap Value Subaccount..................... 283,315 8,573,037 1,376,016 1,267,406 Deutsche II Government & Agency Securities Subaccount....... 201,547 2,460,619 216,224 393,682 Deutsche II Small Mid Cap Value Subaccount.................. 254,567 3,764,005 584,632 1,023,375 Dreyfus Socially Responsible Growth Subaccount.............. 13,439 406,773 61,102 21,356 Fidelity VIP Contrafund Subaccount.......................... 6,176,702 169,242,638 21,140,264 30,047,052 Fidelity VIP Dynamic Capital Appreciation Subaccount........ 147,281 1,411,433 104,556 272,310 Fidelity VIP Equity-Income Subaccount....................... 10,649,774 222,503,182 20,418,627 25,133,659 Fidelity VIP Freedom 2020 Subaccount........................ 34,096 421,936 482,030 133,587 Fidelity VIP Freedom 2025 Subaccount........................ 26,052 336,136 226,077 76,540 Fidelity VIP Freedom 2030 Subaccount........................ 44,235 565,484 125,609 1,838 Fidelity VIP Freedom 2040 Subaccount........................ 3,397 60,149 66,893 17,565 Fidelity VIP Freedom 2050 Subaccount........................ 2,903 47,354 45,018 2,629 Fidelity VIP FundsManager 60% Subaccount.................... 53,779,930 612,431,216 76,880,352 24,181,951 Fidelity VIP High Income Subaccount......................... 3,618,925 21,602,445 1,626,688 2,386,036 Fidelity VIP Mid Cap Subaccount............................. 7,432,358 219,730,623 20,079,549 31,665,782 FTVIPT Franklin Income VIP Subaccount....................... 1,281,813 18,970,626 1,582,104 4,753,278 FTVIPT Franklin Mutual Shares VIP Subaccount................ 737,396 12,857,247 1,615,327 3,531,926 FTVIPT Franklin Rising Dividends VIP Subaccount............. 567,468 12,121,761 4,000,381 5,232,024 FTVIPT Franklin Small-Mid Cap Growth VIP Subaccount......... 1,442,083 28,290,818 3,555,835 4,214,976 FTVIPT Templeton Developing Markets VIP Subaccount.......... 1,988,866 19,174,919 1,185,798 2,558,871 FTVIPT Templeton Foreign VIP Subaccount..................... 4,074,557 57,287,117 5,027,796 10,088,553 Invesco V.I. Comstock Subaccount............................ 288,054 3,855,608 535,466 1,004,135 Invesco V.I. Diversified Dividend Subaccount................ 47,765 780,855 135,666 324,941 Invesco V.I. Equity and Income Subaccount................... 2,815,884 39,187,014 2,765,589 9,398,887 Invesco V.I. Government Securities Subaccount............... 653,815 7,643,447 815,231 2,150,247 Invesco V.I. Managed Volatility Subaccount.................. 103,042 1,496,178 143,241 321,696 Invesco V.I. S&P 500 Index Subaccount....................... 114,181 1,491,027 317,637 638,336 Janus Aspen Enterprise Subaccount........................... 218,583 9,086,670 1,890,250 2,266,311 Janus Aspen Global Research Subaccount...................... 16,949 501,676 36,660 169,198 Janus Aspen Overseas Subaccount............................. 1,204,955 46,726,013 3,536,809 4,042,243 LMPVET ClearBridge Variable Aggressive Growth Subaccount.... 13,104,945 228,814,324 22,351,665 45,612,100 LMPVET ClearBridge Variable Appreciation Subaccount......... 6,679,476 166,666,889 10,486,831 38,909,948 LMPVET ClearBridge Variable Dividend Strategy Subaccount.... 5,294,068 66,730,001 3,316,803 15,451,108 LMPVET ClearBridge Variable Large Cap Growth Subaccount..... 4,291,898 75,444,018 10,749,971 15,230,853 LMPVET ClearBridge Variable Large Cap Value Subaccount...... 5,857,545 95,831,523 6,012,876 15,651,650 LMPVET ClearBridge Variable Mid Cap Subaccount.............. 1,681,793 23,798,537 1,541,859 4,528,044 LMPVET ClearBridge Variable Small Cap Growth Subaccount..... 2,082,807 35,265,584 2,827,170 7,584,155 LMPVET QS Variable Conservative Growth Subaccount........... 2,995,009 35,412,102 1,299,764 8,159,997 LMPVET QS Variable Growth Subaccount........................ 1,395,961 18,746,786 1,072,053 2,467,364 LMPVET QS Variable Moderate Growth Subaccount............... 2,065,449 23,881,603 1,158,640 3,324,649 LMPVIT Western Asset Core Plus Subaccount................... 10,554,029 67,949,012 3,390,903 11,153,309 LMPVIT Western Asset Variable Global High Yield Bond Subaccount................................................ 767,093 6,055,546 517,887 1,355,908 MIST American Funds Balanced Allocation Subaccount.......... 556,618 5,441,507 4,523,877 3,768,262 MIST American Funds Growth Allocation Subaccount............ 415,428 3,961,926 810,638 459,581 MIST American Funds Moderate Allocation Subaccount.......... 298,161 2,972,978 555,579 607,507 MIST BlackRock High Yield Subaccount........................ 10,777,150 86,592,850 13,658,125 19,177,676 MIST Clarion Global Real Estate Subaccount.................. 5,030,736 62,316,787 4,426,563 10,830,380
85 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. STATEMENTS OF INVESTMENTS -- (CONTINUED)
FOR THE YEAR ENDED AS OF DECEMBER 31, 2016 DECEMBER 31, 2016 ----------------------------- ------------------------------ COST OF PROCEEDS SHARES COST ($) PURCHASES ($) FROM SALES ($) ------------- ------------ ------------- -------------- MIST ClearBridge Aggressive Growth Subaccount.............. 30,561,998 430,862,563 7,967,610 65,969,417 MIST Harris Oakmark International Subaccount............... 4,079,143 60,019,753 8,672,280 12,429,404 MIST Invesco Comstock Subaccount........................... 12,528,921 132,981,715 19,617,398 31,454,962 MIST Invesco Mid Cap Value Subaccount...................... 2,145,304 39,442,572 3,497,227 5,923,515 MIST Invesco Small Cap Growth Subaccount................... 955,494 14,411,523 3,717,693 3,374,631 MIST JPMorgan Small Cap Value Subaccount................... 649,838 9,723,906 2,135,008 2,318,354 MIST Loomis Sayles Global Markets Subaccount............... 8,383,972 96,073,560 7,160,245 16,084,032 MIST Met/Aberdeen Emerging Markets Equity Subaccount....... 4,165,539 41,413,005 2,255,678 9,248,236 MIST Met/Eaton Vance Floating Rate Subaccount.............. 267,686 2,781,903 401,919 1,421,399 MIST Met/Wellington Large Cap Research Subaccount.......... 2,694,654 29,670,712 3,850,100 7,333,179 MIST MetLife Asset Allocation 100 Subaccount............... 5,013,791 54,689,851 10,273,627 7,652,460 MIST MetLife Multi-Index Targeted Risk Subaccount.......... 9,797 116,982 93,208 9,508 MIST MetLife Small Cap Value Subaccount.................... 7,103,281 109,299,185 5,188,142 15,003,168 MIST MFS Research International Subaccount................. 5,365,676 60,163,560 3,073,364 10,269,179 MIST Morgan Stanley Mid Cap Growth Subaccount.............. 529,244 6,045,766 596,584 1,964,473 MIST Oppenheimer Global Equity Subaccount.................. 14,857,815 243,441,280 21,468,396 40,887,124 MIST PIMCO Inflation Protected Bond Subaccount............. 4,924,608 52,944,692 2,774,399 9,183,291 MIST PIMCO Total Return Subaccount......................... 15,815,199 178,331,996 10,629,911 35,767,799 MIST Pyramis Managed Risk Subaccount....................... 2,535 28,257 9,745 89 MIST SSGA Growth and Income ETF Subaccount................. 9,476,700 101,430,706 9,056,840 11,383,637 MIST SSGA Growth ETF Subaccount............................ 12,336,954 131,311,815 12,226,104 12,856,374 MIST T. Rowe Price Large Cap Value Subaccount.............. 10,909,042 337,965,813 58,411,293 60,028,215 MIST T. Rowe Price Mid Cap Growth Subaccount............... 135,377 1,315,445 270,925 684,684 Morgan Stanley Multi Cap Growth Subaccount................. 17,200 647,559 132,450 96,485 MSF Barclays Aggregate Bond Index Subaccount............... 5,746,042 62,542,413 4,248,470 9,634,134 MSF BlackRock Bond Income Subaccount....................... 1,256,272 132,147,663 11,874,136 26,859,195 MSF BlackRock Capital Appreciation Subaccount.............. 4,895,490 114,207,594 16,928,295 25,032,021 MSF BlackRock Large Cap Value Subaccount................... 1,187,784 11,840,097 1,676,923 2,161,022 MSF BlackRock Ultra-Short Term Bond Subaccount............. 2,133,941 213,421,332 79,132,571 100,361,947 MSF Frontier Mid Cap Growth Subaccount..................... 2,322,226 63,870,782 10,198,269 12,450,739 MSF Jennison Growth Subaccount............................. 25,015,214 316,574,131 47,591,194 41,699,355 MSF Loomis Sayles Small Cap Core Subaccount................ 2,687 665,606 197,845 193,278 MSF Met/Artisan Mid Cap Value Subaccount................... 7,650 1,398,989 336,550 260,767 MSF Met/Dimensional International Small Company Subaccount............................................... 43,504 603,654 214,824 1,029,113 MSF Met/Wellington Balanced Subaccount..................... 12,492,404 200,414,141 21,445,423 33,716,411 MSF Met/Wellington Core Equity Opportunities Subaccount.... 4,178,061 127,371,521 57,057,077 18,754,539 MSF MetLife Asset Allocation 20 Subaccount................. 1,907,452 21,267,794 2,895,284 5,880,953 MSF MetLife Asset Allocation 40 Subaccount................. 6,089,701 69,667,579 11,041,009 14,349,548 MSF MetLife Asset Allocation 60 Subaccount................. 38,683,446 458,840,253 63,409,731 66,370,030 MSF MetLife Asset Allocation 80 Subaccount................. 44,866,080 573,130,897 95,031,986 63,362,463 MSF MetLife Mid Cap Stock Index Subaccount................. 944,850 14,827,600 3,329,805 2,372,965 MSF MetLife Stock Index Subaccount......................... 17,821,047 623,629,152 69,571,192 114,134,780 MSF MFS Total Return Subaccount............................ 2,054,386 294,699,882 31,729,539 57,762,715 MSF MFS Value Subaccount................................... 8,305,126 121,155,322 18,640,234 21,154,309 MSF MSCI EAFE Index Subaccount............................. 3,888,648 59,502,166 2,448,762 5,360,257 MSF Neuberger Berman Genesis Subaccount.................... 2,865,343 41,974,375 1,142,639 9,511,695 MSF Russell 2000 Index Subaccount.......................... 5,470,780 80,605,634 9,817,418 12,907,213 MSF T. Rowe Price Large Cap Growth Subaccount.............. 2,650,810 50,098,003 10,008,200 10,112,930 MSF T. Rowe Price Small Cap Growth Subaccount.............. 5,402,843 87,531,747 16,223,847 14,462,057 MSF Western Asset Management Strategic Bond Opportunities Subaccount................................. 12,787,840 165,489,092 158,787,038 26,739,950 MSF Western Asset Management U.S. Government Subaccount............................................... 6,411,607 76,630,315 9,571,172 15,742,266
86 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. STATEMENTS OF INVESTMENTS -- (CONCLUDED)
FOR THE YEAR ENDED AS OF DECEMBER 31, 2016 DECEMBER 31, 2016 ------------------------------ ------------------------------- COST OF PROCEEDS SHARES COST ($) PURCHASES ($) FROM SALES ($) ------------- ------------- -------------- -------------- Pioneer VCT Mid Cap Value Subaccount....................... 960,478 19,085,528 1,815,494 4,374,274 Pioneer VCT Real Estate Shares Subaccount.................. 460,067 8,537,443 2,193,720 1,804,709 TAP 1919 Variable Socially Responsive Balanced Subaccount............................................... 1,315,931 32,624,819 2,803,521 4,827,164 UIF Growth Subaccount...................................... 229,229 4,632,499 1,184,526 1,115,949
87 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015:
AB GLOBAL THEMATIC GROWTH ALGER CAPITAL APPRECIATION AMERICAN FUNDS BOND SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------- ------------------------------- 2016 2015 2016 2015 2016 2015 -------------- --------------- -------------- --------------- -------------- --------------- Units beginning of year.......... 433,718 842,863 973,382 1,145,362 2,919,559 3,888,953 Units issued and transferred from other funding options.... 16,714 8,029 17,163 147,172 770,840 509,746 Units redeemed and transferred to other funding options......... (48,035) (417,174) (200,200) (319,152) (894,985) (1,479,140) -------------- --------------- -------------- --------------- -------------- --------------- Units end of year................ 402,397 433,718 790,345 973,382 2,795,414 2,919,559 ============== =============== ============== =============== ============== =============== AMERICAN FUNDS AMERICAN FUNDS GLOBAL GROWTH GLOBAL SMALL CAPITALIZATION SUBACCOUNT SUBACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 43,593,647 50,715,493 620,815 785,948 Units issued and transferred from other funding options.... 1,145,866 2,049,606 39,344 66,178 Units redeemed and transferred to other funding options......... (7,726,016) (9,171,452) (164,468) (231,311) --------------- --------------- --------------- --------------- Units end of year................ 37,013,497 43,593,647 495,691 620,815 =============== =============== =============== =============== AMERICAN FUNDS GROWTH SUBACCOUNT -------------------------------- 2016 2015 --------------- --------------- Units beginning of year.......... 103,574,782 122,112,054 Units issued and transferred from other funding options.... 2,985,402 4,087,732 Units redeemed and transferred to other funding options......... (16,805,003) (22,625,004) --------------- --------------- Units end of year................ 89,755,181 103,574,782 =============== ===============
AMERICAN FUNDS GROWTH-INCOME DELAWARE VIP SMALL CAP VALUE SUBACCOUNT SUBACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 96,683,093 114,152,086 2,998,177 3,517,796 Units issued and transferred from other funding options.... 2,630,261 4,047,386 156,661 61,518 Units redeemed and transferred to other funding options......... (16,287,210) (21,516,379) (390,498) (581,137) --------------- --------------- --------------- --------------- Units end of year................ 83,026,144 96,683,093 2,764,340 2,998,177 =============== =============== =============== =============== DEUTSCHE II GOVERNMENT & AGENCY SECURITIES DEUTSCHE II SMALL MID CAP VALUE SUBACCOUNT SUBACCOUNT -------------------------------- --------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 2,061,094 2,276,924 1,750,951 2,326,077 Units issued and transferred from other funding options.... 131,560 179,781 60,584 75,880 Units redeemed and transferred to other funding options......... (295,713) (395,611) (380,012) (651,006) --------------- --------------- --------------- --------------- Units end of year................ 1,896,941 2,061,094 1,431,523 1,750,951 =============== =============== =============== =============== DREYFUS SOCIALLY RESPONSIBLE GROWTH FIDELITY VIP CONTRAFUND SUBACCOUNT SUBACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 253,443 380,167 82,770,515 92,864,202 Units issued and transferred from other funding options.... 5,593 20,569 3,516,391 4,551,613 Units redeemed and transferred to other funding options......... (6,138) (147,293) (12,832,376) (14,645,300) --------------- --------------- --------------- --------------- Units end of year................ 252,898 253,443 73,454,530 82,770,515 =============== =============== =============== ===============
FIDELITY VIP DYNAMIC CAPITAL APPRECIATION FIDELITY VIP EQUITY-INCOME SUBACCOUNT SUBACCOUNT --------------------------------- --------------------------------- 2016 2015 2016 2015 --------------- ---------------- --------------- ---------------- Units beginning of year.......... 934,036 1,011,331 52,549,940 58,365,899 Units issued and transferred from other funding options.... 6,473 361,296 1,483,731 1,580,356 Units redeemed and transferred to other funding options......... (114,211) (438,591) (6,391,332) (7,396,315) --------------- ---------------- --------------- ---------------- Units end of year................ 826,298 934,036 47,642,339 52,549,940 =============== ================ =============== ================ FIDELITY VIP FREEDOM 2020 FIDELITY VIP FREEDOM 2025 SUBACCOUNT SUBACCOUNT --------------------------------- --------------------------------- 2016 2015 (a) 2016 2015 (a) ---------------- --------------- --------------- ---------------- Units beginning of year.......... 42,288 -- 104,718 -- Units issued and transferred from other funding options.... 276,435 42,332 121,655 104,821 Units redeemed and transferred to other funding options......... (76,043) (44) (44,732) (103) ---------------- --------------- --------------- ---------------- Units end of year................ 242,680 42,288 181,641 104,718 ================ =============== =============== ================ FIDELITY VIP FREEDOM 2030 FIDELITY VIP FREEDOM 2040 SUBACCOUNT SUBACCOUNT --------------------------------- --------------------------------- 2016 2015 (a) 2016 2015 (A) ---------------- --------------- ---------------- --------------- Units beginning of year.......... 240,061 -- 4,565 -- Units issued and transferred from other funding options.... 59,702 240,091 29,405 4,586 Units redeemed and transferred to other funding options......... (1,066) (30) (7,591) (21) ---------------- --------------- ---------------- --------------- Units end of year................ 298,697 240,061 26,379 4,565 ================ =============== ================ ===============
FIDELITY VIP FREEDOM 2050 FIDELITY VIP FUNDSMANAGER 60% SUBACCOUNT SUBACCOUNT -------------------------------- -------------------------------- 2016 2015 (a) 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 2,194 -- 43,562,575 3,719,213 Units issued and transferred from other funding options.... 18,744 3,028 4,795,740 40,373,616 Units redeemed and transferred to other funding options......... (1,201) (834) (1,465,717) (530,254) --------------- --------------- --------------- --------------- Units end of year................ 19,737 2,194 46,892,598 43,562,575 =============== =============== =============== =============== FIDELITY VIP HIGH INCOME FIDELITY VIP MID CAP SUBACCOUNT SUBACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 6,309,633 7,082,915 78,497,047 88,269,188 Units issued and transferred from other funding options.... 316,553 199,182 3,852,517 4,405,175 Units redeemed and transferred to other funding options......... (799,536) (972,464) (11,516,530) (14,177,316) --------------- --------------- --------------- --------------- Units end of year................ 5,826,650 6,309,633 70,833,034 78,497,047 =============== =============== =============== =============== FTVIPT FTVIPT FRANKLIN INCOME VIP FRANKLIN MUTUAL SHARES VIP SUBACCOUNT SUBACCOUNT ------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- -------------- --------------- --------------- Units beginning of year.......... 11,175,992 13,052,798 9,109,098 11,130,280 Units issued and transferred from other funding options.... 382,854 441,808 169,298 291,148 Units redeemed and transferred to other funding options......... (2,057,291) (2,318,614) (1,932,675) (2,312,330) --------------- -------------- --------------- --------------- Units end of year................ 9,501,555 11,175,992 7,345,721 9,109,098 =============== ============== =============== ===============
(a) For the period May 1, 2015 to December 31, 2015. 88 89 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015:
FTVIPT FTVIPT FRANKLIN FRANKLIN RISING DIVIDENDS VIP SMALL-MID CAP GROWTH VIP SUBACCOUNT SUBACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 7,513,466 9,499,985 13,151,027 15,338,031 Units issued and transferred from other funding options.... 947,508 328,618 548,358 737,491 Units redeemed and transferred to other funding options......... (2,271,312) (2,315,137) (2,058,524) (2,924,495) --------------- --------------- --------------- --------------- Units end of year................ 6,189,662 7,513,466 11,640,861 13,151,027 =============== =============== =============== =============== FTVIPT TEMPLETON DEVELOPING MARKETS VIP FTVIPT TEMPLETON FOREIGN VIP SUBACCOUNT SUBACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 9,114,020 10,086,656 37,823,632 42,645,501 Units issued and transferred from other funding options.... 1,227,892 1,027,745 3,100,044 4,414,237 Units redeemed and transferred to other funding options......... (2,013,051) (2,000,381) (6,991,659) (9,236,106) --------------- --------------- --------------- --------------- Units end of year................ 8,328,861 9,114,020 33,932,017 37,823,632 =============== =============== =============== =============== INVESCO V.I. COMSTOCK INVESCO V.I. DIVERSIFIED DIVIDEND SUBACCOUNT SUBACCOUNT -------------------------------- ---------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 3,897,706 4,455,900 764,684 832,783 Units issued and transferred from other funding options.... 57,794 23,891 68,412 61,656 Units redeemed and transferred to other funding options......... (613,337) (582,085) (170,627) (129,755) --------------- --------------- --------------- --------------- Units end of year................ 3,342,163 3,897,706 662,469 764,684 =============== =============== =============== ===============
INVESCO V.I. EQUITY AND INCOME INVESCO V.I. GOVERNMENT SECURITIES SUBACCOUNT SUBACCOUNT --------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- --------------- --------------- --------------- Units beginning of year.......... 25,216,381 30,474,326 7,219,285 8,543,666 Units issued and transferred from other funding options.... 593,218 1,508,223 671,161 625,531 Units redeemed and transferred to other funding options......... (4,495,556) (6,766,168) (1,722,960) (1,949,912) ---------------- --------------- --------------- --------------- Units end of year................ 21,314,043 25,216,381 6,167,486 7,219,285 ================ =============== =============== =============== INVESCO V.I. MANAGED VOLATILITY INVESCO V.I. S&P 500 INDEX SUBACCOUNT SUBACCOUNT -------------------------------- ---------------------------------- 2016 2015 2016 2015 --------------- --------------- ---------------- ---------------- Units beginning of year.......... 572,546 663,209 1,204,868 1,281,929 Units issued and transferred from other funding options.... 39,256 95,076 87,833 109,011 Units redeemed and transferred to other funding options......... (131,877) (185,739) (331,870) (186,072) --------------- --------------- ---------------- ---------------- Units end of year................ 479,925 572,546 960,831 1,204,868 =============== =============== ================ ================ JANUS ASPEN ENTERPRISE JANUS ASPEN GLOBAL RESEARCH SUBACCOUNT SUBACCOUNT ---------------------------------- ---------------------------------- 2016 2015 2016 2015 ---------------- ---------------- ---------------- ---------------- Units beginning of year.......... 7,987,829 9,230,937 539,820 634,971 Units issued and transferred from other funding options.... 552,187 473,648 27,899 38,064 Units redeemed and transferred to other funding options......... (1,372,216) (1,716,756) (125,714) (133,215) ---------------- ---------------- ---------------- ---------------- Units end of year................ 7,167,800 7,987,829 442,005 539,820 ================ ================ ================ ================
LMPVET CLEARBRIDGE LMPVET CLEARBRIDGE JANUS ASPEN OVERSEAS VARIABLE AGGRESSIVE GROWTH VARIABLE APPRECIATION SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------- ------------------------------- 2016 2015 2016 2015 2016 2015 --------------- -------------- -------------- --------------- --------------- -------------- Units beginning of year.......... 23,066,962 25,235,388 167,403,724 192,876,953 123,885,127 144,399,729 Units issued and transferred from other funding options.... 2,291,160 2,343,364 5,942,521 6,482,210 1,977,149 2,202,697 Units redeemed and transferred to other funding options......... (4,093,381) (4,511,790) (23,402,967) (31,955,439) (17,498,041) (22,717,299) --------------- -------------- -------------- --------------- --------------- -------------- Units end of year................ 21,264,741 23,066,962 149,943,278 167,403,724 108,364,235 123,885,127 =============== ============== ============== =============== =============== ============== LMPVET CLEARBRIDGE LMPVET CLEARBRIDGE LMPVET CLEARBRIDGE VARIABLE DIVIDEND STRATEGY VARIABLE LARGE CAP GROWTH VARIABLE LARGE CAP VALUE SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------- ------------------------------- 2016 2015 2016 2015 2016 2015 -------------- --------------- --------------- -------------- -------------- --------------- Units beginning of year.......... 54,421,552 63,992,104 42,889,895 49,849,619 57,721,574 66,183,724 Units issued and transferred from other funding options.... 1,342,967 3,710,723 1,944,297 2,004,538 2,045,414 1,390,697 Units redeemed and transferred to other funding options......... (8,112,496) (13,281,275) (6,724,857) (8,964,262) (7,886,784) (9,852,847) -------------- --------------- --------------- -------------- -------------- --------------- Units end of year................ 47,652,023 54,421,552 38,109,335 42,889,895 51,880,204 57,721,574 ============== =============== =============== ============== ============== ===============
LMPVET CLEARBRIDGE LMPVET CLEARBRIDGE LMPVET QS VARIABLE MID CAP VARIABLE SMALL CAP GROWTH VARIABLE CONSERVATIVE GROWTH SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------ ------------------------------ 2016 2015 2016 2015 2016 2015 -------------- --------------- -------------- -------------- -------------- -------------- Units beginning of year............ 13,634,362 15,892,449 19,565,583 22,972,604 26,949,264 31,787,275 Units issued and transferred from other funding options...... 385,546 545,267 804,204 1,335,231 316,041 470,702 Units redeemed and transferred to other funding options........... (1,847,520) (2,803,354) (3,218,883) (4,742,252) (4,190,546) (5,308,713) -------------- --------------- -------------- -------------- -------------- -------------- Units end of year.................. 12,172,388 13,634,362 17,150,904 19,565,583 23,074,759 26,949,264 ============== =============== ============== ============== ============== ============== LMPVET QS LMPVET QS VARIABLE GROWTH VARIABLE MODERATE GROWTH SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- -------------- -------------- --------------- Units beginning of year............ 13,074,765 14,489,682 18,733,090 21,841,591 Units issued and transferred from other funding options...... 63,168 121,611 149,412 187,364 Units redeemed and transferred to other funding options........... (1,395,438) (1,536,528) (1,780,249) (3,295,865) --------------- -------------- -------------- --------------- Units end of year.................. 11,742,495 13,074,765 17,102,253 18,733,090 =============== ============== ============== =============== LMPVIT WESTERN ASSET CORE PLUS SUBACCOUNT ------------------------------- 2016 2015 -------------- -------------- Units beginning of year............ 32,101,360 37,890,107 Units issued and transferred from other funding options...... 1,346,090 1,327,737 Units redeemed and transferred to other funding options........... (5,124,523) (7,116,484) -------------- -------------- Units end of year.................. 28,322,927 32,101,360 ============== ==============
(a) For the period May 1, 2015 to December 31, 2015. 90 91 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015:
LMPVIT WESTERN ASSET MIST AMERICAN FUNDS VARIABLE GLOBAL HIGH YIELD BOND BALANCED ALLOCATION SUBACCOUNT SUBACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- -------------- --------------- --------------- Units beginning of year.......... 3,405,003 4,116,947 3,593,345 3,198,147 Units issued and transferred from other funding options.... 139,391 170,707 2,921,381 986,660 Units redeemed and transferred to other funding options......... (734,076) (882,651) (2,769,363) (591,462) --------------- -------------- --------------- --------------- Units end of year................ 2,810,318 3,405,003 3,745,363 3,593,345 =============== ============== =============== =============== MIST AMERICAN FUNDS MIST AMERICAN FUNDS GROWTH ALLOCATION MODERATE ALLOCATION SUBACCOUNT SUBACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 2,633,410 2,717,215 2,284,599 2,152,245 Units issued and transferred from other funding options.... 374,571 467,527 273,378 395,928 Units redeemed and transferred to other funding options......... (400,282) (551,332) (480,948) (263,574) --------------- --------------- --------------- --------------- Units end of year................ 2,607,699 2,633,410 2,077,029 2,284,599 =============== =============== =============== =============== MIST CLARION MIST BLACKROCK HIGH YIELD GLOBAL REAL ESTATE SUBACCOUNT SUBACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 30,089,681 36,693,530 50,678,041 58,479,092 Units issued and transferred from other funding options.... 3,818,695 4,014,633 3,930,616 4,402,558 Units redeemed and transferred to other funding options......... (7,629,635) (10,618,482) (9,145,299) (12,203,609) --------------- --------------- --------------- --------------- Units end of year................ 26,278,741 30,089,681 45,463,358 50,678,041 =============== =============== =============== ===============
MIST CLEARBRIDGE MIST HARRIS OAKMARK AGGRESSIVE GROWTH INTERNATIONAL MIST INVESCO COMSTOCK SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------- ------------------------------- 2016 2015 2016 2015 2016 2015 --------------- -------------- -------------- --------------- --------------- -------------- Units beginning of year.......... 74,168,853 83,295,458 31,636,054 34,506,428 97,875,599 114,273,627 Units issued and transferred from other funding options.... 4,331,426 10,418,908 3,162,843 4,108,689 2,396,325 3,217,680 Units redeemed and transferred to other funding options......... (13,819,981) (19,545,513) (7,639,439) (6,979,063) (16,358,704) (19,615,708) --------------- -------------- -------------- --------------- --------------- -------------- Units end of year................ 64,680,298 74,168,853 27,159,458 31,636,054 83,913,220 97,875,599 =============== ============== ============== =============== =============== ============== MIST INVESCO MID CAP VALUE MIST INVESCO SMALL CAP GROWTH SUBACCOUNT SUBACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- -------------- --------------- Units beginning of year.......... 27,773,801 33,040,249 5,777,662 5,841,705 Units issued and transferred from other funding options.... 1,459,759 1,822,018 682,133 1,562,549 Units redeemed and transferred to other funding options......... (4,132,832) (7,088,466) (1,457,871) (1,626,592) --------------- --------------- -------------- --------------- Units end of year................ 25,100,728 27,773,801 5,001,924 5,777,662 =============== =============== ============== =============== MIST JPMORGAN SMALL CAP VALUE SUBACCOUNT -------------------------------- 2016 2015 --------------- --------------- Units beginning of year.......... 5,524,272 6,763,553 Units issued and transferred from other funding options.... 787,188 832,699 Units redeemed and transferred to other funding options......... (1,246,816) (2,071,980) --------------- --------------- Units end of year................ 5,064,644 5,524,272 =============== ===============
MIST LOOMIS MIST MET/ABERDEEN MIST MET/EATON SAYLES GLOBAL MARKETS EMERGING MARKETS EQUITY VANCE FLOATING RATE SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------- ------------------------------- 2016 2015 2016 2015 2016 2015 -------------- --------------- --------------- -------------- --------------- -------------- Units beginning of year.......... 19,556,931 21,660,824 20,803,894 23,705,249 3,452,793 3,823,833 Units issued and transferred from other funding options.... 703,919 695,185 1,141,915 2,301,875 252,806 612,752 Units redeemed and transferred to other funding options......... (2,650,576) (2,799,078) (4,311,897) (5,203,230) (1,272,116) (983,792) -------------- --------------- --------------- -------------- --------------- -------------- Units end of year................ 17,610,274 19,556,931 17,633,912 20,803,894 2,433,483 3,452,793 ============== =============== =============== ============== =============== ============== MIST MET/WELLINGTON MIST METLIFE MIST METLIFE LARGE CAP RESEARCH ASSET ALLOCATION 100 MULTI-INDEX TARGETED RISK SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------- ------------------------------- 2016 2015 2016 2015 2016 2015 -------------- --------------- -------------- --------------- --------------- -------------- Units beginning of year.......... 24,145,925 28,125,928 43,198,777 45,212,729 2,641 1,008 Units issued and transferred from other funding options.... 369,875 865,361 2,417,208 2,780,860 7,543 3,167 Units redeemed and transferred to other funding options......... (3,981,709) (4,845,364) (6,253,485) (4,794,812) (789) (1,534) -------------- --------------- -------------- --------------- --------------- -------------- Units end of year................ 20,534,091 24,145,925 39,362,500 43,198,777 9,395 2,641 ============== =============== ============== =============== =============== ==============
MIST METLIFE SMALL CAP VALUE MIST MFS RESEARCH INTERNATIONAL SUBACCOUNT SUBACCOUNT ------------------------------- -------------------------------- 2016 2015 2016 2015 -------------- --------------- --------------- -------------- Units beginning of year............ 54,080,595 63,208,688 41,917,165 46,101,233 Units issued and transferred from other funding options...... 1,801,393 2,668,018 2,531,592 3,231,900 Units redeemed and transferred to other funding options........... (8,071,176) (11,796,111) (7,708,524) (7,415,968) -------------- --------------- --------------- -------------- Units end of year.................. 47,810,812 54,080,595 36,740,233 41,917,165 ============== =============== =============== ============== MIST MORGAN STANLEY MIST OPPENHEIMER MID CAP GROWTH GLOBAL EQUITY SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------- 2016 2015 2016 2015 -------------- --------------- -------------- --------------- Units beginning of year............ 5,073,086 5,743,592 223,372,532 249,440,312 Units issued and transferred from other funding options...... 424,644 551,051 7,725,204 9,496,724 Units redeemed and transferred to other funding options........... (1,116,613) (1,221,557) (31,892,226) (35,564,504) -------------- --------------- -------------- --------------- Units end of year.................. 4,381,117 5,073,086 199,205,510 223,372,532 ============== =============== ============== =============== MIST PIMCO INFLATION PROTECTED BOND MIST PIMCO TOTAL RETURN SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------- 2016 2015 2016 2015 -------------- --------------- --------------- -------------- Units beginning of year............ 39,426,607 47,696,077 125,500,853 150,568,606 Units issued and transferred from other funding options...... 2,833,834 3,936,590 6,557,358 8,290,093 Units redeemed and transferred to other funding options........... (6,952,634) (12,206,060) (23,068,332) (33,357,846) -------------- --------------- --------------- -------------- Units end of year.................. 35,307,807 39,426,607 108,989,879 125,500,853 ============== =============== =============== ==============
(a) For the period May 1, 2015 to December 31, 2015. 92 93 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015:
MIST SSGA MIST PYRAMIS MANAGED RISK GROWTH AND INCOME ETF SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- -------------- --------------- -------------- Units beginning of year............ 1,566 992 75,897,851 82,493,632 Units issued and transferred from other funding options...... 832 805 2,278,974 2,378,137 Units redeemed and transferred to other funding options........... -- (231) (8,795,575) (8,973,918) --------------- -------------- --------------- -------------- Units end of year.................. 2,398 1,566 69,381,250 75,897,851 =============== ============== =============== ============== MIST T. ROWE PRICE MIST T. ROWE PRICE MIST SSGA GROWTH ETF LARGE CAP VALUE MID CAP GROWTH SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------ ------------------------------ 2016 2015 2016 2015 2016 2015 -------------- --------------- -------------- -------------- -------------- -------------- Units beginning of year............ 98,530,509 107,020,440 215,108,437 246,029,179 890,955 1,048,455 Units issued and transferred from other funding options...... 3,624,499 3,793,017 6,948,699 10,444,372 30,563 84,715 Units redeemed and transferred to other funding options........... (11,010,648) (12,282,948) (33,779,177) (41,365,114) (362,321) (242,215) -------------- --------------- -------------- -------------- -------------- -------------- Units end of year.................. 91,144,360 98,530,509 188,277,959 215,108,437 559,197 890,955 ============== =============== ============== ============== ============== ============== MORGAN STANLEY MULTI CAP GROWTH SUBACCOUNT ------------------------------ 2016 2015 -------------- -------------- Units beginning of year............ 302,631 367,876 Units issued and transferred from other funding options...... 4,893 7,272 Units redeemed and transferred to other funding options........... (32,839) (72,517) -------------- -------------- Units end of year.................. 274,685 302,631 ============== ==============
MSF BARCLAYS AGGREGATE BOND INDEX MSF BLACKROCK BOND INCOME SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------- 2016 2015 2016 2015 -------------- --------------- --------------- -------------- Units beginning of year............ 28,582,132 31,665,367 101,411,127 116,573,933 Units issued and transferred from other funding options...... 1,806,333 1,233,724 7,043,616 6,484,501 Units redeemed and transferred to other funding options........... (4,460,848) (4,316,959) (18,632,893) (21,647,307) -------------- --------------- --------------- -------------- Units end of year.................. 25,927,617 28,582,132 89,821,850 101,411,127 ============== =============== =============== ============== MSF BLACKROCK CAPITAL APPRECIATION MSF BLACKROCK LARGE CAP VALUE SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------- 2016 2015 2016 2015 -------------- --------------- -------------- --------------- Units beginning of year............ 102,258,198 116,660,042 6,317,929 7,271,879 Units issued and transferred from other funding options...... 1,850,151 3,904,460 471,889 312,849 Units redeemed and transferred to other funding options........... (13,874,357) (18,306,304) (1,256,775) (1,266,799) -------------- --------------- -------------- --------------- Units end of year.................. 90,233,992 102,258,198 5,533,043 6,317,929 ============== =============== ============== =============== MSF BLACKROCK ULTRA-SHORT TERM BOND MSF FRONTIER MID CAP GROWTH SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- -------------- --------------- -------------- Units beginning of year............ 207,458,223 228,692,218 53,062,687 59,828,713 Units issued and transferred from other funding options...... 85,385,618 143,320,829 1,910,698 3,088,415 Units redeemed and transferred to other funding options........... (101,353,505) (164,554,824) (8,203,496) (9,854,441) --------------- -------------- --------------- -------------- Units end of year.................. 191,490,336 207,458,223 46,769,889 53,062,687 =============== ============== =============== ==============
MSF LOOMIS MSF JENNISON GROWTH SAYLES SMALL CAP CORE SUBACCOUNT SUBACCOUNT -------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- -------------- Units beginning of year.......... 255,430,902 283,460,406 133,839 146,236 Units issued and transferred from other funding options.... 6,886,091 7,823,483 29,296 4,178 Units redeemed and transferred to other funding options......... (31,982,587) (35,852,987) (37,509) (16,575) --------------- --------------- --------------- -------------- Units end of year................ 230,334,406 255,430,902 125,626 133,839 =============== =============== =============== ============== MSF MET/ARTISAN MSF MET/DIMENSIONAL MID CAP VALUE INTERNATIONAL SMALL COMPANY SUBACCOUNT SUBACCOUNT ------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- -------------- --------------- --------------- Units beginning of year.......... 516,603 599,313 749,110 750,406 Units issued and transferred from other funding options.... 44,521 803 59,438 204,958 Units redeemed and transferred to other funding options......... (73,247) (83,513) (534,608) (206,254) --------------- -------------- --------------- --------------- Units end of year................ 487,877 516,603 273,940 749,110 =============== ============== =============== =============== MSF MET/WELLINGTON MSF MET/WELLINGTON BALANCED CORE EQUITY OPPORTUNITIES SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- -------------- --------------- -------------- Units beginning of year.......... 72,571,267 78,788,126 44,358,088 53,012,778 Units issued and transferred from other funding options.... 2,878,958 3,113,140 16,381,725 1,165,930 Units redeemed and transferred to other funding options......... (10,858,980) (9,329,999) (8,513,261) (9,820,620) --------------- -------------- --------------- -------------- Units end of year................ 64,591,245 72,571,267 52,226,552 44,358,088 =============== ============== =============== ==============
MSF METLIFE MSF METLIFE ASSET ALLOCATION 20 ASSET ALLOCATION 40 SUBACCOUNT SUBACCOUNT --------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- ---------------- --------------- --------------- Units beginning of year.......... 17,745,651 21,756,153 54,365,636 62,281,508 Units issued and transferred from other funding options.... 1,266,156 1,472,533 3,703,438 6,873,676 Units redeemed and transferred to other funding options......... (4,303,562) (5,483,035) (10,526,809) (14,789,548) --------------- ---------------- --------------- --------------- Units end of year................ 14,708,245 17,745,651 47,542,265 54,365,636 =============== ================ =============== =============== MSF METLIFE MSF METLIFE ASSET ALLOCATION 60 ASSET ALLOCATION 80 SUBACCOUNT SUBACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 351,132,615 393,087,875 438,830,497 469,940,862 Units issued and transferred from other funding options.... 15,168,468 18,508,983 18,379,097 24,760,375 Units redeemed and transferred to other funding options......... (53,287,982) (60,464,243) (50,355,685) (55,870,740) --------------- --------------- --------------- --------------- Units end of year................ 313,013,101 351,132,615 406,853,909 438,830,497 =============== =============== =============== =============== MSF METLIFE MID CAP STOCK INDEX MSF METLIFE STOCK INDEX SUBACCOUNT SUBACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 8,349,197 8,659,503 444,545,333 512,472,472 Units issued and transferred from other funding options.... 1,165,755 1,291,399 19,831,419 22,913,339 Units redeemed and transferred to other funding options......... (1,563,956) (1,601,705) (64,632,208) (90,840,478) --------------- --------------- --------------- --------------- Units end of year................ 7,950,996 8,349,197 399,744,544 444,545,333 =============== =============== =============== ===============
(a) For the period May 1, 2015 to December 31, 2015. 94 95 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015:
MSF MFS TOTAL RETURN MSF MFS VALUE SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------- 2016 2015 2016 2015 --------------- -------------- -------------- --------------- Units beginning of year............ 157,676,884 181,477,236 61,186,657 71,426,723 Units issued and transferred from other funding options...... 5,999,001 6,557,260 3,397,015 3,398,881 Units redeemed and transferred to other funding options........... (25,601,136) (30,357,612) (10,183,523) (13,638,947) --------------- -------------- -------------- --------------- Units end of year.................. 138,074,749 157,676,884 54,400,150 61,186,657 =============== ============== ============== =============== MSF MSCI EAFE INDEX MSF NEUBERGER BERMAN GENESIS MSF RUSSELL 2000 INDEX SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------ ------------------------------ 2016 2015 2016 2015 2016 2015 -------------- --------------- -------------- -------------- -------------- -------------- Units beginning of year............ 24,065,038 25,971,462 25,655,787 30,031,861 25,834,307 27,782,287 Units issued and transferred from other funding options...... 1,427,810 1,180,869 723,420 1,337,705 1,553,788 1,391,372 Units redeemed and transferred to other funding options........... (3,318,774) (3,087,293) (4,015,807) (5,713,779) (3,896,413) (3,339,352) -------------- --------------- -------------- -------------- -------------- -------------- Units end of year.................. 22,174,074 24,065,038 22,363,400 25,655,787 23,491,682 25,834,307 ============== =============== ============== ============== ============== ============== MSF T. ROWE PRICE LARGE CAP GROWTH SUBACCOUNT ------------------------------ 2016 2015 -------------- -------------- Units beginning of year............ 29,861,303 33,034,416 Units issued and transferred from other funding options...... 2,369,564 4,269,320 Units redeemed and transferred to other funding options........... (5,543,050) (7,442,433) -------------- -------------- Units end of year.................. 26,687,817 29,861,303 ============== ==============
MSF WESTERN ASSET MSF T. ROWE PRICE MANAGEMENT STRATEGIC SMALL CAP GROWTH BOND OPPORTUNITIES SUBACCOUNT SUBACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 46,060,640 50,212,351 19,595,073 23,348,172 Units issued and transferred from other funding options.... 2,529,356 3,538,349 18,283,279 1,028,130 Units redeemed and transferred to other funding options......... (7,090,334) (7,690,060) (5,411,306) (4,781,229) --------------- --------------- --------------- --------------- Units end of year................ 41,499,662 46,060,640 32,467,046 19,595,073 =============== =============== =============== =============== MSF WESTERN ASSET MANAGEMENT U.S. GOVERNMENT PIONEER VCT MID CAP VALUE SUBACCOUNT SUBACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 53,614,394 64,344,337 9,348,957 11,449,417 Units issued and transferred from other funding options.... 7,017,275 3,839,656 311,519 460,262 Units redeemed and transferred to other funding options......... (11,485,160) (14,569,599) (1,866,877) (2,560,722) --------------- --------------- --------------- --------------- Units end of year................ 49,146,509 53,614,394 7,793,599 9,348,957 =============== =============== =============== =============== TAP 1919 VARIABLE PIONEER VCT REAL ESTATE SHARES SOCIALLY RESPONSIVE BALANCED SUBACCOUNT SUBACCOUNT -------------------------------- -------------------------------- 2016 2015 2016 2015 --------------- --------------- --------------- --------------- Units beginning of year.......... 2,872,791 3,456,891 13,640,111 15,783,435 Units issued and transferred from other funding options.... 190,008 231,453 266,912 407,383 Units redeemed and transferred to other funding options......... (574,929) (815,553) (1,890,524) (2,550,707) --------------- --------------- --------------- --------------- Units end of year................ 2,487,870 2,872,791 12,016,499 13,640,111 =============== =============== =============== ===============
UIF GROWTH SUBACCOUNT ------------------------------ 2016 2015 -------------- -------------- Units beginning of year............ 2,947,999 3,258,928 Units issued and transferred from other funding options...... 91,224 138,111 Units redeemed and transferred to other funding options........... (434,087) (449,040) -------------- -------------- Units end of year.................. 2,605,136 2,947,999 ============== ==============
(a) For the period May 1, 2015 to December 31, 2015. 96 97 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS The Company sells a number of variable annuity products which have unique combinations of features and fees, some of which directly affect the unit values of the Subaccounts. Differences in the fee structures result in a variety of unit values, expense ratios, and total returns. The following table is a summary of unit values and units outstanding for the Contracts, net investment income ratios, and expense ratios, excluding expenses for the underlying portfolio, series or fund, for the respective stated periods in the five years ended December 31, 2016:
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------- ------------------------------------------------- UNIT VALUE INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ------------ ------------- -------------- ------------- ---------------- ---------------- AB Global Thematic Growth 2016 402,397 0.95 - 0.99 395,223 -- 1.65 - 1.90 (2.74) - (2.50) Subaccount 2015 433,718 0.98 - 1.01 437,107 -- 1.65 - 1.90 0.72 - 0.97 2014 842,863 0.97 - 1.00 831,818 -- 1.65 - 1.90 2.83 - 3.09 2013 939,841 0.94 - 0.97 901,277 0.02 1.65 - 1.90 20.61 - 20.92 2012 1,104,786 0.78 - 0.80 878,354 -- 1.65 - 1.90 11.10 - 11.38 Alger Capital Appreciation 2016 790,345 2.43 - 3.19 2,393,354 -- 1.55 - 2.65 (2.40) - (1.32) Subaccount 2015 973,382 2.48 - 3.24 2,984,795 -- 1.55 - 2.65 3.14 - 4.28 2014 1,145,362 2.40 - 3.10 3,369,272 -- 1.55 - 2.65 10.48 - 11.70 2013 1,275,479 2.17 - 2.78 3,363,995 0.10 1.55 - 2.65 31.27 - 32.72 2012 1,645,523 1.66 - 2.09 3,300,965 0.46 1.55 - 2.65 14.79 - 16.07 American Funds Bond 2016 2,795,414 1.64 - 1.81 4,872,464 1.59 1.40 - 1.90 1.01 - 1.51 Subaccount 2015 2,919,559 1.62 - 1.78 5,024,441 1.54 1.40 - 1.90 (1.61) - (1.12) 2014 3,888,953 1.65 - 1.80 6,766,160 1.81 1.40 - 1.90 3.30 - 3.81 2013 4,603,974 1.59 - 1.73 7,716,511 1.60 1.40 - 1.90 (4.00) - (3.52) 2012 6,125,338 1.66 - 1.80 10,642,898 2.46 1.40 - 1.90 3.38 - 3.90 American Funds Global 2016 37,013,497 1.96 - 3.07 94,479,486 0.88 0.30 - 2.60 (1.96) - 0.32 Growth Subaccount 2015 43,593,647 1.98 - 3.10 112,218,439 0.97 0.30 - 2.60 4.19 - 6.62 2014 50,715,493 1.89 - 2.95 124,133,870 1.10 0.30 - 2.60 (0.31) - 2.01 2013 61,715,610 1.88 - 2.93 150,574,183 1.20 0.30 - 2.60 25.86 - 28.79 2012 74,340,049 1.48 - 2.31 143,143,628 0.84 0.30 - 2.60 19.40 - 22.19 American Funds Global Small 2016 495,691 3.34 - 3.66 1,744,804 0.23 1.40 - 1.90 0.18 - 0.68 Capitalization Subaccount 2015 620,815 3.33 - 3.64 2,173,442 -- 1.40 - 1.90 (1.62) - (1.13) 2014 785,948 3.39 - 3.68 2,794,308 0.11 1.40 - 1.90 0.20 - 0.70 2013 1,010,185 3.38 - 3.65 3,564,842 0.86 1.40 - 1.90 25.87 - 26.50 2012 1,174,553 2.68 - 2.89 3,283,267 1.34 1.40 - 1.90 15.94 - 16.53 American Funds Growth 2016 89,755,181 1.81 - 3.03 227,525,831 0.75 0.30 - 2.70 6.57 - 9.16 Subaccount 2015 103,574,782 1.70 - 2.82 244,016,695 0.57 0.30 - 2.70 4.01 - 6.54 2014 122,112,054 1.63 - 2.68 273,472,215 0.73 0.30 - 2.70 5.62 - 8.18 2013 154,846,650 1.55 - 2.51 325,074,327 0.90 0.30 - 2.70 26.64 - 29.71 2012 187,729,621 1.22 - 1.96 309,138,975 0.76 0.30 - 2.70 14.74 - 17.54 American Funds 2016 83,026,144 1.71 - 2.62 193,185,203 1.42 0.30 - 2.75 8.50 - 11.19 Growth-Income Subaccount 2015 96,683,093 1.58 - 2.39 205,249,115 1.24 0.30 - 2.75 (1.30) - 1.15 2014 114,152,086 1.60 - 2.40 242,579,693 1.21 0.30 - 2.75 7.63 - 10.30 2013 142,763,134 1.49 - 2.21 279,010,804 1.29 0.30 - 2.75 29.88 - 33.10 2012 174,788,776 1.14 - 1.68 261,008,029 1.53 0.30 - 2.75 14.28 - 17.13 Delaware VIP Small Cap 2016 2,764,340 3.25 - 5.85 11,287,261 0.98 0.30 - 1.30 29.71 - 31.01 Value Subaccount 2015 2,998,177 2.48 - 4.48 9,400,488 0.73 0.30 - 1.30 (7.43) - (6.50) 2014 3,517,796 2.65 - 4.81 11,900,887 0.57 0.30 - 1.30 4.50 - 5.55 2013 4,830,286 2.51 - 4.57 15,302,896 0.72 0.30 - 1.30 31.78 - 33.11 2012 5,246,939 1.89 - 3.44 12,614,903 0.59 0.30 - 1.30 12.43 - 13.56
98 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ ------------- -------------- Deutsche II Government & 2016 1,896,941 1.09 - 1.26 2,265,390 Agency Securities Subaccount 2015 2,061,094 1.11 - 1.27 2,487,768 2014 2,276,924 1.14 - 1.30 2,817,918 2013 2,830,693 1.12 - 1.26 3,417,259 2012 4,017,203 1.19 - 1.32 5,114,710 Deutsche II Small Mid Cap 2016 1,431,523 2.14 - 3.24 4,233,440 Value Subaccount 2015 1,750,951 1.65 - 2.82 4,507,291 2014 2,326,077 1.73 - 2.93 6,302,015 2013 3,103,273 1.69 - 2.83 8,094,382 2012 3,970,007 1.28 - 2.14 7,824,888 Dreyfus Socially 2016 252,898 1.66 - 2.14 503,431 Responsible Growth Subaccount 2015 253,443 1.55 - 1.98 467,910 2014 380,167 1.65 - 2.08 754,943 2013 398,114 1.50 - 1.87 710,335 2012 429,359 1.15 - 1.41 581,605 Fidelity VIP Contrafund 2016 73,454,530 1.80 - 3.00 200,953,161 Subaccount 2015 82,770,515 1.71 - 2.82 213,090,938 2014 92,864,202 1.74 - 2.85 240,965,803 2013 108,680,474 1.60 - 2.59 255,326,876 2012 123,668,052 1.25 - 2.01 224,167,053 Fidelity VIP Dynamic 2016 826,298 1.66 - 2.94 1,801,247 Capital Appreciation 2015 934,036 1.64 - 2.87 2,014,900 Subaccount 2014 1,011,331 1.64 - 2.85 2,212,496 2013 1,197,666 1.51 - 2.59 2,445,391 2012 1,416,012 1.11 - 1.88 2,129,562 Fidelity VIP Equity-Income 2016 47,642,339 1.81 - 5.12 233,851,528 Subaccount 2015 52,549,940 1.57 - 4.40 220,784,877 2014 58,365,899 1.67 - 4.64 257,632,017 2013 63,687,670 1.56 - 4.32 261,131,881 2012 69,667,292 1.22 - 3.41 224,230,879 Fidelity VIP Freedom 2020 2016 242,680 1.68 - 1.85 425,855 Subaccount 2015 42,288 1.61 - 1.65 69,713 (Commenced 5/1/2015) Fidelity VIP Freedom 2025 2016 181,641 1.77 - 1.89 335,281 Subaccount 2015 104,718 1.69 - 1.75 182,283 (Commenced 5/1/2015) Fidelity VIP Freedom 2030 2016 298,697 1.76 - 1.94 561,340 Subaccount 2015 240,061 1.67 - 1.83 429,195 (Commenced 5/1/2015) Fidelity VIP Freedom 2040 2016 26,379 2.33 - 2.49 62,152 Subaccount 2015 4,565 2.21 - 2.25 10,128 (Commenced 5/1/2015) Fidelity VIP Freedom 2050 2016 19,737 2.38 - 2.54 47,803 Subaccount 2015 2,194 2.26 - 2.30 4,997 (Commenced 5/1/2015) FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ---------------- Deutsche II Government & 2016 2.75 1.55 - 2.65 (1.85) - (0.76) Agency Securities Subaccount 2015 2.44 1.55 - 2.65 (2.97) - (1.90) 2014 2.00 1.55 - 2.65 2.21 - 3.34 2013 2.71 1.55 - 2.65 (5.78) - (4.74) 2012 3.52 1.55 - 2.65 (0.21) - 0.90 Deutsche II Small Mid Cap 2016 0.24 1.55 - 2.65 13.42 - 14.68 Value Subaccount 2015 -- 1.55 - 2.65 (4.77) - (3.72) 2014 0.46 1.55 - 2.65 2.34 - 3.48 2013 0.83 1.55 - 2.65 31.18 - 32.63 2012 0.81 1.55 - 2.65 10.40 - 11.63 Dreyfus Socially 2016 1.02 1.55 - 2.65 7.20 - 8.38 Responsible Growth Subaccount 2015 0.83 1.55 - 2.65 (5.94) - (4.90) 2014 0.84 1.55 - 2.65 10.17 - 11.39 2013 1.03 1.55 - 2.65 30.49 - 31.94 2012 0.63 1.55 - 2.65 8.76 - 9.97 Fidelity VIP Contrafund 2016 0.62 0.30 - 2.65 4.91 - 7.41 Subaccount 2015 0.79 0.30 - 2.65 (2.21) - 0.11 2014 0.72 0.30 - 2.65 8.73 - 11.32 2013 0.84 0.30 - 2.65 27.53 - 30.56 2012 1.10 0.30 - 2.65 13.09 - 15.79 Fidelity VIP Dynamic 2016 0.69 0.30 - 2.50 0.12 - 2.35 Capital Appreciation 2015 0.55 0.30 - 2.50 (1.47) - 0.72 Subaccount 2014 0.20 0.30 - 2.50 7.93 - 10.33 2013 0.12 0.30 - 2.50 34.84 - 37.84 2012 0.53 0.30 - 2.50 19.22 - 21.88 Fidelity VIP Equity-Income 2016 2.27 0.30 - 1.90 15.49 - 17.66 Subaccount 2015 3.07 0.30 - 1.90 (6.04) - (4.25) 2014 2.77 0.30 - 1.90 6.44 - 8.39 2013 2.47 0.30 - 1.90 25.42 - 27.76 2012 3.06 0.30 - 1.90 14.84 - 16.95 Fidelity VIP Freedom 2020 2016 1.67 0.30 - 1.15 4.59 - 5.49 Subaccount 2015 2.21 0.90 - 1.15 (4.96) - (4.81) (Commenced 5/1/2015) Fidelity VIP Freedom 2025 2016 1.67 0.60 - 1.15 4.77 - 5.35 Subaccount 2015 4.15 0.80 - 1.15 (5.34) - (5.12) (Commenced 5/1/2015) Fidelity VIP Freedom 2030 2016 1.34 0.30 - 1.15 5.16 - 6.06 Subaccount 2015 9.73 0.30 - 1.15 (5.97) - (5.43) (Commenced 5/1/2015) Fidelity VIP Freedom 2040 2016 1.60 0.30 - 1.15 5.31 - 6.21 Subaccount 2015 3.45 0.90 - 1.15 (6.19) - (6.04) (Commenced 5/1/2015) Fidelity VIP Freedom 2050 2016 3.14 0.30 - 1.15 5.34 - 6.24 Subaccount 2015 3.42 0.90 - 1.15 (6.24) - (6.09) (Commenced 5/1/2015)
99 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ ------------- -------------- Fidelity VIP FundsManager 2016 46,892,598 12.50 - 14.26 593,192,621 60% Subaccount 2015 43,562,575 12.19 - 13.70 537,008,428 (Commenced 11/17/2014) 2014 3,719,213 12.62 46,949,186 Fidelity VIP High Income 2016 5,826,650 1.90 - 3.36 19,469,815 Subaccount 2015 6,309,633 1.68 - 2.97 18,631,012 2014 7,082,915 1.77 - 3.12 21,901,589 2013 7,872,590 1.77 - 3.12 24,369,719 2012 8,865,709 1.69 - 2.98 26,193,581 Fidelity VIP Mid Cap 2016 70,833,034 1.97 - 3.94 245,490,758 Subaccount 2015 78,497,047 1.80 - 3.55 246,200,236 2014 88,269,188 1.87 - 3.67 284,320,518 2013 101,839,154 1.80 - 3.51 312,221,233 2012 114,724,500 1.36 - 2.62 262,317,915 FTVIPT Franklin Income VIP 2016 9,501,555 1.49 - 6.39 19,714,285 Subaccount 2015 11,175,992 1.34 - 5.68 21,261,003 2014 13,052,798 1.47 - 6.20 28,076,571 2013 17,033,712 1.45 - 6.01 36,879,662 2012 20,017,657 1.30 - 5.35 38,617,121 FTVIPT Franklin Mutual 2016 7,345,721 1.91 - 2.18 14,806,916 Shares VIP Subaccount 2015 9,109,098 1.68 - 1.91 16,047,671 2014 11,130,280 1.80 - 2.04 20,922,139 2013 14,194,716 1.71 - 1.93 25,274,641 2012 18,783,084 1.36 - 1.52 26,504,729 FTVIPT Franklin Rising 2016 6,189,662 1.53 - 2.51 14,124,147 Dividends VIP Subaccount 2015 7,513,466 1.56 - 2.20 15,073,297 2014 9,499,985 1.45 - 2.32 20,296,254 2013 12,034,304 1.59 - 2.16 24,118,817 2012 12,855,504 1.26 - 1.69 20,237,493 FTVIPT Franklin Small-Mid 2016 11,640,861 1.42 - 2.61 23,462,681 Cap Growth VIP Subaccount 2015 13,151,027 1.38 - 2.56 26,005,031 2014 15,338,031 1.45 - 2.67 31,983,347 2013 18,344,786 1.37 - 2.53 36,768,267 2012 21,757,192 1.01 - 1.87 32,196,686 FTVIPT Templeton Developing 2016 8,328,861 1.48 - 2.48 14,638,051 Markets VIP Subaccount 2015 9,114,020 1.28 - 2.14 13,806,146 2014 10,086,656 1.62 - 2.70 19,231,372 2013 11,016,768 1.80 - 2.99 23,212,625 2012 12,276,465 1.85 - 3.06 26,436,064 FTVIPT Templeton Foreign 2016 33,932,017 1.14 - 2.12 55,454,715 VIP Subaccount 2015 37,823,632 1.09 - 2.01 58,736,117 2014 42,645,501 1.20 - 2.19 72,158,890 2013 49,602,475 1.39 - 2.50 96,258,675 2012 59,299,810 1.16 - 2.07 95,361,211 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- Fidelity VIP FundsManager 2016 1.27 0.70 - 2.10 2.61 - 4.06 60% Subaccount 2015 1.75 0.70 - 2.10 (1.68) - (0.29) (Commenced 11/17/2014) 2014 2.66 1.85 0.55 Fidelity VIP High Income 2016 5.27 0.95 - 1.30 13.13 - 13.52 Subaccount 2015 6.30 0.95 - 1.30 (4.87) - (4.54) 2014 5.49 0.95 - 1.30 (0.15) - 0.20 2013 5.60 0.95 - 1.30 4.58 - 4.95 2012 5.59 0.60 - 1.30 12.75 - 13.54 Fidelity VIP Mid Cap 2016 0.31 0.30 - 2.65 9.00 - 11.59 Subaccount 2015 0.24 0.30 - 2.65 (4.20) - (1.92) 2014 0.02 0.30 - 2.65 3.26 - 5.71 2013 0.27 0.30 - 2.65 32.32 - 35.46 2012 0.37 0.30 - 2.65 11.55 - 14.22 FTVIPT Franklin Income VIP 2016 4.99 1.30 - 2.55 11.15 - 12.55 Subaccount 2015 4.61 1.30 - 2.55 (9.40) - (8.25) 2014 5.23 1.30 - 2.60 1.93 - 3.26 2013 6.44 1.30 - 2.60 11.02 - 12.47 2012 6.43 1.30 - 2.60 9.75 - 11.19 FTVIPT Franklin Mutual 2016 1.95 1.40 - 1.90 13.87 - 14.44 Shares VIP Subaccount 2015 2.97 1.40 - 1.90 (6.73) - (6.26) 2014 1.94 1.40 - 1.90 5.11 - 5.63 2013 2.04 1.40 - 1.90 25.85 - 26.48 2012 1.96 1.40 - 1.90 12.08 - 12.65 FTVIPT Franklin Rising 2016 1.41 1.50 - 3.05 12.56 - 14.31 Dividends VIP Subaccount 2015 1.41 1.50 - 2.70 (6.22) - (5.08) 2014 1.34 1.50 - 3.05 5.46 - 7.10 2013 1.56 1.50 - 2.65 26.30 - 27.76 2012 1.62 1.50 - 2.65 9.02 - 10.29 FTVIPT Franklin Small-Mid 2016 -- 1.25 - 2.75 1.34 - 2.88 Cap Growth VIP Subaccount 2015 -- 1.25 - 2.75 (5.30) - (3.87) 2014 -- 1.25 - 2.75 4.56 - 6.14 2013 -- 1.25 - 2.75 34.41 - 36.44 2012 -- 1.25 - 2.75 7.83 - 9.47 FTVIPT Templeton Developing 2016 0.83 0.30 - 1.80 15.35 - 17.09 Markets VIP Subaccount 2015 2.04 0.30 - 1.80 (21.04) - (19.84) 2014 1.48 0.30 - 1.80 (10.03) - (8.67) 2013 1.98 0.30 - 1.80 (2.69) - (1.22) 2012 1.40 0.30 - 1.80 11.13 - 12.82 FTVIPT Templeton Foreign 2016 1.96 0.30 - 2.70 4.32 - 6.85 VIP Subaccount 2015 3.24 0.30 - 2.70 (8.99) - (6.77) 2014 1.87 0.30 - 2.70 (13.50) - (11.40) 2013 2.37 0.30 - 2.70 19.70 - 22.60 2012 3.01 0.30 - 2.70 15.07 - 17.88
100 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------- -------------------------------------------------- UNIT VALUE INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ------------ ------------- -------------- ------------- ---------------- ----------------- Invesco V.I. Comstock 2016 3,342,163 1.13 - 2.39 5,383,720 1.58 1.40 - 2.60 14.29 - 15.67 Subaccount 2015 3,897,706 0.98 - 2.07 5,511,939 1.92 1.40 - 2.60 (8.40) - (7.29) 2014 4,455,900 1.06 - 2.24 6,878,913 1.26 1.40 - 2.60 6.58 - 7.87 2013 5,818,437 0.98 - 2.07 8,281,585 1.58 1.40 - 2.60 32.49 - 34.08 2012 7,161,636 0.73 - 1.55 7,826,903 1.69 1.40 - 2.60 16.16 - 17.57 Invesco V.I. Diversified 2016 662,469 1.64 - 2.06 1,252,863 1.19 1.60 - 2.50 11.71 - 12.72 Dividend Subaccount 2015 764,684 1.46 - 1.83 1,284,340 1.43 1.60 - 2.50 (0.70) - 0.20 2014 832,783 1.47 - 1.82 1,404,784 1.51 1.60 - 2.50 9.76 - 10.75 2013 983,199 1.33 - 1.64 1,508,707 1.98 1.60 - 2.50 27.54 - 28.69 2012 1,166,210 1.04 - 1.28 1,404,646 1.77 1.60 - 2.50 15.43 - 16.48 Invesco V.I. Equity and 2016 21,314,043 2.25 - 2.41 49,784,834 1.62 1.40 - 1.90 12.67 - 13.24 Income Subaccount 2015 25,216,381 2.00 - 2.13 52,124,645 2.21 1.40 - 1.90 (4.42) - (3.94) 2014 30,474,326 2.09 - 2.22 65,679,718 1.51 1.40 - 1.90 6.72 - 7.25 2013 38,518,228 1.96 - 2.07 77,591,291 1.45 1.40 - 1.90 22.54 - 23.15 2012 49,170,292 1.60 - 1.68 80,615,587 1.68 1.40 - 1.90 10.26 - 10.82 Invesco V.I. Government 2016 6,167,486 1.01 - 1.56 7,417,830 1.73 1.40 - 2.50 (1.49) - (0.18) Securities Subaccount 2015 7,219,285 1.02 - 1.57 8,782,732 1.94 1.40 - 2.60 (2.51) - (1.05) 2014 8,543,666 1.05 - 1.58 10,593,179 2.85 1.40 - 2.60 1.22 - 2.69 2013 10,276,593 1.03 - 1.54 12,461,122 3.16 1.40 - 2.60 (5.35) - (3.98) 2012 13,042,147 1.09 - 1.60 16,856,929 2.85 1.40 - 2.60 (0.42) - 1.04 Invesco V.I. Managed 2016 479,925 2.22 - 2.75 1,233,406 1.83 1.55 - 2.65 7.72 - 8.91 Volatility Subaccount 2015 572,546 1.69 - 2.53 1,350,241 1.36 1.55 - 2.65 (4.71) - (3.66) 2014 663,209 1.78 - 2.62 1,632,992 2.80 1.55 - 2.65 17.42 - 18.71 2013 918,646 1.51 - 2.21 1,919,717 3.02 1.55 - 2.65 7.86 - 9.05 2012 1,026,009 1.40 - 2.03 1,966,140 3.17 1.55 - 2.65 0.88 - 2.00 Invesco V.I. S&P 500 Index 2016 960,831 1.70 - 2.19 1,905,676 1.46 1.55 - 2.60 8.34 - 9.49 Subaccount 2015 1,204,868 1.57 - 2.00 2,194,793 1.50 1.55 - 2.60 (1.81) - (0.77) 2014 1,281,929 1.59 - 2.02 2,376,295 1.57 1.55 - 2.60 10.06 - 11.22 2013 1,651,321 1.44 - 1.82 2,775,395 1.79 1.55 - 2.60 28.18 - 29.53 2012 2,132,423 1.12 - 1.40 2,789,479 1.71 1.55 - 2.60 12.54 - 13.73 Janus Aspen Enterprise 2016 7,167,800 1.10 - 3.92 12,288,719 0.02 0.30 - 2.60 9.23 - 11.77 Subaccount 2015 7,987,829 1.00 - 3.56 12,285,705 0.51 0.30 - 2.60 1.10 - 3.46 2014 9,230,937 0.98 - 3.49 13,633,114 0.03 0.30 - 2.60 9.36 - 11.91 2013 10,596,566 0.89 - 3.17 14,258,782 0.36 0.30 - 2.60 28.65 - 31.64 2012 13,439,690 0.69 - 2.44 13,564,824 -- 0.30 - 2.60 13.97 - 16.64 Janus Aspen Global Research 2016 442,005 1.11 - 1.80 675,764 0.93 0.30 - 1.30 0.50 - 1.51 Subaccount 2015 539,820 1.10 - 1.77 803,814 0.53 0.30 - 1.30 (3.79) - (2.82) 2014 634,971 1.15 - 1.83 964,819 0.94 0.30 - 1.30 5.80 - 6.86 2013 798,297 1.08 - 1.71 1,151,374 1.09 0.30 - 1.30 26.42 - 27.69 2012 821,059 0.86 - 1.34 920,807 0.79 0.30 - 1.30 18.30 - 19.50 Janus Aspen Overseas 2016 21,264,741 0.92 - 2.16 28,762,285 4.68 1.25 - 2.50 (9.01) - (7.87) Subaccount 2015 23,066,962 1.00 - 2.37 33,941,265 0.51 1.25 - 2.50 (11.06) - (9.94) 2014 25,235,388 1.12 - 2.66 41,260,094 2.99 1.25 - 2.50 (14.27) - (13.19) 2013 28,081,395 1.30 - 3.09 53,057,257 3.06 1.25 - 2.50 11.46 - 12.86 2012 32,661,250 1.16 - 2.77 54,579,707 0.61 1.25 - 2.50 10.37 - 11.77
101 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ------------------------------------------ UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- ------------- -------------- LMPVET ClearBridge Variable 2016 149,943,278 1.85 - 3.12 328,523,979 Aggressive Growth Subaccount 2015 167,403,724 1.86 - 3.14 368,227,608 2014 192,876,953 1.92 - 3.26 439,598,703 2013 230,124,058 1.62 - 2.75 443,416,713 2012 276,489,134 1.11 - 1.86 366,326,724 LMPVET ClearBridge Variable 2016 108,364,235 1.84 - 2.91 245,202,993 Appreciation Subaccount 2015 123,885,127 1.72 - 2.69 259,099,416 2014 144,399,729 1.74 - 2.69 301,511,929 2013 171,514,828 1.61 - 2.45 327,510,422 2012 209,159,554 0.79 - 1.91 312,282,413 LMPVET ClearBridge Variable 2016 47,652,023 1.46 - 2.55 90,118,532 Dividend Strategy Subaccount 2015 54,421,552 1.31 - 2.23 91,048,394 2014 63,992,104 1.01 - 2.37 114,208,205 2013 78,389,764 1.28 - 2.13 125,813,040 2012 94,929,719 1.04 - 1.74 123,812,547 LMPVET ClearBridge Variable 2016 38,109,335 1.84 - 3.52 89,099,797 Large Cap Growth Subaccount 2015 42,889,895 1.74 - 3.30 94,894,567 2014 49,849,619 1.61 - 3.02 101,931,592 2013 59,527,149 1.44 - 2.67 108,269,810 2012 72,914,920 1.07 - 1.95 98,033,854 LMPVET ClearBridge Variable 2016 51,880,204 1.77 - 3.42 114,104,961 Large Cap Value Subaccount 2015 57,721,574 1.60 - 3.05 114,052,269 2014 66,183,724 1.59 - 3.15 136,570,924 2013 76,780,219 1.46 - 2.84 143,905,517 2012 91,023,321 1.14 - 2.16 131,281,736 LMPVET ClearBridge Variable 2016 12,172,388 2.14 - 3.12 32,071,788 Mid Cap Subaccount 2015 13,634,362 2.01 - 2.90 33,367,358 2014 15,892,449 2.02 - 2.87 38,689,450 2013 18,761,175 1.92 - 2.69 42,887,469 2012 22,961,433 1.41 - 1.99 38,808,174 LMPVET ClearBridge Variable 2016 17,150,904 1.92 - 3.66 44,384,618 Small Cap Growth Subaccount 2015 19,565,583 1.86 - 3.52 48,622,214 2014 22,972,604 1.99 - 3.75 60,699,074 2013 28,785,296 1.96 - 3.67 74,135,000 2012 31,622,684 1.36 - 2.54 56,626,804 LMPVET QS Variable 2016 23,074,759 1.70 - 2.39 44,206,329 Conservative Growth 2015 26,949,264 1.62 - 2.25 48,860,860 Subaccount 2014 31,787,275 1.67 - 2.30 59,118,500 2013 37,872,131 1.62 - 2.22 67,949,518 2012 44,938,353 1.43 - 1.95 70,946,364 LMPVET QS Variable Growth 2016 11,742,495 1.60 - 2.20 20,311,234 Subaccount 2015 13,074,765 1.51 - 2.05 21,126,287 2014 14,489,682 1.57 - 2.12 24,272,556 2013 16,420,256 1.53 - 2.05 26,611,146 2012 19,365,531 1.23 - 1.64 25,137,447 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ---------------- LMPVET ClearBridge Variable 2016 0.62 0.30 - 2.60 (1.65) - 0.90 Aggressive Growth Subaccount 2015 0.33 0.30 - 2.60 (4.46) - (2.03) 2014 0.16 0.30 - 2.65 16.94 - 20.03 2013 0.25 0.30 - 2.65 43.52 - 47.34 2012 0.38 0.30 - 2.65 15.34 - 18.37 LMPVET ClearBridge Variable 2016 1.27 0.30 - 2.70 6.85 - 9.44 Appreciation Subaccount 2015 1.14 0.30 - 2.70 (1.11) - 1.30 2014 1.11 0.30 - 2.70 8.04 - 10.66 2013 1.15 0.30 - 2.70 26.54 - 29.61 2012 1.49 0.30 - 2.70 0.00 - 15.60 LMPVET ClearBridge Variable 2016 1.42 0.30 - 2.75 9.76 - 66.26 Dividend Strategy Subaccount 2015 1.61 0.30 - 2.75 (7.03) - (4.59) 2014 1.98 0.30 - 2.75 8.44 - 13.27 2013 1.50 0.30 - 2.70 22.34 - 25.56 2012 2.70 0.30 - 2.70 11.02 - 13.86 LMPVET ClearBridge Variable 2016 0.50 0.30 - 2.70 4.53 - 7.07 Large Cap Growth Subaccount 2015 0.46 0.30 - 2.70 6.87 - 9.46 2014 0.50 0.30 - 2.70 10.95 - 13.65 2013 0.49 0.30 - 2.70 34.19 - 37.44 2012 0.65 0.30 - 2.70 17.13 - 19.99 LMPVET ClearBridge Variable 2016 1.51 0.30 - 2.60 10.10 - 12.66 Large Cap Value Subaccount 2015 1.40 0.30 - 2.60 (5.36) - (3.16) 2014 1.73 0.30 - 2.70 8.73 - 11.37 2013 1.57 0.30 - 2.70 28.85 - 31.97 2012 2.19 0.30 - 2.70 13.39 - 16.15 LMPVET ClearBridge Variable 2016 0.87 1.30 - 2.70 6.43 - 7.93 Mid Cap Subaccount 2015 0.06 1.30 - 2.70 (0.42) - 0.98 2014 0.27 1.30 - 2.70 5.24 - 6.72 2013 0.13 1.30 - 2.70 33.71 - 35.59 2012 0.81 1.30 - 2.70 14.74 - 16.37 LMPVET ClearBridge Variable 2016 -- 0.30 - 2.60 3.09 - 5.49 Small Cap Growth Subaccount 2015 -- 0.30 - 2.60 (6.83) - (4.66) 2014 -- 0.30 - 2.60 1.41 - 3.77 2013 0.05 0.30 - 2.60 43.28 - 46.61 2012 0.33 0.30 - 2.60 16.35 - 19.07 LMPVET QS Variable 2016 2.28 1.17 - 1.90 5.41 - 6.18 Conservative Growth 2015 1.90 1.17 - 1.90 (3.05) - (2.33) Subaccount 2014 2.36 1.17 - 1.90 2.93 - 3.69 2013 1.96 1.17 - 1.90 13.16 - 13.99 2012 2.54 1.17 - 1.90 10.96 - 11.77 LMPVET QS Variable Growth 2016 1.41 1.17 - 1.90 6.46 - 7.24 Subaccount 2015 1.32 1.17 - 1.90 (4.07) - (3.37) 2014 1.71 1.17 - 1.90 2.72 - 3.47 2013 1.60 1.17 - 1.90 24.12 - 25.03 2012 1.69 1.17 - 1.90 13.70 - 14.53
102 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ ------------- -------------- LMPVET QS Variable Moderate 2016 17,102,253 1.65 - 2.17 30,093,587 Growth Subaccount 2015 18,733,090 1.56 - 2.04 30,991,123 2014 21,841,591 1.62 - 2.10 37,227,976 2013 25,062,174 1.57 - 2.02 41,240,143 2012 29,657,743 1.31 - 1.68 40,633,478 LMPVIT Western Asset Core 2016 28,322,927 1.65 - 3.02 60,157,955 Plus Subaccount 2015 32,101,360 1.62 - 2.92 66,305,234 2014 37,890,107 1.61 - 2.92 78,692,683 2013 44,750,902 1.65 - 2.96 94,954,012 2012 54,128,179 1.54 - 2.75 106,932,282 LMPVIT Western Asset 2016 2,810,318 1.44 - 2.47 5,438,686 Variable Global High Yield 2015 3,405,003 1.28 - 2.17 5,805,010 Bond Subaccount 2014 4,116,947 1.40 - 2.34 7,593,996 2013 4,982,108 1.45 - 2.40 9,465,032 2012 5,919,632 1.40 - 2.29 10,968,395 MIST American Funds 2016 3,745,363 1.37 - 1.50 5,393,633 Balanced Allocation 2015 3,593,345 1.29 - 1.39 4,828,342 Subaccount 2014 3,198,147 1.32 - 1.41 4,360,096 2013 2,980,777 1.26 - 1.33 3,871,348 2012 2,190,157 1.07 - 1.13 2,431,852 MIST American Funds Growth 2016 2,607,699 1.39 - 1.52 3,801,167 Allocation Subaccount 2015 2,633,410 1.29 - 1.40 3,549,784 2014 2,717,215 1.32 - 1.41 3,718,850 2013 2,729,186 1.26 - 1.33 3,542,062 2012 1,922,890 1.02 - 1.07 2,020,923 MIST American Funds 2016 2,077,029 1.34 - 1.46 2,886,201 Moderate Allocation 2015 2,284,599 1.27 - 1.37 2,991,070 Subaccount 2014 2,152,245 1.29 - 1.38 2,864,383 2013 2,143,767 1.23 - 1.30 2,718,823 2012 1,804,687 1.10 - 1.15 2,034,082 MIST BlackRock High Yield 2016 26,278,741 1.47 - 10.55 82,544,588 Subaccount 2015 30,089,681 1.33 - 9.34 82,643,530 2014 36,693,530 1.42 - 9.81 104,638,887 2013 45,512,194 1.41 - 9.60 123,385,092 2012 53,791,302 1.33 - 8.84 132,794,550 MIST Clarion Global Real 2016 45,463,358 1.02 - 2.88 58,508,417 Estate Subaccount 2015 50,678,041 1.04 - 2.90 65,557,139 2014 58,479,092 1.08 - 2.98 77,846,976 2013 60,592,799 0.98 - 2.67 69,115,555 2012 68,080,621 0.97 - 2.62 76,052,564 MIST ClearBridge Aggressive 2016 64,680,298 1.05 - 12.43 478,123,942 Growth Subaccount 2015 74,168,853 1.05 - 12.22 526,677,455 2014 83,295,458 1.12 - 12.86 614,674,474 2013 5,674,029 0.97 - 1.49 5,944,351 2012 4,186,645 0.68 - 2.10 3,075,258 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ---------------- LMPVET QS Variable Moderate 2016 2.04 1.17 - 1.90 5.96 - 6.74 Growth Subaccount 2015 1.66 1.17 - 1.90 (3.64) - (2.93) 2014 1.84 1.17 - 1.90 2.93 - 3.69 2013 1.51 1.17 - 1.90 19.53 - 20.40 2012 2.31 1.17 - 1.90 12.43 - 13.26 LMPVIT Western Asset Core 2016 2.15 0.30 - 2.60 1.86 - 4.23 Plus Subaccount 2015 1.44 0.30 - 2.60 (1.40) - 0.89 2014 6.77 0.30 - 2.60 (2.89) - (0.63) 2013 6.79 0.30 - 2.60 6.41 - 8.88 2012 7.85 0.30 - 2.60 14.84 - 17.52 LMPVIT Western Asset 2016 5.97 1.40 - 2.60 12.64 - 14.00 Variable Global High Yield 2015 5.63 1.40 - 2.60 (8.26) - (7.15) Bond Subaccount 2014 6.42 1.40 - 2.60 (3.69) - (2.53) 2013 5.42 1.40 - 2.60 3.54 - 4.79 2012 6.91 1.40 - 2.60 15.28 - 16.67 MIST American Funds 2016 1.75 0.30 - 1.30 6.42 - 7.49 Balanced Allocation 2015 1.31 0.30 - 1.30 (1.99) - (1.00) Subaccount 2014 1.26 0.30 - 1.30 4.68 - 5.73 2013 1.30 0.30 - 1.30 17.00 - 18.18 2012 1.61 0.30 - 1.30 12.06 - 13.19 MIST American Funds Growth 2016 1.28 0.30 - 1.30 7.55 - 8.63 Allocation Subaccount 2015 1.33 0.30 - 1.30 (2.04) - (1.05) 2014 1.03 0.30 - 1.30 5.01 - 6.07 2013 0.97 0.30 - 1.30 23.49 - 24.73 2012 1.18 0.30 - 1.30 14.65 - 15.81 MIST American Funds 2016 1.88 0.30 - 1.30 5.63 - 6.69 Moderate Allocation 2015 1.52 0.30 - 1.30 (2.01) - (1.02) Subaccount 2014 1.48 0.30 - 1.30 4.72 - 5.78 2013 1.68 0.30 - 1.30 12.05 - 13.18 2012 1.88 0.30 - 1.30 9.40 - 10.51 MIST BlackRock High Yield 2016 6.72 0.19 - 2.75 10.89 - 14.05 Subaccount 2015 7.95 0.19 - 2.75 (6.65) - (3.92) 2014 6.24 0.19 - 2.75 0.49 - 3.21 2013 6.90 0.19 - 2.75 6.37 - 9.56 2012 7.22 0.19 - 2.75 13.37 - 16.57 MIST Clarion Global Real 2016 2.30 0.30 - 2.65 (1.71) - 0.85 Estate Subaccount 2015 4.00 0.30 - 2.65 (3.93) - (1.52) 2014 1.65 0.30 - 2.65 5.92 - 13.33 2013 7.21 0.30 - 2.65 0.89 - 3.45 2012 2.30 0.30 - 2.65 22.74 - 25.92 MIST ClearBridge Aggressive 2016 0.66 0.30 - 2.60 0.06 - 2.68 Growth Subaccount 2015 0.42 0.30 - 2.60 (6.47) - (4.10) 2014 -- 0.30 - 2.60 11.76 - 18.64 2013 0.21 0.30 - 2.60 42.03 - 45.33 2012 0.02 0.00 - 2.60 15.58 - 18.64
103 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ ------------- -------------- MIST Harris Oakmark 2016 27,159,458 1.45 - 2.64 53,763,097 International Subaccount 2015 31,636,054 1.36 - 2.48 58,322,409 2014 34,506,428 1.45 - 2.63 67,655,904 2013 39,139,950 1.56 - 2.84 83,400,611 2012 42,865,772 1.21 - 2.40 70,442,950 MIST Invesco Comstock 2016 83,913,220 1.52 - 2.88 182,714,519 Subaccount 2015 97,875,599 1.33 - 2.47 184,751,261 2014 114,273,627 1.45 - 2.65 233,561,068 2013 84,372,068 1.36 - 2.43 159,177,699 2012 105,506,703 1.03 - 1.81 150,180,851 MIST Invesco Mid Cap Value 2016 25,100,728 1.32 - 2.86 40,718,448 Subaccount 2015 27,773,801 1.17 - 2.52 39,601,373 2014 33,040,249 1.32 - 2.82 52,410,952 2013 41,645,975 1.24 - 2.61 61,479,507 2012 49,340,187 0.98 - 2.04 57,094,364 MIST Invesco Small Cap 2016 5,001,924 1.94 - 3.50 12,959,914 Growth Subaccount 2015 5,777,662 1.74 - 3.18 13,547,388 2014 5,841,705 1.81 - 3.29 14,198,348 2013 6,603,009 1.71 - 3.09 15,149,420 2012 6,837,358 1.25 - 2.24 11,541,386 MIST JPMorgan Small Cap 2016 5,064,644 1.90 - 2.50 11,768,551 Value Subaccount 2015 5,524,272 1.47 - 1.93 9,963,889 2014 6,763,553 1.60 - 2.11 13,340,006 2013 7,275,439 1.55 - 2.04 13,918,317 2012 8,174,785 1.18 - 1.88 11,901,829 MIST Loomis Sayles Global 2016 17,610,274 2.48 - 7.26 125,927,258 Markets Subaccount 2015 19,556,931 2.39 - 7.00 135,115,612 2014 21,660,824 2.39 - 6.99 149,334,905 2013 23,910,152 2.24 - 6.82 160,979,990 2012 26,809,216 1.94 - 5.88 155,638,699 MIST Met/Aberdeen Emerging 2016 17,633,912 1.08 - 3.04 37,203,662 Markets Equity Subaccount 2015 20,803,894 0.99 - 2.74 40,103,316 2014 23,705,249 1.18 - 3.19 53,420,816 2013 23,618,677 1.30 - 3.42 58,259,362 2012 27,471,452 1.41 - 3.61 72,730,901 MIST Met/Eaton Vance 2016 2,433,483 1.08 - 1.14 2,754,483 Floating Rate Subaccount 2015 3,452,793 1.01 - 1.06 3,637,330 2014 3,823,833 1.05 - 1.09 4,142,616 2013 4,616,505 1.07 - 1.10 5,050,875 2012 2,309,179 1.05 - 1.08 2,477,277 MIST Met/Wellington Large 2016 20,534,091 1.41 - 2.56 36,808,971 Cap Research Subaccount 2015 24,145,925 1.32 - 2.41 40,746,872 2014 28,125,928 1.29 - 2.34 46,264,418 2013 33,795,286 1.15 - 2.10 50,072,685 2012 38,383,679 0.87 - 1.59 42,749,505 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- MIST Harris Oakmark 2016 2.40 0.30 - 2.60 5.64 - 8.10 International Subaccount 2015 3.22 0.30 - 2.60 (6.77) - (4.60) 2014 2.63 0.30 - 2.70 (8.04) - (5.81) 2013 2.71 0.30 - 2.70 27.32 - 30.41 2012 1.85 0.00 - 2.70 26.01 - 29.47 MIST Invesco Comstock 2016 2.55 0.30 - 2.75 14.12 - 16.95 Subaccount 2015 2.89 0.30 - 2.75 (8.52) - (6.25) 2014 0.67 0.30 - 2.75 6.01 - 8.98 2013 1.13 0.30 - 2.75 31.72 - 34.99 2012 1.34 0.30 - 2.75 15.29 - 18.16 MIST Invesco Mid Cap Value 2016 0.68 0.30 - 2.65 12.48 - 15.16 Subaccount 2015 0.52 0.30 - 2.70 (11.41) - (9.25) 2014 0.55 0.30 - 2.70 6.72 - 9.31 2013 0.78 0.30 - 2.70 26.84 - 29.91 2012 0.35 0.30 - 2.70 1.60 - 14.35 MIST Invesco Small Cap 2016 -- 0.30 - 2.60 8.57 - 11.39 Growth Subaccount 2015 0.12 0.30 - 2.60 (4.23) - (1.72) 2014 -- 0.30 - 2.60 5.14 - 7.86 2013 0.37 0.30 - 2.60 36.58 - 40.11 2012 -- 0.30 - 2.60 15.18 - 18.15 MIST JPMorgan Small Cap 2016 1.85 0.30 - 2.60 27.50 - 30.46 Value Subaccount 2015 1.39 0.30 - 2.60 (9.63) - (7.53) 2014 1.09 0.30 - 2.60 1.97 - 4.34 2013 0.70 0.30 - 2.60 29.83 - 32.85 2012 0.86 0.00 - 2.60 12.67 - 15.66 MIST Loomis Sayles Global 2016 1.93 0.60 - 1.30 3.67 - 4.40 Markets Subaccount 2015 1.82 0.60 - 1.30 0.16 - 0.86 2014 2.32 0.60 - 1.30 2.41 - 3.13 2013 2.61 0.60 - 1.65 15.43 - 16.64 2012 2.54 0.60 - 1.65 15.31 - 16.53 MIST Met/Aberdeen Emerging 2016 1.05 0.30 - 2.75 8.48 - 11.50 Markets Equity Subaccount 2015 1.89 0.30 - 2.75 (16.15) - (13.92) 2014 0.84 0.30 - 2.75 (9.06) - (4.90) 2013 1.22 0.30 - 2.70 (7.51) - (5.08) 2012 0.88 0.30 - 2.70 15.71 - 18.74 MIST Met/Eaton Vance 2016 4.39 1.70 - 2.60 6.46 - 7.43 Floating Rate Subaccount 2015 3.55 1.70 - 2.60 (3.38) - (2.51) 2014 3.52 1.70 - 2.60 (1.85) - (0.96) 2013 4.00 1.70 - 2.60 1.17 - 2.09 2012 2.13 1.70 - 2.60 4.56 - 5.51 MIST Met/Wellington Large 2016 2.28 0.30 - 2.75 5.36 - 7.97 Cap Research Subaccount 2015 0.79 0.30 - 2.75 1.62 - 4.14 2014 0.82 0.30 - 2.75 10.54 - 13.28 2013 1.29 0.30 - 2.75 30.53 - 33.77 2012 1.09 0.30 - 2.75 10.41 - 13.16
104 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------- ------------------------------------------------- UNIT VALUE INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ------------ ------------- -------------- ------------- ---------------- ---------------- MIST MetLife Asset 2016 39,362,500 1.23 - 2.26 58,009,540 2.25 0.30 - 2.45 6.34 - 8.65 Allocation 100 Subaccount 2015 43,198,777 1.16 - 2.13 59,108,391 1.28 0.30 - 2.45 (4.38) - (2.30) 2014 45,212,729 1.02 - 2.22 63,831,385 0.72 0.30 - 2.50 0.61 - 4.25 2013 49,145,768 1.17 - 2.17 66,836,972 0.75 0.30 - 2.55 26.25 - 29.12 2012 51,476,410 0.93 - 1.72 54,584,808 0.64 0.30 - 2.55 13.79 - 16.39 MIST MetLife Multi-Index 2016 9,395 12.32 - 12.61 117,266 1.09 0.60 - 1.15 3.17 - 3.74 Targeted Risk Subaccount 2015 2,641 11.94 - 12.15 31,905 1.72 0.60 - 1.15 (2.34) - (1.80) (Commenced 4/29/2013 and 2014 1,008 12.23 - 12.38 12,424 -- 0.60 - 1.15 8.01 - 8.61 began transactions in 2014) MIST MetLife Small Cap 2016 47,810,812 1.44 - 4.07 112,211,997 1.07 0.30 - 2.70 27.76 - 30.86 Value Subaccount 2015 54,080,595 1.13 - 3.15 97,811,772 0.11 0.30 - 2.70 (7.93) - (5.69) 2014 63,208,688 1.23 - 3.38 120,747,347 0.05 0.30 - 2.70 (0.99) - 1.41 2013 74,099,811 1.24 - 3.37 139,708,195 1.00 0.30 - 2.70 28.92 - 32.05 2012 87,597,110 0.96 - 2.58 124,998,359 -- 0.30 - 2.70 14.83 - 17.63 MIST MFS Research 2016 36,740,233 1.09 - 1.99 53,978,694 2.00 0.30 - 2.65 (3.47) - (1.17) International Subaccount 2015 41,917,165 1.12 - 2.04 63,005,452 2.74 0.30 - 2.65 (4.34) - (2.07) 2014 46,101,233 1.17 - 2.11 72,277,215 2.28 0.30 - 2.65 (9.38) - (7.23) 2013 53,996,698 1.29 - 2.31 92,815,172 2.61 0.30 - 2.65 16.14 - 18.90 2012 64,389,120 1.11 - 1.98 94,306,211 1.94 0.30 - 2.65 13.64 - 16.36 MIST Morgan Stanley Mid Cap 2016 4,381,117 1.08 - 2.99 7,516,054 -- 0.30 - 2.60 (10.81) - (8.73) Growth Subaccount 2015 5,073,086 1.21 - 3.32 9,645,446 -- 0.30 - 2.60 (7.46) - (5.31) 2014 5,743,592 1.29 - 3.55 11,736,546 0.04 0.30 - 2.60 (1.58) - 0.71 2013 6,809,955 1.30 - 3.58 14,243,583 0.75 0.30 - 2.60 35.46 - 38.61 2012 8,161,498 0.95 - 2.62 12,071,251 -- 0.30 - 2.60 6.46 - 8.95 MIST Oppenheimer Global 2016 199,205,510 1.13 - 2.45 285,997,810 1.11 0.30 - 2.70 (2.44) - (0.07) Equity Subaccount 2015 223,372,532 1.16 - 2.48 323,609,477 1.11 0.30 - 2.70 1.17 - 3.62 2014 249,440,312 1.15 - 2.50 351,667,634 0.97 0.30 - 2.70 (0.58) - 1.84 2013 284,367,464 1.15 - 2.49 395,783,735 1.84 0.30 - 2.70 14.60 - 26.73 2012 280,274,259 1.01 - 1.99 316,647,038 1.59 0.30 - 2.70 17.93 - 20.81 MIST PIMCO Inflation 2016 35,307,807 1.14 - 1.52 48,063,859 -- 0.30 - 2.75 2.29 - 4.85 Protected Bond Subaccount 2015 39,426,607 1.11 - 1.47 51,884,514 5.06 0.30 - 2.75 (5.60) - (3.20) 2014 47,696,077 1.18 - 1.53 65,747,511 1.82 0.30 - 2.75 0.25 - 2.87 2013 56,428,155 1.18 - 1.50 76,820,088 2.53 0.30 - 2.75 (11.60) - (9.25) 2012 76,954,212 1.33 - 1.67 117,364,047 3.19 0.00 - 2.75 6.32 - 9.33 MIST PIMCO Total Return 2016 108,989,879 1.28 - 2.11 175,865,002 2.58 0.30 - 2.75 (0.17) - 2.30 Subaccount 2015 125,500,853 1.28 - 2.07 200,669,344 5.27 0.30 - 2.75 (2.71) - (0.29) 2014 150,568,606 1.32 - 2.09 243,988,067 2.38 0.30 - 2.75 1.37 - 3.88 2013 187,162,730 1.30 - 2.01 296,027,272 4.35 0.30 - 2.75 (4.58) - (2.21) 2012 230,205,457 1.36 - 2.07 377,907,353 3.16 0.30 - 2.75 6.29 - 8.94 MIST Pyramis Managed Risk 2016 2,398 11.67 - 12.05 28,371 0.75 0.30 - 1.15 3.37 - 4.25 Subaccount 2015 1,566 11.29 - 11.56 17,857 0.75 0.30 - 1.15 (2.38) - (1.55) (Commenced 4/29/2013) 2014 992 11.62 - 11.74 11,539 -- 0.30 - 0.90 7.67 - 8.32 2013 127 10.80 1,369 0.85 0.80 5.68
105 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------- ------------------------------------------------- UNIT VALUE INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ------------ ------------- -------------- ------------- ---------------- ---------------- MIST SSGA Growth and Income 2016 69,381,250 1.51 104,433,234 2.34 1.25 4.47 ETF Subaccount 2015 75,897,851 1.44 109,354,013 2.30 1.25 (3.18) 2014 82,493,632 1.49 122,762,323 2.26 1.25 4.50 2013 90,079,084 1.42 128,281,207 2.51 1.25 11.53 2012 96,610,845 1.28 123,361,227 2.37 1.25 11.44 MIST SSGA Growth ETF 2016 91,144,360 1.49 136,076,571 2.15 1.25 5.55 Subaccount 2015 98,530,509 1.41 139,366,676 2.01 1.25 (3.52) 2014 107,020,440 1.47 156,905,463 1.89 1.25 4.07 2013 115,766,294 1.41 163,090,332 2.10 1.25 16.61 2012 123,165,362 1.21 148,804,069 1.94 1.25 13.60 MIST T. Rowe Price Large 2016 188,277,959 1.36 - 9.48 366,994,258 2.85 0.30 - 2.75 0.00 - 15.71 Cap Value Subaccount 2015 215,108,437 1.27 - 8.25 366,982,709 1.60 0.30 - 2.75 (6.15) - (3.77) 2014 246,029,179 1.35 - 7.43 443,370,558 0.47 0.30 - 2.75 8.25 - 12.94 2013 93,678,767 1.22 - 6.66 129,704,910 1.54 0.30 - 2.70 30.21 - 33.37 2012 109,882,316 0.94 - 5.81 116,086,753 1.45 0.30 - 2.70 14.82 - 17.62 MIST T. Rowe Price Mid Cap 2016 559,197 1.55 - 2.91 1,310,449 -- 1.55 - 2.65 3.44 - 4.58 Growth Subaccount 2015 890,955 1.50 - 2.78 1,870,191 -- 1.55 - 2.65 3.88 - 5.03 2014 1,048,455 1.44 - 2.65 2,094,286 -- 1.55 - 2.65 9.83 - 11.04 2013 1,441,274 1.31 - 2.39 2,644,910 0.23 1.55 - 2.65 33.01 - 34.48 2012 2,028,845 0.99 - 1.77 2,812,261 -- 1.55 - 2.65 10.69 - 11.93 Morgan Stanley Multi Cap 2016 274,685 2.18 - 2.65 678,520 -- 1.85 - 2.50 (6.03) - (5.41) Growth Subaccount 2015 302,631 2.31 - 2.80 790,647 -- 1.85 - 2.50 5.66 - 6.35 2014 367,876 2.18 - 2.64 914,004 -- 1.85 - 2.50 2.84 - 3.51 2013 499,433 2.11 - 2.66 1,210,400 0.23 1.60 - 2.50 46.66 - 47.99 2012 634,940 1.41 - 1.80 1,052,964 -- 1.60 - 2.50 9.31 - 10.31 MSF Barclays Aggregate Bond 2016 25,927,617 1.37 - 2.58 62,459,481 2.77 0.30 - 1.30 1.03 - 2.04 Index Subaccount 2015 28,582,132 1.36 - 2.55 68,017,985 2.91 0.30 - 1.30 (1.04) - (0.05) 2014 31,665,367 1.37 - 2.58 75,845,003 3.02 0.30 - 1.30 4.44 - 5.49 2013 35,381,978 1.31 - 2.47 80,759,985 3.62 0.30 - 1.30 (3.59) - (2.62) 2012 40,275,965 1.36 - 2.56 95,180,911 3.74 0.30 - 1.30 2.55 - 3.59 MSF BlackRock Bond Income 2016 89,821,850 1.08 - 2.25 132,434,541 3.12 0.30 - 2.75 0.18 - 2.81 Subaccount 2015 101,411,127 1.08 - 2.21 147,353,917 3.73 0.30 - 2.75 (2.28) - 0.29 2014 116,573,933 1.11 - 2.23 171,167,569 3.45 0.30 - 2.75 4.02 - 6.76 2013 133,280,506 1.06 - 2.11 185,528,381 4.02 0.30 - 2.75 (3.60) - (1.06) 2012 159,459,776 1.10 - 2.15 227,477,835 2.66 0.30 - 2.75 4.46 - 7.22 MSF BlackRock Capital 2016 90,233,992 1.04 - 5.06 162,582,117 -- 0.30 - 2.65 (2.62) - (0.21) Appreciation Subaccount 2015 102,258,198 1.06 - 5.12 186,416,345 -- 0.30 - 2.65 3.38 - 5.96 2014 116,660,042 1.01 - 4.88 201,471,712 0.06 0.30 - 2.65 5.95 - 8.57 2013 137,072,166 0.94 - 4.54 218,130,450 0.84 0.30 - 2.65 30.61 - 33.82 2012 165,758,971 0.71 - 3.42 197,078,248 0.31 0.30 - 2.65 11.23 - 14.03 MSF BlackRock Large Cap 2016 5,533,043 1.34 - 2.22 10,606,904 1.42 0.30 - 2.65 15.01 - 17.74 Value Subaccount 2015 6,317,929 1.16 - 1.89 10,329,127 1.55 0.30 - 2.65 (8.63) - (6.46) 2014 7,271,879 1.27 - 2.02 12,887,179 1.11 0.30 - 2.65 6.83 - 9.37 2013 9,446,977 1.19 - 1.84 15,413,317 1.21 0.30 - 2.65 28.30 - 31.35 2012 11,585,791 0.93 - 1.40 14,563,747 1.44 0.30 - 2.65 10.97 - 13.63
106 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ------------------------------------------ UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ ------------ -------------- MSF BlackRock Ultra-Short 2016 191,490,336 0.83 - 2.28 213,922,334 Term Bond Subaccount 2015 207,458,223 0.85 - 2.31 234,598,971 2014 228,692,218 0.87 - 2.34 260,029,222 2013 272,484,145 0.89 - 2.37 306,076,669 2012 305,952,973 0.92 - 2.41 338,263,961 MSF Frontier Mid Cap Growth 2016 46,769,889 0.92 - 2.54 71,558,936 Subaccount 2015 53,062,687 0.89 - 2.46 78,853,375 2014 59,828,713 0.88 - 2.44 88,449,747 2013 69,033,438 0.81 - 2.23 93,792,080 2012 80,896,694 0.62 - 1.71 83,365,935 MSF Jennison Growth 2016 230,334,406 0.94 - 2.60 330,843,366 Subaccount 2015 255,430,902 0.96 - 2.64 370,985,158 2014 283,460,406 0.88 - 2.43 376,259,287 2013 306,377,182 0.82 - 2.27 377,320,708 2012 347,786,347 0.61 - 1.68 317,110,813 MSF Loomis Sayles Small Cap 2016 125,626 5.00 - 5.99 695,462 Core Subaccount 2015 133,839 4.31 - 5.12 637,286 2014 146,236 4.49 - 5.30 725,826 2013 205,325 4.36 - 5.21 1,019,553 2012 324,926 3.18 - 3.77 1,156,434 MSF Met/Artisan Mid Cap 2016 487,877 3.33 - 3.67 1,708,962 Value Subaccount 2015 516,603 2.77 - 3.03 1,498,283 2014 599,313 3.14 - 3.40 1,961,420 2013 672,017 3.15 - 3.40 2,205,749 2012 727,228 2.36 - 2.52 1,786,794 MSF Met/Dimensional 2016 273,940 1.91 - 2.04 543,802 International Small Company 2015 749,110 1.85 - 1.96 1,434,554 Subaccount 2014 750,406 1.79 - 1.88 1,388,811 2013 479,292 1.97 - 2.05 969,532 2012 512,674 1.58 - 1.64 828,694 MSF Met/Wellington Balanced 2016 64,591,245 1.49 - 3.90 230,965,585 Subaccount 2015 72,571,267 1.43 - 3.69 244,860,534 2014 78,788,126 1.44 - 3.64 263,144,756 2013 87,559,708 1.34 - 3.34 265,542,357 2012 95,084,218 1.14 - 2.80 241,918,758 MSF Met/Wellington Core 2016 52,226,552 1.43 - 58.47 118,746,402 Equity Opportunities 2015 44,358,088 1.35 - 2.26 80,800,707 Subaccount 2014 53,012,778 1.34 - 2.26 96,109,883 2013 65,547,224 1.24 - 2.10 109,181,322 2012 81,093,170 0.94 - 1.61 103,067,131 MSF MetLife Asset 2016 14,708,245 1.23 - 1.57 20,218,985 Allocation 20 Subaccount 2015 17,745,651 1.21 - 1.51 23,643,801 2014 21,756,153 1.25 - 1.52 29,613,599 2013 27,300,301 1.21 - 1.46 35,985,163 2012 33,750,786 1.19 - 1.41 43,181,333 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- MSF BlackRock Ultra-Short 2016 0.05 0.30 - 2.75 (2.51) - 0.05 Term Bond Subaccount 2015 -- 0.30 - 2.75 (2.71) - (0.30) 2014 -- 0.30 - 2.75 (2.71) - (0.30) 2013 -- 0.30 - 2.75 (2.71) - (0.30) 2012 -- 0.30 - 2.75 (2.73) - (0.30) MSF Frontier Mid Cap Growth 2016 -- 0.30 - 2.70 2.41 - 4.98 Subaccount 2015 -- 0.30 - 2.70 (0.08) - 2.47 2014 -- 0.30 - 2.70 7.98 - 10.72 2013 1.18 0.30 - 2.70 18.97 - 32.23 2012 -- 0.30 - 2.70 7.91 - 10.55 MSF Jennison Growth 2016 0.26 0.30 - 2.70 (3.86) - (0.13) Subaccount 2015 0.24 0.30 - 2.70 7.59 - 10.45 2014 0.23 0.30 - 2.70 4.51 - 12.77 2013 0.39 0.30 - 2.60 33.22 - 36.59 2012 0.01 0.30 - 2.60 (4.86) - 15.21 MSF Loomis Sayles Small Cap 2016 0.06 1.70 - 2.50 16.04 - 16.97 Core Subaccount 2015 -- 1.70 - 2.50 (4.17) - (3.40) 2014 -- 1.70 - 2.50 0.95 - 1.76 2013 0.25 1.70 - 2.60 37.08 - 38.31 2012 -- 1.70 - 2.60 11.32 - 12.33 MSF Met/Artisan Mid Cap 2016 0.87 1.40 - 2.10 20.10 - 20.95 Value Subaccount 2015 0.94 1.40 - 2.10 (11.54) - (10.92) 2014 0.54 1.40 - 2.10 (0.44) - 0.26 2013 0.80 1.40 - 2.10 33.67 - 34.61 2012 0.81 1.40 - 2.10 9.25 - 10.02 MSF Met/Dimensional 2016 2.61 1.70 - 2.50 3.21 - 4.04 International Small Company 2015 1.68 1.70 - 2.50 3.14 - 3.97 Subaccount 2014 1.56 1.70 - 2.50 (9.00) - (8.27) 2013 1.77 1.70 - 2.50 24.45 - 25.45 2012 0.49 1.70 - 2.50 14.98 - 15.91 MSF Met/Wellington Balanced 2016 2.75 0.30 - 2.65 3.95 - 6.67 Subaccount 2015 1.96 0.30 - 2.65 (0.38) - 2.27 2014 2.00 0.30 - 2.65 7.40 - 10.22 2013 2.48 0.30 - 2.65 17.13 - 20.23 2012 2.29 0.30 - 2.65 9.16 - 12.04 MSF Met/Wellington Core 2016 1.72 0.30 - 2.65 0.53 - 7.02 Equity Opportunities 2015 1.62 0.30 - 2.65 (0.53) - 2.09 Subaccount 2014 0.56 0.30 - 2.65 5.33 - 10.30 2013 1.27 0.30 - 2.65 29.87 - 33.30 2012 0.69 0.30 - 2.65 9.66 - 12.52 MSF MetLife Asset 2016 3.19 0.30 - 2.50 1.95 - 4.22 Allocation 20 Subaccount 2015 2.09 0.30 - 2.50 (3.04) - (0.88) 2014 3.97 0.30 - 2.50 1.89 - 4.16 2013 2.99 0.30 - 2.70 1.51 - 3.97 2012 2.99 0.30 - 2.70 6.26 - 8.85
107 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------- ------------------------------------------------- UNIT VALUE INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ------------ ------------- -------------- ------------- ---------------- ---------------- MSF MetLife Asset 2016 47,542,265 1.26 - 1.63 68,509,133 3.55 0.30 - 2.55 3.42 - 5.77 Allocation 40 Subaccount 2015 54,365,636 1.22 - 1.54 74,878,498 0.27 0.30 - 2.55 (3.56) - (1.37) 2014 62,281,508 1.25 - 1.56 87,527,049 2.62 0.30 - 2.65 2.04 - 4.61 2013 63,017,183 1.23 - 1.49 85,938,160 2.54 0.30 - 2.65 8.02 - 10.59 2012 69,601,690 1.13 - 1.35 86,810,589 2.94 0.30 - 2.65 8.53 - 11.13 MSF MetLife Asset 2016 313,013,101 1.23 - 1.66 452,209,477 3.14 0.30 - 2.85 4.10 - 6.78 Allocation 60 Subaccount 2015 351,132,615 1.18 - 1.55 480,001,704 0.54 0.30 - 2.85 (4.04) - (1.56) 2014 393,087,875 1.10 - 1.58 550,983,256 1.72 0.30 - 2.85 1.05 - 4.74 2013 325,210,824 1.21 - 1.51 449,109,725 1.95 0.30 - 2.75 14.78 - 17.63 2012 342,679,345 1.06 - 1.72 406,247,240 2.31 0.00 - 2.75 10.15 - 13.24 MSF MetLife Asset 2016 406,853,909 1.21 - 1.66 574,285,819 2.94 0.30 - 2.90 5.05 - 7.82 Allocation 80 Subaccount 2015 438,830,497 1.15 - 1.55 582,539,493 0.33 0.30 - 2.90 (4.51) - (1.99) 2014 469,940,862 1.21 - 1.61 645,019,159 1.11 0.30 - 2.90 2.22 - 4.91 2013 281,259,764 1.21 - 1.50 392,110,510 1.46 0.30 - 2.60 21.12 - 23.94 2012 301,438,988 1.00 - 1.21 341,958,464 1.91 0.30 - 2.60 12.41 - 15.04 MSF MetLife Mid Cap Stock 2016 7,950,996 2.09 - 36.72 17,822,009 1.27 0.30 - 1.25 18.71 - 19.72 Index Subaccount 2015 8,349,197 1.75 - 30.67 15,269,454 1.16 0.30 - 1.25 (3.79) - (2.97) 2014 8,659,503 1.82 - 31.61 16,117,119 1.01 0.30 - 1.25 7.96 - 8.89 2013 8,357,897 1.68 - 29.03 14,115,032 1.09 0.30 - 1.25 16.63 - 31.49 2012 6,983,172 1.28 8,935,310 1.02 1.25 16.13 MSF MetLife Stock Index 2016 399,744,544 1.40 - 40.16 818,490,354 1.98 0.28 - 3.50 7.70 - 11.36 Subaccount 2015 444,545,333 1.29 - 36.32 825,958,902 1.72 0.28 - 3.50 (2.41) - 0.88 2014 512,472,472 1.22 - 36.26 948,735,700 1.69 0.28 - 3.50 9.37 - 13.05 2013 619,079,605 1.11 - 32.31 1,022,210,401 1.86 0.28 - 3.50 27.37 - 31.65 2012 746,876,608 0.85 - 24.72 955,635,335 1.43 0.28 - 3.50 11.63 - 15.43 MSF MFS Total Return 2016 138,074,749 1.22 - 4.20 347,116,215 2.73 0.30 - 2.75 5.97 - 8.65 Subaccount 2015 157,676,884 1.15 - 3.90 367,197,782 2.42 0.30 - 2.75 (3.10) - (0.65) 2014 181,477,236 1.19 - 3.96 427,404,149 2.25 0.30 - 2.75 5.42 - 8.09 2013 214,758,429 1.13 - 3.69 467,083,516 2.45 0.30 - 2.75 15.48 - 18.40 2012 252,752,393 0.97 - 3.15 465,580,415 2.74 0.30 - 2.75 8.27 - 11.03 MSF MFS Value Subaccount 2016 54,400,150 1.36 - 2.83 126,985,750 2.24 0.30 - 2.75 11.00 - 14.05 2015 61,186,657 1.22 - 2.53 126,858,359 2.66 0.30 - 2.75 (3.07) - (0.45) 2014 71,426,723 1.26 - 2.59 149,803,816 1.64 0.30 - 2.75 7.72 - 10.48 2013 76,198,106 1.18 - 2.39 152,814,296 1.08 0.30 - 2.65 16.93 - 35.32 2012 42,193,599 1.17 - 1.80 64,099,072 1.95 0.30 - 2.65 13.33 - 16.30 MSF MSCI EAFE Index 2016 22,174,074 0.98 - 2.39 46,547,113 2.63 0.30 - 1.60 (0.27) - 1.04 Subaccount 2015 24,065,038 0.99 - 2.38 50,132,009 3.23 0.30 - 1.60 (2.66) - (1.39) 2014 25,971,462 1.01 - 2.44 55,159,835 2.60 0.30 - 1.60 (7.50) - (6.28) 2013 29,240,272 1.09 - 2.63 66,367,832 3.06 0.30 - 1.60 19.93 - 21.50 2012 31,591,933 0.91 - 2.18 59,212,775 3.14 0.30 - 1.60 16.44 - 17.97 MSF Neuberger Berman 2016 22,363,400 1.40 - 4.28 61,097,301 0.43 0.30 - 2.65 15.30 - 18.33 Genesis Subaccount 2015 25,655,787 1.20 - 3.63 59,714,866 0.38 0.30 - 2.65 (2.25) - 0.28 2014 30,031,861 1.23 - 3.63 69,389,880 0.37 0.30 - 2.65 (2.91) - (0.29) 2013 35,991,632 1.25 - 3.65 82,899,600 -- 0.30 - 2.65 24.17 - 35.86 2012 70,294 1.58 - 1.77 118,604 0.12 1.70 - 2.60 6.92 - 7.89
108 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ------------ ------------- -------------- MSF Russell 2000 Index 2016 23,491,682 2.27 - 5.23 110,619,177 Subaccount 2015 25,834,307 1.90 - 4.36 101,108,420 2014 27,782,287 2.02 - 4.62 114,688,189 2013 31,268,599 1.96 - 4.45 123,574,772 2012 33,654,928 1.43 - 3.25 96,816,463 MSF T. Rowe Price Large Cap 2016 26,687,817 1.62 - 3.14 52,673,898 Growth Subaccount 2015 29,861,303 1.64 - 3.11 58,885,774 2014 33,034,416 1.52 - 2.82 59,661,381 2013 32,411,409 1.26 - 2.60 54,003,653 2012 32,201,056 1.12 - 1.88 38,929,294 MSF T. Rowe Price Small Cap 2016 41,499,662 1.82 - 3.98 108,651,167 Growth Subaccount 2015 46,060,640 1.68 - 3.59 109,539,493 2014 50,212,351 1.68 - 3.52 118,139,543 2013 55,991,286 1.62 - 3.32 125,245,594 2012 62,635,996 1.15 - 2.32 98,474,574 MSF Western Asset 2016 32,467,046 1.25 - 41.83 170,890,372 Management Strategic Bond 2015 19,595,073 1.18 - 2.94 32,316,442 Opportunities Subaccount 2014 23,348,172 1.08 - 3.03 39,669,737 2013 27,649,077 1.19 - 2.91 44,979,001 2012 33,573,093 1.21 - 2.91 55,654,805 MSF Western Asset 2016 49,146,509 1.04 - 2.57 75,272,260 Management U.S. Government 2015 53,614,394 1.05 - 2.57 82,426,356 Subaccount 2014 64,344,337 1.07 - 2.58 98,096,572 2013 73,690,565 1.07 - 2.54 109,839,169 2012 89,352,294 1.10 - 2.58 134,993,660 Pioneer VCT Mid Cap Value 2016 7,793,599 1.77 - 2.84 19,478,488 Subaccount 2015 9,348,957 1.56 - 2.48 20,514,005 2014 11,449,417 1.72 - 2.69 27,355,302 2013 13,948,854 1.54 - 2.38 29,462,183 2012 17,566,894 1.19 - 1.82 28,565,653 Pioneer VCT Real Estate 2016 2,487,870 2.08 - 3.45 7,545,087 Shares Subaccount 2015 2,872,791 2.00 - 3.31 8,432,222 2014 3,456,891 1.95 - 3.22 9,986,466 2013 4,679,392 1.52 - 2.50 10,515,684 2012 5,535,016 1.53 - 2.50 12,543,885 TAP 1919 Variable Socially 2016 12,016,499 1.31 - 4.37 34,122,083 Responsive Balanced 2015 13,640,111 1.25 - 4.17 36,506,368 Subaccount 2014 15,783,435 1.29 - 4.29 43,091,030 2013 17,650,098 1.20 - 3.98 44,216,482 2012 19,935,151 1.03 - 3.39 41,969,589 UIF Growth Subaccount 2016 2,605,136 1.54 - 3.11 5,650,496 2015 2,947,999 1.59 - 3.23 6,666,780 2014 3,258,928 1.44 - 2.93 6,688,278 2013 3,897,642 1.35 - 2.81 7,732,651 2012 5,479,096 0.93 - 1.93 7,099,628 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ---------------- MSF Russell 2000 Index 2016 1.38 0.30 - 1.65 19.30 - 20.92 Subaccount 2015 1.21 0.30 - 1.65 (5.84) - (4.56) 2014 1.17 0.30 - 1.65 3.32 - 4.72 2013 1.55 0.30 - 1.65 36.29 - 38.14 2012 1.16 0.30 - 1.65 14.44 - 16.00 MSF T. Rowe Price Large Cap 2016 -- 0.30 - 2.65 (1.07) - 1.23 Growth Subaccount 2015 0.01 0.30 - 2.65 7.68 - 10.18 2014 -- 0.30 - 2.65 6.03 - 13.92 2013 0.07 0.30 - 2.65 25.92 - 38.35 2012 -- 0.30 - 2.65 15.56 - 18.32 MSF T. Rowe Price Small Cap 2016 0.03 0.30 - 2.65 8.57 - 11.15 Growth Subaccount 2015 -- 0.30 - 2.65 (0.22) - 2.16 2014 -- 0.30 - 2.65 3.86 - 6.33 2013 0.14 0.30 - 2.65 40.40 - 43.74 2012 -- 0.30 - 2.65 12.86 - 15.56 MSF Western Asset 2016 2.14 0.30 - 2.75 3.17 - 7.29 Management Strategic Bond 2015 4.93 1.17 - 2.60 (4.52) - (2.86) Opportunities Subaccount 2014 5.32 1.17 - 2.60 0.50 - 4.24 2013 4.97 1.17 - 2.60 (1.76) - (0.08) 2012 3.46 1.17 - 2.60 8.42 - 10.19 MSF Western Asset 2016 2.62 0.15 - 2.45 (1.17) - 1.13 Management U.S. Government 2015 2.32 0.15 - 2.45 (1.86) - 0.42 Subaccount 2014 1.96 0.15 - 2.45 0.32 - 2.66 2013 2.23 0.15 - 2.45 (3.14) - (0.89) 2012 2.10 0.15 - 2.45 0.86 - 3.21 Pioneer VCT Mid Cap Value 2016 0.48 1.40 - 2.75 13.08 - 14.61 Subaccount 2015 0.55 1.40 - 2.75 (8.89) - (7.66) 2014 0.66 1.40 - 2.75 11.69 - 13.20 2013 0.74 1.40 - 2.75 29.15 - 30.91 2012 0.84 1.40 - 2.75 7.80 - 9.28 Pioneer VCT Real Estate 2016 3.21 1.55 - 2.70 3.00 - 4.19 Shares Subaccount 2015 2.02 1.55 - 2.70 1.73 - 2.91 2014 2.29 1.50 - 2.70 27.08 - 28.62 2013 2.09 1.50 - 2.65 (1.12) - 0.03 2012 2.10 1.50 - 2.65 13.04 - 14.35 TAP 1919 Variable Socially 2016 0.91 0.30 - 2.30 3.82 - 5.92 Responsive Balanced 2015 1.19 0.30 - 2.50 (4.14) - (2.01) Subaccount 2014 0.85 0.30 - 2.50 6.61 - 8.98 2013 0.84 0.30 - 2.50 15.78 - 18.35 2012 1.43 0.30 - 2.50 7.97 - 10.38 UIF Growth Subaccount 2016 -- 1.40 - 2.50 (4.06) - (3.00) 2015 -- 1.40 - 2.50 9.47 - 10.68 2014 -- 1.40 - 2.50 3.73 - 4.88 2013 0.46 1.40 - 2.50 44.42 - 46.02 2012 -- 1.40 - 2.50 11.54 - 12.78
109 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONCLUDED) 1 These amounts represent the dividends, excluding distributions of capital gains, received by the Subaccount from the underlying portfolio, series or fund, net of management fees assessed by the fund manager, divided by the average net assets, regardless of share class, if any. These ratios exclude those expenses, such as mortality and expense risk charges, that are assessed against contract owner accounts either through reductions in the unit values or the redemption of units. The investment income ratio is calculated for each period indicated or from the effective date through the end of the reporting period. The recognition of investment income by the Subaccount is affected by the timing of the declaration of dividends by the underlying portfolio, series or fund in which the Subaccount invests. The investment income ratio is calculated as a weighted average ratio since the Subaccount may invest in two or more share classes, within the underlying portfolio, series or fund of the trusts which may have unique investment income ratios. 2 These amounts represent annualized contract expenses of each of the applicable Subaccounts, consisting primarily of mortality and expense risk charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying portfolio, series or fund have been excluded. 3 These amounts represent the total return for the period indicated, including changes in the value of the underlying portfolio, series or fund, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. The total return is presented as a range of minimum to maximum returns, based on the minimum and maximum returns within each product grouping of the applicable Subaccount. 110 METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES OF METLIFE INSURANCE COMPANY USA NOTES TO THE FINANCIAL STATEMENTS -- (CONCLUDED) 9. SUBSEQUENT EVENTS The operations of the Subaccounts were affected by the following changes that occurred on March 6, 2017: PORTFOLIO NAME CHANGES: Former Name New Name (MIST) Met/Aberdeen Emerging Markets Equity (BHFTI) Brighthouse/Aberdeen Emerging Markets Portfolio Equity Portfolio (MIST) Met/Artisan International Portfolio (BHFTI) Brighthouse/Artisan International Portfolio (MIST) Met/Eaton Vance Floating Rate Portfolio (BHFTI) Brighthouse/Eaton Vance Floating Rate Portfolio (MIST) Met/Franklin Low Duration Total Return (BHFTI) Brighthouse/Franklin Low Duration Total Portfolio Return Portfolio (MIST) Met/Templeton International Bond (BHFTI) Brighthouse/Templeton International Bond Portfolio Portfolio (MIST) Met/Wellington Large Cap Research (BHFTI) Brighthouse/Wellington Large Cap Research Portfolio Portfolio (MIST) MetLife Asset Allocation 100 Portfolio (BHFTI) Brighthouse Asset Allocation 100 Portfolio (MIST) MetLife Balanced Plus Portfolio (BHFTI) Brighthouse Balanced Plus Portfolio (MIST) MetLife Small Cap Value Portfolio (BHFTI) Brighthouse Small Cap Value Portfolio (MSF) Barclays Aggregate Bond Index Portfolio (BHFTII) MetLife Aggregate Bond Index Portfolio (MSF) Met/Artisan Mid Cap Value Portfolio (BHFTII) Brighthouse/Artisan Mid Cap Value Portfolio (MSF) Met/Dimensional International Small Company (BHFTII) Brighthouse/Dimensional International Portfolio Small Company Portfolio (MSF) Met/Wellington Balanced Portfolio (BHFTII) Brighthouse/Wellington Balanced Portfolio (MSF) Met/Wellington Core Equity Opportunities (BHFTII) Brighthouse/Wellington Core Equity Portfolio Opportunities Portfolio (MSF) MetLife Asset Allocation 20 Portfolio (BHFTII) Brighthouse Asset Allocation 20 Portfolio (MSF) MetLife Asset Allocation 40 Portfolio (BHFTII) Brighthouse Asset Allocation 40 Portfolio (MSF) MetLife Asset Allocation 60 Portfolio (BHFTII) Brighthouse Asset Allocation 60 Portfolio (MSF) MetLife Asset Allocation 80 Portfolio (BHFTII) Brighthouse Asset Allocation 80 Portfolio (MSF) MSCI EAFE Index Portfolio (BHFTII) MetLife MSCI EAFE Index Portfolio (MSF) Russell 2000 Index Portfolio (BHFTII) MetLife Russell 2000 Index Portfolio
TRUST NAME CHANGES: Former Trust New Trust Met Investors Series Trust (MIST) Brighthouse Funds Trust I (BHFTI) Metropolitan Series Fund (MSF) Brighthouse Funds Trust II (BHFTII)
ADVISER NAME CHANGE: Former Adviser New Adviser MetLife Advisers, LLC Brighthouse Investment Advisers, LLC
SEPARATE ACCOUNT NAME CHANGE: Former Name New Name MetLife of CT Separate Account Eleven for Variable Brighthouse Separate Account Eleven for Variable Annuities Annuities
111 This page is intentionally left blank. Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements, Notes and Schedules
Page --------- Report of Independent Registered Public Accounting Firm.............................................. 2 Financial Statements at December 31, 2016 and 2015 and for the Years Ended December 31, 2016, 2015 and 2014: Consolidated Balance Sheets......................................................................... 3 Consolidated Statements of Operations............................................................... 4 Consolidated Statements of Comprehensive Income (Loss).............................................. 5 Consolidated Statements of Stockholder's Equity..................................................... 6 Consolidated Statements of Cash Flows............................................................... 7 Notes to the Consolidated Financial Statements...................................................... 9 Note 1 -- Business, Basis of Presentation and Summary of Significant Accounting Policies........ 9 Note 2 -- Segment Information................................................................... 25 Note 3 -- Mergers............................................................................... 30 Note 4 -- Disposition........................................................................... 30 Note 5 -- Insurance............................................................................. 31 Note 6 -- Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles... 37 Note 7 -- Reinsurance........................................................................... 40 Note 8 -- Investments........................................................................... 46 Note 9 -- Derivatives........................................................................... 66 Note 10 -- Fair Value........................................................................... 78 Note 11 -- Goodwill............................................................................. 95 Note 12 -- Debt................................................................................. 97 Note 13 -- Equity............................................................................... 97 Note 14 -- Other Expenses....................................................................... 101 Note 15 -- Income Tax........................................................................... 102 Note 16 -- Contingencies, Commitments and Guarantees............................................ 105 Note 17 -- Related Party Transactions........................................................... 109 Note 18 -- Subsequent Events.................................................................... 111 Financial Statement Schedules at December 31, 2016 and 2015 and for the Years Ended December 31, 2016, 2015 and 2014: Schedule I -- Consolidated Summary of Investments -- Other Than Investments in Related Parties...... 112 Schedule III -- Consolidated Supplementary Insurance Information.................................... 113 Schedule IV -- Consolidated Reinsurance............................................................. 115
1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholder of Brighthouse Life Insurance Company: We have audited the accompanying consolidated balance sheets of Brighthouse Life Insurance Company (formerly MetLife Insurance Company USA) and subsidiaries (the "Company") as of December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive income (loss), stockholder's equity, and cash flows for each of the three years in the period ended December 31, 2016. Our audits also included the financial statement schedules listed in the Index to Consolidated Financial Statements, Notes and Schedules. These consolidated financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the consolidated financial statements and financial statement schedules based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Brighthouse Life Insurance Company and subsidiaries as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. /s/ DELOITTE & TOUCHE LLP New York, New York March 28, 2017 2 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Balance Sheets December 31, 2016 and 2015 (In millions, except share and per share data)
2016 2015 ------------ ------------- Assets Investments: Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $49,312 and $50,154, respectively)...................................................... $ 51,785 $ 52,409 Equity securities available-for-sale, at estimated fair value (cost: $280 and $384, respectively)........................................................................... 300 409 Mortgage loans (net of valuation allowances of $38 and $36, respectively; includes $136 and $172, respectively, at estimated fair value, relating to variable interest entities) 8,884 7,262 Policy loans............................................................................. 1,093 1,266 Real estate and real estate joint ventures (includes $0 and $5, respectively, of real estate held-for-sale)................................................................... 215 628 Other limited partnership interests...................................................... 1,639 1,846 Short-term investments, principally at estimated fair value.............................. 926 1,737 Other invested assets, principally at estimated fair value............................... 3,887 4,942 ------------ ------------- Total investments....................................................................... 68,729 70,499 Cash and cash equivalents, principally at estimated fair value............................ 1,888 1,383 Accrued investment income (includes $1 and $1, respectively, relating to variable interest entities)....................................................................... 591 505 Premiums, reinsurance and other receivables............................................... 20,101 22,251 Deferred policy acquisition costs and value of business acquired.......................... 5,274 4,809 Current income tax recoverable............................................................ 454 -- Deferred income tax receivable............................................................ 1,018 -- Goodwill.................................................................................. -- 381 Other assets.............................................................................. 630 799 Separate account assets................................................................... 100,588 101,735 ------------ ------------- Total assets.......................................................................... $ 199,273 $ 202,362 ============ ============= Liabilities and Stockholder's Equity Liabilities Future policy benefits.................................................................... $ 31,684 $ 29,894 Policyholder account balances............................................................. 35,587 35,661 Other policy-related balances............................................................. 3,384 3,549 Payables for collateral under securities loaned and other transactions.................... 7,362 10,619 Long-term debt (includes $23 and $48, respectively, at estimated fair value, relating to variable interest entities).............................................................. 804 836 Current income tax payable................................................................ -- 20 Deferred income tax liability............................................................. -- 803 Other liabilities (includes $1 and $1, respectively, relating to variable interest entities)................................................................................ 10,147 7,682 Separate account liabilities.............................................................. 100,588 101,735 ------------ ------------- Total liabilities..................................................................... 189,556 190,799 ------------ ------------- Contingencies, Commitments and Guarantees (Note 16) Stockholder's Equity Common stock, par value $25,000 per share; 4,000 shares authorized; 3,000 shares issued and outstanding.......................................................................... 75 75 Additional paid-in capital................................................................ 12,449 10,871 Retained earnings (deficit)............................................................... (4,209) (1,011) Accumulated other comprehensive income (loss)............................................. 1,402 1,628 ------------ ------------- Total stockholder's equity............................................................ 9,717 11,563 ------------ ------------- Total liabilities and stockholder's equity............................................ $ 199,273 $ 202,362 ============ =============
See accompanying notes to the consolidated financial statements. 3 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Operations For the Years Ended December 31, 2016, 2015 and 2014 (In millions)
2016 2015 2014 --------- ----------- ----------- Revenues Premiums...................................................................... $ 921 $ 1,433 $ 1,152 Universal life and investment-type product policy fees........................ 2,696 2,940 3,193 Net investment income......................................................... 2,712 2,615 2,669 Other revenues................................................................ 761 504 539 Net investment gains (losses): Other-than-temporary impairments on fixed maturity securities................ (16) (16) (6) Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income (loss).......................................... (3) (9) (6) Other net investment gains (losses).......................................... (13) 61 (457) --------- ----------- ----------- Total net investment gains (losses)........................................ (32) 36 (469) Net derivative gains (losses)................................................ (5,878) (424) (181) --------- ----------- ----------- Total revenues........................................................... 1,180 7,104 6,903 --------- ----------- ----------- Expenses Policyholder benefits and claims.............................................. 2,984 2,696 2,764 Interest credited to policyholder account balances............................ 957 1,037 1,062 Goodwill impairment........................................................... 381 -- 33 Amortization of deferred policy acquisition costs and value of business acquired.................................................................... (172) 595 990 Other expenses................................................................ 1,738 1,722 1,764 --------- ----------- ----------- Total expenses........................................................... 5,888 6,050 6,613 --------- ----------- ----------- Income (loss) before provision for income tax................................. (4,708) 1,054 290 Provision for income tax expense (benefit).................................... (1,771) 215 (5) --------- ----------- ----------- Net income (loss)............................................................. $ (2,937) $ 839 $ 295 ========= =========== ===========
See accompanying notes to the consolidated financial statements. 4 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Comprehensive Income (Loss) For the Years Ended December 31, 2016, 2015 and 2014 (In millions)
2016 2015 2014 ------------- ------------- ------------- Net income (loss)........................................................... $ (2,937) $ 839 $ 295 Other comprehensive income (loss): Unrealized investment gains (losses), net of related offsets.............. (349) (1,324) 1,953 Unrealized gains (losses) on derivatives.................................. 25 86 244 Foreign currency translation adjustments.................................. (3) (28) (50) ------------- ------------- ------------- Other comprehensive income (loss), before income tax........................ (327) (1,266) 2,147 Income tax (expense) benefit related to items of other comprehensive income (loss)..................................................................... 101 468 (701) ------------- ------------- ------------- Other comprehensive income (loss), net of income tax........................ (226) (798) 1,446 ------------- ------------- ------------- Comprehensive income (loss)................................................. $ (3,163) $ 41 $ 1,741 ============= ============= =============
See accompanying notes to the consolidated financial statements. 5 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Stockholder's Equity For the Years Ended December 31, 2016, 2015 and 2014 (In millions)
Accumulated Additional Retained Other Total Common Paid-in Earnings Comprehensive Stockholder's Stock Capital (Deficit) Income (Loss) Equity --------- ------------- ---------- ------------- ------------- Balance at December 31, 2013......................... $ 86 $ 11,506 $ (1,006) $ 980 $ 11,566 Redemption of common stock........................... (11) (895) (484) (1,390) Capital contributions from MetLife, Inc.............. 244 244 Dividends paid to MetLife, Inc....................... (155) (155) Net income (loss).................................... 295 295 Other comprehensive income (loss), net of income tax. 1,446 1,446 --------- ------------- ---------- ------------- ------------- Balance at December 31, 2014......................... 75 10,855 (1,350) 2,426 12,006 Capital contributions from MetLife, Inc.............. 16 16 Dividends paid to MetLife, Inc....................... (500) (500) Net income (loss).................................... 839 839 Other comprehensive income (loss), net of income tax. (798) (798) --------- ------------- ---------- ------------- ------------- Balance at December 31, 2015......................... 75 10,871 (1,011) 1,628 11,563 Capital contributions from MetLife, Inc.............. 1,578 1,578 Dividends paid to MetLife, Inc....................... (261) (261) Net income (loss).................................... (2,937) (2,937) Other comprehensive income (loss), net of income tax. (226) (226) --------- ------------- ---------- ------------- ------------- Balance at December 31, 2016......................... $ 75 $ 12,449 $ (4,209) $ 1,402 $ 9,717 ========= ============= ========== ============= =============
See accompanying notes to the consolidated financial statements. 6 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Cash Flows For the Years Ended December 31, 2016, 2015 and 2014 (In millions)
2016 2015 2014 ------------- ------------- ------------- Cash flows from operating activities Net income (loss)........................................... $ (2,937) $ 839 $ 295 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:............... Depreciation and amortization expenses..................... 52 23 30 Amortization of premiums and accretion of discounts associated with investments, net.......................... (197) (204) (166) (Gains) losses on investments and from sales of businesses, net........................................... 32 (36) 469 (Gains) losses on derivatives, net......................... 7,082 1,225 1,443 (Income) loss from equity method investments, net of dividends or distributions................................ 26 108 (11) Interest credited to policyholder account balances......... 957 1,037 1,062 Universal life and investment-type product policy fees..... (2,696) (2,940) (3,193) Goodwill impairment........................................ 381 -- 33 Change in accrued investment income........................ (44) 9 124 Change in premiums, reinsurance and other receivables...... (1,157) (586) (1,479) Change in deferred policy acquisition costs and value of business acquired, net.................................... (455) 270 711 Change in income tax....................................... (2,195) 491 245 Change in other assets..................................... 2,060 2,127 2,258 Change in future policy benefits and other policy-related balances.................................................. 2,197 2,104 1,398 Change in other liabilities................................ 389 (267) 1,390 Other, net................................................. (206) 5 (67) ------------- ------------- ------------- Net cash provided by (used in) operating activities......... 3,289 4,205 4,542 ------------- ------------- ------------- Cash flows from investing activities Sales, maturities and repayments of: Fixed maturity securities.................................. 39,080 35,704 20,249 Equity securities.......................................... 175 308 98 Mortgage loans............................................. 1,518 1,059 2,428 Real estate and real estate joint ventures................. 446 512 28 Other limited partnership interests........................ 417 425 255 Purchases of: Fixed maturity securities.................................. (34,906) (39,298) (24,520) Equity securities.......................................... (58) (273) (41) Mortgage loans............................................. (2,803) (2,515) (343) Real estate and real estate joint ventures................. (75) (109) (209) Other limited partnership interests........................ (203) (233) (345) Cash received in connection with freestanding derivatives... 707 223 788 Cash paid in connection with freestanding derivatives....... (2,764) (868) (1,991) Cash received under repurchase agreements................... -- 199 -- Cash paid under repurchase agreements....................... -- (199) -- Cash received under reverse repurchase agreements........... -- 199 -- Cash paid under reverse repurchase agreements............... -- (199) -- Sale of business, net of cash and cash equivalents disposed of $0, $0 and $251, respectively........................... -- -- 451 Sales of loans to affiliates................................ -- -- 520 Net change in policy loans.................................. 109 (72) 52 Net change in short-term investments........................ 882 (495) 3,581 Net change in other invested assets......................... 7 (55) (305) ------------- ------------- ------------- Net cash provided by (used in) investing activities......... $ 2,532 $ (5,687) $ 696 ------------- ------------- -------------
See accompanying notes to the consolidated financial statements. 7 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Cash Flows -- (continued) For the Years Ended December 31, 2016, 2015 and 2014 (In millions)
2016 2015 2014 ------------- -------------- -------------- Cash flows from financing activities Policyholder account balances: Deposits................................................... $ 9,672 $ 19,970 $ 18,581 Withdrawals................................................ (12,001) (20,797) (21,564) Net change in payables for collateral under securities loaned and other transactions.............................. (3,257) 3,118 703 Long-term debt issued....................................... -- 175 -- Long-term debt repaid....................................... (26) (235) (1,379) Financing element on certain derivative instruments, net.... (1,011) (81) (414) Redemption of common stock.................................. -- -- (906) Common stock redemption premium............................. -- -- (484) Dividends paid to MetLife, Inc.............................. (261) (500) (155) Capital contributions....................................... 1,568 11 231 ------------- -------------- -------------- Net cash provided by (used in) financing activities......... (5,316) 1,661 (5,387) ------------- -------------- -------------- Effect of change in foreign currency exchange rates on cash and cash equivalents balances.............................. -- (2) (45) ------------- -------------- -------------- Change in cash and cash equivalents......................... 505 177 (194) Cash and cash equivalents, beginning of year................ 1,383 1,206 1,400 ------------- -------------- -------------- Cash and cash equivalents, end of year...................... $ 1,888 $ 1,383 $ 1,206 ============= ============== ============== Supplemental disclosures of cash flow information Net cash paid (received) for: Interest................................................... $ 70 $ 77 $ 116 ============= ============== ============== Income tax................................................. $ 431 $ (263) $ (221) ============= ============== ============== Non-cash transactions: Capital contributions...................................... $ 10 $ 5 $ 13 ============= ============== ============== Transfer of fixed maturity securities from affiliates...... $ 3,565 $ -- $ -- ============= ============== ============== Transfer of mortgage loans from affiliates................. $ 395 $ -- $ -- ============= ============== ============== Transfer of short-term investments from affiliates......... $ 94 $ -- $ -- ============= ============== ============== Transfer of fixed maturity securities to affiliates........ $ 346 $ -- $ 804 ============= ============== ============== Reduction of other invested assets in connection with reinsurance transactions.................................. $ 676 $ -- $ -- ============= ============== ==============
See accompanying notes to the consolidated financial statements. 8 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements 1. Business, Basis of Presentation and Summary of Significant Accounting Policies Business "Brighthouse Insurance" and the "Company" refer to Brighthouse Life Insurance Company (formerly, MetLife Insurance Company USA, "MetLife USA"), a Delaware corporation originally incorporated in Connecticut in 1863, and its subsidiaries. Brighthouse Life Insurance Company is a wholly-owned subsidiary of MetLife, Inc. (MetLife, Inc., together with its subsidiaries and affiliates, "MetLife"). The Company offers a range of individual annuities and individual life insurance products. In anticipation of MetLife's plan to separate a substantial portion of its former Retail segment, as well as certain portions of its former Corporate Benefit Funding segment and Corporate & Other (the "Separation"), in the third quarter of 2016, the Company reorganized its businesses into three segments: Annuities, Life and Run-off. See Note 2 for further information on the reorganization of the Company's segments in the third quarter of 2016, which was applied retrospectively. On January 12, 2016, MetLife, Inc. announced its plan to pursue the Separation. Additionally, on July 21, 2016, MetLife, Inc. announced that following the planned Separation, the separated business will be rebranded as Brighthouse Financial. On October 5, 2016, Brighthouse Financial, Inc., a subsidiary of MetLife, Inc. ("Brighthouse"), filed a registration statement on Form 10 (the "Form 10") with the U.S. Securities and Exchange Commission ("SEC"). The information statement filed as an exhibit to the Form 10 disclosed that MetLife intends to include Brighthouse Insurance and certain affiliates in the proposed separated business and distribute at least 80.1% of the shares of Brighthouse's common stock on a pro rata basis to the holders of MetLife, Inc. common stock. Effective March 6, 2017, and in connection with the planned Separation, the Company changed its name from MetLife Insurance Company USA to Brighthouse Life Insurance Company. The ultimate form and timing of the planned Separation will be influenced by a number of factors, including regulatory considerations and economic conditions. MetLife continues to evaluate and pursue structural alternatives for the proposed Separation. The planned Separation remains subject to certain conditions, including among others, obtaining final approval from the MetLife, Inc. Board of Directors, receipt of a favorable ruling from the Internal Revenue Service ("IRS") and an opinion from MetLife's tax advisor regarding certain U.S. federal income tax matters, insurance and other regulatory approvals, and an SEC declaration of the effectiveness of the Form 10. In November 2014, MetLife Insurance Company of Connecticut re-domesticated from Connecticut to Delaware, changed its name to MetLife Insurance Company USA and merged with its subsidiary, MetLife Investors USA Insurance Company ("MLI-USA"), and its affiliates, MetLife Investors Insurance Company ("MLIIC") and Exeter Reassurance Company, Ltd. ("Exeter"). See Note 3 for further information on the merger transactions and the prior periods' adjustments. Basis of Presentation The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the consolidated financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company's business and operations. Actual results could differ from these estimates. Consolidation The accompanying consolidated financial statements include the accounts of Brighthouse Life Insurance Company and its subsidiaries, as well as partnerships and joint ventures in which the Company has control, and variable interest entities ("VIEs") for which the Company is the primary beneficiary. Intercompany accounts and transactions have been eliminated. Since the Company is a member of a controlled group of affiliated companies, its results may not be indicative of those of a stand-alone entity. 9 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Discontinued Operations The results of operations of a component of the Company that has either been disposed of or is classified as held-for-sale are reported in discontinued operations if certain criteria are met. Effective January 1, 2014, the Company adopted new guidance regarding reporting of discontinued operations for disposals or classifications as held-for-sale that have not been previously reported on the consolidated financial statements. A disposal of a component is reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on the Company's operations and financial results. See "-- Adoption of New Accounting Pronouncements." Separate Accounts Separate accounts are established in conformity with insurance laws. Generally, the assets of the separate accounts cannot be used to settle the liabilities that arise from any other business of the Company. Separate account assets are subject to general account claims only to the extent the value of such assets exceeds the separate account liabilities. The Company reports separately, as assets and liabilities, investments held in separate accounts and liabilities of the separate accounts if: . such separate accounts are legally recognized; . assets supporting the contract liabilities are legally insulated from the Company's general account liabilities; . investments are directed by the contractholder; and . all investment performance, net of contract fees and assessments, is passed through to the contractholder. The Company reports separate account assets at their fair value, which is based on the estimated fair values of the underlying assets comprising the individual separate account portfolios. Investment performance (including investment income, net investment gains (losses) and changes in unrealized gains (losses)) and the corresponding amounts credited to contractholders of such separate accounts are offset within the same line on the statements of operations. Separate accounts credited with a contractual investment return are combined on a line-by-line basis with the Company's general account assets, liabilities, revenues and expenses and the accounting for these investments is consistent with the methodologies described herein for similar financial instruments held within the general account. The Company's revenues reflect fees charged to the separate accounts, including mortality charges, risk charges, policy administration fees, investment management fees and surrender charges. Such fees are included in universal life and investment-type product policy fees on the statements of operations. Reclassifications Certain amounts in the prior years' consolidated financial statements and related footnotes thereto have been reclassified to conform with the current year presentation as discussed throughout the Notes to the Consolidated Financial Statements. Summary of Significant Accounting Policies The following are the Company's significant accounting policies with references to notes providing additional information on such policies and critical accounting estimates relating to such policies. ----------------------------------------------------------------------------------------- Accounting Policy Note ----------------------------------------------------------------------------------------- Insurance 5 ----------------------------------------------------------------------------------------- Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles 6 ----------------------------------------------------------------------------------------- Reinsurance 7 ----------------------------------------------------------------------------------------- Investments 8 ----------------------------------------------------------------------------------------- Derivatives 9 ----------------------------------------------------------------------------------------- Fair Value 10 ----------------------------------------------------------------------------------------- Income Tax 15 ----------------------------------------------------------------------------------------- Litigation Contingencies 16 -----------------------------------------------------------------------------------------
10 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Insurance Future Policy Benefit Liabilities and Policyholder Account Balances The Company establishes liabilities for amounts payable under insurance policies. Generally, amounts are payable over an extended period of time and related liabilities are calculated as the present value of future expected benefits to be paid, reduced by the present value of future expected premiums. Such liabilities are established based on methods and underlying assumptions that are in accordance with GAAP and applicable actuarial standards. The principal assumptions used in the establishment of liabilities for future policy benefits are mortality, morbidity, policy lapse, policy renewal, retirement, disability incidence, disability terminations, investment returns, inflation, expenses and other contingent events as appropriate to the respective product type. These assumptions are established at the time the policy is issued and locked in and are intended to estimate the experience for the period the policy benefits are payable. Utilizing these assumptions, liabilities are established on a block of business basis. For long duration insurance contracts, assumptions such as mortality, morbidity and interest rates are locked in upon the issuance of new business. However, significant adverse changes in experience on such contracts may require the establishment of premium deficiency reserves. Such reserves are determined based on the then current assumptions and do not include a provision for adverse deviation. To assess whether or not a premium deficiency exists, the Company groups insurance contracts based on the manner acquired, serviced, and the measurement of profitability. In applying the profitability criteria, groupings are limited by segment. Liabilities for universal and variable life secondary guarantees are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the contract period based on total expected assessments. The assumptions used in estimating the secondary guarantee liabilities are consistent with those used for amortizing deferred policy acquisition costs ("DAC"), and are therefore subject to the same variability and risk as further discussed herein. The assumptions of investment performance and volatility for variable products are consistent with historical experience of the appropriate underlying equity indices, such as the Standard & Poor's Global Ratings ("S&P") 500 Index. The benefits used in calculating the liabilities are based on the average benefits payable over a range of scenarios. The Company regularly reviews its assumptions supporting its estimates of actuarial liabilities for future policy benefits. For universal life and annuity product guarantees, assumptions are updated periodically, whereas for traditional life products, such as term life and non-participating whole life insurance, assumptions are established and locked in at inception but reviewed periodically to determine whether a premium deficiency exists that would trigger an unlocking of assumptions. Differences result in changes to the liability balances with related charges or credits to benefit expenses in the period in which the changes occur. Policyholder account balances relate to contracts or contract features where the Company has no significant insurance risk. See "-- "Variable Annuity Guarantees" for additional information on the Company's variable annuity guarantee features that are accounted for as insurance liabilities and recorded in future policy benefits, as well as the guarantee features that are accounted for at fair value as embedded derivatives and recorded in policyholder account balances. Other Policy-Related Balances Other policy-related balances primarily include assumed affiliated reinsurance payables, affiliated deferred experience refunds, policy and contract claims and unearned revenue liabilities. The assumed affiliated reinsurance payable relates primarily to reinsurance for certain universal life business assumed from an affiliate, net of other reinsurance. The affiliated deferred experience refunds relate to the repayment of acquisition costs under an affiliated reinsurance agreement and represent part of the net cost of reinsurance for the business reinsured. The deferred experience refund is being amortized consistent with the DAC methodology on the underlying contracts. 11 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) The liability for policy and contract claims generally relates to incurred but not reported death, disability and long-term care claims, as well as claims which have been reported but not yet settled. The liability for these claims is based on the Company's estimated ultimate cost of settling all claims. The Company derives estimates for the development of incurred but not reported claims principally from analyses of historical patterns of claims by business line. The methods used to determine these estimates are continually reviewed. Adjustments resulting from this continuous review process and differences between estimates and payments for claims are recognized in policyholder benefits and claims expense in the period in which the estimates are changed or payments are made. The unearned revenue liability relates to universal life-type and investment-type products and represents policy charges for services to be provided in future periods. The charges are deferred as unearned revenue and amortized using the product's estimated gross profits, similar to DAC as discussed further herein. Such amortization is recorded in universal life and investment-type product policy fees. Recognition of Insurance Revenues and Deposits Premiums related to traditional life and annuity contracts with life contingencies are recognized as revenues when due from policyholders. When premiums are due over a significantly shorter period than the period over which policyholder benefits are incurred, any excess profit is deferred and recognized into earnings in proportion to insurance in-force or, for annuities, the amount of expected future policy benefit payments. Premiums related to non-medical health and disability contracts are recognized on a pro rata basis over the applicable contract term. Deposits related to universal life-type and investment-type products are credited to policyholder account balances. Revenues from such contracts consist of fees for mortality, policy administration and surrender charges and are recorded in universal life and investment-type product policy fees in the period in which policyholder benefits and expenses are incurred. Amounts that are charged to earnings include interest credited and benefit claims incurred in excess of related policyholder account balances. Premiums, policy fees, policyholder benefits and expenses are presented net of reinsurance. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that are related directly to the successful acquisition or renewal of insurance contracts are capitalized as DAC. Such costs include: . incremental direct costs of contract acquisition, such as commissions; . the portion of an employee's total compensation and benefits related to time spent selling, underwriting or processing the issuance of new and renewal insurance business only with respect to actual policies acquired or renewed; . other essential direct costs that would not have been incurred had a policy not been acquired or renewed; and . the costs of direct-response advertising, the primary purpose of which is to elicit sales to customers who could be shown to have responded specifically to the advertising and that results in probable future benefits. All other acquisition-related costs, including those related to general advertising and solicitation, market research, agent training, product development, unsuccessful sales and underwriting efforts, as well as all indirect costs, are expensed as incurred. Value of business acquired ("VOBA") is an intangible asset resulting from a business combination that represents the excess of book value over the estimated fair value of acquired insurance, annuity, and investment-type contracts in-force at the acquisition date. The estimated fair value of the acquired liabilities is based on projections, by each block of business, of future policy and contract charges, premiums, mortality and morbidity, separate account performance, surrenders, operating expenses, investment returns, nonperformance risk adjustment and other factors. Actual experience on the purchased business may vary from these projections. 12 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) DAC and VOBA are amortized as follows: ------------------------------------------------------------------------------------------------------------------------------ Products: In proportion to the following over estimated lives of the contracts: ------------------------------------------------------------------------------------------------------------------------------ Nonparticipating and non-dividend-paying traditional contracts (primarily term insurance) Actual and expected future gross premiums. ------------------------------------------------------------------------------------------------------------------------------ Participating, dividend-paying traditional contracts Actual and expected future gross margins. ------------------------------------------------------------------------------------------------------------------------------ Fixed and variable universal life contracts Actual and expected future gross profits. Fixed and variable deferred annuity contracts ------------------------------------------------------------------------------------------------------------------------------
See Note 6 for additional information on DAC and VOBA amortization. The recovery of DAC and VOBA is dependent upon the future profitability of the related business. DAC and VOBA are aggregated on the financial statements for reporting purposes. The Company generally has two different types of sales inducements which are included in other assets: (i) the policyholder receives a bonus whereby the policyholder's initial account balance is increased by an amount equal to a specified percentage of the customer's deposit; and (ii) the policyholder receives a higher interest rate using a dollar cost averaging method than would have been received based on the normal general account interest rate credited. The Company defers sales inducements and amortizes them over the life of the policy using the same methodology and assumptions used to amortize DAC. The amortization of sales inducements is included in policyholder benefits and claims. Each year, or more frequently if circumstances indicate a potential recoverability issue exists, the Company reviews deferred sales inducements ("DSI") to determine the recoverability of the asset. Value of distribution agreements acquired ("VODA") is reported in other assets and represents the present value of expected future profits associated with the expected future business derived from the distribution agreements acquired as part of a business combination. Value of customer relationships acquired ("VOCRA") is also reported in other assets and represents the present value of the expected future profits associated with the expected future business acquired through existing customers of the acquired company or business. The VODA and VOCRA associated with past business combinations are amortized over useful lives ranging from 10 to 40 years and such amortization is included in other expenses. Each year, or more frequently if circumstances indicate a possible impairment exists, the Company reviews VODA and VOCRA to determine whether the asset is impaired. Reinsurance For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. Cessions under reinsurance agreements do not discharge the Company's obligations as the primary insurer. The Company reviews all contractual features, including those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. For reinsurance of existing in-force blocks of long-duration contracts that transfer significant insurance risk, the difference, if any, between the amounts paid (received), and the liabilities ceded (assumed) related to the underlying contracts is considered the net cost of reinsurance at the inception of the reinsurance agreement. The net cost of reinsurance is recorded as an adjustment to DAC when there is a gain at inception on the ceding entity and to other liabilities when there is a loss at inception. The net cost of reinsurance is recognized as a component of other expenses when there is a gain at inception and as policyholder benefits and claims when there is a loss and is subsequently amortized on a basis consistent with the methodology used for amortizing DAC related to the underlying reinsured contracts. Subsequent amounts paid (received) on the reinsurance of in-force blocks, as well as amounts paid (received) related to new business, are recorded as ceded (assumed) premiums and ceded (assumed) premiums, reinsurance and other receivables (future policy benefits) are established. Amounts currently recoverable under reinsurance agreements are included in premiums, reinsurance and other receivables and amounts currently payable are included in other liabilities. Assets and liabilities relating to reinsurance agreements with the same reinsurer may be recorded net on the balance sheet, if a right of offset exists within the reinsurance agreement. In the event that reinsurers do not meet their obligations to the Company under the terms of the reinsurance agreements, reinsurance recoverable balances could become uncollectible. In such instances, reinsurance recoverable balances are stated net of allowances for uncollectible reinsurance. 13 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) The funds withheld liability represents amounts withheld by the Company in accordance with the terms of the reinsurance agreements. The Company withholds the funds rather than transferring the underlying investments and, as a result, records funds withheld liability within other liabilities. The Company recognizes interest on funds withheld, included in other expenses, at rates defined by the terms of the agreement which may be contractually specified or directly related to the investment portfolio. Premiums, fees and policyholder benefits and claims include amounts assumed under reinsurance agreements and are net of reinsurance ceded. Amounts received from reinsurers for policy administration are reported in other revenues. With respect to guaranteed minimum income benefits ("GMIBs"), a portion of the directly written GMIBs are accounted for as insurance liabilities, but the associated reinsurance agreements contain embedded derivatives. These embedded derivatives are included in premiums, reinsurance and other receivables with changes in estimated fair value reported in net derivative gains (losses). If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Deposits received are included in other liabilities and deposits made are included within premiums, reinsurance and other receivables. As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabilities are adjusted. Interest on such deposits is recorded as other revenues or other expenses, as appropriate. Periodically, the Company evaluates the adequacy of the expected payments or recoveries and adjusts the deposit asset or liability through other revenues or other expenses, as appropriate. Certain assumed non-life contingent portion of guaranteed minimum withdrawal benefits ("GMWBs"), guaranteed minimum accumulation benefits ("GMABs") and GMIBs are also accounted for as embedded derivatives with changes in estimated fair value reported in net derivative gains (losses). Variable Annuity Guarantees The Company issues directly and assumes from an affiliate through reinsurance certain variable annuity products with guaranteed minimum benefits that provide the policyholder a minimum return based on their initial deposit (i.e., the benefit base) less withdrawals. In some cases, the benefit base may be increased by additional deposits, bonus amounts, accruals or optional market value step-ups. Certain of the Company's variable annuity guarantee features are accounted for as insurance liabilities and recorded in future policy benefits while others are accounted for at fair value as embedded derivatives and recorded in policyholder account balances. Generally speaking, a guarantee is accounted for as an insurance liability if the guarantee is paid only upon either (i) the occurrence of a specific insurable event, or (ii) annuitization. Alternatively, a guarantee is accounted for as an embedded derivative if a guarantee is paid without requiring (i) the occurrence of specific insurable event, or (ii) the policyholder to annuitize, that is, the policyholder can receive the guarantee on a net basis. In certain cases, a guarantee may have elements of both an insurance liability and an embedded derivative and in such cases the guarantee is split and accounted for under both models. Further, changes in assumptions, principally involving behavior, can result in a change of expected future cash outflows of a guarantee between portions accounted for as insurance liabilities and portions accounted for as embedded derivatives. Guarantees accounted for as insurance liabilities in future policy benefits include guaranteed minimum death benefits ("GMDBs"), the life contingent portion of the GMWBs and the portion of the GMIBs that require annuitization, as well as the life contingent portion of the expected annuitization when the policyholder is forced into an annuitization upon depletion of their account value. These insurance liabilities are accrued over the accumulation phase of the contract in proportion to actual and future expected policy assessments based on the level of guaranteed minimum benefits generated using multiple scenarios of separate account returns. The scenarios are based on best estimate assumptions consistent with those used to amortize DAC. When current estimates of future benefits exceed those previously projected or when current estimates of future assessments are lower than those previously projected, liabilities will increase, resulting in a current period charge to net income. The opposite result occurs when the current estimates of future benefits are lower than those previously projected or when current estimates of future assessments exceed those previously projected. At each reporting period, we update the actual amount of business remaining in-force, which impacts expected future assessments and the projection of estimated future benefits resulting in a current period charge or increase to earnings. See Note 5 for additional details of guarantees accounted for as insurance liabilities. 14 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Guarantees accounted for as embedded derivatives in policyholder account balances include the non-life contingent portion of GMWBs, GMABs, and for GMIBs the non-life contingent portion of the expected annuitization when the policyholder is forced into an annuitization upon depletion of their account value, as well as the Guaranteed Principal Option. The estimated fair values of guarantees accounted for as embedded derivatives are determined based on the present value of projected future benefits minus the present value of projected future fees. At policy inception, the Company attributes to the embedded derivative a portion of the projected future guarantee fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. Any additional fees represent "excess" fees and are reported in universal life and investment-type product policy fees. In valuing the embedded derivative, the percentage of fees included in the fair value measurement is locked-in at inception. The projections of future benefits and future fees require capital market and actuarial assumptions including expectations concerning policyholder behavior. A risk neutral valuation methodology is used to project the cash flows from the guarantees under multiple capital market scenarios to determine an economic liability. The reported estimated fair value is then determined by taking the present value of these risk-free generated cash flows using a discount rate that incorporates a spread over the risk-free rate to reflect our nonperformance risk and adding a risk margin. For more information on the determination of estimated fair value, see Note 10 Fair Value. Investments Net Investment Income and Net Investment Gains (Losses) Income from investments is reported within net investment income, unless otherwise stated herein. Gains and losses on sales of investments, impairment losses and changes in valuation allowances are reported within net investment gains (losses), unless otherwise stated herein. Fixed Maturity and Equity Securities The Company's fixed maturity and equity securities are classified as available-for-sale ("AFS") and are reported at their estimated fair value. Unrealized investment gains and losses on these securities are recorded as a separate component of other comprehensive income (loss) ("OCI"), net of policy-related amounts and deferred income taxes. All security transactions are recorded on a trade date basis. Investment gains and losses on sales are determined on a specific identification basis. Interest income and prepayment fees are recognized when earned. Interest income is recognized using an effective yield method giving effect to amortization of premiums and accretion of discounts and is based on the estimated economic life of the securities, which for mortgage-backed and asset-backed securities ("ABS") considers the estimated timing and amount of prepayments of the underlying loans. See Note 8 "Investments -- Fixed Maturity and Equity Securities AFS -- Methodology for Amortization of Premium and Accretion of Discount on Structured Securities". The amortization of premium and accretion of discount of fixed maturity securities also takes into consideration call and maturity dates. Dividends on equity securities are recognized when declared. The Company periodically evaluates fixed maturity and equity securities for impairment. The assessment of whether impairments have occurred is based on management's case-by-case evaluation of the underlying reasons for the decline in estimated fair value, as well as an analysis of the gross unrealized losses by severity and/or age as described in Note 8 "-- Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities." For fixed maturity securities in an unrealized loss position, an other-than-temporary impairment ("OTTI") is recognized in earnings when it is anticipated that the amortized cost will not be recovered. When either: (i) the Company has the intent to sell the security; or (ii) it is more likely than not that the Company will be required to sell the security before recovery, the OTTI recognized in earnings is the entire difference between the security's amortized cost and estimated fair value. If neither of these conditions exists, the difference between the amortized cost of the security and the present value of projected future cash flows expected to be collected is recognized as an OTTI in earnings ("credit loss"). If the estimated fair value is less than the present value of projected future cash flows expected to be collected, this portion of OTTI related to other-than-credit factors ("noncredit loss") is recorded in OCI. 15 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) With respect to equity securities, the Company considers in its OTTI analysis its intent and ability to hold a particular equity security for a period of time sufficient to allow for the recovery of its estimated fair value to an amount equal to or greater than cost. If a sale decision is made for an equity security and recovery to an amount at least equal to cost prior to the sale is not expected, the security will be deemed to be other-than-temporarily impaired in the period that the sale decision was made and an OTTI loss will be recorded in earnings. The OTTI loss recognized is the entire difference between the security's cost and its estimated fair value. Mortgage Loans The Company disaggregates its mortgage loan investments into three portfolio segments: commercial, agricultural and residential. The accounting policies that are applicable to all portfolio segments are presented below and the accounting policies related to each of the portfolio segments are included in Note 8. Mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, deferred fees or expenses, and are net of valuation allowances. Interest income and prepayment fees are recognized when earned. Interest income is recognized using an effective yield method giving effect to amortization of premiums and accretion of discounts. Also included in mortgage loans are commercial mortgage loans held by consolidated securitization entities ("CSEs") for which the fair value option ("FVO") was elected, which are stated at estimated fair value. Changes in estimated fair value are recognized in net investment gains (losses) for commercial mortgage loans held by CSEs. Policy Loans Policy loans are stated at unpaid principal balances. Interest income is recorded as earned using the contractual interest rate. Generally, accrued interest is capitalized on the policy's anniversary date. Valuation allowances are not established for policy loans, as they are fully collateralized by the cash surrender value of the underlying insurance policies. Any unpaid principal and accrued interest is deducted from the cash surrender value or the death benefit prior to settlement of the insurance policy. Real Estate Real estate held-for-investment is stated at cost less accumulated depreciation. Depreciation is recorded on a straight-line basis over the estimated useful life of the asset (typically 20 to 55 years). Rental income is recognized on a straight-line basis over the term of the respective leases. The Company periodically reviews its real estate held-for-investment for impairment and tests for recoverability whenever events or changes in circumstances indicate the carrying value may not be recoverable and exceeds its estimated fair value. Properties whose carrying values are greater than their undiscounted cash flows are written down to their estimated fair value, which is generally computed using the present value of expected future cash flows discounted at a rate commensurate with the underlying risks. Real estate for which the Company commits to a plan to sell within one year and actively markets in its current condition for a reasonable price in comparison to its estimated fair value is classified as held-for-sale. Real estate held-for-sale is stated at the lower of depreciated cost or estimated fair value less expected disposition costs and is not depreciated. Real Estate Joint Ventures and Other Limited Partnership Interests The Company uses the equity method of accounting for investments ("investees") when it has more than a minor ownership interest or more than a minor influence over the investee's operations, while the cost method is used when the Company has virtually no influence over the investee's operations. The Company generally recognizes its share of the equity method investee's earnings on a three-month lag in instances where the investee's financial information is not sufficiently timely or when the investee's reporting period differs from the Company's reporting period; while distributions on cost method investments are recognized as earned or received. The Company routinely evaluates such investments for impairment. For equity method investees, the Company considers financial and other information provided by the investee, other known information and inherent risks in the underlying investments, as well as future capital commitments, in determining whether an impairment has occurred. The Company considers its cost method investments for impairment when the carrying value of such investments exceeds the net asset value ("NAV"). The Company takes into consideration the severity and duration of this excess when determining whether the cost method investment is impaired. 16 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Short-term Investments Short-term investments include securities and other investments with remaining maturities of one year or less, but greater than three months, at the time of purchase and are stated at estimated fair value or amortized cost, which approximates estimated fair value. Short-term investments also include investments in affiliated money market pools. Other Invested Assets Other invested assets consist principally of the following: . Freestanding derivatives with positive estimated fair values which are described in "-- Derivatives" below. . Tax credit and renewable energy partnerships which derive a significant source of investment return in the form of income tax credits or other tax incentives. Where tax credits are guaranteed by a creditworthy third party, the investment is accounted for under the effective yield method. Otherwise, the investment is accounted for under the equity method. . Leveraged leases which are recorded net of non-recourse debt. Income is recognized by applying the leveraged lease's estimated rate of return to the net investment in the lease. The Company regularly reviews residual values for impairment. . Investments in an operating joint venture that engages in insurance underwriting activities which are accounted for under the equity method. . Funds withheld which represent a receivable for amounts contractually withheld by ceding companies in accordance with reinsurance agreements. The Company recognizes interest on funds withheld at rates defined by the terms of the agreement which may be contractually specified or directly related to the underlying investments. Securities Lending Program Securities lending transactions, whereby blocks of securities are loaned to third parties, primarily brokerage firms and commercial banks, are treated as financing arrangements and the associated liability is recorded at the amount of cash received. The Company obtains collateral at the inception of the loan, usually cash, in an amount generally equal to 102% of the estimated fair value of the securities loaned, and maintains it at a level greater than or equal to 100% for the duration of the loan. Securities loaned under such transactions may be sold or re-pledged by the transferee. The Company is liable to return to the counterparties the cash collateral received. Security collateral on deposit from counterparties in connection with securities lending transactions may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the Company's financial statements. The Company monitors the estimated fair value of the securities loaned on a daily basis and additional collateral is obtained as necessary throughout the duration of the loan. Income and expenses associated with securities lending transactions are reported as investment income and investment expense, respectively, within net investment income. Derivatives Freestanding Derivatives Freestanding derivatives are carried on the Company's balance sheet either as assets within other invested assets or as liabilities within other liabilities at estimated fair value. The Company does not offset the estimated fair value amounts recognized for derivatives executed with the same counterparty under the same master netting agreement. Accruals on derivatives are generally recorded in accrued investment income or within other liabilities. However, accruals that are not scheduled to settle within one year are included with the derivatives carrying value in other invested assets or other liabilities. 17 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are reported in net derivative gains (losses) except as follows: ------------------------------------------------------------------------------------------------------------- Statement of Operations Presentation: Derivative: ------------------------------------------------------------------------------------------------------------- Policyholder benefits and claims . Economic hedges of variable annuity guarantees included in future policy benefits ------------------------------------------------------------------------------------------------------------- Net investment income . Economic hedges of equity method investments in joint ventures -------------------------------------------------------------------------------------------------------------
Hedge Accounting To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge. Hedge designation and financial statement presentation of changes in estimated fair value of the hedging derivatives are as follows: . Fair value hedge (a hedge of the estimated fair value of a recognized asset or liability) - in net derivative gains (losses), consistent with the change in estimated fair value of the hedged item attributable to the designated risk being hedged. . Cash flow hedge (a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability) - effectiveness in OCI (deferred gains or losses on the derivative are reclassified into the statement of operations when the Company's earnings are affected by the variability in cash flows of the hedged item); ineffectiveness in net derivative gains (losses). The changes in estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported on the statement of operations within interest income or interest expense to match the location of the hedged item. In its hedge documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the hedging instrument's effectiveness and the method that will be used to measure ineffectiveness. A derivative designated as a hedging instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and at least quarterly throughout the life of the designated hedging relationship. Assessments of hedge effectiveness and measurements of ineffectiveness are also subject to interpretation and estimation and different interpretations or estimates may have a material effect on the amount reported in net income. The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item; (ii) the derivative expires, is sold, terminated, or exercised; (iii) it is no longer probable that the hedged forecasted transaction will occur; or (iv) the derivative is de-designated as a hedging instrument. When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized in net derivative gains (losses). The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its estimated fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. Provided the hedged forecasted transaction is still probable of occurrence, the changes in estimated fair value of derivatives recorded in OCI related to discontinued cash flow hedges are released into the statement of operations when the Company's earnings are affected by the variability in cash flows of the hedged item. When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur on the anticipated date or within two months of that date, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized currently in net derivative gains (losses). Deferred gains and losses of a derivative recorded in OCI pursuant to the discontinued cash flow hedge of a forecasted transaction that is no longer probable are recognized immediately in net derivative gains (losses). In all other situations in which hedge accounting is discontinued, the derivative is carried at its estimated fair value on the balance sheet, with changes in its estimated fair value recognized in the current period as net derivative gains (losses). 18 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Embedded Derivatives The Company sells variable annuities and issues certain insurance products and investment contracts and is a party to certain reinsurance agreements that have embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated. The embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative if: . the combined instrument is not accounted for in its entirety at estimated fair value with changes in estimated fair value recorded in earnings; . the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract; and . a separate instrument with the same terms as the embedded derivative would qualify as a derivative instrument. See "Variable Annuity Guarantees" for additional information on the accounting policy for embedded derivatives bifurcated from variable annuity host contracts. Such embedded derivatives are carried on the balance sheet at estimated fair value with the host contract and changes in their estimated fair value are generally reported in net derivative gains (losses), except for those in policyholder benefits and claims related to ceded reinsurance of GMIB. If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire contract is carried on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income. Additionally, the Company may elect to carry an entire contract on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income if that contract contains an embedded derivative that requires bifurcation. Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In most cases, the exit price and the transaction (or entry) price will be the same at initial recognition. Subsequent to initial recognition, fair values are based on unadjusted quoted prices for identical assets or liabilities in active markets that are readily and regularly obtainable. When such quoted prices are not available, fair values are based on quoted prices in markets that are not active, quoted prices for similar but not identical assets or liabilities, or other observable inputs. If these inputs are not available, or observable inputs are not determinable, unobservable inputs and/or adjustments to observable inputs requiring management judgment are used to determine the estimated fair value of assets and liabilities. Income Tax Brighthouse Life Insurance Company and its includable subsidiaries join with MetLife, Inc. and its includable subsidiaries in filing a consolidated U.S. life and non-life federal income tax return in accordance with the provisions of the Internal Revenue Code of 1986, as amended. Current taxes (and the benefits of tax attributes such as losses) are allocated to Brighthouse Life Insurance Company and its subsidiaries under the consolidated tax return regulations and a tax sharing agreement. Under the consolidated tax return regulations, MetLife, Inc. has elected the "percentage method" (and 100% under such method) of reimbursing companies for tax attributes e.g. net operating losses. As a result, 100% of tax attributes are reimbursed by MetLife, Inc. to the extent that consolidated federal income tax of the consolidated federal tax return group is reduced in a year by tax attributes. On an annual basis, each of the profitable subsidiaries pays to MetLife, Inc. the federal income tax which it would have paid based upon that year's taxable income. If Brighthouse Life Insurance Company or its includable subsidiaries has current or prior deductions and credits (including but not limited to losses) which reduce the consolidated tax liability of the consolidated federal tax return group, the deductions and credits are characterized as realized (or realizable) by Brighthouse Life Insurance Company and its includable subsidiaries when those tax attributes are realized (or realizable) by the consolidated federal tax return group, even if Brighthouse Life Insurance Company or its includable subsidiaries would not have realized the attributes on a stand-alone basis under a "wait and see" method. 19 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) The Company's accounting for income taxes represents management's best estimate of various events and transactions. Deferred tax assets and liabilities resulting from temporary differences between the financial reporting and tax bases of assets and liabilities are measured at the balance sheet date using enacted tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. The realization of deferred tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods under the tax law in the applicable tax jurisdiction. Valuation allowances are established against deferred tax assets when management determines, based on available information, that it is more likely than not that deferred income tax assets will not be realized. Significant judgment is required in determining whether valuation allowances should be established, as well as the amount of such allowances. When making such determination the Company considers many factors, including: . the nature, frequency, and amount of cumulative financial reporting income and losses in recent years; . the jurisdiction in which the deferred tax asset was generated; . the length of time that carryforward can be utilized in the various taxing jurisdiction; . future taxable income exclusive of reversing temporary differences and carryforwards; . future reversals of existing taxable temporary differences; . taxable income in prior carryback years; and . tax planning strategies. The Company may be required to change its provision for income taxes when estimates used in determining valuation allowances on deferred tax assets significantly change or when receipt of new information indicates the need for adjustment in valuation allowances. Additionally, the effect of changes in tax laws, tax regulations, or interpretations of such laws or regulations, is recognized in net income tax expense (benefit) in the period of change. The Company determines whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded on the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. Unrecognized tax benefits due to tax uncertainties that do not meet the threshold are included within other liabilities and are charged to earnings in the period that such determination is made. The Company classifies interest recognized as interest expense and penalties recognized as a component of income tax expense. Litigation Contingencies The Company is a party to a number of legal actions and is involved in a number of regulatory investigations. Given the inherent unpredictability of these matters, it is difficult to estimate the impact on the Company's financial position. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Legal costs are recognized as incurred. On a quarterly and annual basis, the Company reviews relevant information with respect to liabilities for litigation, regulatory investigations and litigation-related contingencies to be reflected on the Company's financial statements. Other Accounting Policies Cash and Cash Equivalents The Company considers all highly liquid securities and other investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents are stated at amortized cost, which approximates estimated fair value. 20 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Property, Equipment, Leasehold Improvements and Computer Software Property, equipment and leasehold improvements, which are included in other assets, are stated at cost, less accumulated depreciation and amortization. Depreciation is determined using the straight-line method over the estimated useful lives of the assets, as appropriate. Estimated lives generally range from five to 10 years for leasehold improvements, and from three to seven years for all other property and equipment. The net book value of the property, equipment and leasehold improvements was insignificant at both December 31, 2016 and 2015. Computer software, which is included in other assets, is stated at cost, less accumulated amortization. Purchased software costs, as well as certain internal and external costs incurred to develop internal-use computer software during the application development stage, are capitalized. Such costs are amortized generally over a four-year period using the straight-line method. The cost basis of computer software was $236 million and $254 million at December 31, 2016 and 2015, respectively. Accumulated amortization of capitalized software was $136 million and $107 million at December 31, 2016 and 2015, respectively. Related amortization expense was $37 million, less than $1 million and $2 million for the years ended December 31, 2016, 2015 and 2014, respectively. Other Revenues Other revenues primarily include, in addition to items described elsewhere herein, fee income on financial reinsurance agreements and broker-dealer fees. Employee Benefit Plans Through December 31, 2016, Metropolitan Life Insurance Company ("MLIC") provided and the Company contributed to defined benefit pension and postemployment plans for its employees and retirees. MLIC also provides and the Company contributes to a postretirement medical and life insurance benefit plan for certain retired employees. The Company accounts for these plans as multiemployer benefit plans and as a result the assets, obligations and other comprehensive gains and losses of these benefit plans are not included on the consolidated balance sheet. Within its consolidated statement of operations, the Company has included expense associated with its participants in these plans. These plans also include participants from other affiliates of MLIC. The Company's participation in these plans ceased December 31, 2016. Defined Contribution Plans Through December 31, 2016, MLIC provides and the Company contributes to a defined contribution plan sponsored by MLIC for substantially all employees under which a portion of employee contributions are matched. The Company's participation in this plan ceased on December 31, 2016. Foreign Currency Assets, liabilities and operations of a foreign affiliate (owned in 2014) are recorded based on functional currency. The determination of the functional currency is made based on the appropriate economic and management indicators. The local currencies of foreign operations are the functional currencies. Assets and liabilities of this foreign affiliate are translated from the functional currency to U.S. dollars at the exchange rates in effect at each year-end and revenues and expenses are translated at the average exchange rates during the year. The resulting translation adjustments are charged or credited directly to OCI, net of applicable taxes. Gains and losses from foreign currency transactions, including the effect of re-measurement of monetary assets and liabilities to the appropriate functional currency, are reported as part of net investment gains (losses) in the period in which they occur. Goodwill Goodwill represents the future economic benefits arising from net assets acquired in a business combination that are not individually identified and recognized. Goodwill is calculated as the excess of cost over the estimated fair value of such net assets acquired, is not amortized, and is tested for impairment based on a fair value approach at least annually or more frequently if events or circumstances indicate that there may be justification for conducting an interim test. The Company performs its annual goodwill impairment testing during the third quarter of each year based upon data as of the close of the second quarter. Goodwill associated with a business acquisition is not tested for impairment during the year the business is acquired unless there is a significant identified impairment event. 21 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) The impairment test is performed at the reporting unit level, which is the operating segment or a business one level below the operating segment, if discrete financial information is prepared and regularly reviewed by management at that level. For purposes of goodwill impairment testing, if the carrying value of a reporting unit exceeds its estimated fair value, there may be an indication of impairment. In such instances, the implied fair value of the goodwill is determined in the same manner as the amount of goodwill that would be determined in a business combination. The excess of the carrying value of goodwill over the implied fair value of goodwill would be recognized as an impairment and recorded as a charge against net income. On an ongoing basis, the Company evaluates potential triggering events that may affect the estimated fair value of the Company's reporting units to assess whether any goodwill impairment exists. Adoption of New Accounting Pronouncements Effective January 1, 2016, the Company adopted guidance relating to short-duration contracts. Upon adopting the new guidance, the Company updated the disclosure for the rollforward of the liability of the unpaid policy and contract claims to include incurred and paid long-duration life claims that are settled within one year. The Company's liability for unpaid policy and contract claims includes incurred but not reported claims, as well as claims which have been reported but not yet settled. The net incurred and paid claims within the Company's tabular rollforward are principally comprised of death benefits on long-duration life contracts. The adoption did not have an impact on the consolidated financial statements and given the Company's minimal extent of short-duration insurance contracts did not require any other expanded disclosures. Effective January 1, 2016, the Company retrospectively adopted new guidance relating to the consolidation of certain entities. The objective of the new standard is to improve targeted areas of the consolidation guidance and to reduce the number of consolidation models. The new consolidation standard provides guidance on how a reporting entity (i) evaluates whether the entity should consolidate limited partnerships and similar entities, (ii) assesses whether the fees paid to a decisionmaker or service provider are variable interests in a VIE, and (iii) assesses the variable interests in a VIE held by related parties of the reporting entity. The new guidance also eliminates the VIE consolidation model based on majority exposure to variability that applied to certain investment companies and similar entities. The adoption of the new guidance did not impact which entities are consolidated by the Company. The consolidated VIE assets and liabilities and unconsolidated VIE carrying amounts and maximum exposure to loss as of December 31, 2016, disclosed in Note 8, reflect the application of the new guidance. Effective November 18, 2014, the Company adopted new guidance on when, if ever, the cost of acquiring an entity should be used to establish a new accounting basis ("pushdown") in the acquired entity's separate financial statements. The guidance provides an acquired entity and its subsidiaries with an irrevocable option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. If a reporting entity elects to apply pushdown accounting, its stand-alone financial statements would reflect the acquirer's new basis in the acquired entity's assets and liabilities. The election to apply pushdown accounting should be determined by an acquired entity for each individual change-in-control event in which an acquirer obtains control of the acquired entity; however, an entity that does not elect to apply pushdown accounting in the period of a change-in-control can later elect to retrospectively apply pushdown accounting to the most recent change-in-control transaction as a change in accounting principle. The new guidance did not have a material impact on the consolidated financial statements upon adoption. Effective January 1, 2014, the Company adopted new guidance regarding reporting of discontinued operations and disclosures of disposals of components of an entity. The guidance increases the threshold for a disposal to qualify as a discontinued operation, expands the disclosures for discontinued operations and requires new disclosures for certain disposals that do not meet the definition of a discontinued operation. Disposals must now represent a strategic shift that has or will have a major effect on the entity's operations and financial results to qualify as discontinued operations. As discussed in Note 4, the Company sold its wholly-owned subsidiary, MetLife Assurance Limited ("MAL"). As a result of the adoption of this new guidance, the results of operations of MAL and the loss on sale have been included in income from continuing operations. 22 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Future Adoption of New Accounting Pronouncements In February 2017, the Financial Accounting Standards Board ("FASB") issued new guidance on derecognition of nonfinancial assets (Accounting Standards Update ("ASU") 2017- 05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those years. Early adoption is permitted for interim or annual reporting periods beginning after December 15, 2016. The guidance may be applied retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment at the date of adoption. The new guidance clarifies the scope and accounting of a financial asset that meets the definition of an "in-substance nonfinancial asset" and defines the term, "in-substance nonfinancial asset." The ASU also adds guidance for partial sales of nonfinancial assets. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In January 2017, the FASB issued new guidance on business combinations (ASU 2017- 01, Business Combinations (Topic 805): Clarifying the Definition of a Business). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied on a prospective basis. Early adoption is permitted as specified in the guidance. The new guidance clarifies the definition of a business and requires that an entity apply certain criteria in order to determine when a set of assets and activities qualifies as a business. The adoption of this standard will result in fewer acquisitions qualifying as businesses and, accordingly, acquisition costs for those acquisitions that do not qualify as businesses will be capitalized rather than expensed. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In November 2016, the FASB issued new guidance on restricted cash (ASU 2016-18, Statement of Cash Flows (Topic 230): a consensus of the FASB Emerging Issues Task Force). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied on a retrospective basis. Early adoption is permitted. The new guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, the new guidance requires that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance does not provide a definition of restricted cash or restricted cash equivalents. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In October 2016, the FASB issued new guidance on consolidation evaluation for entities under common control (ASU 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control). The new guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years, and should be applied on a retrospective basis. Early adoption is permitted. The new guidance does not change the characteristics of a primary beneficiary under current GAAP. It changes how a reporting entity evaluates whether it is the primary beneficiary of a VIE by changing how a reporting entity that is a single decisionmaker of a VIE handles indirect interests in the entity held through related parties that are under common control with the reporting entity. The adoption of this new guidance will not have a material impact on the Company's consolidated financial statements. In October 2016, the FASB issued new guidance on tax accounting for intra-entity transfers of assets (ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied on a modified retrospective basis. Early adoption is permitted in the first interim or annual reporting period. Current guidance prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. The new guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Also, the guidance eliminates the exception for an intra-entity transfer of an asset other than inventory. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In August 2016, the FASB issued new guidance on cash flow statement presentation (ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied retrospectively to all periods presented. Early adoption is permitted in any interim or annual period. This ASU addresses diversity in how certain cash receipts and cash payments are presented and classified on the statement of cash flows. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. 23 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) In June 2016, the FASB issued new guidance on measurement of credit losses on financial instruments (ASU 2016-13, Financial Instruments--Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments). The new guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This ASU replaces the incurred loss impairment methodology with one that reflects expected credit losses. The measurement of expected credit losses should be based on historical loss information, current conditions, and reasonable and supportable forecasts. The new guidance requires that an OTTI on a debt security will be recognized as an allowance going forward, such that improvements in expected future cash flows after an impairment will no longer be reflected as a prospective yield adjustment through net investment income, but rather a reversal of the previous impairment and recognized through realized investment gains and losses. The guidance also requires enhanced disclosures. The Company has assessed the asset classes impacted by the new guidance and is currently assessing the accounting and reporting system changes that will be required to comply with the new guidance. The Company believes that the most significant impact upon adoption will be to its mortgage loan investments. The Company is continuing to evaluate the overall impact of the new guidance on its consolidated financial statements. In January 2016, the FASB issued new guidance (ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities) on the recognition and measurement of financial instruments. The new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted for the instrument-specific credit risk provision. The new guidance changes the current accounting guidance related to (i) the classification and measurement of certain equity investments, (ii) the presentation of changes in the fair value of financial liabilities measured under the FVO that are due to instrument-specific credit risk, and (iii) certain disclosures associated with the fair value of financial instruments. Additionally, there will no longer be a requirement to assess equity securities for impairment since such securities will be measured at fair value through net income. The Company has assessed the population of financial instruments that are subject to the new guidance and has determined that the most significant impact will be the requirement to report changes in fair value in net income each reporting period for all equity securities currently classified as AFS and to a lesser extent, other limited partnership interests and real estate joint ventures that are currently accounted for under the cost method. The population of these investments accounted for under the cost method is not material. The Company is continuing to evaluate the overall impact of this guidance on its consolidated financial statements. In May 2014, the FASB issued a comprehensive new revenue recognition standard (ASU 2014-09, Revenue from Contracts with Customers (Topic 606)), effective for fiscal years beginning after December 15, 2017 and interim periods within those years. The guidance may be applied retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment at the date of adoption. The new guidance will supersede nearly all existing revenue recognition guidance under U.S. GAAP; however, it will not impact the accounting for insurance and investment contracts within the scope of Financial Services insurance (Topic 944), leases, financial instruments and guarantees. For those contracts that are impacted, the guidance will require an entity to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled, in exchange for those goods or services. Given the scope of the new revenue recognition guidance, the Company does not expect the adoption to have a material impact on its consolidated revenues or statements of operations, with the Company's implementation efforts primarily focused on other revenues on the consolidated statements of operations. Other Effective January 3, 2017, the Chicago Mercantile Exchange ("CME") amended its rulebook, resulting in the characterization of variation margin transfers as settlement payments, as opposed to adjustments to collateral. These amendments will impact the accounting treatment of the Company's centrally cleared derivatives, for which the CME serves as the central clearing party. The application of the amended rulebook is expected to reduce the gross derivative assets and liabilities, as well as the related collateral, recorded on the consolidated balance sheet for trades cleared through the CME. The Company is currently evaluating the impact of these amendments on its consolidated financial statements. This change is not expected to impact the tax treatment of such derivatives, although the IRS is being asked to issue definitive guidance. 24 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information In anticipation of the planned Separation, in the third quarter of 2016, the Company reorganized its businesses into three segments: Annuities, Life and Run-off. In addition, the Company reports certain of its results of operations in Corporate & Other. Also, in the fourth quarter of 2016, the Company moved the universal life policies with secondary guarantees ("ULSG") business from the Life segment to the Run-off segment. These and certain other presentation changes were applied retrospectively and did not have an impact on total consolidated net income (loss) or operating earnings in the prior periods. Annuities The Annuities segment offers a variety of variable, fixed, index-linked and income annuities designed to address contractholders' needs for protected wealth accumulation on a tax-deferred basis, wealth transfer and income security. Life The Life segment offers insurance products and services, including term, whole, universal and variable life products designed to address policyholders' needs for financial security and protected wealth transfer, which may be provided on a tax-advantaged basis. Run-off The Run-off segment consists of products no longer actively sold and which are separately managed, including structured settlements, certain company-owned life insurance policies, bank-owned life insurance policies, funding agreements and ULSG. Corporate & Other Corporate & Other contains the excess capital not allocated to the segments and interest expense related to the majority of the Company's outstanding debt, as well as expenses associated with certain legal proceedings and income tax audit issues. Additionally, Corporate & Other includes assumed reinsurance of certain variable annuity products from a former affiliated operating joint venture in Japan. Under this in-force reinsurance agreement, the Company reinsured living and death benefit guarantees issued in connection with variable annuity products. Also, Corporate & Other includes a reinsurance agreement to assume certain blocks of indemnity reinsurance from an affiliate. These reinsurance agreements were recaptured effective November 1, 2014. Corporate & Other also includes the elimination of intersegment amounts and a portion of MetLife's U.S. insurance business sold direct to consumers. Financial Measures and Segment Accounting Policies Operating earnings is used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, operating earnings is also the Company's GAAP measure of segment performance and is reported below. Operating earnings should not be viewed as a substitute for net income (loss). The Company believes the presentation of operating earnings as the Company measures it for management purposes enhances the understanding of its performance by highlighting the results of operations and the underlying profitability drivers of the business. Operating earnings allows analysis of the Company's performance and facilitates comparisons to industry results. Operating earnings is defined as operating revenues less operating expenses, both net of income tax. 25 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued) The following are excluded from total revenues in calculating operating revenues: . Net investment gains (losses); . Net derivative gains (losses) except: (i) earned income on derivatives and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment and (ii) earned income on derivatives and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment; . Amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity GMIB fees ("GMIB Fees"); . Certain amounts related to securitization entities that are VIEs consolidated under GAAP; and . Results of discontinued operations and other businesses that have been or will be sold or exited by the Company ("Divested Businesses"). The following are excluded from total expenses in calculating operating expenses: . Amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets, benefits and hedging costs related to GMIBs ("GMIB Costs") and market value adjustments associated with surrenders or terminations of contracts; . Amounts related to: (i) net investment gains (losses) and net derivative gains (losses) and (ii) GMIB Fees and GMIB Costs included in amortization of deferred policy acquisition costs and value of business acquired; . Recognition of certain contingent assets and liabilities that could not be recognized at acquisition or adjusted for during the measurement period under GAAP business combination accounting guidance; . Results of discontinued operations and Divested Businesses; . Amounts related to securitization entities that are VIEs consolidated under GAAP; . Goodwill impairment; and . Costs related to: (i) implementation of new insurance regulatory requirements and (ii) acquisition and integration costs. The tax impact of the adjustments mentioned above are calculated net of the U.S. or foreign statutory tax rate, which could differ from the Company's effective tax rate. Set forth in the tables below is certain financial information with respect to the Company's segments, as well as Corporate & Other, for the years ended December 31, 2016, 2015 and 2014 and at December 31, 2016 and 2015. The segment accounting policies are the same as those used to prepare the Company's consolidated financial statements, except for operating earnings adjustments as defined above. In addition, segment accounting policies include the method of capital allocation described below. The internal capital model is a MetLife developed risk capital model that reflects management's judgment and view of required capital to represent the measurement of the risk profile of the business, to meet the Company's long term promises to clients, to service long-term obligations and to support the credit ratings of the Company. It accounts for the unique and specific nature of the risks inherent in the Company's business. Management is responsible for the ongoing production and enhancement of the internal capital model and reviews its approach periodically to ensure that it remains consistent with emerging industry practice standards. As such, the internal capital allocation methodology in the future may differ from MetLife's historical model. The Company allocates equity to the segments based on the internal capital model, coupled with considerations of local capital requirements, and aligns with emerging standards and consistent risk principles. Segment net investment income is credited or charged based on the level of allocated equity; however, changes in allocated equity do not impact the Company's consolidated net investment income or net income (loss). 26 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued) Net investment income is based upon the actual results of each segment's specifically identifiable investment portfolios adjusted for allocated equity. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such costs; (ii) time studies analyzing the amount of employee time incurred by each segment; and (iii) cost estimates included in the Company's product pricing.
Operating Results -------------------------------------------------------- Corporate Year Ended December 31, 2016 Annuities Life Run-off & Other Total ------------------------------------------- ----------- --------- --------- --------- ----------- (In millions) Pre-tax operating earnings................. $ 1,399 $ (138) $ (63) $ (64) $ 1,134 Provision for income tax expense (benefit). 411 (50) (25) (40) 296 ----------- --------- --------- --------- ----------- Operating earnings....................... $ 988 $ (88) $ (38) $ (24) 838 =========== ========= ========= ========= Adjustments for:........................... Net investment gains (losses).............. (32) Net derivative gains (losses).............. (5,878) Other adjustments to net income............ 68 Provision for income tax (expense) benefit. 2,067 ----------- Net income (loss).......................... $ (2,937) =========== Inter-segment revenues..................... $ 722 $ (867) $ (127) $ (40) Interest revenue........................... $ 1,412 $ 295 $ 1,235 $ 62 Interest expense........................... $ -- $ -- $ -- $ 67
Corporate At December 31, 2016 Annuities Life Run-off & Other Total ----------------------------- ---------- --------- --------- --------- ---------- (In millions) Total assets................. $ 141,111 $ 12,674 $ 39,261 $ 6,227 $ 199,273 Separate account assets...... $ 95,450 $ 1,671 $ 3,467 $ -- $ 100,588 Separate account liabilities. $ 95,450 $ 1,671 $ 3,467 $ -- $ 100,588
27 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued)
Operating Results -------------------------------------------------------- Corporate Year Ended December 31, 2015 Annuities Life Run-off & Other Total ------------------------------------------- ----------- --------- --------- --------- ----------- (In millions) Pre-tax operating earnings................. $ 1,318 $ (54) $ 590 $ (207) $ 1,647 Provision for income tax expense (benefit). 329 (21) 204 (89) 423 ----------- --------- --------- --------- ----------- Operating earnings....................... $ 989 $ (33) $ 386 $ (118) 1,224 =========== ========= ========= ========= Adjustments for: Net investment gains (losses).............. 36 Net derivative gains (losses).............. (424) Other adjustments to net income............ (205) Provision for income tax (expense) benefit. 208 ----------- Net income (loss).......................... $ 839 =========== Inter-segment revenues..................... $ 590 $ (740) $ (72) $ 137 Interest revenue........................... $ 1,245 $ 296 $ 1,360 $ (60) Interest expense........................... $ -- $ -- $ -- $ 68
Corporate & At December 31, 2015 Annuities Life Run-off Other Total ----------------------------- ----------- ---------- ---------- ----------- ----------- (In millions) Total assets................. $ 136,230 $ 12,805 $ 43,142 $ 10,185 $ 202,362 Separate account assets...... $ 96,922 $ 1,580 $ 3,233 $ -- $ 101,735 Separate account liabilities. $ 96,922 $ 1,580 $ 3,233 $ -- $ 101,735
Operating Results -------------------------------------------------------- Corporate Year Ended December 31, 2014 Annuities Life Run-off & Other Total ------------------------------------------- ----------- --------- --------- --------- ----------- (In millions) Pre-tax operating earnings................. $ 1,221 $ (152) $ 664 $ (109) $ 1,624 Provision for income tax expense (benefit). 295 (56) 227 (46) 420 ----------- --------- --------- --------- ----------- Operating earnings....................... $ 926 $ (96) $ 437 $ (63) 1,204 =========== ========= ========= ========= Adjustments for: Net investment gains (losses).............. (469) Net derivative gains (losses).............. (181) Other adjustments to net income............ (684) Provision for income tax (expense) benefit. 425 ----------- Net income (loss).......................... $ 295 =========== Inter-segment revenues..................... $ 729 $ (703) $ (275) $ 66 Interest revenue........................... $ 1,177 $ 295 $ 1,384 $ (109) Interest expense........................... $ -- $ 5 $ -- $ 68
28 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued) Reconciliation of Company operating revenues to total revenues:
Years Ended December 31, ------------------------------------------- 2016 2015 2014 ------------- ------------- ------------- (In millions) Annuities..................... $ 4,295 $ 4,528 $ 4,677 Life.......................... 725 738 568 Run-off....................... 1,919 1,998 1,935 ------------- ------------- ------------- Total segment............... 6,939 7,264 7,180 ------------- ------------- ------------- Corporate & Other............. 176 188 134 Net investment gains (losses). (32) 36 (469) Net derivative gains (losses). (5,878) (424) (181) Other adjustments............. (25) 40 239 ------------- ------------- ------------- Total....................... $ 1,180 $ 7,104 $ 6,903 ============= ============= =============
The following table presents total premiums, universal life and investment-type product policy fees and other revenues by major product groups of the Company's segments, as well as Corporate & Other:
Years Ended December 31, ----------------------------------------- 2016 2015 2014 ------------- ------------- ------------- (In millions) Annuity products........ $ 3,300 $ 3,568 $ 3,926 Life insurance products. 1,055 1,176 953 Other products.......... 23 133 5 ------------- ------------- ------------- Total................. $ 4,378 $ 4,877 $ 4,884 ============= ============= =============
Substantially all of the Company's consolidated premiums, universal life and investment-type product policy fees and other revenues originated in the U.S. Revenues derived from any customer did not exceed 10% of consolidated premiums, universal life and investment-type product policy fees and other revenues for the years ended December 31, 2016, 2015 and 2014. 29 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 3. Mergers In November 2014, MetLife Insurance Company of Connecticut, a wholly-owned subsidiary of MetLife, Inc., re-domesticated from Connecticut to Delaware, changed its name to MetLife Insurance Company USA and merged with its subsidiary, MLI-USA, and its affiliate, MLIIC, each a U.S. insurance company that issued variable annuity products in addition to other products, and Exeter, a former offshore, captive reinsurance subsidiary of MetLife, Inc. and affiliate of MetLife Insurance Company of Connecticut that mainly reinsured guarantees associated with variable annuity products (the "Mergers"). The surviving entity of the Mergers was MetLife USA. Exeter, formerly a Cayman Islands company, was re-domesticated to Delaware in October 2013. Prior to the Mergers, 40,000,000 authorized shares of common stock, of which 30,000,000 shares were issued and outstanding, were converted to 4,000 authorized shares of common stock, of which 3,000 shares were issued and outstanding. Prior to the Mergers, effective January 1, 2014, following receipt of New York State Department of Financial Services approval, MetLife Insurance Company of Connecticut withdrew its license to issue insurance policies and annuity contracts in New York. Also effective January 1, 2014, MetLife Insurance Company of Connecticut reinsured with MLIC, an affiliate, all existing New York insurance policies and annuity contracts that include a separate account feature and deposited investments with an estimated fair market value of $6.3 billion into a custodial account to secure MetLife Insurance Company of Connecticut's remaining New York policyholder liabilities not covered by such reinsurance. Also prior to the Mergers, certain risks ceded to Exeter were recaptured. See Notes 8, 9 and 13 for information regarding additional transactions in connection with the Mergers. The Mergers represent a transaction among entities under common control and have been accounted for in a manner similar to the pooling-of-interests method, which requires that the merged entities be combined at their historical cost. The Company's consolidated financial statements and related footnotes are presented as if the transaction occurred at the beginning of the earliest date presented and the prior periods have been retrospectively adjusted. 4. Disposition In May 2014, the Company completed the sale of its wholly-owned subsidiary, MAL, for $702 million ((Pounds)418 million) in net cash consideration. As a result of the sale, a loss of $608 million ($436 million, net of income tax), was recorded for the year ended December 31, 2014, which includes a reduction to goodwill of $112 million ($94 million, net of income tax). The loss is reflected within net investment gains (losses) on the consolidated statements of operations and comprehensive income (loss). Compared to the expected loss at the time of the sales agreement, the actual loss on the sale was increased by net income from MAL of $77 million for the year ended December 31, 2014. MAL's results of operations are included in continuing operations. They were historically included in the Run-off segment. 30 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Insurance Insurance Liabilities Insurance liabilities, including affiliated insurance liabilities on reinsurance assumed and ceded, are comprised of future policy benefits, policyholder account balances and other policy-related balances. Information regarding insurance liabilities by segment, as well as Corporate & Other, was as follows at:
December 31, ----------------------------- 2016 2015 -------------- -------------- (In millions) Annuities $ 31,516 $ 27,370 Life 6,687 7,105 Run-off 25,027 27,463 Corporate & Other 7,425 7,166 -------------- -------------- Total $ 70,655 $ 69,104 ============== ==============
See Note 7 for discussion of affiliated reinsurance liabilities included in the table above. Future policy benefits are measured as follows:
Product Type: Measurement Assumptions: ----------------------------------------------------------------------------------------------------------------------------- Participating life Aggregate of (i) net level premium reserves for death and endowment policy benefits (calculated based upon the non-forfeiture interest rate of 4%, and mortality rates guaranteed in calculating the cash surrender values described in such contracts); and (ii) the liability for terminal dividends. ----------------------------------------------------------------------------------------------------------------------------- Nonparticipating life Aggregate of the present value of expected future benefit payments and related expenses less the present value of expected future net premiums. Assumptions as to mortality and persistency are based upon the Company's experience when the basis of the liability is established. Interest rate assumptions for the aggregate future policy benefit liabilities range from 3% to 8%. ----------------------------------------------------------------------------------------------------------------------------- Individual and group Present value of expected future payments. Interest rate assumptions used in establishing traditional fixed annuities after such liabilities range from 3% to 8%. annuitization ----------------------------------------------------------------------------------------------------------------------------- Non-medical health The net level premium method and assumptions as to future morbidity, withdrawals and insurance interest, which provide a margin for adverse deviation. Interest rate assumptions used in establishing such liabilities range from 4% to 7%. ----------------------------------------------------------------------------------------------------------------------------- Disabled lives Present value of benefits method and experience assumptions as to claim terminations, expenses and interest. Interest rate assumptions used in establishing such liabilities range from 3% to 7%.
Participating business represented 4% and 3% of the Company's life insurance in-force at December 31, 2016 and 2015, respectively. Participating policies represented 45%, 43% and 39% of gross traditional life insurance premiums for the years ended December 31, 2016, 2015 and 2014, respectively. Policyholder account balances are equal to: (i) policy account values, which consist of an accumulation of gross premium payments; (ii) credited interest, ranging from less than 1% to 8%, less expenses, mortality charges and withdrawals; and (iii) fair value adjustments relating to business combinations. 31 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Insurance (continued) Guarantees The Company issues variable annuity products with guaranteed minimum benefits. GMABs, the non-life contingent portion of GMWBs and the portion of certain GMIBs that do not require annuitization are accounted for as embedded derivatives in policyholder account balances and are further discussed in Note 9. Guarantees accounted for as insurance liabilities include:
Guarantee: Measurement Assumptions: ---------------------------------------------------------------------------------------------------------------------- GMDBs A return of purchase payment upon death Present value of expected death benefits in excess of the even if the account value is reduced projected account balance recognizing the excess ratably to zero. over the accumulation period based on the present value of total expected assessments. An enhanced death benefit may be Assumptions are consistent with those used for amortizing available for an additional fee. DAC, and are thus subject to the same variability and risk. Investment performance and volatility assumptions are consistent with the historical experience of the appropriate underlying equity index, such as the S&P 500 Index. Benefit assumptions are based on the average benefits payable over a range of scenarios. ---------------------------------------------------------------------------------------------------------------------- GMIBs After a specified period of time Present value of expected income benefits in excess of the determined at the time of issuance of projected account balance at any future date of the variable annuity contract, a annuitization and recognizing the excess ratably over the minimum accumulation of purchase accumulation period based on present value of total payments, even if the account value is expected assessments. reduced to zero, that can be annuitized to receive a monthly income stream that is not less than a specified amount. Certain contracts also provide for a Assumptions are consistent with those used for estimating guaranteed lump sum return of purchase GMDB liabilities. premium in lieu of the annuitization benefit. Calculation incorporates an assumption for the percentage of the potential annuitizations that may be elected by the contractholder. ---------------------------------------------------------------------------------------------------------------------- GMWBs A return of purchase payment via Expected value of the life contingent payments and partial withdrawals, even if the expected assessments using assumptions consistent with account value is reduced to zero, those used for estimating the GMDB liabilities. provided that cumulative withdrawals in a contract year do not exceed a certain limit. Certain contracts include guaranteed withdrawals that are life contingent.
32 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Insurance (continued) Information regarding the liabilities for guarantees (excluding base policy liabilities and embedded derivatives) relating to annuity and universal and variable life contracts was as follows:
Universal and Variable Annuity Contracts Life Contracts ---------------- ---------------------- Secondary GMDBs GMIBs Guarantees Total ------ ------ ---------------------- ------ (In millions) Direct Balance at January 1, 2014....... $ 404 $1,155 $1,784 $3,343 Incurred guaranteed benefits (1). 231 285 590 1,106 Paid guaranteed benefits......... (24) -- -- (24) ------ ------ ---------------------- ------ Balance at December 31, 2014..... 611 1,440 2,374 4,425 Incurred guaranteed benefits..... 248 317 413 978 Paid guaranteed benefits......... (36) -- -- (36) ------ ------ ---------------------- ------ Balance at December 31, 2015..... 823 1,757 2,787 5,367 Incurred guaranteed benefits..... 331 300 752 1,383 Paid guaranteed benefits......... (58) -- -- (58) ------ ------ ---------------------- ------ Balance at December 31, 2016..... $1,096 $2,057 $3,539 $6,692 ====== ====== ====================== ====== Net Ceded/(Assumed) Balance at January 1, 2014....... $ (205) $ (155) $1,312 $ 952 Incurred guaranteed benefits (1). 175 98 477 750 Paid guaranteed benefits......... 1 -- -- 1 ------ ------ ---------------------- ------ Balance at December 31, 2014..... (29) (57) 1,789 1,703 Incurred guaranteed benefits..... 19 (9) 362 372 Paid guaranteed benefits......... (33) -- -- (33) ------ ------ ---------------------- ------ Balance at December 31, 2015..... (43) (66) 2,151 2,042 Incurred guaranteed benefits..... 41 (3) 594 632 Paid guaranteed benefits......... (54) (1) -- (55) ------ ------ ---------------------- ------ Balance at December 31, 2016..... $ (56) $ (70) $2,745 $2,619 ====== ====== ====================== ====== Net Balance at January 1, 2014....... $ 609 $1,310 $ 472 $2,391 Incurred guaranteed benefits (1). 56 187 113 356 Paid guaranteed benefits......... (25) -- -- (25) ------ ------ ---------------------- ------ Balance at December 31, 2014..... 640 1,497 585 2,722 Incurred guaranteed benefits..... 229 326 51 606 Paid guaranteed benefits......... (3) -- -- (3) ------ ------ ---------------------- ------ Balance at December 31, 2015..... 866 1,823 636 3,325 Incurred guaranteed benefits..... 290 303 158 751 Paid guaranteed benefits......... (4) 1 -- (3) ------ ------ ---------------------- ------ Balance at December 31, 2016..... $1,152 $2,127 $ 794 $4,073 ====== ====== ====================== ======
--------- (1) See Note 7. 33 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Insurance (continued) Information regarding the Company's guarantee exposure was as follows at:
December 31, ----------------------------------------------------------- 2016 2015 --------------------------- --------------------------- In the At In the At Event of Death Annuitization Event of Death Annuitization -------------- ------------- -------------- ------------- (Dollars in millions) Annuity Contracts (1), (2) Variable Annuity Guarantees Total account value (3)................. $ 101,827 $ 57,370 $ 103,830 $ 58,615 Separate account value.................. $ 97,237 $ 56,048 $ 98,897 $ 57,284 Net amount at risk...................... $ 6,726 (4) $ 2,906 (5) $ 8,168 (4) $ 2,088 (5) Average attained age of contractholders. 67 years 67 years 66 years 66 years
December 31, --------------------- 2016 2015 --------- --------- Secondary Guarantees --------------------- (Dollars in millions) Universal and Variable Life Contracts Total account value (3)............... $ 7,176 $ 6,919 Net amount at risk (6)................ $ 90,973 $ 90,940 Average attained age of policyholders. 60 years 59 years
--------- (1) The Company's annuity contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive. (2) Includes direct business, but excludes offsets from hedging or reinsurance, if any. Therefore, the NARs presented reflect the economic exposures of living and death benefit guarantees associated with variable annuities, but not necessarily their impact on the Company. See Note 7 for a discussion of GMxBs which have been reinsured. (3) Includes the contractholder's investments in the general account and separate account, if applicable. (4) Defined as the death benefit less the total account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date and includes any additional contractual claims associated with riders purchased to assist with covering income taxes payable upon death. (5) Defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. This amount represents the Company's potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date, even though the contracts contain terms that allow annuitization of the guaranteed amount only after the 10th anniversary of the contract, which not all contractholders have achieved. (6) Defined as the guarantee amount less the account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date. 34 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Insurance (continued) Account balances of contracts with guarantees were invested in separate account asset classes as follows at:
December 31, --------------- 2016 2015 ------- ------- (In millions) Fund Groupings: Balanced...... $49,224 $49,870 Equity........ 39,749 41,269 Bond.......... 5,726 4,802 Money Market.. 654 768 ------- ------- Total....... $95,353 $96,709 ======= =======
Obligations Under Funding Agreements The Company issues fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign currencies, to certain special purpose entities that have issued either debt securities or commercial paper for which payment of interest and principal is secured by such funding agreements. During the years ended December 31, 2016, 2015 and 2014, the Company issued $1.4 billion, $13.0 billion and $12.2 billion, respectively, and repaid $3.4 billion, $14.4 billion and $13.9 billion, respectively, of such funding agreements. As of December 31, 2016 and 2015, liabilities for funding agreements outstanding, which are included in policyholder account balances, were $127 million and $2.2 billion, respectively. The Company is a member of the Federal Home Loan Bank ("FHLB") of Pittsburgh and holds common stock in certain regional banks in the FHLB system ("FHLBanks"). Holdings of common stock of FHLBanks, included in equity securities, were as follows as of:
December 31, ------------ 2016 2015 ---- ---- (In millions) FHLB of Pittsburgh. $44 $85 FHLB of Boston..... $27 $36 FHLB of Des Moines. $ 4 $ 4
The Company has also entered into funding agreements with FHLBanks. The liability for such funding agreements is included in policyholder account balances. Information related to such funding agreements was as follows as of:
Liability Collateral ----------- ----------------------------------- December 31, ----------------------------------------------- 2016 2015 2016 2015 ---- ------ ----------------- - (In millions) FHLB of Pittsburgh (1). $500 $1,570 $ 3,765 (2) $ 1,789 (2) FHLB of Boston (1)..... $ 50 $ 250 $ 144 (2) $ 311 (2) FHLB of Des Moines (1). $ 95 $ 95 $ 266 (2) $ 147 (2)
--------- (1) Represents funding agreements issued to the applicable FHLBank in exchange for cash and for which such FHLBank has been granted a lien on certain assets, some of which are in the custody of such FHLBank, including residential mortgage-backed securities ("RMBS"), to collateralize obligations under advances evidenced by funding agreements. The Company is permitted to withdraw any portion of the collateral in the custody of such FHLBank as long as there is no event of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level. Upon any event of default by the Company, such FHLBank's recovery on the collateral is limited to the amount of the Company's liability to such FHLBank. 35 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Insurance (continued) (2) Advances are collateralized by mortgage-backed securities. The amount of collateral presented is at estimated fair value. Liabilities for Unpaid Claims and Claim Expenses Information regarding the liabilities for unpaid claims and claim expense was as follows:
Years Ended December 31, ------------------------- 2016 2015 2014 ------- ------- ------- (In millions) Balance at December 31 of prior period..... $1,693 $1,483 $1,325 Less: Reinsurance recoverables........... 1,545 1,400 1,235 ------- ------- ------- Net balance at December 31 of prior period. 148 83 90 Cumulative adjustment (1).................. 67 -- -- ------- ------- ------- Net balance at January 1,.................. 215 83 90 Incurred related to: Current year............................. 638 105 3 Prior years (2).......................... (22) -- 2 ------- ------- ------- Total incurred......................... 616 105 5 ------- ------- ------- Paid related to: Current year............................. (613) (30) -- Prior years.............................. (60) (10) (12) ------- ------- ------- Total paid............................. (673) (40) (12) ------- ------- ------- Net balance at December 31,................ 158 148 83 Add: Reinsurance recoverables............ 1,808 1,545 1,400 ------- ------- ------- Balance at December 31,.................... $1,966 $1,693 $1,483 ======= ======= =======
--------- (1) Reflects the accumulated adjustment, net of reinsurance, upon implementation of the new guidance related to short-duration contracts. Prior periods have not been restated. See Note 1. (2) During 2016, 2015 and 2014, claims and claims adjustment expenses associated with prior years changed due to differences between the actual benefits paid and the expected benefits owed during those periods. 36 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Insurance (continued) Separate Accounts Separate account assets and liabilities include two categories of account types: pass-through separate accounts totaling $100.6 billion and $101.5 billion at December 31, 2016 and 2015, respectively, for which the policyholder assumes all investment risk, and separate accounts for which the Company contractually guarantees either a minimum return or account value to the policyholder which totaled $33 million and $189 million at December 31, 2016 and 2015, respectively. The latter category consisted of bank owned life insurance contracts. The average interest rate credited on these contracts was 2.63% and 2.56% at December 31, 2016 and 2015, respectively. For each of the years ended December 31, 2016, 2015 and 2014, there were no investment gains (losses) on transfers of assets from the general account to the separate accounts. 6. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles See Note 1 for a description of capitalized acquisition costs. Nonparticipating and Non-Dividend-Paying Traditional Contracts The Company amortizes DAC and VOBA related to these contracts (primarily term insurance) over the appropriate premium paying period in proportion to the actual and expected future gross premiums that were set at contract issue. The expected premiums are based upon the premium requirement of each policy and assumptions for mortality, persistency and investment returns at policy issuance, or policy acquisition (as it relates to VOBA), include provisions for adverse deviation, and are consistent with the assumptions used to calculate future policy benefit liabilities. These assumptions are not revised after policy issuance or acquisition unless the DAC or VOBA balance is deemed to be unrecoverable from future expected profits. Absent a premium deficiency, variability in amortization after policy issuance or acquisition is caused only by variability in premium volumes. Participating, Dividend-Paying Traditional Contracts The Company amortizes DAC related to these contracts over the estimated lives of the contracts in proportion to actual and expected future gross margins. The amortization includes interest based on rates in effect at inception or acquisition of the contracts. The future gross margins are dependent principally on investment returns, policyholder dividend scales, mortality, persistency, expenses to administer the business, creditworthiness of reinsurance counterparties and certain economic variables, such as inflation. Of these factors, the Company anticipates that investment returns, expenses, persistency and other factor changes, as well as policyholder dividend scales, are reasonably likely to significantly impact the rate of DAC amortization. Each reporting period, the Company updates the estimated gross margins with the actual gross margins for that period. When the actual gross margins change from previously estimated gross margins, the cumulative DAC amortization is re-estimated and adjusted by a cumulative charge or credit to current operations. When actual gross margins exceed those previously estimated, the DAC amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the actual gross margins are below the previously estimated gross margins. Each reporting period, the Company also updates the actual amount of business in-force, which impacts expected future gross margins. When expected future gross margins are below those previously estimated, the DAC amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the expected future gross margins are above the previously estimated expected future gross margins. Each period, the Company also reviews the estimated gross margins for each block of business to determine the recoverability of DAC balances. 37 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued) Fixed and Variable Universal Life Contracts and Fixed and Variable Deferred Annuity Contracts The Company amortizes DAC and VOBA related to these contracts over the estimated lives of the contracts in proportion to actual and expected future gross profits. The amortization includes interest based on rates in effect at inception or acquisition of the contracts. The amount of future gross profits is dependent principally upon returns in excess of the amounts credited to policyholders, mortality, persistency, benefit elections and withdrawals, interest crediting rates, expenses to administer the business, creditworthiness of reinsurance counterparties, the effect of any hedges used and certain economic variables, such as inflation. Of these factors, the Company anticipates that investment returns, expenses, persistency and benefit elections and withdrawals are reasonably likely to significantly impact the rate of DAC and VOBA amortization. Each reporting period, the Company updates the estimated gross profits with the actual gross profits for that period. When the actual gross profits change from previously estimated gross profits, the cumulative DAC and VOBA amortization is re-estimated and adjusted by a cumulative charge or credit to current operations. When actual gross profits exceed those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the actual gross profits are below the previously estimated gross profits. Each reporting period, the Company also updates the actual amount of business remaining in-force, which impacts expected future gross profits. When expected future gross profits are below those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the expected future gross profits are above the previously estimated expected future gross profits. Each period, the Company also reviews the estimated gross profits for each block of business to determine the recoverability of DAC and VOBA balances. Factors Impacting Amortization Separate account rates of return on variable universal life contracts and variable deferred annuity contracts affect in-force account balances on such contracts each reporting period, which can result in significant fluctuations in amortization of DAC and VOBA. Returns that are higher than the Company's long-term expectation produce higher account balances, which increases the Company's future fee expectations and decreases future benefit payment expectations on minimum death and living benefit guarantees, resulting in higher expected future gross profits. The opposite result occurs when returns are lower than the Company's long-term expectation. The Company's practice to determine the impact of gross profits resulting from returns on separate accounts assumes that long-term appreciation in equity markets is not changed by short-term market fluctuations, but is only changed when sustained interim deviations are expected. The Company monitors these events and only changes the assumption when its long-term expectation changes. The Company also periodically reviews other long-term assumptions underlying the projections of estimated gross margins and profits. These assumptions primarily relate to investment returns, policyholder dividend scales, interest crediting rates, mortality, persistency, benefit elections and withdrawals and expenses to administer business. Management annually updates assumptions used in the calculation of estimated gross margins and profits which may have significantly changed. If the update of assumptions causes expected future gross margins and profits to increase, DAC and VOBA amortization will generally decrease, resulting in a current period increase to earnings. The opposite result occurs when the assumption update causes expected future gross margins and profits to decrease. Periodically, the Company modifies product benefits, features, rights or coverages that occur by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to a contract, or by election or coverage within a contract. If such modification, referred to as an internal replacement, substantially changes the contract, the associated DAC or VOBA is written off immediately through income and any new deferrable costs associated with the replacement contract are deferred. If the modification does not substantially change the contract, the DAC or VOBA amortization on the original contract will continue and any acquisition costs associated with the related modification are expensed. Amortization of DAC and VOBA is attributed to net investment gains (losses) and net derivative gains (losses), and to other expenses for the amount of gross margins or profits originating from transactions other than investment gains and losses. Unrealized investment gains and losses represent the amount of DAC and VOBA that would have been amortized if such gains and losses had been recognized. 38 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued) Information regarding DAC and VOBA was as follows:
Years Ended December 31, ----------------------- 2016 2015 2014 ------- ------ ------ (In millions) DAC Balance at January 1,............................................. $ 4,131 $4,162 $4,795 Capitalizations................................................... 282 325 279 Amortization related to: Net investment gains (losses) and net derivative gains (losses). 1,348 188 (152) Other expenses.................................................. (1,107) (639) (699) ------- ------ ------ Total amortization............................................ 241 (451) (851) ------- ------ ------ Unrealized investment gains (losses).............................. (20) 95 (61) ------- ------ ------ Balance at December 31,........................................... 4,634 4,131 4,162 ------- ------ ------ VOBA Balance at January 1,............................................. 678 728 896 Amortization related to: Net investment gains (losses) and net derivative gains (losses). 2 (19) (1) Other expenses.................................................. (71) (125) (138) ------- ------ ------ Total amortization............................................ (69) (144) (139) ------- ------ ------ Unrealized investment gains (losses).............................. 31 94 (29) ------- ------ ------ Balance at December 31,........................................... 640 678 728 ------- ------ ------ Total DAC and VOBA Balance at December 31,........................................... $ 5,274 $4,809 $4,890 ======= ====== ======
Information regarding total DAC and VOBA by segment, as well as Corporate & Other, was as follows at:
December 31, ------------- 2016 2015 ------ ------ (In millions) Annuities......... $4,521 $3,510 Life.............. 504 680 Run-off........... 112 510 Corporate & Other. 137 109 ------ ------ Total........... $5,274 $4,809 ====== ======
39 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued) Information regarding other intangibles was as follows:
Years Ended December 31, ----------------------- 2016 2015 2014 ---- ---- ---- (In millions) DSI Balance at January 1,................ $478 $522 $619 Capitalization....................... 2 3 4 Amortization......................... (88) (64) (73) Unrealized investment gains (losses). (1) 17 (28) ---- ---- ---- Balance at December 31,.............. $391 $478 $522 ==== ==== ==== VODA and VOCRA Balance at January 1,................ $125 $142 $159 Amortization......................... (15) (17) (17) ---- ---- ---- Balance at December 31,.............. $110 $125 $142 ==== ==== ==== Accumulated amortization............. $130 $115 $ 98 ==== ==== ====
The estimated future amortization expense to be reported in other expenses for the next five years is as follows:
VOBA VODA and VOCRA -------------- -------------- (In millions) 2017. $ 108 $ 14 2018. $ 92 $ 13 2019. $ 78 $ 12 2020. $ 58 $ 11 2021. $ 50 $ 9
7. Reinsurance The Company enters into reinsurance agreements primarily as a purchaser of reinsurance for its various insurance products and also as a provider of reinsurance for some insurance products issued by affiliated and unaffiliated companies. The Company participates in reinsurance activities in order to limit losses, minimize exposure to significant risks and provide additional capacity for future growth. Accounting for reinsurance requires extensive use of assumptions and estimates, particularly related to the future performance of the underlying business and the potential impact of counterparty credit risks. The Company periodically reviews actual and anticipated experience compared to the aforementioned assumptions used to establish assets and liabilities relating to ceded and assumed reinsurance and evaluates the financial strength of counterparties to its reinsurance agreements using criteria similar to that evaluated in the security impairment process discussed in Note 8. 40 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Reinsurance (continued) Annuities and Life For annuities, the Company reinsures portions of the living and death benefit guarantees issued in connection with certain variable annuities to unaffiliated reinsurers. Under these reinsurance agreements, the Company pays a reinsurance premium generally based on fees associated with the guarantees collected from policyholders, and receives reimbursement for benefits paid or accrued in excess of account values, subject to certain limitations. The value of embedded derivatives on the ceded risk is determined using a methodology consistent with the guarantees directly written by the Company with the exception of the input for nonperformance risk that reflects the credit of the reinsurer. The Company reinsures 100% of certain variable annuity risks to an affiliate. The Company also assumes 100% of the living and death benefit guarantees issued in connection with certain variable annuities issued by certain affiliates. For its life products, the Company has historically reinsured the mortality risk primarily on an excess of retention basis or on a quota share basis. The Company currently reinsures 90% of the mortality risk in excess of $2 million for most products. In addition to reinsuring mortality risk as described above, the Company reinsures other risks, as well as specific coverages. Placement of reinsurance is done primarily on an automatic basis and also on a facultative basis for risks with specified characteristics. On a case by case basis, the Company may retain up to $20 million per life and reinsure 100% of amounts in excess of the amount the Company retains. The Company also reinsures portions of the risk associated with certain whole life policies to an affiliate and assumes certain term life policies and universal life policies with secondary death benefit guarantees issued by an affiliate. The Company evaluates its reinsurance programs routinely and may increase or decrease its retention at any time. Corporate & Other The Company reinsures, through 100% quota share reinsurance agreements certain run-off long-term care and workers' compensation business written by the Company. Catastrophe Coverage The Company has exposure to catastrophes which could contribute to significant fluctuations in the Company's results of operations. The Company uses excess of retention and quota share reinsurance agreements to provide greater diversification of risk and minimize exposure to larger risks. Reinsurance Recoverables The Company reinsures its business through a diversified group of well-capitalized reinsurers. The Company analyzes recent trends in arbitration and litigation outcomes in disputes, if any, with its reinsurers. The Company monitors ratings and evaluates the financial strength of its reinsurers by analyzing their financial statements. In addition, the reinsurance recoverable balance due from each reinsurer is evaluated as part of the overall monitoring process. Recoverability of reinsurance recoverable balances is evaluated based on these analyses. The Company generally secures large reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. These reinsurance recoverable balances are stated net of allowances for uncollectible reinsurance, which at both December 31, 2016 and 2015, were not significant. The Company has secured certain reinsurance recoverable balances with various forms of collateral, including secured trusts and funds withheld accounts. The Company had $2.6 billion and $2.4 billion of unsecured unaffiliated reinsurance recoverable balances at December 31, 2016 and 2015, respectively. At December 31, 2016, the Company had $9.1 billion of net unaffiliated ceded reinsurance recoverables. Of this total, $7.8 billion, or 86%, were with the Company's five largest unaffiliated ceded reinsurers, including $1.5 billion of net unaffiliated ceded reinsurance recoverables which were unsecured. At December 31, 2015, the Company had $8.5 billion of net unaffiliated ceded reinsurance recoverables. Of this total, $7.4 billion, or 87%, were with the Company's five largest unaffiliated ceded reinsurers, including $1.5 billion of net unaffiliated ceded reinsurance recoverables which were unsecured. 41 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Reinsurance (continued) The amounts on the consolidated statements of operations include the impact of reinsurance. Information regarding the significant effects of reinsurance was as follows:
Years Ended December 31, ------------------------- 2016 2015 2014 ------- ------- ------- (In millions) Premiums Direct premiums................................................................ $ 2,117 $ 2,281 $ 2,226 Reinsurance assumed............................................................ 79 297 94 Reinsurance ceded.............................................................. (1,275) (1,145) (1,168) ------- ------- ------- Net premiums................................................................. $ 921 $ 1,433 $ 1,152 ======= ======= ======= Universal life and investment-type product policy fees Direct universal life and investment-type product policy fees.................. $ 3,476 $ 3,607 $ 3,610 Reinsurance assumed............................................................ 129 142 398 Reinsurance ceded.............................................................. (909) (809) (815) ------- ------- ------- Net universal life and investment-type product policy fees................... $ 2,696 $ 2,940 $ 3,193 ======= ======= ======= Other revenues Direct other revenues.......................................................... $ 259 $ 258 $ 259 Reinsurance assumed............................................................ 87 -- 28 Reinsurance ceded.............................................................. 415 246 252 ------- ------- ------- Net other revenues........................................................... $ 761 $ 504 $ 539 ======= ======= ======= Policyholder benefits and claims Direct policyholder benefits and claims........................................ $ 5,909 $ 4,807 $ 4,797 Reinsurance assumed............................................................ 128 305 263 Reinsurance ceded.............................................................. (3,053) (2,416) (2,296) ------- ------- ------- Net policyholder benefits and claims......................................... $ 2,984 $ 2,696 $ 2,764 ======= ======= ======= Interest credited to policyholder account balances Direct interest credited to policyholder account balances...................... $ 1,027 $ 1,104 $ 1,125 Reinsurance assumed............................................................ 75 78 76 Reinsurance ceded.............................................................. (145) (145) (139) ------- ------- ------- Net interest credited to policyholder account balances....................... $ 957 $ 1,037 $ 1,062 ======= ======= ======= Amortization of deferred policy acquisition costs and value of business acquired Direct amortization of deferred policy acquisition costs and value of business acquired...................................................................... $ (114) $ 630 $ 958 Reinsurance assumed............................................................ 148 8 100 Reinsurance ceded.............................................................. (206) (43) (68) ------- ------- ------- Net amortization of deferred policy acquisition costs and value of business acquired.................................................................... $ (172) $ 595 $ 990 ======= ======= ======= Other expenses Direct other expenses.......................................................... $ 1,482 $ 1,512 $ 1,566 Reinsurance assumed............................................................ 35 47 6 Reinsurance ceded.............................................................. 221 163 192 ------- ------- ------- Net other expenses........................................................... $ 1,738 $ 1,722 $ 1,764 ======= ======= =======
42 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Reinsurance (continued) The amounts on the consolidated balance sheets include the impact of reinsurance. Information regarding the significant effects of reinsurance was as follows at:
December 31, ------------------------------------------------------------------------------- 2016 2015 --------------------------------------------- --------------------------------- Total Balance Direct Assumed Ceded Sheet Direct Assumed Ceded ----------- ---------- --------- ----------- ----------- ---------- --------- (In millions) Assets Premiums, reinsurance and other receivables................................... $ 1,143 $ 23 $ 18,935 $ 20,101 $ 630 $ 162 $ 21,459 Deferred policy acquisition costs and value of business acquired............................. 6,020 71 (817) 5,274 5,467 219 (877) ----------- ---------- --------- ----------- ----------- ---------- --------- Total assets................................. $ 7,163 $ 94 $ 18,118 $ 25,375 $ 6,097 $ 381 $ 20,582 =========== ========== ========= =========== =========== ========== ========= Liabilities Future policy benefits......................... $ 31,567 $ 234 $ (117) $ 31,684 $ 28,670 $ 1,294 $ (70) Policyholder account balances.................. 34,635 952 -- 35,587 34,764 897 -- Other policy-related balances.................. 1,027 1,677 680 3,384 990 1,804 755 Other liabilities.............................. 4,466 12 5,669 10,147 2,566 86 5,030 ----------- ---------- --------- ----------- ----------- ---------- --------- Total liabilities............................ $ 71,695 $ 2,875 $ 6,232 $ 80,802 $ 66,990 $ 4,081 $ 5,715 =========== ========== ========= =========== =========== ========== =========
------------ ------------ Total Balance Sheet ----------- Assets Premiums, reinsurance and other receivables................................... $ 22,251 Deferred policy acquisition costs and value of business acquired............................. 4,809 ----------- Total assets................................. $ 27,060 =========== Liabilities Future policy benefits......................... $ 29,894 Policyholder account balances.................. 35,661 Other policy-related balances.................. 3,549 Other liabilities.............................. 7,682 ----------- Total liabilities............................ $ 76,786 ===========
Effective December 1, 2016, the Company terminated two agreements with an unaffiliated reinsurer which covered 90% of the liabilities on certain participating whole life insurance policies issued between April 1, 2000 and December 31, 2001 by MLIC. This termination resulted in a decrease in other invested assets of $713 million, a decrease in deferred policy acquisition costs and value of business acquired of $95 million, a decrease in future policy benefits of $654 million, and a decrease in other liabilities of $43 million. The Company recognized a loss of approximately $72 million, net of income tax, as a result of this transaction. Reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded using the deposit method of accounting. The deposit assets on reinsurance were $2.0 billion and $6.0 billion at December 31, 2016 and 2015, respectively. The deposit liabilities on reinsurance was $1 million at both December 31, 2016 and 2015. Related Party Reinsurance Transactions The Company has reinsurance agreements with certain of MetLife, Inc.'s subsidiaries, including MLIC, MetLife Reinsurance Company of South Carolina, Brighthouse Life Insurance Company of NY ("Brighthouse NY"), General American Life Insurance Company ("GALIC"), MetLife Europe d.a.c., MetLife Reinsurance Company of Vermont ("MRV"), New England Life Insurance Company ("NELICO"), MetLife Reinsurance Company of Delaware ("MRD"), Delaware American Life Insurance Company ("DELAM") and American Life Insurance Company ("ALICO"), all of which are related parties. 43 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Reinsurance (continued) Information regarding the significant effects of affiliated reinsurance included on the consolidated statements of operations was as follows:
Years Ended December 31, --------------------- 2016 2015 2014 ------- ----- ----- (In millions) Premiums Reinsurance assumed........................................................... $ 34 $ 227 $ 55 Reinsurance ceded............................................................. (928) (783) (830) ------- ----- ----- Net premiums................................................................ $ (894) $(556) $(775) ======= ===== ===== Universal life and investment-type product policy fees Reinsurance assumed........................................................... $ 129 $ 142 $ 291 Reinsurance ceded............................................................. (359) (299) (361) ------- ----- ----- Net universal life and investment-type product policy fees.................. $ (230) $(157) $ (70) ======= ===== ===== Other revenues Reinsurance assumed........................................................... $ 56 $ -- $ 28 Reinsurance ceded............................................................. 414 246 252 ------- ----- ----- Net other revenues.......................................................... $ 470 $ 246 $ 280 ======= ===== ===== Policyholder benefits and claims Reinsurance assumed........................................................... $ 91 $ 255 $ 229 Reinsurance ceded............................................................. (1,304) (925) (942) ------- ----- ----- Net policyholder benefits and claims........................................ $(1,213) $(670) $(713) ======= ===== ===== Interest credited to policyholder account balances Reinsurance assumed........................................................... $ 75 $ 78 $ 76 Reinsurance ceded............................................................. (145) (145) (139) ------- ----- ----- Net interest credited to policyholder account balances...................... $ (70) $ (67) $ (63) ======= ===== ===== Amortization of deferred policy acquisition costs and value of business acquired Reinsurance assumed........................................................... $ 49 $ 24 $ 90 Reinsurance ceded............................................................. (189) (40) (63) ------- ----- ----- Net amortization of deferred policy acquisition costs and value of business. $ (140) $ (16) $ 27 ======= ===== ===== Other expenses Reinsurance assumed........................................................... $ 19 $ 41 $ 2 Reinsurance ceded............................................................. 242 186 219 ------- ----- ----- Net other expenses.......................................................... $ 261 $ 227 $ 221 ======= ===== =====
44 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Reinsurance (continued) Information regarding the significant effects of affiliated reinsurance included on the consolidated balance sheets was as follows at:
December 31, ------------------------------- 2016 2015 -------------- --------------- Assumed Ceded Assumed Ceded ------- ------ ------- ------- (In millions) Assets Premiums, reinsurance and other receivables...................... $ 23 $9,661 $ 129 $12,746 Deferred policy acquisition costs and value of business acquired. 71 (803) 120 (861) ------- ------ ------- ------- Total assets................................................... $ 94 $8,858 $ 249 $11,885 ======= ====== ======= ======= Liabilities Future policy benefits........................................... $ 213 $ (117) $ 630 $ (70) Policyholder account balances.................................... 952 -- 897 -- Other policy-related balances.................................... 1,677 680 1,785 755 Other liabilities................................................ 10 5,344 27 4,691 ------- ------ ------- ------- Total liabilities.............................................. $2,852 $5,907 $3,339 $ 5,376 ======= ====== ======= =======
The Company assumes risks from affiliates related to guaranteed minimum benefit guarantees written directly by the affiliates. These assumed reinsurance agreements contain embedded derivatives and changes in their estimated fair value are also included within net derivative gains (losses). The embedded derivatives associated with the cessions are included within policyholder account balances and were $952 million and $897 million at December 31, 2016 and 2015, respectively. Net derivative gains (losses) associated with the embedded derivatives were ($45) million, ($59) million and ($541) million for the years ended December 31, 2016, 2015 and 2014, respectively. The Company ceded two blocks of business to two affiliates on a 90% coinsurance with funds withheld basis. Certain contractual features of these agreements qualify as embedded derivatives, which are separately accounted for at estimated fair value on the Company's consolidated balance sheets. The embedded derivatives related to the funds withheld associated with these reinsurance agreements are included within other liabilities and increased the funds withheld balance by $285 million and $244 million at December 31, 2016 and 2015, respectively. Net derivative gains (losses) associated with these embedded derivatives were ($41) million, $137 million and ($348) million for the years ended December 31, 2016, 2015 and 2014, respectively. The Company ceded risks to an affiliate related to guaranteed minimum benefit guarantees written directly by the Company. This ceded reinsurance agreement contains embedded derivatives and changes in their estimated fair value are also included within net derivative gains (losses). The embedded derivatives associated with this cession is included within premiums, reinsurance and other receivables and were $3 million and $4 million at December 31, 2016 and 2015, respectively. Net derivative gains (losses) associated with the embedded derivatives were less than ($1) million, less than $1 million, and $4 million for the years ended December 31, 2016, 2015 and 2014, respectively. In April 2016, the Company recaptured risks related to certain single premium deferred annuity contracts previously reinsured to MLIC. As a result of this recapture, the significant effects to the Company were an increase in investments and cash and cash equivalents of $4.3 billion and an increase in DAC of $87 million, offset by a decrease in premiums, reinsurance and other receivables of $4.0 billion. The Company recognized a gain of $246 million, net of income tax, as a result of this recapture. In December 2015, the Company entered into a reinsurance agreement to cede one block of business to MRD on a 90% coinsurance with funds withheld basis. This agreement covers certain term life policies issued in 2015 by the Company. This agreement transfers risk to MRD and, therefore, is accounted for as reinsurance. As a result of the agreement, affiliated reinsurance recoverables, included in premiums, reinsurance and other receivables, were $83 million and $126 million at December 31, 2016 and 2015, respectively. The Company also recorded a funds withheld liability and other reinsurance payables, included in other liabilities, which were $34 million and $79 million at December 31, 2016 and 2015, respectively. The Company's consolidated statement of operations and comprehensive income (loss) includes a loss for this agreement of $27 million and no income for the years ended December 31, 2016 and 2015, respectively. 45 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Reinsurance (continued) In December 2014, the Company entered into a reinsurance agreement to cede two blocks of business to MRD on a 90% coinsurance with funds withheld basis. This agreement covers certain term and certain universal life policies issued in 2014 by the Company. This agreement transfers risk to MRD and, therefore, is accounted for as reinsurance. As a result of the agreement, affiliated reinsurance recoverables, included in premiums, reinsurance and other receivables, were $136 million and $81 million at December 31, 2016 and 2015, respectively. The Company also recorded a funds withheld liability and other reinsurance payables, included in other liabilities, which were $83 million and $23 million at December 31, 2016 and 2015, respectively. The Company's consolidated statement of operations and comprehensive income (loss) includes a gain for this agreement of $3 million, a loss of $17 million and a loss of less than $1 million for the years ended December 31, 2016, 2015 and 2014, respectively. The Company has secured certain reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. The Company had $2.4 billion and $6.3 billion of unsecured affiliated reinsurance recoverable balances at December 31, 2016 and 2015, respectively. Affiliated reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded using the deposit method of accounting. The deposit assets on affiliated reinsurance were $1.8 billion and $5.8 billion at December 31, 2016 and 2015, respectively. There were no deposit liabilities on affiliated reinsurance at both December 31, 2016 and 2015. 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 on 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, ABS and certain structured investment transactions) is dependent upon certain factors such as prepayments and defaults, and changes in such factors could result in changes in amounts to be earned. 46 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) 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. 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, commercial mortgage-backed securities ("CMBS") and ABS (collectively, "Structured Securities").
December 31, 2016 December 31, 2015 ------------------------------------------------ ---------------------------------------- Gross Unrealized Gross Unrealized Cost or ------------------------- Estimated Cost or ---------------------------- Amortized Temporary OTTI Fair Amortized Temporary OTTI Cost Gains Losses Losses Value Cost Gains Losses Losses ---------- ------- ---------- ------ ---------- ---------- --------- ---------- ------- (In millions) Fixed maturity securities: U.S. corporate.................. $17,583 $1,158 $235 $ -- $18,506 $16,160 $ 979 $393 $-- U.S. government and agency...... 10,517 1,221 188 -- 11,550 12,562 1,297 53 -- RMBS............................ 6,722 194 101 -- 6,815 8,391 201 95 19 Foreign corporate............... 5,512 201 158 -- 5,555 4,995 153 194 -- State and political subdivision. 2,633 305 24 -- 2,914 2,398 321 13 1 CMBS (1)........................ 2,837 26 26 (1) 2,838 2,303 20 23 (1) ABS............................. 2,562 11 12 -- 2,561 2,694 14 34 -- Foreign government.............. 946 111 11 -- 1,046 651 104 10 -- ---------- ------- ---------- ------ ---------- ---------- --------- ---------- ------- Total fixed maturity securities................... $49,312 $3,227 $755 $ (1) $51,785 $50,154 $ 3,089 $815 $19 ========== ======= ========== ====== ========== ========== ========= ========== ======= Equity securities: Non-redeemable preferred stock.. $ 180 $ 6 $ 9 $ -- $ 177 $ 217 $ 16 $ 9 $-- Common stock.................... 100 23 -- -- 123 167 23 5 -- ---------- ------- ---------- ------ ---------- ---------- --------- ---------- ------- Total equity securities....... $ 280 $ 29 $ 9 $ -- $ 300 $ 384 $ 39 $ 14 $-- ========== ======= ========== ====== ========== ========== ========= ========== =======
----------- Estimated Fair Value ---------- Fixed maturity securities: U.S. corporate.................. $16,746 U.S. government and agency...... 13,806 RMBS............................ 8,478 Foreign corporate............... 4,954 State and political subdivision. 2,705 CMBS (1)........................ 2,301 ABS............................. 2,674 Foreign government.............. 745 ---------- Total fixed maturity securities................... $52,409 ========== Equity securities: Non-redeemable preferred stock.. $ 224 Common stock.................... 185 ---------- Total equity securities....... $ 409 ==========
--------- (1) The noncredit loss component of OTTI losses for CMBS was in an unrealized gain position of $1 million at both December 31, 2016 and 2015, 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 $5 million and $11 million with unrealized gains (losses) of less than $1 million and $1 million at December 31, 2016 and 2015, respectively. Methodology for Amortization of Premium and Accretion of Discount on Structured Securities Amortization of premium and accretion of discount 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 Structured Securities are estimated using inputs obtained from third-party specialists and based on management's knowledge of the current market. For credit-sensitive Structured Securities and certain prepayment-sensitive securities, the effective yield is recalculated on a prospective basis. For all other Structured Securities, the effective yield is recalculated on a retrospective basis. 47 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) 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, 2016:
Due After Five Due After One Years Total Fixed Due in One Year Through Through Ten Due After Ten Structured Maturity Year or Less Five Years Years Years Securities Securities ------------- -------------- --------------- -------------- ----------- ------------ (In millions) Amortized cost...... $1,801 $8,096 $8,570 $18,724 $12,121 $49,312 Estimated fair value $1,805 $8,460 $8,684 $20,622 $12,214 $51,785
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. Structured Securities 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 at:
December 31, 2016 December 31, 2015 ----------------------------------------------- ---------------------------------------------------- Equal to or Greater than Equal to or Greater than 12 Less than 12 Months 12 Months Less than 12 Months Months ----------------------- ----------------------- ------------------------ --------------------------- Estimated Gross Estimated Gross Estimated Gross Estimated Gross Fair Unrealized Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Value Losses ----------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ (Dollars in millions) Fixed maturity securities: U.S. corporate...... $ 3,525 $ 145 $ 625 $ 90 $ 4,569 $ 278 $ 571 $ 115 U.S. government and agency............. 3,548 188 -- -- 4,037 53 -- -- RMBS................ 2,642 69 811 32 4,305 73 495 41 Foreign corporate... 1,231 60 532 98 1,650 96 605 98 State and political subdivision........ 548 21 29 3 373 12 19 2 CMBS................ 1,307 22 164 3 1,346 21 44 1 ABS................. 433 4 461 8 1,818 28 194 6 Foreign government.. 228 10 4 1 130 9 6 1 ----------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ Total fixed maturity securities....... $ 13,462 $ 519 $ 2,626 $ 235 $ 18,228 $ 570 $ 1,934 $ 264 =========== =========== =========== =========== ============ =========== =========== ============ Equity securities: Non-redeemable preferred stock.... $ 57 $ 2 $ 40 $ 7 $ 25 $ 1 $ 40 $ 8 Common stock........ -- -- -- -- 6 5 1 -- ----------- ----------- ----------- ----------- ------------ ----------- ----------- ------------ Total equity securities....... $ 57 $ 2 $ 40 $ 7 $ 31 $ 6 $ 41 $ 8 =========== =========== =========== =========== ============ =========== =========== ============ Total number of securities in an unrealized loss position........... 1,388 468 1,850 394 =========== =========== ============ ===========
48 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) 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 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 where the issuer, series of issuers or industry has suffered a catastrophic 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; (viii) the potential for impairments due to weakening of foreign currencies on non-functional currency denominated fixed maturity securities that are near maturity; and (ix) 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, state and political subdivision securities and foreign government 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 above, as well as any 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. 49 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) 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 concluded that these securities were not other-than-temporarily impaired at December 31, 2016. 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, collateral valuation, interest rates and credit spreads. If economic fundamentals deteriorate or if there are adverse changes in the above factors, OTTI may be incurred in upcoming periods. Gross unrealized losses on fixed maturity securities decreased $80 million during the year ended December 31, 2016 to $754 million. The decrease in gross unrealized losses for the year ended December 31, 2016, was primarily attributable to narrowing credit spreads, partially offset by an increase in interest rates and, to a lesser extent, the impact of weakening foreign currencies on non-functional currency denominated fixed maturity securities. At December 31, 2016, $57 million of the total $754 million of gross unrealized losses were from 15 fixed maturity securities with an unrealized loss position of 20% or more of amortized cost for six months or greater. The change in gross unrealized losses on equity securities was not significant during the year ended December 31, 2016. Investment Grade Fixed Maturity Securities Of the $57 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, $53 million, or 93%, were related to gross unrealized losses on six investment grade fixed maturity securities. Unrealized losses on investment grade fixed maturity securities are principally related to widening credit spreads since purchase and, with respect to fixed-rate fixed maturity securities, rising interest rates since purchase. Below Investment Grade Fixed Maturity Securities Of the $57 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, $4 million, or 7%, were related to gross unrealized losses on nine below investment grade fixed maturity securities. Unrealized losses on below investment grade fixed maturity securities are principally related to U.S. and foreign corporate securities (primarily industrial securities) 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 lower oil prices in the energy sector. Management evaluates 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 issuers. 50 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Mortgage Loans Mortgage Loans by Portfolio Segment Mortgage loans are summarized as follows at:
December 31, ----------------------------------------------------- 2016 2015 ------------------------- -------------------------- Carrying % of Carrying % of Value Total Value Total ------------- ---------- ------------- ----------- (Dollars in millions) Mortgage loans Commercial.................................... $ 6,211 69.9% $ 5,331 73.4% Agricultural.................................. 1,708 19.2 1,460 20.1 Residential................................... 867 9.8 335 4.6 ------------- ---------- ------------- ----------- Subtotal.................................... 8,786 98.9 7,126 98.1 Valuation allowances.......................... (38) (0.4) (36) (0.5) ------------- ---------- ------------- ----------- Subtotal mortgage loans, net................ 8,748 98.5 7,090 97.6 Commercial mortgage loans held by CSEs -- FVO. 136 1.5 172 2.4 ------------- ---------- ------------- ----------- Total mortgage loans, net................ $ 8,884 100.0% $ 7,262 100.0% ============= ========== ============= ===========
The Company purchases unaffiliated mortgage loans under a master participation agreement, from an affiliate, simultaneously with the affiliate's origination or acquisition of mortgage loans. The aggregate amount of unaffiliated mortgage loan participation interests purchased by the Company from an affiliate during the years ended December 31, 2016, 2015 and 2014 were $2.3 billion, $2.0 billion and $360 million, respectively. In connection with the mortgage loan participations, the affiliate collected mortgage loan principal and interest payments on the Company's behalf and the affiliate remitted such payments to the Company in the amount of $1.6 billion, $973 million and $1.0 billion during the years ended December 31, 2016, 2015 and 2014, respectively. Purchases of mortgage loans from third parties were $619 million and $346 million for the years ended December 31, 2016 and 2015, respectively, and were primarily comprised of residential mortgage loans. See "-- Variable Interest Entities" for discussion of CSEs. See "-- Related Party Investment Transactions" for discussion of related party mortgage loans. Information on commercial, agricultural and residential mortgage loans is presented in the tables below. Information on commercial mortgage loans held by CSEs - FVO is presented in Note 10. The Company elects the FVO for certain commercial mortgage loans and related long-term debt that are managed on a total return basis. 51 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Mortgage Loans, Valuation Allowance and Impaired Loans by Portfolio Segment Mortgage loans by portfolio segment, by method of evaluation of credit loss, impaired mortgage loans including those modified in a troubled debt restructuring, and the related valuation allowances, were as follows at and for the years ended:
Evaluated Collectively for Evaluated Individually for Credit Losses Credit Losses Impaired Loans --------------------------------------------------------- -------------------------- --------------------- Impaired Loans with a Valuation Impaired Loans without Allowance a Valuation Allowance ---------------------------------- ---------------------- Unpaid Unpaid Average Principal Recorded Valuation Principal Recorded Recorded Valuation Carrying Recorded Balance Investment Allowances Balance Investment Investment Allowances Value Investment ---------- ----------- ----------- ---------- ----------- ----------- ----------- --------- ----------- (In millions) December 31, 2016 Commercial........ $ -- $ -- $ -- $ -- $ -- $ 6,211 $ 30 $ -- $ -- Agricultural...... 4 3 -- -- -- 1,705 5 3 3 Residential....... -- -- -- 1 1 866 3 1 -- ---------- ----------- ----------- ---------- ----------- ----------- ----------- --------- ----------- Total............. $ 4 $ 3 $ -- $ 1 $ 1 $ 8,782 $ 38 $ 4 $ 3 ========== =========== =========== ========== =========== =========== =========== ========= =========== December 31, 2015 Commercial........ $ -- $ -- $ -- $ -- $ -- $ 5,331 $ 28 $ -- $ -- Agricultural...... 4 3 -- -- -- 1,457 5 3 3 Residential....... -- -- -- -- -- 335 3 -- -- ---------- ----------- ----------- ---------- ----------- ----------- ----------- --------- ----------- Total............. $ 4 $ 3 $ -- $ -- $ -- $ 7,123 $ 36 $ 3 $ 3 ========== =========== =========== ========== =========== =========== =========== ========= ===========
The average recorded investment for impaired commercial, agricultural and residential mortgage loans was $43 million, $3 million and $0, respectively, for the year ended December 31, 2014. 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, 2014... $ 31 $ 4 $-- $ 35 Provision (release).......... (10) -- -- (10) ------------ -------------- ------------- --------- Balance at December 31, 2014. 21 4 -- 25 Provision (release).......... 7 1 3 11 ------------ -------------- ------------- --------- Balance at December 31, 2015. 28 5 3 36 Provision (release).......... 2 -- -- 2 ------------ -------------- ------------- --------- Balance at December 31, 2016. $ 30 $ 5 $ 3 $ 38 ============ ============== ============= =========
52 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) 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 mortgage 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 mortgage 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 commercial and agricultural mortgage loans. All commercial mortgage 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. The monitoring process focuses on higher risk loans, which include those that are classified as restructured, delinquent or in foreclosure, as well as loans with higher loan-to-value ratios and lower debt service coverage ratios. All agricultural mortgage loans are monitored on an ongoing basis. The monitoring process for agricultural mortgage loans is generally similar to the commercial mortgage 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. 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 mortgage 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 mortgage 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 the values utilized in calculating the ratio are updated annually on a rolling basis, with a portion of the portfolio updated each quarter. In addition, the loan-to-value ratio is routinely updated for all but the lowest risk loans as part of the Company's ongoing review of its commercial mortgage loan portfolio. For agricultural mortgage 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 mortgage loan portfolio and are routinely updated. 53 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Residential Mortgage Loan Portfolio Segment The Company's residential mortgage loan portfolio is comprised primarily of closed end, amortizing residential mortgage loans. For evaluations of residential mortgage 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 historical experience. In contrast to the commercial and agricultural mortgage loan portfolios, residential mortgage 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 mortgage loans when they have been restructured and are established using the methodology described above for all loan portfolio segments. For residential mortgage loans, the Company's primary credit quality indicator is whether the loan is performing or nonperforming. The Company generally defines nonperforming residential mortgage loans as those that are 60 or more days past due and/or in nonaccrual status which is assessed monthly. Generally, nonperforming residential mortgage loans have a higher risk of experiencing a credit loss. Credit Quality of Commercial Mortgage Loans The credit quality of commercial mortgage loans was as follows at:
Recorded Investment ------------------------------------------------------- Debt Service Coverage Ratios Estimated ------------------------------------ % of Fair % of > 1.20x 1.00x - 1.20x < 1.00x Total Total Value Total ---------- --------------- --------- -------- --------- ----------- -------- (Dollars in millions) December 31, 2016 Loan-to-value ratios Less than 65%........ $5,459 $214 $166 $ 5,839 94.0% $5,922 94.2% 65% to 75%........... 281 -- 19 300 4.8 294 4.7 76% to 80%........... 34 -- -- 34 0.6 33 0.5 Greater than 80%..... 24 14 -- 38 0.6 37 0.6 ---------- --------------- --------- -------- --------- ----------- -------- Total.............. $5,798 $228 $185 $ 6,211 100.0% $6,286 100.0% ========== =============== ========= ======== ========= =========== ======== December 31, 2015 Loan-to-value ratios Less than 65%........ $4,659 $151 $100 $ 4,910 92.1% $5,124 92.6% 65% to 75%........... 330 -- 8 338 6.3 330 6.0 76% to 80%........... -- -- -- -- -- -- -- Greater than 80%..... 44 25 14 83 1.6 80 1.4 ---------- --------------- --------- -------- --------- ----------- -------- Total.............. $5,033 $176 $122 $ 5,331 100.0% $5,534 100.0% ========== =============== ========= ======== ========= =========== ========
54 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Credit Quality of Agricultural Mortgage Loans The credit quality of agricultural mortgage loans was as follows at:
December 31, -------------------------------------------- 2016 2015 ---------------------- -------------------- Recorded % of Recorded % of Investment Total Investment Total ------------ --------- ---------- --------- (Dollars in millions) Loan-to-value ratios Less than 65%........ $1,669 97.7% $1,366 93.6% 65% to 75%........... 39 2.3 94 6.4 ------------ --------- ---------- --------- Total.............. $1,708 100.0% $1,460 100.0% ============ ========= ========== =========
The estimated fair value of agricultural mortgage loans was $1.7 billion and $1.5 billion at December 31, 2016 and 2015, respectively. Credit Quality of Residential Mortgage Loans The credit quality of residential mortgage loans was as follows at:
December 31, ---------------------------------------------------------------- 2016 2015 ------------------------------- ------------------------------- Recorded Investment % of Total Recorded Investment % of Total -------------------- ---------- -------------------- ---------- (Dollars in millions) Performance indicators: Performing.............. $856 98.7% $331 98.8% Nonperforming........... 11 1.3 4 1.2 -------------------- ---------- -------------------- ---------- Total................... $867 100.0% $335 100.0% ==================== ========== ==================== ==========
The estimated fair value of residential mortgage loans was $867 million and $345 million at December 31, 2016 and 2015, respectively. Past Due and Nonaccrual Mortgage Loans The Company has a high quality, well performing, mortgage loan portfolio, with over 99% of all mortgage loans classified as performing as of both December 31, 2016 and 2015. The Company defines delinquency consistent with industry practice, when mortgage loans are past due as follows: commercial and residential mortgage loans -- 60 days and agricultural mortgage loans -- 90 days. The Company had no commercial or agricultural mortgage loans past due and no commercial or agricultural mortgage loans in nonaccrual status at either December 31, 2016, or 2015. The recorded investment of residential mortgage loans past due and in nonaccrual status was $11 million and $4 million at December 31, 2016 and 2015, respectively. Mortgage Loans Modified in a Troubled Debt Restructuring The Company may grant concessions related to borrowers experiencing financial difficulties, which are classified as troubled debt restructurings. 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 concessions granted are considered in determining any impairment or changes in the specific valuation allowance. During the year ended December 31, 2016, the Company did not have a significant amount of mortgage loans modified in a troubled debt restructuring. There were no mortgage loans modified in a troubled debt restructuring during the year ended December 31, 2015. 55 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Other Invested Assets Other invested assets is comprised primarily of freestanding derivatives with positive estimated fair values (see Note 9), operating joint venture, tax credit and renewable energy partnerships, leveraged leases and funds withheld. Tax Credit Partnerships The carrying value of tax credit partnerships was $41 million and $42 million at December 31, 2016 and 2015, respectively. Net investment income (loss) from tax credit partnerships were ($1) million for both of the years ended December 31, 2016 and 2015. Net investment income (loss) was $3 million for the year ended December 31, 2014. Leveraged Leases Investment in leveraged leases consisted of the following at:
December 31, -------------------- 2016 2015 --------- --------- (In millions) Rental receivables, net........................................ $ 87 $ 90 Estimated residual values...................................... 14 14 --------- --------- Subtotal..................................................... 101 104 Unearned income................................................ (32) (33) --------- --------- Investment in leveraged leases, net of non-recourse debt... $ 69 $ 71 ========= =========
Rental receivables are generally due in periodic installments. The payment periods for leveraged leases range from one to 16 years. For rental receivables, the primary credit quality indicator is whether the rental receivable is performing or nonperforming, which is assessed monthly. The Company generally defines nonperforming rental receivables as those that are 90 days or more past due. At December 31, 2016 and 2015, all rental receivables were performing. The deferred income tax liability related to leveraged leases was $74 million and $76 million at December 31, 2016 and 2015, respectively. 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 $1.6 billion and $1.1 billion at December 31, 2016 and 2015, respectively. Net Unrealized Investment Gains (Losses) Unrealized investment gains (losses) on fixed maturity and equity securities AFS and the effect on DAC, VOBA, DSI and future policy benefits, that would result from the realization of the unrealized gains (losses), are included in net unrealized investment gains (losses) in accumulated other comprehensive income (loss) ("AOCI"). 56 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The components of net unrealized investment gains (losses), included in AOCI, were as follows:
Years Ended December 31, -------------------------- 2016 2015 2014 ------- ------- -------- (In millions) Fixed maturity securities......................................................... $2,464 $2,265 $ 4,311 Fixed maturity securities with noncredit OTTI losses included in AOCI............. 1 (19) (34) ------- ------- -------- Total fixed maturity securities................................................. 2,465 2,246 4,277 Equity securities................................................................. 32 54 69 Derivatives....................................................................... 393 368 282 Short-term investments............................................................ (42) -- -- Other............................................................................. 58 78 9 ------- ------- -------- Subtotal........................................................................ 2,906 2,746 4,637 ------- ------- -------- Amounts allocated from: Future policy benefits............................................................ (550) (56) (503) DAC and VOBA related to noncredit OTTI losses recognized in AOCI.................. (1) (1) (2) DAC, VOBA and DSI................................................................. (188) (198) (403) ------- ------- -------- Subtotal........................................................................ (739) (255) (908) Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI.......................................................................... -- 7 12 Deferred income tax benefit (expense)............................................. (736) (844) (1,308) ------- ------- -------- Net unrealized investment gains (losses)...................................... $1,431 $1,654 $ 2,433 ======= ======= ========
The changes in fixed maturity securities with noncredit OTTI losses included in AOCI were as follows:
Years Ended December 31, ----------------------- 2016 2015 ----- ----- (In millions) Balance at January 1,................................... $(19) $(34) Noncredit OTTI losses and subsequent changes recognized. 3 9 Securities sold with previous noncredit OTTI loss....... 14 17 Subsequent changes in estimated fair value.............. 3 (11) ----- ----- Balance at December 31,................................. $ 1 $(19) ===== =====
57 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The changes in net unrealized investment gains (losses) were as follows:
Years Ended December 31, -------------------------- 2016 2015 2014 ------- -------- ------- (In millions) Balance at January 1,....................................................................... $1,654 $ 2,433 $ 941 Fixed maturity securities on which noncredit OTTI losses have been recognized............... 20 15 11 Unrealized investment gains (losses) during the year........................................ 140 (1,906) 2,807 Unrealized investment gains (losses) relating to: Future policy benefits.................................................................... (494) 447 (503) DAC and VOBA related to noncredit OTTI losses recognized in AOCI.......................... -- 1 (2) DAC, VOBA and DSI......................................................................... 10 205 (116) Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI. (7) (5) (3) Deferred income tax benefit (expense)..................................................... 108 464 (702) ------- -------- ------- Balance at December 31,..................................................................... $1,431 $ 1,654 $2,433 ======= ======== ======= Change in net unrealized investment gains (losses)...................................... $ (223) $ (779) $1,492 ======= ======== =======
Concentrations of Credit Risk There were no investments in any counterparty that were greater than 10% of the Company's stockholder's equity, other than the U.S. government and its agencies, at both December 31, 2016 and 2015. Securities Lending Elements of the securities lending program are presented below at:
December 31, --------------- 2016 2015 ------- ------- (In millions) Securities on loan: (1) Amortized cost....................................... $5,895 $8,047 Estimated fair value................................. $6,555 $8,830 Cash collateral on deposit from counterparties (2)..... $6,642 $8,981 Security collateral on deposit from counterparties (3). $ 27 $ 23 Reinvestment portfolio -- estimated fair value......... $6,571 $8,938
--------- (1)Included within fixed maturity 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 re-pledged, unless the counterparty is in default, and is not reflected on the consolidated financial statements. 58 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The cash collateral liability by loaned security type and remaining tenor of the agreements were as follows at:
December 31, 2016 December 31, 2015 ------------------------------------- ------------------------------------- Remaining Tenor of Securities Remaining Tenor of Securities Lending Agreements Lending Agreements ----------------------------- ----------------------------- 1 Month 1 to 6 1 Month 1 to 6 Open (1) or Less Months Total Open (1) or Less Months Total --------- -------- ------- ------- --------- -------- ------- ------- (In millions) Cash collateral liability by loaned security type: U.S. government and agency......................... $2,129 $1,906 $1,743 $5,778 $2,631 $3,140 $1,338 $7,109 U.S. corporate..................................... -- 480 -- 480 9 302 -- 311 Agency RMBS........................................ -- -- 274 274 -- 939 579 1,518 Foreign corporate.................................. -- 58 -- 58 -- -- -- -- Foreign government................................. -- 52 -- 52 1 42 -- 43 --------- -------- ------- ------- --------- -------- ------- ------- Total............................................ $2,129 $2,496 $2,017 $6,642 $2,641 $4,423 $1,917 $8,981 ========= ======== ======= ======= ========= ======== ======= =======
--------- (1) The related loaned security could be returned to the Company on the next business day which would require the Company to immediately return the cash collateral. If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell securities to meet the return obligation, it may have difficulty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than what otherwise would have been realized under normal market conditions, or both. The estimated fair value of the securities on loan related to the cash collateral on open at December 31, 2016 was $2.1 billion, all of which were U.S. government and agency securities which, if put back to the Company, could be immediately sold to satisfy the cash requirement. The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including agency RMBS, ABS, non-agency RMBS, U.S. corporate securities and U.S. government and agency) with 48% invested in agency RMBS, short-term investments, U.S. government and agency, cash equivalents or held in cash at December 31, 2016. If the securities on loan or the reinvestment portfolio become less liquid, the Company has the liquidity resources of most of its general account available to meet any potential cash demands when securities on loan are put back to the Company. 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 all asset classes at:
December 31, ----------------- 2016 2015 -------- -------- (In millions) Invested assets on deposit (regulatory deposits)............................. $ 7,642 $ 7,245 Invested assets held in trust (reinsurance agreements) (1)................... 721 952 Invested assets pledged as collateral (2).................................... 3,548 2,801 -------- -------- Total invested assets on deposit, held in trust, and pledged as collateral. $11,911 $10,998 ======== ========
--------- (1) The Company has held in trust certain investments, primarily fixed maturity securities, in connection with certain reinsurance transactions. (2) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 5) and derivative transactions (see Note 9). See "-- Securities Lending" for information regarding securities on loan. 59 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) 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. The Company's PCI fixed maturity securities were as follows at:
December 31, ------------------- 2016 2015 --------- --------- (In millions) Outstanding principal and interest balance (1). $1,423 $1,224 Carrying value (2)............................. $1,087 $ 911
--------- (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. The following table presents information about PCI fixed maturity securities acquired during the periods indicated:
Years Ended December 31, ------------------------ 2016 2015 --------- --------- (In millions) Contractually required payments (including interest). $525 $785 Cash flows expected to be collected (1).............. $457 $698 Fair value of investments acquired................... $322 $512
--------- (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 fixed maturity securities for:
Years Ended December 31, ------------------------ 2016 2015 ----------- ----------- (In millions) Accretable yield, January 1,........................ $ 400 $ 251 Investments purchased............................... 135 186 Accretion recognized in earnings.................... (66) (48) Disposals........................................... (11) (8) Reclassification (to) from nonaccretable difference. (50) 19 ----------- ----------- Accretable yield, December 31,...................... $ 408 $ 400 =========== ===========
60 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) 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 $1.9 billion at December 31, 2016. 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 $1.1 billion at December 31, 2016. 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) for the two of the most recent annual periods: 2015 and 2014. 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, 2016, 2015 and 2014. Aggregate total assets of these entities totaled $285.1 billion and $294.3 billion at December 31, 2016 and 2015, respectively. Aggregate total liabilities of these entities totaled $26.3 billion and $46.3 billion at December 31, 2016 and 2015, respectively. Aggregate net income (loss) of these entities totaled $21.3 billion, $13.7 billion and $25.1 billion for the years ended December 31, 2016, 2015 and 2014, 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 entities (including CSEs) 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. Consolidated VIEs 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. 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, 2016 and 2015.
December 31, ----------------------- 2016 2015 ----------- ----------- (In millions) CSEs: (1) Assets: Mortgage loans (commercial mortgage loans). $ 136 $ 172 Accrued investment income.................. 1 1 ----------- ----------- Total assets............................. $ 137 $ 173 =========== =========== Liabilities: Long-term debt............................. $ 23 $ 48 Other liabilities.......................... 1 1 ----------- ----------- Total liabilities........................ $ 24 $ 49 =========== ===========
-------- 61 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) (1) The Company consolidates entities that are structured as CMBS. The assets of these entities can only be used to settle their respective liabilities, and under no circumstances is the Company liable for any principal or interest shortfalls should any arise. The Company's exposure was limited to that of its remaining investment in these entities of $95 million and $105 million at estimated fair value at December 31, 2016 and 2015, respectively. 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, --------------------------------------------------- 2016 2015 ------------------------- ------------------------- Maximum Maximum Carrying Exposure Carrying Exposure Amount to Loss (1) Amount to Loss (1) ------------ ------------ ------------ ------------ (In millions) Fixed maturity securities AFS: Structured Securities (2)......... $ 10,789 $ 10,789 $ 13,453 $ 13,453 U.S. and foreign corporate........ 505 505 461 461 Other limited partnership interests. 1,491 2,287 1,367 1,647 Real estate joint ventures.......... 17 22 35 38 Other investments (3)............... 61 66 57 62 ------------ ------------ ------------ ------------ Total........................... $ 12,863 $ 13,669 $ 15,373 $ 15,661 ============ ============ ============ ============
-------- (1)The maximum exposure to loss relating to fixed maturity and equity securities AFS is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests and real estate joint ventures is equal to the carrying amounts plus any unfunded commitments. 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. There were no income tax credits and less than $1 million at December 31, 2016 and 2015, respectively. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee. (2)For these variable interests, the Company's involvement is limited to that of a passive investor in mortgage-backed or asset-backed securities issued by trusts that do not have substantial equity. (3)Other investments is comprised of other invested assets and non-redeemable preferred stock. As described in Note 16, 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, 2016, 2015 and 2014. 62 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Net Investment Income The components of net investment income were as follows:
Years Ended December 31, ----------------------------------------- 2016 2015 2014 ------------- ------------- ------------- (In millions) Investment income: Fixed maturity securities................................ $ 2,167 $ 2,010 $ 1,954 Equity securities........................................ 18 18 17 Mortgage loans........................................... 384 360 337 Policy loans............................................. 54 54 59 Real estate and real estate joint ventures............... 32 108 80 Other limited partnership interests...................... 163 134 266 Cash, cash equivalents and short-term investments........ 18 8 5 Operating joint venture.................................. 11 11 2 Other.................................................... 13 11 3 ------------- ------------- ------------- Subtotal............................................... 2,860 2,714 2,723 Less: Investment expenses................................ 160 115 103 ------------- ------------- ------------- Subtotal, net.......................................... 2,700 2,599 2,620 FVO CSEs -- interest income -- commercial mortgage loans. 12 16 49 ------------- ------------- ------------- Net investment income................................. $ 2,712 $ 2,615 $ 2,669 ============= ============= =============
See "-- Variable Interest Entities" for discussion of CSEs. See "-- Related Party Investment Transactions" for discussion of affiliated net investment income and investment expenses. 63 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Net Investment Gains (Losses) Components of Net Investment Gains (Losses) The components of net investment gains (losses) were as follows:
Years Ended December 31, ---------------------------------- 2016 2015 2014 ---------- ----------- --------- (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: Industrial............................................................. $ (13) $ (3) $ -- Consumer............................................................... -- (8) (2) Transportation......................................................... -- -- (2) ---------- ----------- --------- Total U.S. and foreign corporate securities.......................... (13) (11) (4) RMBS.................................................................... (6) (14) (8) ---------- ----------- --------- OTTI losses on fixed maturity securities recognized in earnings...... (19) (25) (12) Fixed maturity securities -- net gains (losses) on sales and disposals.... 2 (34) 26 ---------- ----------- --------- Total gains (losses) on fixed maturity securities....................... (17) (59) 14 ---------- ----------- --------- Total gains (losses) on equity securities: Total OTTI losses recognized -- by sector: Common stock............................................................ (1) (3) (7) Non-redeemable preferred stock.......................................... (1) -- (8) ---------- ----------- --------- OTTI losses on equity securities recognized in earnings.............. (2) (3) (15) Equity securities -- net gains (losses) on sales and disposals............ 10 18 14 ---------- ----------- --------- Total gains (losses) on equity securities............................... 8 15 (1) ---------- ----------- --------- Mortgage loans............................................................ 7 (11) 17 Real estate and real estate joint ventures................................ (34) 98 (4) Other limited partnership interests....................................... (7) (1) (9) Other..................................................................... 11 (2) 43 ---------- ----------- --------- Subtotal............................................................... (32) 40 60 ---------- ----------- --------- FVO CSEs: Commercial mortgage loans............................................... (2) (7) (13) Long-term debt -- related to commercial mortgage loans.................. 1 4 19 Non-investment portfolio gains (losses) (1)................................. 1 (1) (535) ---------- ----------- --------- Subtotal............................................................... -- (4) (529) ---------- ----------- --------- Total net investment gains (losses).................................. $ (32) $ 36 $ (469) ========== =========== =========
-------- (1)Non-investment portfolio gains (losses) for the year ended December 31, 2014 includes a loss of $608 million related to the disposition of MAL as more fully described in Note 4. See "-- Variable Interest Entities" for discussion of CSEs. See "-- Related Party Investment Transactions" for discussion of affiliated net investment gains (losses) related to transfers of invested assets to affiliates. Gains (losses) from foreign currency transactions included within net investment gains (losses) were $8 million, ($6) million and $66 million for the years ended December 31, 2016, 2015 and 2014, respectively. 64 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Sales or Disposals and Impairments of Fixed Maturity and Equity Securities Investment gains and losses on sales of securities are determined on a specific identification basis. Proceeds from sales or disposals of fixed maturity and equity securities and the components of fixed maturity and equity securities net investment gains (losses) were as shown in the table below.
Years Ended December 31, -------------------------------------------------------------------- 2016 2015 2014 2016 2015 2014 ------------ ---------- ------------ -------- -------- -------- Fixed Maturity Securities Equity Securities -------------------------------------- ---------------------------- (In millions) Proceeds........................ $ 33,339 $ 29,937 $ 14,649 $ 48 $ 80 $ 57 ============ ========== ============ ======== ======== ======== Gross investment gains.......... $ 211 $ 165 $ 84 $ 10 $ 25 $ 15 Gross investment losses......... (209) (199) (58) -- (7) (1) OTTI losses..................... (19) (25) (12) (2) (3) (15) ------------ ---------- ------------ -------- -------- -------- Net investment gains (losses). $ (17) $ (59) $ 14 $ 8 $ 15 $ (1) ============ ========== ============ ======== ======== ========
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, ---------------------- 2016 2015 ---------- ---------- (In millions) Balance at January 1,................................................................................ $ 52 $ 57 Additions: Initial impairments -- credit loss OTTI on securities not previously impaired...................... -- 1 Additional impairments -- credit loss OTTI on securities previously impaired....................... 5 11 Reductions: Sales (maturities, pay downs or prepayments) of securities previously impaired as credit loss OTTI. (28) (14) Increase in cash flows -- accretion of previous credit loss OTTI................................... (1) (3) ---------- ---------- Balance at December 31,.............................................................................. $ 28 $ 52 ========== ==========
Related Party Investment Transactions The Company transfers invested assets, primarily consisting of fixed maturity securities, to and from affiliates. Invested assets transferred to and from affiliates were as follows:
Years Ended December 31, ------------------------------------ 2016 2015 2014 ------------ ---------- ------------ (In millions) Estimated fair value of invested assets transferred to affiliates... $ 1,465 $ 185 $ 1,441 Amortized cost of invested assets transferred to affiliates......... $ 1,370 $ 169 $ 1,362 Net investment gains (losses) recognized on transfers............... $ 27 $ 16 $ 79 Change in additional paid-in-capital recognized on transfers........ $ 68 $ -- $ -- Estimated fair value of invested assets transferred from affiliates. $ 5,428 $ 928 $ 132
In April 2016, the Company received a transfer of investments and cash and cash equivalents totaling $4.3 billion for the recapture of risks related to certain single premium deferred annuity contracts previously reinsured to MLIC, an affiliate, which are included in the table above. See Note 7 for additional information related to these transfers. 65 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) In July 2014, prior to the Mergers, the Company sold affiliated loans to other affiliates, which were included in other invested assets and in the table above, at an estimated fair value totaling $520 million and a $45 million gain was recognized in net investment gains (losses). Net investment income from these affiliated loans was $13 million for the year ended December 31, 2014. The Company had affiliated loans outstanding to wholly-owned real estate subsidiaries of MLIC, which were included in mortgage loans, with a carrying value of $242 million at December 31, 2014. In August 2015 and November 2014, one affiliated loan with a carrying value of $132 million and two affiliated loans with a total carrying value of $120 million were repaid in cash prior to maturity. The remaining loan with a carrying value of $110 million was repaid in cash upon maturity in December 31, 2015. These affiliated loans were secured by interests in the real estate subsidiaries, which owned operating real estate with an estimated fair value in excess of the affiliated loans. Net investment income from these affiliated loans was $8 million and $34 million for the years ended December 31, 2015 and 2014, respectively. In addition, mortgage loan prepayment income earned from the three repayments prior to maturity described above was $31 million and $16 million for the years ended December 31, 2015 and 2014, respectively. The Company receives investment administrative services from an affiliate. The related investment administrative service charges were $85 million, $68 million, and $62 million for the years ended December 31, 2016, 2015 and 2014, respectively. See "-- Mortgage Loans -- Mortgage Loans by Portfolio Segment" for discussion of mortgage loan participation agreements with an affiliate. 9. Derivatives Accounting for Derivatives See Note 1 for a description of the Company's accounting policies for derivatives and Note 10 for information about the fair value hierarchy for derivatives. Derivative Strategies The Company is exposed to various risks relating to its ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. The Company uses a variety of strategies to manage these risks, including the use of derivatives. Derivatives are financial instruments with values derived from interest rates, foreign currency exchange rates, credit spreads and/or other financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter ("OTC") market. Certain of the Company's OTC derivatives are cleared and settled through central clearing counterparties ("OTC-cleared"), while others are bilateral contracts between two counterparties ("OTC-bilateral"). The types of derivatives the Company uses include swaps, forwards, futures and option contracts. To a lesser extent, the Company uses credit default swaps to synthetically replicate investment risks and returns which are not readily available in the cash markets. Interest Rate Derivatives The Company uses a variety of interest rate derivatives to reduce its exposure to changes in interest rates, including interest rate swaps, caps, floors, swaptions, futures and forwards. Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). In an interest rate swap, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts as calculated by reference to an agreed notional amount. The Company utilizes interest rate swaps in fair value, cash flow and nonqualifying hedging relationships. Interest rate total return swaps are swaps whereby the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of an asset or a market index and the London Interbank Offered Rate ("LIBOR"), calculated by reference to an agreed notional amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of the contract based on the terms of the swap. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by the counterparty at each due date. Interest rate total return swaps are used by the Company to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). The Company utilizes interest rate total return swaps in nonqualifying hedging relationships. 66 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The Company purchases interest rate caps and floors primarily to protect its floating rate liabilities against rises in interest rates above a specified level, and against interest rate exposure arising from mismatches between assets and liabilities, as well as to protect its minimum rate guarantee liabilities against declines in interest rates below a specified level, respectively. In certain instances, the Company locks in the economic impact of existing purchased caps and floors by entering into offsetting written caps and floors. The Company utilizes interest rate caps and floors in nonqualifying hedging relationships. In exchange-traded interest rate (Treasury and swap) futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of interest rate securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded interest rate (Treasury and swap) futures are used primarily to hedge mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, to hedge against changes in value of securities the Company owns or anticipates acquiring, to hedge against changes in interest rates on anticipated liability issuances by replicating Treasury or swap curve performance, and to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. The Company utilizes exchange-traded interest rate futures in nonqualifying hedging relationships. Swaptions are used by the Company to hedge interest rate risk associated with the Company's long-term liabilities and invested assets. A swaption is an option to enter into a swap with a forward starting effective date. In certain instances, the Company locks in the economic impact of existing purchased swaptions by entering into offsetting written swaptions. The Company pays a premium for purchased swaptions and receives a premium for written swaptions. The Company utilizes swaptions in nonqualifying hedging relationships. Swaptions are included in interest rate options. The Company enters into interest rate forwards to buy and sell securities. The price is agreed upon at the time of the contract and payment for such a contract is made at a specified future date. The Company utilizes interest rate forwards in cash flow hedging relationships. Foreign Currency Exchange Rate Derivatives The Company uses foreign currency swaps to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies. In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another at a fixed exchange rate, generally set at inception, calculated by reference to an agreed upon notional amount. The notional amount of each currency is exchanged at the inception and termination of the currency swap by each party. The Company utilizes foreign currency swaps in cash flow and nonqualifying hedging relationships. To a lesser extent, the Company uses foreign currency forwards in nonqualifying hedging relationships. Credit Derivatives The Company enters into purchased credit default swaps to hedge against credit-related changes in the value of its investments. In a credit default swap transaction, the Company agrees with another party to pay, at specified intervals, a premium to hedge credit risk. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the delivery of par quantities of the referenced investment equal to the specified swap notional amount in exchange for the payment of cash amounts by the counterparty equal to the par value of the investment surrendered. Credit events vary by type of issuer but typically include bankruptcy, failure to pay debt obligations, repudiation, moratorium, involuntary restructuring or governmental intervention. In each case, payout on a credit default swap is triggered only after the Credit Derivatives Determinations Committee of the International Swaps and Derivatives Association, Inc. ("ISDA") deems that a credit event has occurred. The Company utilizes credit default swaps in nonqualifying hedging relationships. The Company enters into written credit default swaps to synthetically create credit investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and one or more cash instruments, such as U.S. government and agency securities or other fixed maturity securities. These credit default swaps are not designated as hedging instruments. Equity Derivatives The Company uses a variety of equity derivatives to reduce its exposure to equity market risk, including equity index options, equity variance swaps, exchange-traded equity futures and equity total return swaps. 67 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Equity index options are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. To hedge against adverse changes in equity indices, the Company enters into contracts to sell the equity index within a limited time at a contracted price. The contracts will be net settled in cash based on differentials in the indices at the time of exercise and the strike price. Certain of these contracts may also contain settlement provisions linked to interest rates. In certain instances, the Company may enter into a combination of transactions to hedge adverse changes in equity indices within a pre-determined range through the purchase and sale of options. The Company utilizes equity index options in nonqualifying hedging relationships. Equity variance swaps are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. In an equity variance swap, the Company agrees with another party to exchange amounts in the future, based on changes in equity volatility over a defined period. The Company utilizes equity variance swaps in nonqualifying hedging relationships. In exchange-traded equity futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of equity securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded equity futures are used primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. The Company utilizes exchange-traded equity futures in nonqualifying hedging relationships. In an equity total return swap are swaps whereby the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of an asset or a market index and the LIBOR, calculated by reference to an agreed notional amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of the contract based on the terms of the swap. The Company uses equity total return swaps to hedge its equity market guarantees in certain of its insurance products. Equity total return swaps can be used as hedges or to synthetically create investments. The Company utilizes equity total return swaps in nonqualifying hedging relationships. 68 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Primary Risks Managed by Derivatives The following table presents the gross notional amount, estimated fair value and primary underlying risk exposure of the Company's derivatives, excluding embedded derivatives, held at:
December 31, ------------------------------------------------------------------- 2016 2015 --------------------------------- --------------------------------- Estimated Fair Value Estimated Fair Value --------------------- --------------------- Gross Gross Notional Notional Primary Underlying Risk Exposure Amount Assets Liabilities Amount Assets Liabilities ---------------------------------- ----------- --------- ----------- ----------- --------- ----------- (In millions) Derivatives Designated as Hedging Instruments Fair value hedges: Interest rate swaps..... Interest rate................... $ 310 $ 41 $ -- $ 420 $ 38 $ 1 ----------- --------- --------- ----------- --------- --------- Cash flow hedges: Interest rate swaps..... Interest rate................... 45 7 -- 230 60 -- Interest rate forwards.. Interest rate................... -- -- -- 35 8 -- Foreign currency swaps.. Foreign currency exchange rate 1,386 181 10 937 126 3 ----------- --------- --------- ----------- --------- --------- Subtotal.............................................. 1,431 188 10 1,202 194 3 ----------- --------- --------- ----------- --------- --------- Total qualifying hedges............................. 1,741 229 10 1,622 232 4 ----------- --------- --------- ----------- --------- --------- Derivatives Not Designated or Not Qualifying as Hedging Instruments Interest rate swaps...... Interest rate................... 28,175 1,928 1,688 23,086 1,802 638 Interest rate floors..... Interest rate................... 2,100 5 2 7,036 33 24 Interest rate caps....... Interest rate................... 12,042 25 -- 13,792 38 -- Interest rate futures.... Interest rate................... 1,288 9 -- 630 2 -- Interest rate options.... Interest rate................... 15,520 136 -- 18,620 472 5 Interest rate total return swaps............ Interest rate................... 3,876 -- 611 48 2 -- Foreign currency swaps... Foreign currency exchange rate................... 1,236 149 4 659 75 -- Foreign currency forwards Foreign currency exchange rate................... 158 9 -- 185 4 1 Credit default swaps -- purchased............... Credit.......................... 34 -- -- 21 -- -- Credit default swaps -- written................. Credit.......................... 1,891 28 -- 2,093 13 1 Equity futures........... Equity market................... 8,037 38 -- 3,669 37 -- Equity index options..... Equity market................... 37,501 897 934 44,035 1,032 626 Equity variance swaps.... Equity market................... 14,894 140 517 14,866 120 434 Equity total return swaps Equity market................... 2,855 1 117 2,814 31 49 ----------- --------- --------- ----------- --------- --------- Total non-designated or nonqualifying derivatives........................................ 129,607 3,365 3,873 131,554 3,661 1,778 ----------- --------- --------- ----------- --------- --------- Total......................................... $ 131,348 $ 3,594 $ 3,883 $ 133,176 $ 3,893 $ 1,782 =========== ========= ========= =========== ========= =========
Based on gross notional amounts, a substantial portion of the Company's derivatives was not designated or did not qualify as part of a hedging relationship at both December 31, 2016 and 2015. The Company's use of derivatives includes (i) derivatives that serve as macro hedges of the Company's exposure to various risks and that generally do not qualify for hedge accounting due to the criteria required under the portfolio hedging rules; (ii) derivatives that economically hedge insurance liabilities that contain mortality or morbidity risk and that generally do not qualify for hedge accounting because the lack of these risks in the derivatives cannot support an expectation of a highly effective hedging relationship; (iii) derivatives that economically hedge embedded derivatives that do not qualify for hedge accounting because the changes in estimated fair value of the embedded derivatives are already recorded in net income; and (iv) written credit default swaps that are used to synthetically create credit investments and that do not qualify for hedge accounting because they do not involve a hedging relationship. For these nonqualified derivatives, changes in market factors can lead to the recognition of fair value changes on the statement of operations without an offsetting gain or loss recognized in earnings for the item being hedged. 69 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Net Derivative Gains (Losses) The components of net derivative gains (losses) were as follows:
Years Ended December 31, -------------------------- 2016 2015 2014 -------- ------ -------- (In millions) Freestanding derivatives and hedging gains (losses) (1). $(4,030) $(154) $ 868 Embedded derivatives gains (losses)..................... (1,848) (270) (1,049) -------- ------ -------- Total net derivative gains (losses).................... $(5,878) $(424) $ (181) ======== ====== ========
--------- (1) Includes foreign currency transaction gains (losses) on hedged items in cash flow and nonqualifying hedging relationships, which are not presented elsewhere in this note. The following table presents earned income on derivatives:
Years Ended December 31, ------------------------------------ 2016 2015 2014 ----------- ----------- ----------- (In millions) Qualifying hedges: Net investment income.............................. $ 18 $ 11 $ 4 Interest credited to policyholder account balances. -- (2) (1) Nonqualifying hedges: Net derivative gains (losses)...................... 460 360 273 Policyholder benefits and claims................... 16 14 32 ----------- ----------- ----------- Total............................................ $ 494 $ 383 $ 308 =========== =========== ===========
70 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Nonqualifying Derivatives and Derivatives for Purposes Other Than Hedging The following table presents the amount and location of gains (losses) recognized in income for derivatives that were not designated or qualifying as hedging instruments:
Net Net Policyholder Derivative Investment Benefits and Gains (Losses) Income (1) Claims (2) -------------- ------------- ------------- (In millions) Year Ended December 31, 2016 Interest rate derivatives.................. $ (2,873) $ -- $ (4) Foreign currency exchange rate derivatives. 74 -- -- Credit derivatives -- purchased............ -- -- -- Credit derivatives -- written.............. 10 -- -- Equity derivatives......................... (1,724) (6) (320) -------------- ------------- ------------- Total.................................... $ (4,513) $ (6) $ (324) ============== ============= ============= Year Ended December 31, 2015 Interest rate derivatives.................. $ (67) $ -- $ 5 Foreign currency exchange rate derivatives. 42 -- -- Credit derivatives -- purchased............ -- -- -- Credit derivatives -- written.............. (14) -- -- Equity derivatives......................... (476) (4) (25) -------------- ------------- ------------- Total.................................... $ (515) $ (4) $ (20) ============== ============= ============= Year Ended December 31, 2014 Interest rate derivatives.................. $ 1,174 $ -- $ 43 Foreign currency exchange rate derivatives. 4 -- -- Credit derivatives -- purchased............ (22) -- -- Credit derivatives -- written.............. 18 -- -- Equity derivatives......................... (591) (8) (279) -------------- ------------- ------------- Total.................................... $ 583 $ (8) $ (236) ============== ============= =============
--------- (1) Changes in estimated fair value related to economic hedges of equity method investments in joint ventures. (2) Changes in estimated fair value related to economic hedges of variable annuity guarantees included in future policy benefits. Fair Value Hedges The Company designates and accounts for interest rate swaps to convert fixed rate assets and liabilities to floating rate assets and liabilities as fair value hedges when they have met the requirements of fair value hedging. 71 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The Company recognizes gains and losses on derivatives and the related hedged items in fair value hedges within net derivative gains (losses). The following table presents the amount of such net derivative gains (losses):
Net Derivative Net Derivative Ineffectiveness Gains (Losses) Gains (Losses) Recognized in Derivatives in Fair Value Hedged Items in Fair Value Recognized Recognized for Net Derivative Hedging Relationships Hedging Relationships for Derivatives Hedged Items Gains (Losses) ----------------------------- --------------------------------- --------------- -------------- --------------- (In millions) Year Ended December 31, 2016 Interest rate swaps:......... Fixed maturity securities........ $ 1 $ (1) $ -- Policyholder liabilities (1)..... -- -- -- Foreign currency swaps:...... Foreign-denominated policyholder account balances (2)............. -- -- -- --------------- -------------- --------------- Total...................................................... $ 1 $ (1) $ -- =============== ============== =============== Year Ended December 31, 2015 Interest rate swaps:......... Fixed maturity securities........ $ 1 $ 1 $ 2 Policyholder liabilities (1)..... 2 (2) -- Foreign currency swaps:...... Foreign-denominated policyholder account balances (2)............. -- -- -- --------------- -------------- --------------- Total...................................................... $ 3 $ (1) $ 2 =============== ============== =============== Year Ended December 31, 2014 Interest rate swaps:......... Fixed maturity securities........ $ 1 $ (1) $ -- Policyholder liabilities (1)..... 32 (31) 1 Foreign currency swaps:...... Foreign-denominated policyholder account balances (2)............. -- -- -- --------------- -------------- --------------- Total...................................................... $ 33 $ (32) $ 1 =============== ============== ===============
--------- (1) Fixed rate liabilities reported in policyholder account balances or future policy benefits. (2) Fixed rate or floating rate liabilities. All components of each derivative's gain or loss were included in the assessment of hedge effectiveness. Cash Flow Hedges The Company designates and accounts for the following as cash flow hedges when they have met the requirements of cash flow hedging: (i) interest rate swaps to convert floating rate assets and liabilities to fixed rate assets and liabilities; (ii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated assets and liabilities; (iii) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments; and (iv) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed-rate investments. In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions were no longer probable of occurring. Because certain of the forecasted transactions also were not probable of occurring within two months of the anticipated date, the Company reclassified amounts from AOCI into net derivative gains (losses). These amounts were $1 million and $3 million for the years ended December 31, 2016 and 2015, respectively. These amounts were not significant for the year ended December 31, 2014. At December 31, 2016 and 2015, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions did not exceed three years and four years, respectively. At December 31, 2016 and 2015, the balance in AOCI associated with cash flow hedges was $393 million and $368 million, respectively. 72 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The following table presents the effects of derivatives in cash flow hedging relationships on the consolidated statements of operations and comprehensive income (loss) and the consolidated statements of stockholder's equity:
Amount and Location Amount and Location Amount of Gains of Gains (Losses) of Gains (Losses) Derivatives in Cash Flow (Losses) Deferred in Reclassified from Recognized in Income Hedging Relationships AOCI on Derivatives AOCI into Income (Loss) (Loss) on Derivatives ----------------------------- -------------------- -------------------------------- --------------------- (Effective Portion) (Effective Portion) (Ineffective Portion) -------------------- -------------------------------- --------------------- Net Derivative Net Investment Net Derivative Gains (Losses) Income Gains (Losses) --------------- --------------- --------------------- (In millions) Year Ended December 31, 2016 Interest rate swaps.......... $ 24 $ 33 $ 3 $ -- Interest rate forwards....... 4 2 2 -- Foreign currency swaps....... 40 3 -- -- Credit forwards.............. -- -- -- -- -------------------- --------------- --------------- --------------------- Total...................... $ 68 $ 38 $ 5 $ -- ==================== =============== =============== ===================== Year Ended December 31, 2015 Interest rate swaps.......... $ 15 $ 1 $ 1 $ 1 Interest rate forwards....... 1 2 2 -- Foreign currency swaps....... 76 -- -- -- Credit forwards.............. -- -- -- -- -------------------- --------------- --------------- --------------------- Total...................... $ 92 $ 3 $ 3 $ 1 ==================== =============== =============== ===================== Year Ended December 31, 2014 Interest rate swaps.......... $ -- $ 131 $ 1 $ 1 Interest rate forwards....... 55 1 1 -- Foreign currency swaps....... 56 (6) -- -- Credit forwards.............. -- -- -- -- -------------------- --------------- --------------- --------------------- Total...................... $ 242 $ (4) $ 2 $ -- ==================== =============== =============== =====================
All components of each derivative's gain or loss were included in the assessment of hedge effectiveness. At December 31, 2016, the Company expects to reclassify $39 million of deferred net gains (losses) on derivatives in AOCI to earnings within the next 12 months. Credit Derivatives In connection with synthetically created credit investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk. Such credit derivatives are included within the nonqualifying derivatives and derivatives for purposes other than hedging table. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the Company paying the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The Company's maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $1.9 billion and $2.1 billion at December 31, 2016 and 2015, respectively. The Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current estimated fair value of the credit default swaps. At December 31, 2016 and 2015, the Company would have received $28 million and $12 million, respectively, to terminate all of these contracts. 73 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at:
December 31, --------------------------------------------------------------------------------- 2016 2015 ---------------------------------------- ---------------------------------------- Maximum Maximum Estimated Amount Estimated Amount Fair Value of Future Weighted Fair Value of Future Weighted of Credit Payments under Average of Credit Payments under Average Rating Agency Designation of Default Credit Default Years to Default Credit Default Years to Referenced Credit Obligations (1) Swaps Swaps Maturity (2) Swaps Swaps Maturity (2) ------------------------------------- ---------- --------------- ------------- ---------- --------------- ------------- (Dollars in millions) Aaa/Aa/A............................. Single name credit default swaps (3). $ 1 $ 45 2.2 $ 1 $ 207 1.5 Credit default swaps referencing indices............................. 8 433 3.7 1 219 4.0 ---------- --------------- ---------- --------------- Subtotal........................... 9 478 3.6 2 426 2.8 ---------- --------------- ---------- --------------- Baa.................................. Single name credit default swaps (3). 1 180 1.6 2 409 1.6 Credit default swaps referencing indices............................. 18 1,213 4.8 8 1,222 4.8 ---------- --------------- ---------- --------------- Subtotal........................... 19 1,393 4.4 10 1,631 4.0 ---------- --------------- ---------- --------------- Ba................................... Single name credit default swaps (3). -- 20 2.7 -- -- -- Credit default swaps referencing indices............................. -- -- -- -- -- -- ---------- --------------- ---------- --------------- Subtotal........................... -- 20 2.7 -- -- -- ---------- --------------- ---------- --------------- B.................................... Single name credit default swaps (3). -- -- -- -- -- -- Credit default swaps referencing indices............................. -- -- -- -- 36 5.0 ---------- --------------- ---------- --------------- Subtotal........................... -- -- -- -- 36 5.0 ---------- --------------- ---------- --------------- Total............................ $ 28 $ 1,891 4.2 $ 12 $ 2,093 3.8 ========== =============== ========== ===============
--------- (1) The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody's Investors Service ("Moody's"), S&P and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used. (2) The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts. (3) Single name credit default swaps may be referenced to the credit of corporations, foreign governments, or state and political subdivisions. Credit Risk on Freestanding Derivatives The Company may be exposed to credit-related losses in the event of nonperformance by its counterparties to derivatives. Generally, the current credit exposure of the Company's derivatives is limited to the net positive estimated fair value of derivatives at the reporting date after taking into consideration the existence of master netting or similar agreements and any collateral received pursuant to such agreements. 74 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The Company manages its credit risk related to derivatives by entering into transactions with creditworthy counterparties and establishing and monitoring exposure limits. The Company's OTC-bilateral derivative transactions are generally governed by ISDA Master Agreements which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties in the event of early termination of a transaction, which includes, but is not limited to, events of default and bankruptcy. In the event of an early termination, the Company is permitted to set off receivables from the counterparty against payables to the same counterparty arising out of all included transactions. Substantially all of the Company's ISDA Master Agreements also include Credit Support Annex provisions which require both the pledging and accepting of collateral in connection with its OTC-bilateral derivatives. The Company's OTC-cleared derivatives are effected through central clearing counterparties and its exchange-traded derivatives are effected through regulated exchanges. Such positions are marked to market and margined on a daily basis (both initial margin and variation margin), and the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties to such derivatives. See Note 10 for a description of the impact of credit risk on the valuation of derivatives. The estimated fair values of the Company's net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:
December 31, -------------------------------------------- 2016 2015 --------------------- --------------------- Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement Assets Liabilities Assets Liabilities --------------------------------------------------------------------- --------- ----------- --------- ----------- (In millions) Gross estimated fair value of derivatives: OTC-bilateral (1).................................................... $ 3,384 $ 2,929 $ 3,870 $ 1,725 OTC-cleared (1)...................................................... 267 905 78 78 Exchange-traded...................................................... 47 -- 39 -- --------- ----------- --------- ----------- Total gross estimated fair value of derivatives (1)................ 3,698 3,834 3,987 1,803 Amounts offset on the consolidated balance sheets..................... -- -- -- -- --------- ----------- --------- ----------- Estimated fair value of derivatives presented on the consolidated balance sheets (1)................................................... 3,698 3,834 3,987 1,803 Gross amounts not offset on the consolidated balance sheets: Gross estimated fair value of derivatives: (2) OTC-bilateral........................................................ (2,231) (2,231) (1,577) (1,577) OTC-cleared.......................................................... (165) (165) (70) (70) Exchange-traded...................................................... -- -- -- -- Cash collateral: (3), (4) OTC-bilateral........................................................ (625) -- (1,605) -- OTC-cleared.......................................................... (92) (740) (8) (8) Exchange-traded...................................................... -- -- -- -- Securities collateral: (5) OTC-bilateral........................................................ (429) (698) (552) (148) OTC-cleared.......................................................... -- -- -- -- Exchange-traded...................................................... -- -- -- -- --------- ----------- --------- ----------- Net amount after application of master netting agreements and collateral........................................................... $ 156 $ -- $ 175 $ -- ========= =========== ========= ===========
--------- (1) At December 31, 2016 and 2015, derivative assets included income or (expense) accruals reported in accrued investment income or in other liabilities of $104 million and $94 million, respectively, and derivative liabilities included (income) or expense accruals reported in accrued investment income or in other liabilities of ($49) million and $21 million, respectively. 75 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) (2) Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals. (3) Cash collateral received by the Company for OTC-bilateral and OTC-cleared derivatives is included in cash and cash equivalents, short-term investments or in fixed maturity securities, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet. (4) The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-traded and OTC-cleared derivatives and is included in premiums, reinsurance and other receivables on the balance sheet. The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements. At December 31, 2016 and 2015, the Company received excess cash collateral of $3 million and $1 million, respectively, and provided excess cash collateral of $25 million and $62 million, respectively, which is not included in the table above due to the foregoing limitation. (5) Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at December 31, 2016 none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge this collateral. The amount of securities collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At December 31, 2016 and 2015, the Company received excess securities collateral with an estimated fair value of $135 million and $0, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At December 31, 2016 and 2015, the Company provided excess securities collateral with an estimated fair value of $108 million and $36 million, respectively, for its OTC-bilateral derivatives, $630 million and $34 million, respectively, for its OTC-cleared derivatives, and $453 million and $156 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation. The Company's collateral arrangements for its OTC-bilateral derivatives generally require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the collateral amount owed by that counterparty reaches a minimum transfer amount. A small number of these arrangements also include credit-contingent provisions that include a threshold above which collateral must be posted. Such agreements provide for a reduction of these thresholds (on a sliding scale that converges toward zero) in the event of downgrades in the credit ratings of Brighthouse Life Insurance Company, and/or the counterparty. In addition, substantially all of the Company's netting agreements for derivatives contain provisions that require both the Company and the counterparty to maintain a specific investment grade credit rating from each of Moody's and S&P. If a party's credit or financial strength ratings, as applicable, were to fall below that specific investment grade credit rating, that party would be in violation of these provisions, and the other party to the derivatives could terminate the transactions and demand immediate settlement and payment based on such party's reasonable valuation of the derivatives. 76 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The following table presents the estimated fair value of the Company's OTC-bilateral derivatives that are in a net liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged. The Company's collateral agreements require both parties to be fully collateralized, as such, Brighthouse Life Insurance Company would not be required to post additional collateral as a result of a downgrade in financial strength rating. OTC-bilateral derivatives that are not subject to collateral agreements are excluded from this table.
December 31, ----------------------------- 2016 2015 -------------- -------------- (In millions) Estimated fair value of derivatives in a net liability position (1)....................... $ 698 $ 148 Estimated Fair Value of Collateral Provided Fixed maturity securities................................................................ $ 777 $ 179 Cash..................................................................................... $ -- $ -- Fair Value of Incremental Collateral Provided Upon One-notch downgrade in financial strength rating......................................... $ -- $ -- Downgrade in financial strength rating to a level that triggers full overnight collateralization or termination of the derivative position............................ $ -- $ --
--------- (1) After taking into consideration the existence of netting agreements. Embedded Derivatives The Company issues certain products or purchases certain investments that contain embedded derivatives that are required to be separated from their host contracts and accounted for as freestanding derivatives. These host contracts principally include: variable annuities with guaranteed minimum benefits, including GMWBs, GMABs and certain GMIBs; affiliated ceded reinsurance of guaranteed minimum benefits related to GMWBs, GMABs and certain GMIBs; affiliated assumed reinsurance of guaranteed minimum benefits related to GMWBs and certain GMIBs; funds withheld on assumed and ceded reinsurance; fixed annuities with equity indexed returns; and certain debt and equity securities. The following table presents the estimated fair value and balance sheet location of the Company's embedded derivatives that have been separated from their host contracts at:
December 31, ------------------------ Balance Sheet Location 2016 2015 -------------------------------------------- ----------- ----------- (In millions) Embedded derivatives within asset host contracts: Ceded guaranteed minimum benefits................... Premiums, reinsurance and other receivables. $ 241 $ 242 Funds withheld on assumed reinsurance............... Other invested assets....................... -- 35 Options embedded in debt or equity securities....... Investments................................. (49) (63) ----------- ----------- Embedded derivatives within asset host contracts........................................... $ 192 $ 214 =========== =========== Embedded derivatives within liability host contracts: Direct guaranteed minimum benefits.................. Policyholder account balances............... $ 2,261 $ 177 Assumed guaranteed minimum benefits................. Policyholder account balances............... 952 897 Funds withheld on ceded reinsurance................. Other liabilities........................... 285 244 Fixed annuities with equity indexed returns......... Policyholder account balances............... 192 6 ----------- ----------- Embedded derivatives within liability host contracts....................................... $ 3,690 $ 1,324 =========== ===========
77 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The following table presents changes in estimated fair value related to embedded derivatives:
Years Ended December 31, ---------------------------------------- 2016 2015 2014 ------------ ------------ ------------ (In millions) Net derivative gains (losses) (1), (2). $ (1,848) $ (270) $ (1,049) Policyholder benefits and claims....... $ (4) $ 21 $ 87
--------- (1) The valuation of direct and assumed guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net derivative gains (losses) in connection with this adjustment were $253 million, $25 million and $73 million for the years ended December 31, 2016, 2015 and 2014, respectively. (2) See Note 7 for discussion of affiliated net derivative gains (losses). Related Party Freestanding Derivative Transactions In November 2014, as part of the settlement of related party reinsurance transactions, the Company transferred derivatives to affiliates. The estimated fair value of freestanding derivative assets and liabilities transferred was $1.8 billion and $1.2 billion, respectively. 10. Fair Value When developing estimated fair values, the Company considers three broad valuation techniques: (i) the market approach, (ii) the income approach, and (iii) the cost approach. The Company determines the most appropriate valuation technique to use, given what is being measured and the availability of sufficient inputs, giving priority to observable inputs. The Company categorizes its assets and liabilities measured at estimated fair value into a three-level hierarchy, based on the significant input with the lowest level in its valuation. The input levels are as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. The Company defines active markets based on average trading volume for equity securities. The size of the bid/ask spread is used as an indicator of market activity for fixed maturity securities. Level 2 Quoted prices in markets that are not active or inputs that are observable either directly or indirectly. These inputs can include quoted prices for similar assets or liabilities other than quoted prices in Level 1, quoted prices in markets that are not active, or other significant inputs that are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and are significant to the determination of estimated fair value of the assets or liabilities. Unobservable inputs reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the asset or liability. Financial markets are susceptible to severe events evidenced by rapid depreciation in asset values accompanied by a reduction in asset liquidity. The Company's ability to sell securities, or the price ultimately realized for these securities, depends upon the demand and liquidity in the market and increases the use of judgment in determining the estimated fair value of certain securities. Considerable judgment is often required in interpreting market data to develop estimates of fair value, and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts. 78 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Recurring Fair Value Measurements The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy, including those items for which the Company has elected the FVO, are presented below at:
December 31, 2016 -------------------------------------------------------- Fair Value Hierarchy ---------------------------------------- Total Estimated Level 1 Level 2 Level 3 Fair Value ------------ ------------- ------------- --------------- (In millions) Assets Fixed maturity securities: U.S. corporate......................................... $ -- $ 17,107 $ 1,399 $ 18,506 U.S. government and agency............................. 5,279 6,271 -- 11,550 RMBS................................................... -- 5,524 1,291 6,815 Foreign corporate...................................... -- 4,727 828 5,555 State and political subdivision........................ -- 2,897 17 2,914 CMBS................................................... -- 2,676 162 2,838 ABS.................................................... -- 2,350 211 2,561 Foreign government..................................... -- 1,046 -- 1,046 ------------ ------------- ------------- --------------- Total fixed maturity securities....................... 5,279 42,598 3,908 51,785 ------------ ------------- ------------- --------------- Equity securities........................................ 39 124 137 300 Short-term investments................................... 459 465 2 926 Commercial mortgage loans held by CSEs -- FVO............ -- 136 -- 136 Derivative assets: (1) Interest rate.......................................... 9 2,142 -- 2,151 Foreign currency exchange rate......................... -- 339 -- 339 Credit................................................. -- 20 8 28 Equity market.......................................... 38 859 179 1,076 ------------ ------------- ------------- --------------- Total derivative assets............................... 47 3,360 187 3,594 ------------ ------------- ------------- --------------- Embedded derivatives within asset host contracts (2)..... -- -- 241 241 Separate account assets (3).............................. 720 99,858 10 100,588 ------------ ------------- ------------- --------------- Total assets....................................... $ 6,544 $ 146,541 $ 4,485 $ 157,570 ============ ============= ============= =============== Liabilities Derivative liabilities: (1) Interest rate.......................................... $ -- $ 1,690 $ 611 $ 2,301 Foreign currency exchange rate......................... -- 14 -- 14 Equity market.......................................... -- 1,038 530 1,568 ------------ ------------- ------------- --------------- Total derivative liabilities.......................... -- 2,742 1,141 3,883 ------------ ------------- ------------- --------------- Embedded derivatives within liability host contracts (2). -- -- 3,690 3,690 Long-term debt of CSEs -- FVO............................ -- 23 -- 23 ------------ ------------- ------------- --------------- Total liabilities.................................. $ -- $ 2,765 $ 4,831 $ 7,596 ============ ============= ============= ===============
79 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued)
December 31, 2015 -------------------------------------------------------- Fair Value Hierarchy ---------------------------------------- Total Estimated Level 1 Level 2 Level 3 Fair Value ------------ ------------- ------------- --------------- (In millions) Assets Fixed maturity securities: U.S. corporate......................................... $ -- $ 15,295 $ 1,451 $ 16,746 U.S. government and agency............................. 7,998 5,808 -- 13,806 RMBS................................................... -- 7,138 1,340 8,478 Foreign corporate...................................... -- 4,263 691 4,954 State and political subdivision........................ -- 2,692 13 2,705 CMBS................................................... -- 2,120 181 2,301 ABS.................................................... -- 2,357 317 2,674 Foreign government..................................... -- 719 26 745 ------------ ------------- ------------- --------------- Total fixed maturity securities....................... 7,998 40,392 4,019 52,409 ------------ ------------- ------------- --------------- Equity securities........................................ 44 268 97 409 Short-term investments (4)............................... 59 1,623 47 1,729 Commercial mortgage loans held by CSEs -- FVO............ -- 172 -- 172 Derivative assets: (1) Interest rate.......................................... 2 2,445 8 2,455 Foreign currency exchange rate......................... -- 205 -- 205 Credit................................................. -- 12 1 13 Equity market.......................................... 37 968 215 1,220 ------------ ------------- ------------- --------------- Total derivative assets............................... 39 3,630 224 3,893 ------------ ------------- ------------- --------------- Embedded derivatives within asset host contracts (2)..... -- -- 277 277 Separate account assets (3).............................. 624 100,965 146 101,735 ------------ ------------- ------------- --------------- Total assets....................................... $ 8,764 $ 147,050 $ 4,810 $ 160,624 ============ ============= ============= =============== Liabilities Derivative liabilities: (1) Interest rate.......................................... $ -- $ 668 $ -- $ 668 Foreign currency exchange rate......................... -- 4 -- 4 Credit................................................. -- 1 -- 1 Equity market.......................................... -- 653 456 1,109 ------------ ------------- ------------- --------------- Total derivative liabilities.......................... -- 1,326 456 1,782 ------------ ------------- ------------- --------------- Embedded derivatives within liability host contracts (2). -- -- 1,324 1,324 Long-term debt of CSEs -- FVO............................ -- 48 -- 48 ------------ ------------- ------------- --------------- Total liabilities................................. $ -- $ 1,374 $ 1,780 $ 3,154 ============ ============= ============= ===============
--------- (1) Derivative assets are presented within other invested assets on the consolidated balance sheets and derivative liabilities are presented within other liabilities on the consolidated balance sheets. The amounts are presented gross in the tables above to reflect the presentation on the consolidated balance sheets, but are presented net for purposes of the roll-forward in the Fair Value Measurements Using Significant Unobservable Inputs (Level 3) tables. (2) Embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables and other invested assets on the consolidated balance sheets. Embedded derivatives within liability host contracts are presented within policyholder account balances and other liabilities on the consolidated balance sheets. At December 31, 2016 and 2015, debt and equity securities also included embedded derivatives of ($49) million and ($63) million, respectively. 80 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (3) Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities. Separate account liabilities are set equal to the estimated fair value of separate account assets. (4) Short-term investments as presented in the tables above differ from the amounts presented on the consolidated balance sheets because certain short-term investments are not measured at estimated fair value on a recurring basis. The following describes the valuation methodologies used to measure assets and liabilities at fair value. The description includes the valuation techniques and key inputs for each category of assets or liabilities that are classified within Level 2 and Level 3 of the fair value hierarchy. Investments Valuation Controls and Procedures On behalf of the Company and MetLife, Inc.'s Chief Investment Officer and Chief Financial Officer, a pricing and valuation committee that is independent of the trading and investing functions and comprised of senior management, provides oversight of control systems and valuation policies for securities, mortgage loans and derivatives. On a quarterly basis, this committee reviews and approves new transaction types and markets, ensures that observable market prices and market-based parameters are used for valuation, wherever possible, and determines that judgmental valuation adjustments, when applied, are based upon established policies and are applied consistently over time. This committee also provides oversight of the selection of independent third-party pricing providers and the controls and procedures to evaluate third party pricing. Periodically, the Chief Accounting Officer reports to the Audit Committee of Brighthouse Life Insurance Company's Board of Directors regarding compliance with fair value accounting standards. The Company reviews its valuation methodologies on an ongoing basis and revises those methodologies when necessary based on changing market conditions. Assurance is gained on the overall reasonableness and consistent application of input assumptions, valuation methodologies and compliance with fair value accounting standards through controls designed to ensure valuations represent an exit price. Several controls are utilized, including certain monthly controls, which include, but are not limited to, analysis of portfolio returns to corresponding benchmark returns, comparing a sample of executed prices of securities sold to the fair value estimates, comparing fair value estimates to management's knowledge of the current market, reviewing the bid/ask spreads to assess activity, comparing prices from multiple independent pricing services and ongoing due diligence to confirm that independent pricing services use market-based parameters. The process includes a determination of the observability of inputs used in estimated fair values received from independent pricing services or brokers by assessing whether these inputs can be corroborated by observable market data. The Company ensures that prices received from independent brokers, also referred to herein as "consensus pricing," represent a reasonable estimate of fair value by considering such pricing relative to the Company's knowledge of the current market dynamics and current pricing for similar financial instruments. While independent non-binding broker quotations are utilized, they are not used for a significant portion of the portfolio. For example, fixed maturity securities priced using independent non-binding broker quotations represent less than 1% of the total estimated fair value of fixed maturity securities and 5% of the total estimated fair value of Level 3 fixed maturity securities at December 31, 2016. The Company also applies a formal process to challenge any prices received from independent pricing services that are not considered representative of estimated fair value. If prices received from independent pricing services are not considered reflective of market activity or representative of estimated fair value, independent non-binding broker quotations are obtained, or an internally developed valuation is prepared. Internally developed valuations of current estimated fair value, which reflect internal estimates of liquidity and nonperformance risks, compared with pricing received from the independent pricing services, did not produce material differences in the estimated fair values for the majority of the portfolio; accordingly, overrides were not material. This is, in part, because internal estimates of liquidity and nonperformance risks are generally based on available market evidence and estimates used by other market participants. In the absence of such market-based evidence, management's best estimate is used. Securities, Short-term Investments and Long-term Debt of CSEs -- FVO When available, the estimated fair value of these financial instruments is based on quoted prices in active markets that are readily and regularly obtainable. Generally, these are the most liquid of the Company's securities holdings and valuation of these securities does not involve management's judgment. 81 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation methodologies, giving priority to observable inputs. The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price transparency are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. When observable inputs are not available, the market standard valuation methodologies rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs can be based in large part on management's judgment or estimation and cannot be supported by reference to market activity. Even though these inputs are unobservable, management believes they are consistent with what other market participants would use when pricing such securities and are considered appropriate given the circumstances. The estimated fair value of long-term debt of CSEs -- FVO is determined on a basis consistent with the methodologies described herein for securities. The valuation of most instruments listed below is determined using independent pricing sources, matrix pricing, discounted cash flow methodologies or other similar techniques that use either observable market inputs or unobservable inputs.
Instrument Level 2 Level 3 Observable Inputs Unobservable Inputs --------------------------------------------------------------------------------------------- Fixed Maturity Securities --------------------------------------------------------------------------------------------- U.S. corporate and Foreign corporate securities --------------------------------------------------------------------------------------------- Valuation Techniques: Principally the Valuation Techniques: Principally the market and income approaches. market approach. Key Inputs: Key Inputs: . quoted prices in markets that are not . illiquidity premium active . delta spread adjustments to reflect . benchmark yields; spreads off specific credit-related issues benchmark yields; new issuances; . credit spreads issuer rating . quoted prices in markets that are not . trades of identical or comparable active for identical or similar securities; duration securities that are less liquid . Privately-placed securities are and based on lower levels of trading valued using the additional key activity than securities inputs: classified in Level 2 . market yield curve; call provisions . independent non-binding broker . observable prices and spreads for quotations similar public or private securities that incorporate the credit quality and industry sector of the issuer . delta spread adjustments to reflect specific credit-related issues --------------------------------------------------------------------------------------------- U.S. government and agency, State and political subdivision and Foreign government securities --------------------------------------------------------------------------------------------- Valuation Techniques: Principally the market approach. Valuation Techniques: Principally the Key Inputs: market approach. . quoted prices in markets that are not Key Inputs: active . independent non-binding broker . benchmark U.S. Treasury yield or quotations other yields . quoted prices in markets that are not . the spread off the U.S. Treasury active for identical or similar yield curve for the identical security securities that are less liquid . issuer ratings and issuer spreads; and based on lower levels of trading broker-dealer quotes activity than securities . comparable securities that are classified in Level 2 actively traded . credit spreads --------------------------------------------------------------------------------------------- Structured Securities --------------------------------------------------------------------------------------------- Valuation Techniques: Principally the Valuation Techniques: Principally the market and income approaches. market and income approaches. Key Inputs: Key Inputs: . quoted prices in markets that are not . credit spreads active . quoted prices in markets that are not . spreads for actively traded active for identical or similar securities; spreads off benchmark securities that are less liquid yields and based on lower levels of trading . expected prepayment speeds and volumes activity than securities . current and forecasted loss severity; classified in Level 2 ratings; geographic region . independent non-binding broker . weighted average coupon and weighted quotations average maturity . average delinquency rates; debt-service coverage ratios . issuance-specific information, including, but not limited to: . collateral type; structure of the security; vintage of the loans . payment terms of the underlying assets . payment priority within the tranche; deal performance ---------------------------------------------------------------------------------------------
82 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued)
Instrument Level 2 Level 3 Observable Inputs Unobservable Inputs ---------------------------------------------------------------------------------------------- Equity Securities ---------------------------------------------------------------------------------------------- Valuation Techniques: Principally the Valuation Techniques: Principally the market approach. market and income approaches. Key Input: Key Inputs: . quoted prices in markets that are not . credit ratings; issuance structures considered active . quoted prices in markets that are not active for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2 . independent non-binding broker quotations ---------------------------------------------------------------------------------------------- Short-term investments ---------------------------------------------------------------------------------------------- . Short-term investments are of a . Short-term investments are of a similar nature and class to the fixed similar nature and class to the fixed maturity and equity securities maturity and equity securities described above; accordingly, the described above; accordingly, the valuation techniques and observable valuation techniques and inputs used in their valuation are unobservable inputs used in their also similar to those described valuation are also similar to those above. described above. ---------------------------------------------------------------------------------------------- Commercial mortgage loans held by CSEs -- FVO ---------------------------------------------------------------------------------------------- Valuation Techniques: Principally the . N/A market approach. Key Input: . quoted securitization market price of the obligations of the CSEs determined principally by independent pricing services using observable inputs ---------------------------------------------------------------------------------------------- Separate Account Assets (1) ---------------------------------------------------------------------------------------------- Mutual funds without readily determinable fair values as prices are not published publicly ---------------------------------------------------------------------------------------------- Key Input: . N/A . quoted prices or reported net asset value ("NAV") provided by the fund managers ---------------------------------------------------------------------------------------------- Other limited partnership interests ---------------------------------------------------------------------------------------------- . N/A Valuation Techniques: Valued giving consideration to the underlying holdings of the partnerships and by applying a premium or discount, if appropriate. Key Inputs: . liquidity; bid/ask spreads; performance record of the fund manager . other relevant variables that may impact the exit value of the particular partnership interest ----------------------------------------------------------------------------------------------
--------- (1) Estimated fair value equals carrying value, based on the value of the underlying assets, including: mutual fund interests, fixed maturity securities, equity securities, derivatives, other limited partnership interests, short-term investments and cash and cash equivalents. Fixed maturity securities, equity securities, derivatives, short-term investments and cash and cash equivalents are similar in nature to the instruments described under "-- Securities, Short-term Investments and Long-term Debt of CSEs -- FVO" and "-- Derivatives -- Freestanding Derivatives." Derivatives The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives, or through the use of pricing models for OTC-bilateral and OTC-cleared derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that management believes are consistent with what other market participants would use when pricing such instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk, nonperformance risk, volatility, liquidity and changes in estimates and assumptions used in the pricing models. The valuation controls and procedures for derivatives are described in "-- Investments -- Valuation Controls and Procedures." The significant inputs to the pricing models for most OTC-bilateral and OTC-cleared derivatives are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. Certain OTC-bilateral and OTC-cleared derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs may involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and management believes they are consistent with what other market participants would use when pricing such instruments. 83 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Most inputs for OTC-bilateral and OTC-cleared derivatives are mid-market inputs but, in certain cases, liquidity adjustments are made when they are deemed more representative of exit value. Market liquidity, as well as the use of different methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company's derivatives and could materially affect net income. The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all OTC-bilateral and OTC-cleared derivatives, and any potential credit adjustment is based on the net exposure by counterparty after taking into account the effects of netting agreements and collateral arrangements. The Company values its OTC-bilateral and OTC-cleared derivatives using standard swap curves which may include a spread to the risk-free rate, depending upon specific collateral arrangements. This credit spread is appropriate for those parties that execute trades at pricing levels consistent with similar collateral arrangements. As the Company and its significant derivative counterparties generally execute trades at such pricing levels and hold sufficient collateral, additional credit risk adjustments are not currently required in the valuation process. The Company's ability to consistently execute at such pricing levels is in part due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. An evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period. Freestanding Derivatives Level 2 Valuation Techniques and Key Inputs: This level includes all types of derivatives utilized by the Company with the exception of exchange-traded derivatives included within Level 1 and those derivatives with unobservable inputs as described in Level 3. Level 3 Valuation Techniques and Key Inputs: These valuation methodologies generally use the same inputs as described in the corresponding sections for Level 2 measurements of derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Freestanding derivatives are principally valued using the income approach. Valuations of non-option-based derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models. Key inputs are as follows: Instrument Interest Rate Foreign Credit Equity Market Currency Exchange Rate ------------------------------------------------------------------------------- Inputs common . swap yield . swap yield . swap yield . swap yield to Level 2 curves curves curves curves and Level 3 . basis curves . basis curves . credit curves . spot equity by instrument . interest . currency . recovery index levels type rate spot rates rates . dividend volatility . cross yield curves (1) currency . equity basis volatility curves (1) ------------------------------------------------------------------------------- Level 3 . swap yield . N/A . swap yield . dividend curves (2) curves (2) yield curves . basis curves . credit (2) (2) curves (2) . equity . repurchase . credit volatility rates spreads (1), (2) . repurchase . correlation rates between . independent model non-binding inputs (1) broker quotations ------------------------------------------------------------------------------- --------- (1) Option-based only. (2) Extrapolation beyond the observable limits of the curve(s). 84 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Embedded Derivatives Embedded derivatives principally include certain direct, assumed and ceded variable annuity guarantees, equity or bond indexed crediting rates within certain annuity contracts, and those related to funds withheld on ceded reinsurance agreements. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value reported in net income. The Company issues certain variable annuity products with guaranteed minimum benefits. GMWBs, GMABs and certain GMIBs contain embedded derivatives, which are measured at estimated fair value separately from the host variable annuity contract, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives are classified within policyholder account balances on the consolidated balance sheets. The Company's actuarial department calculates the fair value of these embedded derivatives, which are estimated as the present value of projected future benefits minus the present value of projected future fees using actuarial and capital market assumptions including expectations concerning policyholder behavior. The calculation is based on in-force business, and is performed using standard actuarial valuation software which projects future cash flows from the embedded derivative over multiple risk neutral stochastic scenarios using observable risk-free rates. Capital market assumptions, such as risk-free rates and implied volatilities, are based on market prices for publicly traded instruments to the extent that prices for such instruments are observable. Implied volatilities beyond the observable period are extrapolated based on observable implied volatilities and historical volatilities. Actuarial assumptions, including mortality, lapse, withdrawal and utilization, are unobservable and are reviewed at least annually based on actuarial studies of historical experience. The valuation of these guarantee liabilities includes nonperformance risk adjustments and adjustments for a risk margin related to non-capital market inputs. The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.'s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries as compared to MetLife, Inc. Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees. These guarantees may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; changes in nonperformance risk; and variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs, may result in significant fluctuations in the estimated fair value of the guarantees that could materially affect net income. The Company assumed from an affiliated insurance company the risk associated with certain GMIBs. These embedded derivatives are included in policyholder account balances on the consolidated balance sheets with changes in estimated fair value reported in net derivative gains (losses). The value of the embedded derivatives on these assumed risks is determined using a methodology consistent with that described previously for the guarantees directly written by the Company. The Company ceded to an affiliate the risk associated with certain of the GMIBs, GMABs and GMWBs described above that are also accounted for as embedded derivatives. In addition to ceding risks associated with guarantees that are accounted for as embedded derivatives, the Company also cedes, to an affiliated company, certain directly written GMIBs that are accounted for as insurance (i.e., not as embedded derivatives), but where the reinsurance agreement contains an embedded derivative. These embedded derivatives are included within premiums, reinsurance and other receivables on the consolidated balance sheets with changes in estimated fair value reported in net derivative gains (losses). The value of the embedded derivatives on the ceded risk is determined using a methodology consistent with that described previously for the guarantees directly written by the Company with the exception of the input for nonperformance risk that reflects the credit of the reinsurer. 85 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) The estimated fair value of the embedded derivatives within funds withheld related to certain ceded reinsurance is determined based on the change in estimated fair value of the underlying assets held by the Company in a reference portfolio backing the funds withheld liability. The estimated fair value of the underlying assets is determined as previously described in "-- Investments -- Securities, Short-term Investments and Long-term Debt of CSEs -- FVO." The estimated fair value of these embedded derivatives is included, along with their funds withheld hosts, in other liabilities on the consolidated balance sheets with changes in estimated fair value recorded in net derivative gains (losses). Changes in the credit spreads on the underlying assets, interest rates and market volatility may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially affect net income. The Company issues certain annuity contracts which allow the policyholder to participate in returns from equity indices. These equity indexed features are embedded derivatives which are measured at estimated fair value separately from the host fixed annuity contract, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives are classified within policyholder account balances on the consolidated balance sheets. The estimated fair value of the embedded equity indexed derivatives, based on the present value of future equity returns to the policyholder using actuarial and present value assumptions including expectations concerning policyholder behavior, is calculated by the Company's actuarial department. The calculation is based on in-force business and uses standard capital market techniques, such as Black-Scholes, to calculate the value of the portion of the embedded derivative for which the terms are set. The portion of the embedded derivative covering the period beyond where terms are set is calculated as the present value of amounts expected to be spent to provide equity indexed returns in those periods. The valuation of these embedded derivatives also includes the establishment of a risk margin, as well as changes in nonperformance risk. Embedded Derivatives Within Asset and Liability Host Contracts Level 3 Valuation Techniques and Key Inputs: Direct and assumed guaranteed minimum benefits These embedded derivatives are principally valued using the income approach. Valuations are based on option pricing techniques, which utilize significant inputs that may include swap yield curves, currency exchange rates and implied volatilities. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include: the extrapolation beyond observable limits of the swap yield curves and implied volatilities, actuarial assumptions for policyholder behavior and mortality and the potential variability in policyholder behavior and mortality, nonperformance risk and cost of capital for purposes of calculating the risk margin. Reinsurance ceded on certain guaranteed minimum benefits These embedded derivatives are principally valued using the income approach. The valuation techniques and significant market standard unobservable inputs used in their valuation are similar to those described above in "-- Direct and assumed guaranteed minimum benefits" and also include counterparty credit spreads. Transfers between Levels Overall, transfers between levels occur when there are changes in the observability of inputs and market activity. Transfers into or out of any level are assumed to occur at the beginning of the period. Transfers between Levels 1 and 2: For assets and liabilities measured at estimated fair value and still held at December 31, 2016 and 2015, transfers between Levels 1 and 2 were not significant. 86 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Transfers into or out of Level 3: Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable. Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) The following table presents certain quantitative information about the significant unobservable inputs used in the fair value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at:
December 31, 2016 December 31, 2015 --------------------------- --------------------------- Significant Weighted Weighted Valuation Techniques Unobservable Inputs Range Average (1) Range Average (1) --------------------- ---------------------- ------------- ------------ ------------- ------------ Fixed maturity securities (3) U.S. corporate . and foreign Matrix pricing . Delta spread corporate..... adjustments (4) (65) - 240 49 . Offered quotes (5) 18 - 138 104 96 - 96 96 . Market . pricing Quoted prices (5) 13 - 700 99 13 - 780 314 . Consensus . pricing Offered quotes (5) 68 - 109 86 68 - 95 80 ----------------------------------------------------------------------------------------------------------- RMBS........... . . Quoted Market pricing prices (5) 38 - 111 91 29 - 292 93 ----------------------------------------------------------------------------------------------------------- ABS............ . . Market pricing Quoted prices (5) 94 - 106 100 97 - 103 100 . Consensus . Offered pricing quotes (5) 98 - 100 99 66 - 105 99 ----------------------------------------------------------------------------------------------------------- Derivatives Interest rate.. . Present . Swap yield value (7) techniques -- - -- 317 - 317 . Repurchase rates (9) (44) - 18 ----------------------------------------------------------------------------------------------------------- Credit......... . Present value . techniques Credit spreads (10) 97 - 98 -- - -- . Consensus . pricing Offered quotes (11) ----------------------------------------------------------------------------------------------------------- Equity market.. . Present . Volatility 14% - 32% 17% - 36% value (12) techniques or option pricing models . Correlation (13) 40% - 40% 70% - 70% -----------------------------------------------------------------------------------------------------------
Impact of Increase in Input Significant on Estimated Valuation Techniques Unobservable Inputs Fair Value (2) --------------------- ---------------------- ------------------ Fixed maturity securities (3) U.S. corporate . and foreign Matrix pricing . Delta spread corporate..... adjustments (4) Decrease . Offered quotes (5) Increase . Market . pricing Quoted prices (5) Increase . Consensus . pricing Offered quotes (5) Increase ----------------------------------------------------------------- RMBS........... . . Quoted Market pricing prices (5) Increase (6) ----------------------------------------------------------------- ABS............ . . Market pricing Quoted prices (5) Increase (6) . Consensus . Offered pricing quotes (5) Increase (6) ----------------------------------------------------------------- Derivatives Interest rate.. . Present . Swap yield value (7) techniques Increase (8) . Repurchase rates (9) Decrease (8) ----------------------------------------------------------------- Credit......... . Present value . techniques Credit spreads (10) Decrease (10) . Consensus . pricing Offered quotes (11) ----------------------------------------------------------------- Equity market.. . Present . Volatility Increase (8) value (12) techniques or option pricing models . Correlation (13) -----------------------------------------------------------------
December 31, 2016 December 31, 2015 --------------------------- --------------------------- Significant Weighted Weighted Valuation Techniques Unobservable Inputs Range Average (1) Range Average (1) --------------------- ---------------------- ------------- ------------ ------------- ------------ Embedded derivatives Direct, . assumed and Mortality rates: ceded guaranteed . Option minimum pricing benefits...... techniques Ages 0 - 40 0% - 0.09% 0% - 0.09% Ages 41 - 60 0.04% - 0.65% 0.04% - 0.65% Ages 61 - 115 0.26% - 100% 0.26% - 100% . Lapse rates: Durations 1 - 10 0.25% - 100% 0.25% - 100% Durations 11 - 20 2% - 100% 3% - 100% Durations 21 - 116 2% - 100% 3% - 100% . Utilization rates 0% - 25% 0% - 25% . Withdrawal rates 0.25% - 10% 0.25% - 10% . Long-term equity volatilities 17.40% - 25% 17.40% - 25% . Nonperformance risk spread 0.04% - 0.57% 0.04% - 0.52%
Impact of Increase in Input Significant on Estimated Valuation Techniques Unobservable Inputs Fair Value (2) --------------------- ---------------------- ------------------ Embedded derivatives Direct, . assumed and Mortality rates: ceded guaranteed . Option minimum pricing benefits...... techniques Ages 0 - 40 Decrease (14) Ages 41 - 60 Decrease (14) Ages 61 - 115 Decrease (14) . Lapse rates: Durations 1 - 10 Decrease (15) Durations 11 - 20 Decrease (15) Durations 21 - 116 Decrease (15) . Utilization rates Increase (16) . Withdrawal rates (17) . Long-term equity volatilities Increase (18) . Nonperformance risk spread Decrease (19)
--------- (1) The weighted average for fixed maturity securities is determined based on the estimated fair value of the securities. 87 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (2) The impact of a decrease in input would have the opposite impact on estimated fair value. For embedded derivatives, changes to direct and assumed guaranteed minimum benefits are based on liability positions; changes to ceded guaranteed minimum benefits are based on asset positions. (3) Significant increases (decreases) in expected default rates in isolation would result in substantially lower (higher) valuations. (4) Range and weighted average are presented in basis points. (5) Range and weighted average are presented in accordance with the market convention for fixed maturity securities of dollars per hundred dollars of par. (6) Changes in the assumptions used for the probability of default is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumptions used for prepayment rates. (7) Ranges represent the rates across different yield curves and are presented in basis points. The swap yield curves are utilized among different types of derivatives to project cash flows, as well as to discount future cash flows to present value. Since this valuation methodology uses a range of inputs across a yield curve to value the derivative, presenting a range is more representative of the unobservable input used in the valuation. (8) Changes in estimated fair value are based on long U.S. dollar net asset positions and will be inversely impacted for short U.S. dollar net asset positions. (9) Ranges represent different repurchase rates utilized as components within the valuation methodology and are presented in basis points. (10)Represents the risk quoted in basis points of a credit default event on the underlying instrument. Credit derivatives with significant unobservable inputs are primarily comprised of written credit default swaps. (11)As of December 31, 2016 and 2015, independent non-binding broker quotations were used in the determination of 3% and less than 1% of the total net derivative estimated fair value, respectively. (12)Ranges represent the underlying equity volatility quoted in percentage points. Since this valuation methodology uses a range of inputs across multiple volatility surfaces to value the derivative, presenting a range is more representative of the unobservable input used in the valuation. (13)Ranges represent the different correlation factors utilized as components within the valuation methodology. Presenting a range of correlation factors is more representative of the unobservable input used in the valuation. Increases (decreases) in correlation in isolation will increase (decrease) the significance of the change in valuations. (14)Mortality rates vary by age and by demographic characteristics such as gender. Mortality rate assumptions are based on company experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. (15)Base lapse rates are adjusted at the contract level based on a comparison of the actuarially calculated guaranteed values and the current policyholder account value, as well as other factors, such as the applicability of any surrender charges. A dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in the money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower in periods when a surrender charge applies. For any given contract, lapse rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. (16)The utilization rate assumption estimates the percentage of contractholders with a GMIB or lifetime withdrawal benefit who will elect to utilize the benefit upon becoming eligible. The rates may vary by the type of guarantee, the amount by which the guaranteed amount is greater than the account value, the contract's withdrawal history and by the age of the policyholder. For any given contract, utilization rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. 88 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (17)The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw from the contract each year. The withdrawal rate assumption varies by age and duration of the contract, and also by other factors such as benefit type. For any given contract, withdrawal rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. For GMWBs, any increase (decrease) in withdrawal rates results in an increase (decrease) in the estimated fair value of the guarantees. For GMABs and GMIBs, any increase (decrease) in withdrawal rates results in a decrease (increase) in the estimated fair value. (18)Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are available. For any given contract, long-term equity volatility rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. (19)Nonperformance risk spread varies by duration and by currency. For any given contract, multiple nonperformance risk spreads will apply, depending on the duration of the cash flow being discounted for purposes of valuing the embedded derivative. The following is a summary of the valuation techniques and significant unobservable inputs used in the fair value measurement of assets and liabilities classified within Level 3 that are not included in the preceding table. Generally, all other classes of securities classified within Level 3, including those within separate account assets and embedded derivatives within funds withheld related to certain ceded and assumed reinsurance, use the same valuation techniques and significant unobservable inputs as previously described for Level 3 securities. This includes matrix pricing and discounted cash flow methodologies, inputs such as quoted prices for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2, as well as independent non-binding broker quotations. The sensitivity of the estimated fair value to changes in the significant unobservable inputs for these other assets and liabilities is similar in nature to that described in the preceding table. The valuation techniques and significant unobservable inputs used in the fair value measurement for the more significant assets measured at estimated fair value on a nonrecurring basis and determined using significant unobservable inputs (Level 3) are summarized in "-- Nonrecurring Fair Value Measurements." 89 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) The following tables summarize the change of all assets and (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3):
- -------------- - -------------- Corporate (1) - ------------- Balance, January 1, 2015............... $ 2,065 Total realized/unrealized gains (losses) included in net income (loss) (5) (6)..... 16 Total realized/unrealized gains (losses) included in AOCI... (113) Purchases (7)....... 285 Sales (7)........... (118) Issuances (7)....... -- Settlements (7)..... -- Transfers into Level 3 (8)........ 202 Transfers out of Level 3 (8)........ (195) ------------- Balance, December 31, 2015.. $ 2,142 Total realized/unrealized gains (losses) included in net income (loss) (5) (6)..... 1 Total realized/unrealized gains (losses) included in AOCI... (32) Purchases (7)....... 557 Sales (7)........... (244) Issuances (7)....... -- Settlements (7)..... -- Transfers into Level 3 (8)........ 118 Transfers out of Level 3 (8)........ (315) ------------- Balance, December 31, 2016.. $ 2,227 ============= Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2014 (9)................ $ 3 ============= Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2015(9)............ $ 11 ============= Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2016 (9)................ $ 2 ============= Gains (Losses) Data for the year ended December 31, 2014.. Total realized/unrealized gains (losses) included in net income (loss) (5) (6)..... $ 3 Total realized/unrealized gains (losses) included in AOCI... $ 74
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) - ----------------------------------------------------------------------------------------------------------- Fixed Maturity Securities - -------------------------------------- State and Separate Structured Political Foreign Equity Short-term Net Net Embedded Account Securities Subdivision Government Securities Investments Derivatives (2) Derivatives (3) Assets (4) - ------------- ----------- ---------- ---------- ----------- --------------- --------------- ----------- (In millions) Balance, January 1, 2015............... $ 1,045 $ -- $ -- $ 100 $ 71 $ (196) $ (347) $ 158 Total realized/unrealized gains (losses) included in net income (loss) (5) (6)..... 21 -- -- 11 -- (74) (228) (6) Total realized/unrealized gains (losses) included in AOCI... (11) -- (3) (10) -- 2 -- -- Purchases (7)....... 1,255 13 29 -- 47 22 -- 3 Sales (7)........... (360) -- -- (16) -- -- -- (5) Issuances (7)....... -- -- -- -- -- -- -- -- Settlements (7)..... -- -- -- -- -- 14 (472) -- Transfers into Level 3 (8)........ 22 -- -- 19 -- -- -- -- Transfers out of Level 3 (8)........ (134) -- -- (7) (71) -- -- (4) ------------- ----------- ---------- ---------- ----------- --------------- --------------- ----------- Balance, December 31, 2015.. $ 1,838 $ 13 $ 26 $ 97 $ 47 $ (232) $ (1,047) $ 146 Total realized/unrealized gains (losses) included in net income (loss) (5) (6)..... 30 -- -- -- -- (703) (1,866) -- Total realized/unrealized gains (losses) included in AOCI... 20 -- -- (11) -- 4 -- -- Purchases (7)....... 576 -- -- -- 3 10 -- 2 Sales (7)........... (530) -- -- (26) (1) -- -- (134) Issuances (7)....... -- -- -- -- -- -- -- -- Settlements (7)..... -- -- -- -- -- (33) (536) -- Transfers into Level 3 (8)........ 12 9 -- 131 -- -- -- -- Transfers out of Level 3 (8)........ (282) (5) (26) (54) (47) -- -- (4) ------------- ----------- ---------- ---------- ----------- --------------- --------------- ----------- Balance, December 31, 2016.. $ 1,664 $ 17 $ -- $ 137 $ 2 $ (954) $ (3,449) $ 10 ============= =========== ========== ========== =========== =============== =============== =========== Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2014 (9)................ $ 6 $ -- $ -- $ (1) $ -- $ (7) $ (982) $ -- ============= =========== ========== ========== =========== =============== =============== =========== Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2015(9)............ $ 21 $ -- $ -- $ -- $ -- $ (64) $ (241) $ -- ============= =========== ========== ========== =========== =============== =============== =========== Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2016 (9)................ $ 28 $ -- $ -- $ -- $ -- $ (687) $ (1,839) $ -- ============= =========== ========== ========== =========== =============== =============== =========== Gains (Losses) Data for the year ended December 31, 2014.. Total realized/unrealized gains (losses) included in net income (loss) (5) (6)..... $ 10 $ -- $ -- $ (2) $ -- $ (4) $ (957) $ (1) Total realized/unrealized gains (losses) included in AOCI... $ 12 $ -- $ -- $ 7 $ -- $ 57 $ 107 $ --
--------- (1) Comprised of U.S. and foreign corporate securities. 90 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (2) Freestanding derivative assets and liabilities are presented net for purposes of the rollforward. (3) Embedded derivative assets and liabilities are presented net for purposes of the rollforward. (4) Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders within separate account liabilities. Therefore, such changes in estimated fair value are not recorded in net income (loss). For the purpose of this disclosure, these changes are presented within net investment gains (losses). (5) Amortization of premium/accretion of discount is included within net investment income. Impairments charged to net income (loss) on securities are included in net investment gains (losses). Lapses associated with embedded derivatives are included in net derivative gains (losses). Substantially all realized/unrealized gains (losses) included in net income (loss) for net derivatives and embedded derivatives are reported in net derivatives gains (losses). (6) Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward. (7) Items purchased/issued and then sold/settled in the same period are excluded from the rollforward. Fees attributed to embedded derivatives are included in settlements. (8) Gains and losses, in net income (loss) and OCI, are calculated assuming transfers into and/or out of Level 3 occurred at the beginning of the period. Items transferred into and then out of Level 3 in the same period are excluded from the rollforward. (9) Changes in unrealized gains (losses) included in net income (loss) relate to assets and liabilities still held at the end of the respective periods. Substantially all changes in unrealized gains (losses) included in net income (loss) for net derivatives and embedded derivatives are reported in net derivative gains (losses). Fair Value Option The following table presents information for certain assets and liabilities of CSEs, which are accounted for under the FVO. These assets and liabilities were initially measured at fair value.
December 31, --------------------------- 2016 2015 ------------- ------------- (In millions) Assets (1) Unpaid principal balance.................................................. $ 88 $ 121 Difference between estimated fair value and unpaid principal balance...... 48 51 ------------- ------------- Carrying value at estimated fair value.................................. $ 136 $ 172 ============= ============= Liabilities (1) Contractual principal balance............................................. $ 22 $ 46 Difference between estimated fair value and contractual principal balance. 1 2 ------------- ------------- Carrying value at estimated fair value.................................. $ 23 $ 48 ============= =============
--------- (1) These assets and liabilities are comprised of commercial mortgage loans and long-term debt. Changes in estimated fair value on these assets and liabilities and gains or losses on sales of these assets are recognized in net investment gains (losses). Interest income on commercial mortgage loans held by CSEs -- FVO is recognized in net investment income. Interest expense from long-term debt of CSEs -- FVO is recognized in other expenses. 91 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Nonrecurring Fair Value Measurements The following table presents information for assets measured at estimated fair value on a nonrecurring basis during the periods and still held at the reporting dates (for example, when there is evidence of impairment). The estimated fair values for these assets were determined using significant unobservable inputs (Level 3).
At December 31, Years Ended December 31, ------------------------------ -------------------------------- 2016 2015 2014 2016 2015 2014 ---------- --------- --------- ---------- --------- --------- Carrying Value After Measurement Gains (Losses) ------------------------------ -------------------------------- (In millions) Mortgage loans (1)...................... $ 3 $ 3 $ 3 $ -- $ -- $ -- Other limited partnership interests (2). $ 3 $ 2 $ 38 $ (2) $ (1) $ (6) Other assets (3)........................ $ -- $ -- $ -- $ (11) $ -- $ -- Goodwill (4)............................ $ -- $ -- $ -- $ (381) $ -- $ (33)
-------- (1) Estimated fair values for impaired mortgage loans are based on independent broker quotations or valuation models using unobservable inputs or, if the loans are in foreclosure or are otherwise determined to be collateral dependent, are based on the estimated fair value of the underlying collateral or the present value of the expected future cash flows. (2) For these cost method investments, estimated fair value is determined from information provided on the financial statements of the underlying entities including NAV data. These investments include private equity and debt funds that typically invest primarily in various strategies including domestic and international leveraged buyout funds; power, energy, timber and infrastructure development funds; venture capital funds; and below investment grade debt and mezzanine debt funds. Distributions will be generated from investment gains, from operating income from the underlying investments of the funds and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the funds will be liquidated over the next two to 10 years. Unfunded commitments for these investments at both December 31, 2016 and 2015 were not significant. (3) During the year ended December 31, 2016, the Company recognized an impairment of computer software in connection with the sale to Massachusetts Mutual Life Insurance Company ("MassMutual") of MetLife, Inc.'s U.S. retail advisor force and certain assets associated with the MetLife Premier Client Group, including all of the issued and outstanding shares of MetLife's affiliated broker-dealer, MetLife Securities, Inc. ("MSI"), a wholly-owned subsidiary of MetLife, Inc. See Note 17. (4) As discussed in Note 11, for the year ended December 31, 2016, the Company recorded an impairment of goodwill associated with the Run-off reporting unit. Fair Value of Financial Instruments Carried at Other Than Fair Value The following tables provide fair value information for financial instruments that are carried on the balance sheet at amounts other than fair value. These tables exclude the following financial instruments: cash and cash equivalents, accrued investment income, payables for collateral under securities loaned and other transactions and those short-term investments that are not securities, such as time deposits, and therefore are not included in the three level hierarchy table disclosed in the "-- Recurring Fair Value Measurements" section. The estimated fair value of the excluded financial instruments, which are primarily classified in Level 2, approximates carrying value as they are short-term in nature such that the Company believes there is minimal risk of material changes in interest rates or credit quality. All remaining balance sheet amounts excluded from the tables below are not considered financial instruments subject to this disclosure. 92 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows at:
December 31, 2016 ---------------------------------------------------------------------- Fair Value Hierarchy ------------------------------------------ Total Carrying Estimated Value Level 1 Level 2 Level 3 Fair Value ------------- ------------ --------------- ------------- ------------- (In millions) Assets Mortgage loans...................... $ 8,748 $ -- $ -- $ 8,893 $ 8,893 Policy loans........................ $ 1,093 $ -- $ 746 $ 431 $ 1,177 Real estate joint ventures.......... $ 12 $ -- $ -- $ 44 $ 44 Other limited partnership interests. $ 44 $ -- $ -- $ 42 $ 42 Premiums, reinsurance and other receivables........................ $ 2,831 $ -- $ 832 $ 2,843 $ 3,675 Liabilities Policyholder account balances....... $ 14,829 $ -- $ -- $ 15,975 $ 15,975 Long-term debt...................... $ 781 $ -- $ 1,060 $ -- $ 1,060 Other liabilities................... $ 194 $ -- $ 27 $ 167 $ 194 Separate account liabilities........ $ 1,110 $ -- $ 1,110 $ -- $ 1,110
December 31, 2015 ---------------------------------------------------------------------- Fair Value Hierarchy ------------------------------------------ Total Carrying Estimated Value Level 1 Level 2 Level 3 Fair Value ------------- ------------ --------------- ------------- ------------- (In millions) Assets Mortgage loans...................... $ 7,090 $ -- $ -- $ 7,386 $ 7,386 Policy loans........................ $ 1,266 $ -- $ 917 $ 430 $ 1,347 Real estate joint ventures.......... $ 23 $ -- $ -- $ 65 $ 65 Other limited partnership interests. $ 52 $ -- $ -- $ 57 $ 57 Premiums, reinsurance and other receivables........................ $ 6,074 $ -- $ 80 $ 7,163 $ 7,243 Liabilities Policyholder account balances....... $ 18,968 $ -- $ -- $ 20,339 $ 20,339 Long-term debt...................... $ 788 $ -- $ 1,070 $ -- $ 1,070 Other liabilities................... $ 217 $ -- $ 43 $ 174 $ 217 Separate account liabilities........ $ 1,275 $ -- $ 1,275 $ -- $ 1,275
The methods, assumptions and significant valuation techniques and inputs used to estimate the fair value of financial instruments are summarized as follows: Mortgage Loans The estimated fair value of mortgage loans is primarily determined by estimating expected future cash flows and discounting them using current interest rates for similar mortgage loans with similar credit risk, or is determined from pricing for similar loans. 93 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Policy Loans Policy loans with fixed interest rates are classified within Level 3. The estimated fair values for these loans are determined using a discounted cash flow model applied to groups of similar policy loans determined by the nature of the underlying insurance liabilities. Cash flow estimates are developed by applying a weighted-average interest rate to the outstanding principal balance of the respective group of policy loans and an estimated average maturity determined through experience studies of the past performance of policyholder repayment behavior for similar loans. These cash flows are discounted using current risk-free interest rates with no adjustment for borrower credit risk, as these loans are fully collateralized by the cash surrender value of the underlying insurance policy. Policy loans with variable interest rates are classified within Level 2 and the estimated fair value approximates carrying value due to the absence of borrower credit risk and the short time period between interest rate resets, which presents minimal risk of a material change in estimated fair value due to changes in market interest rates. Real Estate Joint Ventures and Other Limited Partnership Interests The estimated fair values of these cost method investments are generally based on the Company's share of the NAV as provided on the financial statements of the investees. In certain circumstances, management may adjust the NAV by a premium or discount when it has sufficient evidence to support applying such adjustments. Premiums, Reinsurance and Other Receivables Premiums, reinsurance and other receivables are principally comprised of certain amounts recoverable under reinsurance agreements, amounts on deposit with financial institutions to facilitate daily settlements related to certain derivatives and amounts receivable for securities sold but not yet settled. Amounts recoverable under ceded reinsurance agreements, which the Company has determined do not transfer significant risk such that they are accounted for using the deposit method of accounting, have been classified as Level 3. The valuation is based on discounted cash flow methodologies using significant unobservable inputs. The estimated fair value is determined using interest rates determined to reflect the appropriate credit standing of the assuming counterparty. The amounts on deposit for derivative settlements, classified within Level 2, essentially represent the equivalent of demand deposit balances and amounts due for securities sold are generally received over short periods such that the estimated fair value approximates carrying value. Policyholder Account Balances These policyholder account balances include investment contracts which primarily include certain funding agreements, fixed deferred annuities, modified guaranteed annuities, fixed term payout annuities and total control accounts. The valuation of these investment contracts is based on discounted cash flow methodologies using significant unobservable inputs. The estimated fair value is determined using current market risk-free interest rates adding a spread to reflect the nonperformance risk in the liability. Long-term Debt The estimated fair value of long-term debt is principally determined using market standard valuation methodologies. Valuations of instruments are based primarily on quoted prices in markets that are not active or using matrix pricing that use standard market observable inputs such as quoted prices in markets that are not active and observable yields and spreads in the market. Instruments valued using discounted cash flow methodologies use standard market observable inputs including market yield curve, duration, observable prices and spreads for similar publicly traded or privately traded issues. Other Liabilities Other liabilities consist primarily of interest payable, amounts due for securities purchased but not yet settled and funds withheld amounts payable, which are contractually withheld by the Company in accordance with the terms of the reinsurance agreements. The Company evaluates the specific terms, facts and circumstances of each instrument to determine the appropriate estimated fair values, which are not materially different from the carrying values. 94 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Separate Account Liabilities Separate account liabilities represent those balances due to policyholders under contracts that are classified as investment contracts. Separate account liabilities classified as investment contracts primarily represent variable annuities with no significant mortality risk to the Company such that the death benefit is equal to the account balance and certain contracts that provide for benefit funding. Since separate account liabilities are fully funded by cash flows from the separate account assets which are recognized at estimated fair value as described in the section "-- Recurring Fair Value Measurements," the value of those assets approximates the estimated fair value of the related separate account liabilities. The valuation techniques and inputs for separate account liabilities are similar to those described for separate account assets. 11. Goodwill The Company tests goodwill for impairment during the third quarter of each year at the reporting unit level based upon best available data as of June 30 of that year. A reporting unit is the operating segment or a business one level below the operating segment, if discrete financial information is prepared and regularly reviewed by management at that level. In anticipation of the planned Separation, in the third quarter of 2016, the Company reorganized its businesses into three segments: Annuities; Life; and Run-off. As a result, the Company reallocated goodwill. In connection with the reorganization and the 2016 annual goodwill impairment test, the Company performed Step 1 of the goodwill impairment process, which requires a comparison of the estimated fair value of a reporting unit to its carrying value. To determine the estimated fair value for the Run-off reporting unit, an actuarial based approach, embedded value, was utilized to estimate the net worth of the reporting unit and the value of existing business. This actuarial based approach requires judgments and assumptions about the projected cash flows, the level of internal capital required to support the mix of business, the account value of in-force business, projections of renewal business and margins on such business, interest rates, credit spreads, equity market levels, and the discount rate that the Company believes is appropriate for this reporting unit. Based on a quantitative analysis performed for the Run-off reporting unit, the Company concluded that the carrying value exceeded the estimated fair value, indicating a potential for goodwill impairment. Accordingly, the Company performed Step 2 of the goodwill impairment process for the reporting unit, which compares the implied estimated fair value of the reporting unit's goodwill with its carrying value. This analysis indicated that the goodwill associated with this reporting unit was not recoverable. As a result, the Company recorded a non-cash charge of $381 million ($305 million, net of income tax) for the impairment of the entire goodwill balance, which is reported in goodwill impairment on the consolidated statements of operations for the year ended December 31, 2016. 95 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 11. Goodwill (continued) Information regarding goodwill by segment was as follows:
Annuities Life Run-off Total ------------ ------------ ------------ ------------ (In millions) Balance at January 1, 2014 Goodwill..................... $ 427 $ 66 $ 493 $ 986 Accumulated impairment....... (394) (66) -- (460) ------------ ------------ ------------ ------------ Total goodwill, net........ 33 -- 493 526 Dispositions (1)............. -- -- (112) (112) Impairments.................. (33) -- -- (33) Balance at December 31, 2014. Goodwill..................... 427 66 381 874 Accumulated impairment....... (427) (66) -- (493) ------------ ------------ ------------ ------------ Total goodwill, net........ -- -- 381 381 Balance at December 31, 2015 Goodwill..................... 427 66 381 874 Accumulated impairment....... (427) (66) -- (493) ------------ ------------ ------------ ------------ Total goodwill, net........ -- -- 381 381 Impairments.................. -- -- (381) (381) Balance at December 31, 2016 Goodwill..................... 427 66 381 874 Accumulated impairment....... (427) (66) (381) (874) ------------ ------------ ------------ ------------ Total goodwill, net........ $ -- $ -- $ -- $ -- ============ ============ ============ ============
--------- (1) In connection with the sale of MAL, goodwill in the Run-off reporting unit was reduced by $112 million during the year ended December 31, 2014. See Note 4. This goodwill was allocated to MAL based on the relative fair values of MAL and the remaining portion of the Run-off reporting unit. 96 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 12. Debt Long-term debt outstanding was as follows:
December 31, ----------------------- Interest Rate Maturity 2016 2015 ------------- -------- ----------- ----------- (In millions) Surplus note -- affiliated (1), (2). 8.60% 2038 $ 744 $ 750 Long-term debt -- unaffiliated (3).. 7.03% 2030 37 38 ----------- ----------- Total long-term debt (4).......... $ 781 $ 788 =========== ===========
-------- (1) Payments of interest and principal on the affiliated surplus note, which is subordinate to all other obligations and may be made only with the prior approval of the Delaware Commissioner of Insurance (the "Delaware Commissioner"). (2) Includes $6 million of debt issuance costs at both December 31, 2016 and 2015. Debt issuance costs were reported in other assets at December 31, 2015. (3) Principal and interest is paid quarterly. (4) Excludes $23 million and $48 million of long-term debt relating to CSEs at December 31, 2016 and 2015, respectively. See Note 8. In December 2014, Brighthouse Insurance repaid in cash at maturity its $75 million 6.80% affiliated note. The aggregate maturities of long-term debt at December 31, 2016 were $1 million in 2017, $2 million in each of 2018, 2019, 2020 and 2021 and $772 million thereafter. Interest expense related to the Company's indebtedness is included in other expenses and was $67 million, $68 million and $73 million for the years ended December 31, 2016, 2015 and 2014, respectively. Letters of Credit The Company had access to unsecured revolving credit facilities from various banks, either directly with the bank or indirectly through letters of credit available to MetLife, Inc. for the benefit of the Company and certain other affiliates of MetLife, Inc. These facilities were used for collateral for certain of the Company's affiliated reinsurance liabilities. Total fees associated with letters of credit was $10 million, $5 million and $13 million for the years ended December 31, 2016, 2015 and 2014, respectively, and was included in other expenses. At December 31, 2016, the Company had $0 in letters of credit outstanding and the remaining availability was $3.3 billion. 13. Equity See Note 3 for a discussion on the Mergers. Common Stock In August 2014, MetLife Insurance Company of Connecticut, the predecessor to MetLife USA, redeemed for $1.4 billion and retired 4,595,317 shares of its common stock owned by MetLife Investors Group, LLC, an affiliate. Capital Contributions In February 2016, Brighthouse Life Insurance Company received a capital contribution of $1.5 billion in cash from MetLife, Inc. In August 2014, MetLife Insurance Company of Connecticut received a capital contribution of $231 million in cash from MetLife, Inc. 97 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 13. Equity (continued) Statutory Equity and Income The state of domicile of Brighthouse Life Insurance Company imposes risk-based capital ("RBC") requirements that were developed by the National Association of Insurance Commissioners ("NAIC"). Regulatory compliance is determined by a ratio of a company's total adjusted capital, calculated in the manner prescribed by the NAIC ("TAC") to its authorized control level RBC, calculated in the manner prescribed by the NAIC ("ACL RBC"), based on the statutory-based filed financial statements. Companies below specific trigger levels or ratios are classified by their respective levels, each of which requires specified corrective action. The minimum level of TAC before corrective action commences is twice ACL RBC ("CAL RBC"). The CAL RBC ratio for Brighthouse Life Insurance Company was in excess of 400% for all periods presented. Brighthouse Life Insurance Company prepares statutory-basis financial statements in accordance with statutory accounting practices prescribed or permitted by the Delaware Department of Insurance. The NAIC has adopted the Codification of Statutory Accounting Principles ("Statutory Codification"). Statutory Codification is intended to standardize regulatory accounting and reporting to state insurance departments. However, statutory accounting principles continue to be established by individual state laws and permitted practices. Modifications by the state insurance department may impact the effect of Statutory Codification on the statutory capital and surplus of Brighthouse Life Insurance Company. Statutory accounting principles differ from GAAP primarily by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions, reporting surplus notes as surplus instead of debt, reporting of reinsurance agreements and valuing securities on a different basis. In addition, certain assets are not admitted under statutory accounting principles and are charged directly to surplus. The most significant assets not admitted by Brighthouse Life Insurance Company are net deferred income tax assets resulting from temporary differences between statutory accounting principles basis and tax basis not expected to reverse and become recoverable within three years. The tables below present amounts from Brighthouse Life Insurance Company, which are derived from the statutory-basis financial statements as filed with the Delaware Department of Insurance. Statutory net income (loss) was as follows:
Years Ended December 31, -------------------------- Company State of Domicile 2016 2015 2014 ----------------------------------- ------------------- ------ ------- ---------- (In millions) Brighthouse Life Insurance Company. Delaware $1,186 $(1,022) $ 1,543
Statutory capital and surplus was as follows at:
December 31, --------------------- Company 2016 2015 ----------------------------------- ---------- ---------- (In millions) Brighthouse Life Insurance Company. $ 4,374 $ 5,942
98 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 13. Equity (continued) Dividend Restrictions Under Delaware Insurance Code, Brighthouse Life Insurance Company is permitted, without prior insurance regulatory clearance, to pay a stockholder dividend to MetLife, Inc. as long as the amount of the dividend when aggregated with all other dividends in the preceding 12 months does not exceed the greater of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year; or (ii) its net statutory gain from operations for the immediately preceding calendar year (excluding realized capital gains). Brighthouse Life Insurance Company will be permitted to pay a dividend to MetLife, Inc. in excess of the greater of such two amounts only if it files notice of the declaration of such a dividend and the amount thereof with the Delaware Commissioner and the Delaware Commissioner either approves the distribution of the dividend or does not disapprove the distribution within 30 days of its filing. In addition, any dividend that exceeds earned surplus (defined as "unassigned funds (surplus)") as of the immediately preceding calendar year requires insurance regulatory approval. Under Delaware Insurance Code, the Delaware Commissioner has broad discretion in determining whether the financial condition of a stock life insurance company would support the payment of such dividends to its stockholders. During the years ended December 31, 2016 and 2015, Brighthouse Life Insurance Company paid dividends to MetLife, Inc. in the amount of $261 million and $500 million, respectively. Based on amounts at December 31, 2016, Brighthouse Life Insurance Company could pay a dividend to MetLife, Inc. in 2017 of $473 million without prior approval of the Delaware Commissioner. 99 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 13. Equity (continued) Accumulated Other Comprehensive Income (Loss) Information regarding changes on the balances of each component of AOCI was as follows:
Unrealized Foreign Investment Gains Unrealized Gains Currency (Losses), Net of (Losses) on Translation Related Offsets (1) Derivatives Adjustments Total --------------------- ---------------- ------------- ------------ (In millions) Balance at January 1, 2014.......................... $ 916 $ 25 $ 39 $ 980 OCI before reclassifications........................ 2,301 242 (56) 2,487 Deferred income tax benefit (expense)............... (707) (85) 4 (788) --------------------- ---------------- ------------- ------------ AOCI before reclassifications, net of income tax.. 2,510 182 (13) 2,679 Amounts reclassified from AOCI...................... (28) 2 -- (26) Deferred income tax benefit (expense)............... 8 (1) -- 7 --------------------- ---------------- ------------- ------------ Amounts reclassified from AOCI, net of income tax. (20) 1 -- (19) --------------------- ---------------- ------------- ------------ Sale of subsidiary (2).............................. (320) -- 6 (314) Deferred income tax benefit (expense)............... 80 -- -- 80 --------------------- ---------------- ------------- ------------ Sale of subsidiary, net of income tax............. (240) -- 6 (234) --------------------- ---------------- ------------- ------------ Balance at December 31, 2014........................ 2,250 183 (7) 2,426 OCI before reclassifications........................ (1,370) 92 (28) (1,306) Deferred income tax benefit (expense)............... 506 (32) 9 483 --------------------- ---------------- ------------- ------------ AOCI before reclassifications, net of income tax.. 1,386 243 (26) 1,603 Amounts reclassified from AOCI...................... 46 (6) -- 40 Deferred income tax benefit (expense)............... (17) 2 -- (15) --------------------- ---------------- ------------- ------------ Amounts reclassified from AOCI, net of income tax. 29 (4) -- 25 --------------------- ---------------- ------------- ------------ Balance at December 31, 2015........................ 1,415 239 (26) 1,628 OCI before reclassifications........................ (348) 68 (3) (283) Deferred income tax benefit (expense)............... 110 (24) -- 86 --------------------- ---------------- ------------- ------------ AOCI before reclassifications, net of income tax.. 1,177 283 (29) 1,431 Amounts reclassified from AOCI...................... (1) (43) -- (44) Deferred income tax benefit (expense)............... -- 15 -- 15 --------------------- ---------------- ------------- ------------ Amounts reclassified from AOCI, net of income tax. (1) (28) -- (29) --------------------- ---------------- ------------- ------------ Balance at December 31, 2016........................ $ 1,176 $ 255 $ (29) $ 1,402 ===================== ================ ============= ============
--------------- (1) See Note 8 for information on offsets to investments related to future policy benefits, DAC, VOBA and DSI. (2) See Note 4. 100 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 13. Equity (continued) Information regarding amounts reclassified out of each component of AOCI was as follows:
Consolidated Statements of Operations and Comprehensive Income (Loss) AOCI Components Amounts Reclassified from AOCI Locations --------------------------------------- --------------------------------------- ------------------------------------- Years Ended December 31, --------------------------------------- 2016 2015 2014 ------------ ----------- ------------ (In millions) Net unrealized investment gains (losses): Net unrealized investment gains (losses)............................... $ (6) $ (48) $ 13 Net investment gains (losses) Net unrealized investment gains (losses)............................... 1 12 11 Net investment income Net unrealized investment gains (losses)............................... 6 (10) 4 Net derivative gains (losses) ------------ ----------- ------------ Net unrealized investment gains (losses), before income tax........... 1 (46) 28 Income tax (expense) benefit........... -- 17 (8) ------------ ----------- ------------ Net unrealized investment gains (losses), net of income tax........... $ 1 $ (29) $ 20 ============ =========== ============ Unrealized gains (losses) on derivatives - cash flow hedges: Interest rate swaps...................... $ 33 $ 1 $ 1 Net derivative gains (losses) Interest rate swaps...................... 3 1 1 Net investment income Interest rate forwards................... 2 2 1 Net derivative gains (losses) Interest rate forwards................... 2 2 1 Net investment income Foreign currency swaps................... 3 -- (6) Net derivative gains (losses) ------------ ----------- ------------ Gains (losses) on cash flow hedges, before income tax...................... 43 6 (2) Income tax (expense) benefit........... (15) (2) 1 ------------ ----------- ------------ Gains (losses) on cash flow hedges, net of income tax...................... $ 28 $ 4 $ (1) ============ =========== ============ Total reclassifications, net of income tax...................................... $ 29 $ (25) $ 19 ============ =========== ============
14. Other Expenses Information on other expenses was as follows:
Years Ended December 31, ---------------------------------------- 2016 2015 2014 ------------ ------------ ------------ (In millions) Compensation......................................... $ 346 $ 472 $ 320 Commissions.......................................... 542 650 492 Volume-related costs................................. 170 134 170 Affiliated expenses on ceded and assumed reinsurance. 314 205 325 Capitalization of DAC................................ (282) (325) (279) Interest expense on debt............................. 70 76 109 Premium taxes, licenses and fees..................... 56 67 53 Professional services................................ 84 21 58 Rent and related expenses............................ 45 53 41 Other................................................ 393 369 475 ------------ ------------ ------------ Total other expenses............................... $ 1,738 $ 1,722 $ 1,764 ============ ============ ============
101 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Other Expenses (continued) Capitalization of DAC See Note 6 for additional information on the capitalization of DAC. Interest Expense on Debt Interest expense on debt includes interest expense on debt (see Note 12) and interest expense related to CSEs (see Note 8). Affiliated Expenses Commissions and capitalization of DAC include the impact of affiliated reinsurance transactions. See Notes 7, 12 and 17 for a discussion of affiliated expenses included in the table above. 15. Income Tax The provision for income tax was as follows:
Years Ended December 31, ---------------------------------------- 2016 2015 2014 ------------ ------------ ------------ (In millions) Current: Federal.......................................... $ (57) $ 281 $ (364) Foreign.......................................... 6 -- 6 ------------ ------------ ------------ Subtotal....................................... (51) 281 (358) ------------ ------------ ------------ Deferred: Federal.......................................... (1,720) (66) 355 Foreign.......................................... -- -- (2) ------------ ------------ ------------ Subtotal....................................... (1,720) (66) 353 ------------ ------------ ------------ Provision for income tax expense (benefit).... $ (1,771) $ 215 $ (5) ============ ============ ============
The Company's income (loss) before income tax expense (benefit) from domestic and foreign operations were as follows:
Years Ended December 31, ------------------------------------- 2016 2015 2014 ----------- ----------- ------------ (In millions) Income (loss): Domestic...... $ (4,720) $ 1,041 $ (174) Foreign....... 12 13 464 ----------- ----------- ------------ Total....... $ (4,708) $ 1,054 $ 290 =========== =========== ============
102 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) The reconciliation of the income tax provision at the U.S. statutory rate to the provision for income tax as reported was as follows:
Years Ended December 31, ------------------------------------- 2016 2015 2014 ----------- ----------- ----------- (In millions) Tax provision at U.S. statutory rate............... $ (1,648) $ 369 $ 102 Tax effect of: Dividend received deduction...................... (105) (127) (114) Prior year tax................................... 23 (4) (20) Tax credits...................................... (20) (16) (14) Foreign tax rate differential.................... 2 (5) -- Goodwill impairment.............................. (20) -- 12 Sale of subsidiary............................... (6) -- 24 Other, net....................................... 3 (2) 5 ----------- ----------- ----------- Provision for income tax expense (benefit).... $ (1,771) $ 215 $ (5) =========== =========== ===========
Deferred income tax represents the tax effect of the differences between the book and tax bases of assets and liabilities. Net deferred income tax assets and liabilities consisted of the following at:
December 31, --------------------- 2016 2015 ---------- ---------- (In millions) Deferred income tax assets: Policyholder liabilities and receivables........ $ 2,841 $ 1,638 Investments, including derivatives.............. 373 -- Tax credit carryforwards........................ 180 168 Other........................................... 52 39 ---------- ---------- Total deferred income tax assets.............. 3,446 1,845 ---------- ---------- Deferred income tax liabilities: Investments, including derivatives.............. -- 132 Intangibles..................................... 391 521 Net unrealized investment gains................. 736 837 DAC............................................. 1,301 1,158 ---------- ---------- Total deferred income tax liabilities......... 2,428 2,648 ---------- ---------- Net deferred income tax asset (liability).... $ 1,018 $ (803) ========== ==========
103 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) The following table sets forth the general business credits, foreign tax credits, and other credit carryforwards for tax purposes as of December 31, 2016.
Tax Credit Carryforwards ------------------------------------------------------- General Business Credits Foreign Tax Credits Other ------------------ -------------------- --------------- (In millions) Expiration 2017-2021.. $ -- $ -- $ -- 2022-2026.. -- 35 -- 2027-2031.. -- -- -- 2032-2036.. 7 -- -- Indefinite. -- -- 145 ------------------ -------------------- --------------- $ 7 $ 35 $ 145 ================== ==================== ===============
The Company currently participates in a tax sharing agreement with MetLife, Inc., as described in Note 1. Pursuant to this tax sharing agreement, the amounts due from affiliates included $490 million and $14 million for the years ended December 31, 2016 and 2015 respectively. The Company also files income tax returns with the U.S. federal government and various state and local jurisdictions, as well as foreign jurisdictions. The Company is under continuous examination by the IRS and other tax authorities in jurisdictions in which the Company has significant business operations. The income tax years under examination vary by jurisdiction and subsidiary. The Company is no longer subject to U.S. federal, state or local income tax examinations for years prior to 2007. Management believes it has established adequate tax liabilities for all open years and any future resolve is not expected to have a material impact on the Company's financial statements. A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:
Years Ended December 31, ------------------------------------- 2016 2015 2014 ----------- ----------- ----------- (In millions) Balance at January 1,......................................................... $ 42 $ 38 $ 26 Additions for tax positions of prior years.................................... 1 5 15 Reductions for tax positions of prior years................................... (9) -- (5) Additions for tax positions of current year................................... 5 3 2 Settlements with tax authorities.............................................. (2) (4) -- ----------- ----------- ----------- Balance at December 31,....................................................... $ 37 $ 42 $ 38 =========== =========== =========== Unrecognized tax benefits that, if recognized would impact the effective rate. $ 37 $ 32 $ 28 =========== =========== ===========
The Company classifies interest accrued related to unrecognized tax benefits in interest expense, included within other expenses, while penalties are included in income tax expense. 104 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) Interest was as follows:
Years Ended December 31, --------------------------------- 2016 2015 2014 --------- ---------- ------------ (In millions) Interest recognized on the consolidated statements of operations. $ 1 $ -- $ --
December 31, ----------------------- 2016 2015 ----------- ----------- (In millions) Interest included in other liabilities on the consolidated balance sheets. $ 1 $ 2
The Company had no penalties for each of the years ended December 31, 2016, 2015 and 2014. The U.S. Treasury Department and the IRS have indicated that they intend to address through regulations the methodology to be followed in determining the dividends received deduction ("DRD"), related to variable life insurance and annuity contracts. The DRD reduces the amount of dividend income subject to tax and is a significant component of the difference between the actual tax expense and expected amount determined using the federal statutory tax rate of 35%. Any regulations that the IRS ultimately proposes for issuance in this area will be subject to public notice and comment, at which time insurance companies and other interested parties will have the opportunity to raise legal and practical questions about the content, scope and application of such regulations. As a result, the ultimate timing and substance of any such regulations are unknown at this time. For the years ended December 31, 2016, 2015 and 2014, the Company recognized an income tax benefit of $84 million, $138 million and $135 million, respectively, related to the separate account DRD. The 2016 benefit included an expense of $21 million related to a true-up of the 2015 tax return. The 2015 and 2014 benefit included a benefit of $12 million and $21 million related to a true-up of the 2014 and 2013 tax returns, respectively. 16. Contingencies, Commitments and Guarantees Contingencies Litigation The Company is a defendant in a number of litigation matters. In some of the matters, large and/or indeterminate amounts, including punitive and treble damages, are sought. Modern pleading practice in the U.S. permits considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. This variability in pleadings, together with the actual experience of the Company in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value. Due to the vagaries of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time may normally be difficult to ascertain. Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law. The Company establishes liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. It is possible that some matters could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be reasonably estimated at December 31, 2016. 105 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Matters as to Which an Estimate Can Be Made For some loss contingency matters, the Company is able to estimate a reasonably possible range of loss. For such matters where a loss is believed to be reasonably possible, but not probable, no accrual has been made. As of December 31, 2016, the aggregate range of reasonably possible losses in excess of amounts accrued for these matters was not material for the Company. Matters as to Which an Estimate Cannot Be Made For other matters, the Company is not currently able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews. Unclaimed Property Litigation On November 14, 2012, the West Virginia Treasurer filed an action against MetLife Investors USA Insurance Company in West Virginia state court (West Virginia ex rel. John D. Perdue v. MetLife Investors USA Insurance Company, Circuit Court of Putnam County, Civil Action No. 12-C-363) alleging that MetLife Investors USA Insurance Company violated the West Virginia Uniform Unclaimed Property Act (the "Act"), seeking to compel compliance with the Act, and seeking payment of unclaimed property, interest, and penalties. On December 28, 2012, the Treasurer filed a substantially identical suit against MetLife Insurance Company of Connecticut (West Virginia ex rel. John D. Perdue v. MetLife Insurance Company of Connecticut, Circuit Court of Putnam County, Civil Action No. 12-C-430). On January 31, 2017, the parties entered into a settlement agreement resolving these actions. 106 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Other Litigation Thrivent Financial for Lutherans v. MetLife Insurance Company USA, (E.D. Wis., filed September 12, 2016) Plaintiff filed a complaint against MetLife USA contending that its use of the Brighthouse Financial trademark and logo will infringe on its trademarks. Alleging violations of federal and state law, plaintiff sought preliminary and permanent injunctions, compensatory damages, and other relief. On December 23, 2016, plaintiff filed an amended complaint adding Brighthouse Financial, Inc. as an additional defendant. The parties have resolved this matter, and the action was voluntarily dismissed on February 15, 2017. Sales Practices Claims Over the past several years, the Company has faced claims and regulatory inquiries and investigations, alleging improper marketing or sales of individual life insurance policies, annuities, mutual funds or other products. The Company continues to defend vigorously against the claims in these matters. The Company believes adequate provision has been made on its consolidated financial statements for all probable and reasonably estimable losses for sales practices matters. Summary Various litigation, claims and assessments against the Company, in addition to those discussed previously and those otherwise provided for on the Company's consolidated financial statements, have arisen in the course of the Company's business, including, but not limited to, in connection with its activities as an insurer, investor and taxpayer. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning the Company's compliance with applicable insurance and other laws and regulations. It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. In some of the matters referred to previously, large and/or indeterminate amounts, including punitive and treble damages, are sought. Although, in light of these considerations it is possible that an adverse outcome in certain cases could have a material effect upon the Company's financial position, based on information currently known by the Company's management, in its opinion, the outcomes of such pending investigations and legal proceedings are not likely to have such an effect. However, given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material effect on the Company's consolidated net income or cash flows in particular quarterly or annual periods. Insolvency Assessments Most of the jurisdictions in which the Company is admitted to transact business require insurers doing business within the jurisdiction to participate in guaranty associations, which are organized to pay contractual benefits owed pursuant to insurance policies issued by impaired, insolvent or failed insurers. These associations levy assessments, up to prescribed limits, on all member insurers in a particular state on the basis of the proportionate share of the premiums written by member insurers in the lines of business in which the impaired, insolvent or failed insurer engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. Assets and liabilities held for insolvency assessments were as follows:
December 31, ------------ 2016 2015 ---- ----- (In millions) Other Assets: Premium tax offset for future discounted and undiscounted assessments. $12 $ 13 Premium tax offsets currently available for paid assessments.......... 7 10 ---- ----- Total................................................................... $19 $ 23 ==== ===== Other Liabilities: Insolvency assessments................................................ $16 $ 17 ==== =====
107 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Commitments Mortgage Loan Commitments The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $335 million and $124 million at December 31, 2016 and 2015, respectively. Commitments to Fund Partnership Investments and Private Corporate Bond Investments The Company commits to fund partnership investments and to lend funds under private corporate bond investments. The amounts of these unfunded commitments were $1.3 billion and $1.0 billion at December 31, 2016 and 2015, respectively. Other Commitments The Company has entered into collateral arrangements with affiliates, which require the transfer of collateral in connection with secured demand notes. At both December 31, 2016 and 2015, the Company had agreed to fund up to $20 million of cash upon the request by these affiliates and had transferred collateral consisting of various securities with a fair market value of $25 million to custody accounts to secure the demand notes. Each of these affiliates is permitted by contract to sell or re-pledge this collateral. Guarantees In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties such that it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third-party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation ranging from $6 million to $222 million, with a cumulative maximum of $228 million, while in other cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future. Management believes that it is unlikely the Company will have to make any material payments under these indemnities, guarantees, or commitments. In addition, the Company indemnifies its directors and officers as provided in its charters and by-laws. Also, the Company indemnifies its agents for liabilities incurred as a result of their representation of the Company's interests. Since these indemnities are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these indemnities in the future. The Company's recorded liabilities were $2 million at both December 31, 2016 and 2015, for indemnities, guarantees and commitments. 108 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 17. Related Party Transactions The Company has various existing relationships with MetLife for services necessary to conduct its activities. Non-Broker-Dealer Transactions The following table summarizes income and expense from transactions with MetLife (excluding broker-dealer transactions) for the years indicated:
Years Ended December 31, Years Ended December 31, --------------------- ------------------------ 2016 2015 2014 2016 2015 2014 ----- ----- ------- --------- ---- ---- Income Expense --------------------- ------------------------ (In millions) MetLife. $(602) $(199) $(1,042) $ (265) $511 $539
The following table summarizes assets and liabilities from transactions with MetLife (excluding broker-dealer transactions) at:
At December 31, At December 31, -------------- --------------- 2016 2015 2016 2015 ------ ------- ------ ------ Assets Liabilities -------------- --------------- (In millions) MetLife. $8,972 $12,277 $9,518 $9,479
The material arrangements between the Company and MetLife are as follows: Reinsurance Agreements The Company enters into reinsurance agreements primarily as a purchaser of reinsurance for its various insurance products and also as a provider of reinsurance for some insurance products issued by affiliated companies. The Company participates in reinsurance activities in order to limit losses, minimize exposure to significant risks and provide additional capacity for future growth. The Company has reinsurance agreements with certain of MetLife, Inc.'s subsidiaries, including MLIC, GALIC, MetLife Europe d.a.c., MRV, DELAM and ALICO, all of which are related parties. See Note 7 for further discussion of the affiliated reinsurance agreements. Financing Arrangements The Company has financing arrangements with MetLife that are used to support reinsurance obligations arising under affiliated reinsurance agreements. The Company recognized interest expense for affiliated debt of $65 million, $64 million and $70 million, for the years ended December 31, 2016, 2015 and 2014, respectively. See Note 12 for further discussion of the related party financing arrangements. Investment Transactions The Company has extended loans to certain subsidiaries of MetLife, Inc. Additionally, in the ordinary course of business, the Company transfers invested assets, primarily consisting of fixed maturity securities, to and from MetLife affiliates. See Note 8 for further discussion of the related party investment transactions. 109 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 17. Related Party Transactions (continued) Shared Services and Overhead Allocations MetLife provides the Company certain services, which include, but are not limited to, executive oversight, treasury, finance, legal, human resources, tax planning, internal audit, financial reporting, information technology, distribution services and investor relations. The Company is charged for these services based on direct and indirect costs. When specific identification is not practicable, an allocation methodology is used, primarily based on sales, in-force liabilities, or headcount. For certain agreements, charges are based on various performance measures or activity-based costing, such as sales, new policies/contracts issued, reserves, and in-force policy counts. The bases for such charges are modified and adjusted by management when necessary or appropriate to reflect fairly and equitably the actual incidence of cost incurred by the Company and/or affiliate. Management believes that the methods used to allocate expenses under these arrangements are reasonable. Expenses incurred with MetLife related to these arrangements, recorded in other operating expenses, were $820 million, $1.0 billion and $985 million for the years ended December 31, 2016, 2015 and 2014, respectively. Sales Distribution Services In July 2016, MetLife, Inc. completed the sale to MassMutual of MetLife's retail advisor force and certain assets associated with the MetLife Premier Client Group, including all of the issued and outstanding shares of MSI. MassMutual assumed all of the liabilities related to such assets and that arise or occur after the closing of the sale. Broker-Dealer Transactions The Company accrues related party revenues and expenses arising from transactions with MetLife's broker-dealers whereby the MetLife broker-dealers sell the Company's variable annuity and life products. The affiliated revenue for the Company is fee income from trusts and mutual funds whose shares serve as investment options of policyholders of the Company. The affiliated expense for the Company is commissions collected on the sale of variable products by the Company and passed through to the broker-dealer. The following table summarizes income and expense from transactions with related broker-dealers for the years indicated:
Years Ended December 31, Years Ended December 31, ------------------------ ------------------------ 2016 2015 2014 2016 2015 2014 ---- ---- ---- ---- ---- ---- Fee Income Commission Expense ------------------------ ------------------------ (In millions) MetLife broker-dealers. $192 $208 $202 $606 $612 $572
The following table summarizes assets and liabilities from transactions with affiliated broker-dealers as follows:
At December 31, At December 31, --------------- --------------- 2016 2015 2016 2015 ---- ---- ---- ---- Fee Income Receivables Secured Demand Notes --------------- --------------- (In millions) MetLife broker-dealers. $18 $18 $20 $20
110 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 18. Subsequent Events Effective January 1, 2017, the Company executed a novation and assignment agreement whereby it will replace MLIC as the reinsurer of certain variable annuities, including guaranteed minimum benefits, issued by Brighthouse NY and NELICO. This novation and assignment resulted in an increase in cash and cash equivalents of approximately $34 million, an increase in future policy benefits of approximately $79 million, an increase in policyholder account balances of approximately $387 million and a decrease in other liabilities of approximately $427 million. The Company will recognize no gain or loss as a result of this transaction. Effective January 1, 2017, MLIC recaptured risks related to guaranteed minimum benefit guarantees on certain variable annuities being reinsured by the Company. This recapture resulted in a decrease in investments and cash and cash equivalents of approximately $568 million, a decrease in future policy benefits of approximately $106 million, and a decrease in policyholder account balances of approximately $460 million. The Company will recognize a loss of approximately $2 million, net of income tax, as a result of this transaction. 111 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule I Consolidated Summary of Investments -- Other Than Investments in Related Parties December 31, 2016 (In millions)
Amount at Cost or Estimated Fair Which Shown on Amortized Cost (1) Value Balance Sheet Types of Investments ------------------- -------------- --------------- Fixed maturity securities: Bonds: U.S. government and agency securities...... $ 10,517 $ 11,550 $ 11,550 State and political subdivision securities. 2,633 2,914 2,914 Public utilities........................... 1,637 1,815 1,815 Foreign government securities.............. 946 1,046 1,046 All other corporate bonds.................. 21,214 21,912 21,912 ------------------- -------------- --------------- Total bonds.............................. 36,947 39,237 39,237 Mortgage-backed and asset-backed securities.. 12,121 12,214 12,214 Redeemable preferred stock................... 244 334 334 ------------------- -------------- --------------- Total fixed maturity securities........ 49,312 51,785 51,785 ------------------- -------------- --------------- Equity securities: Common stock: Industrial, miscellaneous and all other.... 98 116 116 Public utilities........................... -- 2 2 Banks, trust and insurance companies....... 2 5 5 Non-redeemable preferred stock............... 180 177 177 ------------------- -------------- --------------- Total equity securities.................. 280 300 300 ------------------- -------------- --------------- Mortgage loans................................ 8,884 8,884 Policy loans.................................. 1,093 1,093 Real estate and real estate joint ventures.... 215 215 Other limited partnership interests........... 1,639 1,639 Short-term investments........................ 926 926 Other invested assets......................... 3,887 3,887 ------------------- --------------- Total investments..................... $ 66,236 $ 68,729 =================== ===============
--------- (1) Cost or amortized cost for fixed maturity securities and mortgage loans represents original cost reduced by repayments, valuation allowances and impairments from other-than-temporary declines in estimated fair value that are charged to earnings and adjusted for amortization of premiums or accretion of discounts; for equity securities, cost represents original cost reduced by impairments from other-than-temporary declines in estimated fair value; for real estate, cost represents original cost reduced by impairments and adjusted for valuation allowances and depreciation; for real estate joint ventures and other limited partnership interests, cost represents original cost reduced for impairments or original cost adjusted for equity in earnings and distributions. 112 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule III Consolidated Supplementary Insurance Information December 31, 2016, 2015 and 2014 (In millions)
Future Policy DAC Benefits and Other Policyholder and Policy-Related Account Unearned Unearned Segment VOBA Balances Balances Premiums (1), (2) Revenue (1) ------------------ ---------- ------------------ ------------ ----------------- ----------- 2016 Annuities......... $ 4,521 $ 7,251 $ 24,265 $ -- $ 83 Life.............. 504 3,871 2,816 12 53 Run-off........... 112 16,522 8,505 -- 44 Corporate & Other. 137 7,424 1 6 -- ---------- ------------------ ------------ ----------------- ----------- Total............ $ 5,274 $ 35,068 $ 35,587 $ 18 $ 180 ========== ================== ============ ================= =========== 2015 Annuities......... $ 3,510 $ 6,395 $ 20,975 $ -- $ 93 Life.............. 680 4,438 2,667 12 52 Run-off........... 510 15,446 12,017 -- 43 Corporate & Other. 109 7,164 2 6 -- ---------- ------------------ ------------ ----------------- ----------- Total............ $ 4,809 $ 33,443 $ 35,661 $ 18 $ 188 ========== ================== ============ ================= =========== 2014 Annuities......... $ 3,548 $ 5,205 $ 20,161 $ -- $ 98 Life.............. 680 3,968 2,658 9 48 Run-off........... 601 15,860 12,666 -- 58 Corporate & Other. 61 6,766 1 5 -- ---------- ------------------ ------------ ----------------- ----------- Total............ $ 4,890 $ 31,799 $ 35,486 $ 14 $ 204 ========== ================== ============ ================= ===========
--------- (1)Amounts are included within the future policy benefits and other policy-related balances column. (2)Includes premiums received in advance. 113 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule III Consolidated Supplementary Insurance Information -- (continued) December 31, 2016, 2015 and 2014 (In millions)
Policyholder Premiums and Benefits and Claims Universal Life Net and Interest Credited Other and Investment-Type Investment to Policyholder Amortization of Operating Segment Product Policy Fees Income (1) Account Balances DAC and VOBA Expenses ------------------ ------------------- ------------ --------------------- --------------- ---------- 2016 Annuities......... $ 2,593 $ 1,290 $ 2,288 $ (825) $ 866 Life.............. 333 275 330 239 300 Run-off........... 579 1,135 1,256 392 347 Corporate & Other. 112 12 67 22 225 ------------------- ------------ --------------------- --------------- ---------- Total............ $ 3,617 $ 2,712 $ 3,941 $(172) $ 1,738 =================== ============ ===================== =============== ========== 2015 Annuities......... $ 3,142 $ 1,120 $ 2,218 $ 358 $ 892 Life.............. 431 277 355 128 288 Run-off........... 552 1,270 954 86 368 Corporate & Other. 248 (52) 206 23 174 ------------------- ------------ --------------------- --------------- ---------- Total............ $ 4,373 $ 2,615 $ 3,733 $ 595 $ 1,722 =================== ============ ===================== =============== ========== 2014 Annuities......... $ 3,374 $ 1,114 $ 2,536 $ 705 $ 939 Life.............. 282 281 291 172 278 Run-off........... 447 1,358 944 91 345 Corporate & Other. 242 (84) 55 22 202 ------------------- ------------ --------------------- --------------- ---------- Total............ $ 4,345 $ 2,669 $ 3,826 $ 990 $ 1,764 =================== ============ ===================== =============== ==========
--------- (1)See Note 2 of the Notes to the Consolidated Financial Statements for information on certain segment reporting changes which were retrospectively applied. 114 Brighthouse Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule IV Consolidated Reinsurance December 31, 2016, 2015 and 2014 (Dollars in millions)
% Amount Gross Amount Ceded Assumed Net Amount Assumed to Net ------------- ------------- ----------- ------------ -------------- 2016 Life insurance in-force..... $ 559,458 $ 483,391 $ 7,006 $ 83,073 8.4% ============= ============= =========== ============ Insurance premium Life insurance (1).......... $ 1,894 $ 1,057 $ 76 $ 913 8.3% Accident & health insurance. 223 218 3 8 37.5% ------------- ------------- ----------- ------------ Total insurance premium.... $ 2,117 $ 1,275 $ 79 $ 921 8.6% ============= ============= =========== ============ 2015 Life insurance in-force..... $ 538,086 $ 497,017 $ 94,863 $ 135,932 69.8% ============= ============= =========== ============ Insurance premium Life insurance (1).......... $ 2,046 $ 916 $ 288 $ 1,418 20.3% Accident & health insurance. 235 229 9 15 60.0% ------------- ------------- ----------- ------------ Total insurance premium.... $ 2,281 $ 1,145 $ 297 $ 1,433 20.7% ============= ============= =========== ============ 2014 Life insurance in-force..... $ 489,194 $ 450,342 $ 52,728 $ 91,580 57.6% ============= ============= =========== ============ Insurance premium Life insurance (1).......... $ 1,995 $ 943 $ 94 $ 1,146 8.2% Accident & health insurance. 231 225 -- 6 0.0% ------------- ------------- ----------- ------------ Total insurance premium.... $ 2,226 $ 1,168 $ 94 $ 1,152 8.2% ============= ============= =========== ============
-------- (1)Includes annuities with life contingencies. For the year ended December 31, 2016, reinsurance ceded and assumed included affiliated transactions for life insurance in-force of $311.0 billion and $7.0 billion, respectively, and life insurance premiums of $928 million and $34 million, respectively. For the year ended December 31, 2015, reinsurance ceded and assumed included affiliated transactions for life insurance in-force of $321.0 billion and $86.4 billion, respectively, and life insurance premiums of $783 million and $227 million, respectively. For the year ended December 31, 2014, reinsurance ceded and assumed included affiliated transactions for life insurance in-force of $292.0 billion and $50.2 billion, respectively, and life insurance premiums of $830 million and $55 million, respectively. 115 [THIS PAGE INTENTIONALLY LEFT BLANK] 116 PART C OTHER INFORMATION ----------------- ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements The financial statements and financial highlights of each of the Subaccounts of the Separate Account are included in Part B hereof and include: (1) Report of Independent Registered Public Accounting Firm (2) Statements of Assets and Liabilities as of December 31, 2016 (3) Statements of Operations for the year ended December 31, 2016 (4) Statements of Changes in Net Assets for the years ended December 31, 2016 and 2015 (5) Notes to the Financial Statements The consolidated financial statements and financial statement schedules of Brighthouse Life Insurance Company (formerly MetLife Insurance Company USA) and subsidiaries are included in Part B hereof and include: (1) Report of Independent Registered Public Accounting Firm (2) Consolidated Balance Sheets as of December 31, 2016 and 2015 (3) Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014 (4) Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2016, 2015 and 2014 (5) Consolidated Statements of Stockholder's Equity for the years ended December 31, 2016, 2015 and 2014 (6) Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014 (7) Notes to the Consolidated Financial Statements (8) Financial Statement Schedules (b) Exhibits EXHIBIT DESCRIPTION ----------- NUMBER ------ 1(a). Resolutions of The Travelers Insurance Company Board of Directors authorizing the establishment of the Registrant. (Incorporated herein by reference to Exhibit 1 to The Travelers Fund ABD for Variable Annuities' Registration Statement on Form N-4, File Nos. 033-65343/811-07465, filed December 22, 1995.) 1(b). Resolutions of The MetLife Insurance Company of Connecticut Board of Directors, dated March 24, 2008, authorizing the combining of MetLife of CT Separate Account PF for Variable Annuities into MetLife of CT Separate Account Eleven for Variable Annuities. (Incorporated herein by reference to Exhibit 1(b) to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File Nos. 333-152258/811-21262, filed November 20, 2008.) 1(c). Resolutions of The MetLife Insurance Company of Connecticut's Board of Directors, dated August 13, 2014 (including Certificate of Conversion, Certificate of Incorporation and Certificate of Redomestication). (Incorporated herein by reference to Exhibit 2(c) to MetLife Insurance Company USA's Registration Statement on Form S-3, File No. 333-201857, filed February 4, 2015.) 2. Not Applicable 3(a). Distribution and Principal Underwriting Agreement among the Registrant, MetLife Insurance Company of Connecticut and MetLife Investors Distribution Company. (Incorporated herein by reference to Exhibit 3(a) to Post-Effective Amendment No. 1 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-152258/811-21262 filed on April 8, 2009.) EXHIBITNUMBER DESCRIPTION ------ ----------- 3(a)(i). Amendment to Distribution and Principal Underwriting Agreement between MetLife Insurance Company of Connecticut and MetLife Investors Distribution Company (effective November 14, 2014). (Incorporated herein by reference to Exhibit 3(i)(b) to MetLife Investors USA Separate Account A's Registration Statement on Form N-4, File Nos. 333-200231/811-03365, filed on November 17, 2014.) 3(a)(ii). Amendment No. 2 to the Distribution and Principal Underwriting Agreement between MetLife Insurance Company USA and MetLife Investors Distribution Company (effective December 7, 2015). (Incorporated herein by reference to Exhibit 3(a)(ii) to Post-Effective Amendment No. 26 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/811-21262, filed on April 6, 2016.) 3(b). Agreement and Plan of Merger (10-26-06) (MLIDLLC into MLIDC). (Incorporated herein by reference to Exhibit 3(c) to Post-Effective Amendment No. 16 to MetLife of CT Fund ABD for Variable Annuities' Registration Statement on Form N-4, File Nos. 033-65343/811-07465, filed April 4, 2007.) 3(c). Master Retail Sales Agreement (MLIDC) (9-2012). (Incorporated herein by reference to Exhibit 3(d) to Post-Effective Amendment No. 23 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/811-21262, filed April 3, 2013.) 3(d). Services Agreement between MetLife Investors Distribution Company and MetLife Insurance Company of Connecticut. (Incorporated herein by reference to Exhibit 3(e) to Post-Effective Amendment No. 15 to MetLife of CT Fund BD for Variable Annuities' Registration Statement on Form N-4, File Nos. 033-73466/811-08242, filed April 7, 2008.) 3(e). Principal Underwriting and Distribution Agreement between Brighthouse Life Insurance Company and Brighthouse Securities, LLC (effective March 6, 2017). (Incorporated herein by reference to Exhibit 3(f) to Post-Effective Amendment No. 27 to Brighthouse Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/811-21262, filed April 5, 2017.) 3(f). Brighthouse Securities, LLC Sales Agreement. (Incorporated herein by reference to Exhibit 3(g) to Post-Effective Amendment No. 27 to Brighthouse Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/811-21262, filed April 5, 2017.) 4(a). Variable Annuity Contract. (Incorporated herein by reference to Exhibit 4 to the Registration Statement on Form N-4, File No. 333-32589, filed July 31, 1997.) 4(b). Company Name Change Endorsement The Travelers Insurance Company effective May 1, 2006. (Incorporated herein by reference to Exhibit 4(c) to Post-Effective Amendment No. 14 to The Travelers Fund ABD for Variable Annuities' Registration Statement on Form N-4, File No. 033-65343, filed April 6, 2006.) 4(c). Roth 401 Endorsement. (Incorporated herein by reference to Exhibit 4(d) to Post-Effective Amendment No. 14 to The Travelers Fund ABD for Variable Annuities' Registration Statement on Form N-4, File No. 033-65343, filed April 6, 2006.) 4(d). Roth 403(b) Endorsement. (Incorporated herein by reference to Exhibit 4(e) to Post-Effective Amendment No. 14 to The Travelers Fund ABD for Variable Annuities' Registration Statement on Form N-4, File No. 033-65343, filed April 6, 2006.) 4(e). 403(b) Nationwide Tax Sheltered Annuity Endorsement (L-22487 (12/08)). (Incorporated herein by reference to Exhibit 4(e)(i) to Post-Effective Amendment No. 2 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File No. 333-152189, filed April 6, 2010.) 4(f). Company Name Change Endorsement effective November 14, 2014 (6-E120-14). (Incorporated herein by reference to Exhibit 4(a)(i) to MetLife Insurance Company USA's Registration Statement on Form S-3, File No. 333-201857, filed February 4, 2015.) 4(g). Company Name Change Endorsement (effective March 6, 2017) (5-E132-6). (Incorporated herein by reference to Exhibit 4(i) to Post-Effective Amendment No. 27 EXHIBITNUMBER DESCRIPTION ------ ----------- to Brighthouse Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/811-21262, filed April 5, 2017.) 5(a). Form of Application. (Incorporated herein by reference to Exhibit 5 to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-32589, filed November 4, 1997.) 5(b). Form of Variable Annuity Application. (Incorporated herein by reference to Exhibit 5 to Post-Effective Amendment No. 14 to The Travelers Fund ABD for Variable Annuities' Registration Statement on Form N-4, File No. 033-65343, filed April 6, 2006.) 6(a). Copy of Certificate of Incorporation of the Company and Certificate of Amendment (effective November 17, 2014). (Incorporated herein by reference to Exhibit 6(a)(i) to MetLife Investors USA Separate Account A's Registration Statement on Form N-4, File Nos. 333-200231/811-03365, filed November 17, 2014.) 6(b). Copy of the By-Laws of the Company. (Incorporated herein by reference to Exhibit 6(a)(ii) to MetLife Investors USA Separate Account A's Registration Statement on Form N-4, File Nos. 333-200231/811-03365, filed November 17, 2014.) 6(c). Copy of Certificate of Amendment of Certificate of Incorporation of MetLife Insurance Company USA (effective March 6, 2017). (Incorporated herein by reference to Exhibit 6(e) to Post-Effective Amendment No. 27 to Brighthouse Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/811-21262, filed April 5, 2017.) 6(d). Copy of Amended and Restated By-Laws of the Company. (Incorporated herein by reference to Exhibit 6(f) to Post-Effective Amendment No. 27 to Brighthouse Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/811-21262, filed April 5, 2017.) 7(a). Specimen Reinsurance Contract. (Incorporated herein by reference to Exhibit 7 to the Registration Statement on Form N-4 , File No. 333-65942, filed April 15, 2003.) 7(b). Variable Annuity Death Benefit Reinsurance Agreement (effective June 30, 1998) between The Travelers Life and Annuity Company, The Travelers Insurance Company and Connecticut General Life Insurance Company, Amendment No. 1, and Notice Letter of termination of new business. (Incorporated herein by reference to Exhibit 7(b) to Post-Effective Amendment No. 4 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-152258/811-21262, filed April 6, 2012.) 7(c). Automatic Reinsurance Agreement between MetLife Insurance Company of Connecticut and Exeter Reassurance Company, Ltd. (effective April 1, 2006). (Incorporated herein by reference to Exhibit 7(b) to Post-Effective Amendment No. 4 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-152189/811-21262, filed April 4, 2012.) 7(d). Automatic Reinsurance Agreement between MetLife Life and Annuity Company of Connecticut and Exeter Reassurance Company, Ltd. (effective April 1, 2006). (Incorporated herein by reference to Exhibit 7(c) to Post-Effective Amendment No. 4 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-152189/811-21262, filed April 4, 2012.) 7(e). Service Agreement and Indemnity Combination Coinsurance and Modified Coinsurance Agreement of Certain Annuity Contracts between MetLife Insurance Company of Connecticut and Metropolitan Life Insurance Company (Treaty #20176.) (Incorporated herein by reference to Exhibit 7(d) to Post-Effective Amendment No. 24 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/811-21262, filed April 4, 2014.) 7(f). Amendment to the Automatic Reinsurance Agreement effective as of April 1, 2006 between MetLife Insurance Company of Connecticut and Exeter Reassurance Company, Ltd. (effective January 1, 2014). (Incorporated herein by reference to Exhibit 7(e) to Post-Effective Amendment No. 25 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/811-21262, filed April 8, 2015.) EXHIBITNUMBER DESCRIPTION ------ ----------- 7(g). Amended and Restated Indemnity Retrocession Agreement Coverage effective as of April 1, 2006 between MetLife Insurance Company USA and Catalyst Re Ltd. (Incorporated herein by reference to Exhibit 7(f) to Post-Effective Amendment No. 25 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/811-21262, filed April 8, 2015.) 7(h). Partition and Novation Agreement by and between MetLife Insurance Company of Connecticut, Connecticut General Life Insurance Company and Metropolitan Life Insurance Company (effective January 1, 2014). (Incorporated herein by reference to Exhibit No. 7(h) to Post-Effective Amendment No. 7 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-152258/811-21262, filed on April 9, 2015.) 7(i). Notice of Final Adjusted Recapture Payment Amount in respect of the Amended and Restated Indemnity Retrocession Agreement, effective as of April 1, 2006 between MetLife Insurance Company USA and Catalyst Re., Ltd. (effective July 31, 2015) (Incorporated herein by reference to Exhibit 7(g) to Post-Effective Amendment No. 26 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4 File No. 333-101778/811-21262, filed on April 6, 2016.) 8(a). Participation Agreement Among Metropolitan Series Fund, Inc., MetLife Advisers, LLC, MetLife Investors Distribution Company and MetLife Insurance Company of Connecticut (effective August 31, 2007). (Incorporated herein by reference to Exhibit 8(e) to Post-Effective Amendment No. 11 to MetLife of CT Separate Account Nine for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-65926/811-09411, filed October 31, 2007.) 8(a)(i). Amendment dated April 30, 2010 to the Participation Agreement dated August 31, 2007 by and among Metropolitan Series Fund, Inc., MetLife Advisers, LLC, MetLife Investors Distribution Company and MetLife Insurance Company of Connecticut. (Incorporated herein by reference to Exhibit 8(b)(iii) to Post-Effective Amendment No. 4 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-152189/811-21262, filed April 4, 2012.) 8(a)(ii). Participation Agreement among Brighthouse Funds Trust II, Brighthouse Investment Advisers, LLC, Brighthouse Securities, LLC and Brighthouse Life Insurance Company (effective March 6, 2017). (Incorporated herein by reference to Exhibit 8(b)(iv) to Post-Effective Amendment No. 27 to Brighthouse Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/811-21262, filed April 5, 2017.) 8(b). Participation Agreement Among Met Investors Series Trust, Met Investors Advisory, LLC, MetLife Investors Distribution Company, The Travelers Insurance Company and The Travelers Life and Annuity Company effective November 1, 2005. (Incorporated herein by reference to Exhibit 8(c) to Post-Effective Amendment No. 14 to The Travelers Fund ABD for Variable Annuities Registration Statement on Form N-4, File No. 033-65343, filed April 6, 2006.) 8(b)(i). First Amendment dated May 1, 2009 to the Participation Agreement dated November 1, 2005 by and among Met Investors Series Trust, MetLife Advisers, LLC, MetLife Investors Distribution Company and MetLife Insurance Company of Connecticut. (Incorporated herein by reference to Exhibit 8(a)(i) to Post-Effective Amendment No. 4 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-152189/811-21262, filed April 4, 2012.) 8(b)(ii). Amendment dated April 30, 2010 to the Participation Agreement dated November 1, 2005 by and among Met Investors Series Trust, MetLife Advisers, LLC, MetLife Investors Distribution Company and MetLife Insurance Company of Connecticut. (Incorporated herein by reference to Exhibit 8(a)(ii) to Post-Effective Amendment No. 4 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-152189/811-21262, filed April 4, 2012.) 8(b)(iii). Amendment to Participation Agreement Among Met Investors Series Trust, MetLife Advisers, LLC, MetLife Investors Distribution Company and MetLife Insurance Company of Connecticut (effective November 17, 2014). (Incorporated herein by reference to Exhibit 8(i)(d) to MetLife Investors USA Separate Account A's Registration EXHIBITNUMBER DESCRIPTION ------ ----------- Statement on Form N-4, File Nos. 333-200231/811-03365, filed November 17, 2014.) 8(b)(iv). Participation Agreement among Brighthouse Funds Trust I, Brighthouse Investment Advisers, LLC, Brighthouse Securities, LLC and Brighthouse Life Insurance Company (effective March 6, 2017). (Incorporated herein by reference to Exhibit 8(a)(ii) to Post-Effective Amendment No. 27 to Brighthouse Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/811-21262, filed April 5, 2017.) 8(c). Participation Agreement Among The Travelers Insurance Company, The Travelers Life and Annuity Company, American Funds Insurance Series, American Funds Distributors, Inc. and Capital Research and Management Company effective October 1, 1999 and Amendments to the Participation Agreement (respectively effective May 1, 2001, December 31, 2002, April 14, 2003, October 20, 2005 and April 28, 2008.) (Incorporated herein by reference to Exhibit 8(e) to Post-Effective Amendment No. 19 to the Registration Statement on Form N-4, File No. 333-101778, filed April 7, 2009.) 8(c)(i). Amendment dated April 30, 2010 to the Participation Agreement dated October 1, 1999 between American Funds Insurance Series, Capital Research and Management Company and MetLife Insurance Company of Connecticut. (Incorporated herein by reference to Exhibit 8(d)(i) to Post-Effective Amendment No. 3 to the Registration Statement on Form N-4, File No. 333-152194, filed April 5, 2011.) 8(c)(ii). Amendment No. 7 to the Participation Agreement Among MetLife Insurance Company of Connecticut, American Funds Insurance Series, American Funds Distributors, Inc. and Capital Research and Management Company. (Incorporated herein by reference to Exhibit 8(iii)(c) to MetLife Investors USA Separate Account A's Registration Statement on Form N-4, File Nos. 333-200237/811-03365, filed on November 17, 2014.) 8(c)(iii). Eighth Amendment to the Participation Agreement between MetLife Insurance Company USA, American Funds Insurance Series, American Funds Distributors, Inc. and Capital Research and Management Company dated May 15, 2015. (Incorporated herein by reference to Exhibit 8(e)(iii) to Post-Effective Amendment No. 26 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/811-21262, filed on April 6, 2016.) 8(c)(iv). Ninth Amendment to the Participation Agreement between MetLife Insurance Company USA, American Funds Insurance Series, American Funds Distributors, Inc. and Capital Research and Management Company dated November 19, 2014. (Incorporated herein by reference to Exhibit 8(e)(iv) to Post-Effective Amendment No. 26 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/811-21262, filed on April 6, 2016.) 8(d). Amended and Restated Participation Agreement Among The Travelers Insurance Company, The Travelers Life and Annuity Company, Travelers Distribution LLC, Franklin Templeton Variable Insurance Products Trust and Franklin Templeton Distributors, Inc. effective May 1, 2004 and an Amendment to the Amended and Restated Participation Agreement (effective May 1, 2005.) (Incorporated herein by reference to Exhibit 8(i) to Post-Effective Amendment No. 19 to the Registration Statement on Form N-4, File No. 333-101778, filed April 7, 2009.) 8(d)(i). Amendment No. 5 dated October 5, 2010 to the Amended and Restated Participation Agreement dated May 1, 2004 among Franklin Templeton Variable Insurance Products Trust, Franklin/Templeton Distributors, Inc., MetLife Insurance Company of Connecticut and MetLife Investors Distribution Company. (Incorporated herein by reference to Exhibit 8(d)(i) to Post-Effective Amendment No. 3 to the Registration Statement on Form N-4, File No. 333-152189, filed April 5, 2011.) 8(d)(ii). Participation Agreement Addendum effective May 1, 2011 Among Franklin Templeton Variable Insurance Products Trust, Franklin/Templeton Distributors, Inc., MetLife Insurance Company of Connecticut and MetLife Investors Distribution Company. (Incorporated herein by reference to Exhibit 8(d)(ii) to Post-Effective Amendment No. 4 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-152189/811-21262, filed April 4, 2012.) EXHIBITNUMBER DESCRIPTION ------ ----------- 8(d)(iii). Amendment dated January 15, 2013 to the Participation Agreement Among Franklin Templeton Variable Insurance Products Trust, Franklin/Templeton Distributors, Inc., MetLife Insurance Company of Connecticut and MetLife Investors Distribution Company. (Incorporated herein by reference to Exhibit 8(i)(iii) to Post-Effective Amendment No. 23 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/811-21262, filed April 3, 2013.) 8(d)(iv). Amendment No. 7 to the Amended and Restated Participation Agreement Among Franklin Templeton Variable Insurance Products Trust, Franklin/Templeton Distributors, Inc., MetLife Insurance Company of Connecticut and MetLife Investors Distribution Company. (Incorporated herein by reference to Exhibit 8(ii)- to MetLife Investors Variable Annuity Account One's Registration Statement on Form N-4, File Nos. 333-200247/811-05200, filed November 17, 2014.) 8(d)(v). Amendment to Participation Agreement between Franklin Templeton Variable Insurance Products Trust, Franklin/Templeton Distributors, Inc., MetLife Insurance Company of Connecticut and MetLife Investors Distribution Company (eefective August 1, 2014). (Incorporated herein by reference to Exhibit No.8(i)(v) to Post-Effective Amendment No. 26 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statemtent on Form N-4, File Nos. 333-101778/811-21262, filed on April 6, 2016.) 8(e). Participation Agreement Among MetLife Insurance Company of Connecticut, Legg Mason Partners Variable Equity Trust, Legg Mason Partners Variable Income Trust, Legg Mason Investor Services, LLC and Legg Mason Partners Fund Advisor, LLC effective January 1, 2009. (Incorporated herein by reference to Exhibit 8(k) to Post-Effective Amendment No. 19 to the Registration Statement on Form N-4, File No. 333-101778, filed April 7, 2009.) 8(e)(i). Amendment dated April 30, 2010 to the Participation Agreement dated January 1, 2009 between Legg Mason Partners Variable Equity Trust, Legg Mason Partners Variable Income trust, Legg Mason Investor Services, LLC, Legg Mason Partners Fund Advisor, LLC and MetLife Insurance Company of Connecticut. (Incorporated herein by reference to Exhibit 8(f)(i) to Post-Effective Amendment No. 3 to the Registration Statement on Form N-4, File No. 333-152189, filed April 5, 2011.) 8(e)(ii). Second Amendment to Participation Agreement Among Legg Mason Investors Services, LLC, Legg Mason Partners Fund Advisor, LLC, Legg Mason Partners Variable Equity Trust, Legg Mason Partners Variable Income Trust and MetLife Insurance Company of Connecticut. (Incorporated herein by reference to Exhibit 8(vii)(c) to MetLife Investors USA Separate Account A's Registration Statement on Form N-4, File Nos. 333-200237/811-03365, filed on November 17, 2014.) 8(f). Participation Agreement Among The Travelers Insurance Company, The Travelers Life and Annuity Company, Pioneer Variable Contracts Trust, Pioneer Investment Management, Inc. and Pioneer Fund Distributor, Inc. effective January 1, 2002 and Amendments to the Participation Agreement (respectively effective May 1, 2003 and April 28, 2008.) (Incorporated herein by reference to Exhibit 8(m) to Post-Effective Amendment No. 19 to the Registration Statement on Form N-4, File No. 333-101778, filed April 7, 2009.) 8(f)(i). Amendment No. 3 dated May 1, 2011 to the Participation Agreement Among MetLife Insurance Company of Connecticut, Pioneer Variable Contracts Trust, Pioneer Investment Management, Inc. and Pioneer Funds Distributor, Inc. (Incorporated herein by reference to Exhibit 8(k)(i) to Post-Effective Amendment No. 22 to the Registration Statement on Form N-4, File No. 333-101778, filed April 4, 2012.) 8(f)(ii). Amendment to Participation Agreement with Pioneer Variable Contracts Trust (effective November 17, 2014). (Incorporated herein by reference to Exhibit 8(iv)(c) to MetLife Investors USA Separate Account A's Registration Statement on Form N-4, File Nos. 333-200288/811-03365, filed on November 17, 2014.) 8(g). Amended and Restated Participation Agreement Among The Travelers Insurance Company, The Travelers Life and Annuity Company, The Universal Institutional Funds, Inc., Morgan Stanley Investment Management, Inc. and Morgan Stanley Distributors Inc. effective May 1, 2005 and an Amendment to the Amended and Restated Participation Agreement (effective November 10, 2008.) (Incorporated EXHIBITNUMBER DESCRIPTION ------ ----------- herein by reference to Exhibit 8(d) to Post-Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-152232, filed April 7, 2009.) 8(g)(i). Amendment No. 3 dated June 11, 2015 to the Participation Agreement dated May 1, 2005 between MetLife Insurance Company USA, The Universal Institutional Funds, Inc., Morgan Stanley Distribution, Inc. and Morgan Stanley Investment Management, Inc. (Incorporated herein by reference to Exhibit 8(f)(ii) to Post-Effective Amendment No. 8 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-152232/811-21262, filed on April 6, 2016.) 8(h). Participation Agreement Among AIM Variable Insurance Funds, AIM Distributors, Inc., The Travelers Insurance Company, The Travelers Life and Annuity Company and Travelers Distribution LLC effective October 1, 2000 and Amendments to the Participation Agreement (respectively effective May 1, 2003, March 31, 2005 and April 28, 2008.) (Incorporated herein by reference to Exhibit 8(c) to Post-Effective Amendment No. 19 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File No. 333-101778, filed April 7, 2009.) 8(h)(i). Amendment dated April 30, 2010 to the Participation Agreement dated October 1, 2000 by and among AIM Variable Insurance Funds, A I M Distributors, Inc., MetLife Insurance Company of Connecticut and MetLife Investors Distribution Company. (Incorporated herein by reference to Exhibit 8(c)(i) to Post-Effective Amendment No. 21 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File No. 333-101778, filed April 5, 2011.) 8(h)(ii). Amendment dated April 30, 2010 to the Participation Agreement dated October 1, 2000 between AIM Variable Insurance Funds (Invesco Variable Insurance Funds) ("AVIF"), Invesco Distributors, Inc. and MetLife Insurance Company of Connecticut. (Incorporated herein by reference to Exhibit 8(c)(ii) to Post-Effective Amendment No. 21 to MetLife of CT Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File No. 333-101778, filed April 5, 2011.) 8(h)(iii). Amendment to Participation Agreement with AIM Variable Insurance Funds (Invesco Variable Insurance Funds and Invesco Distributors, Inc. (effective November 17, 2014). (Incorporated herein by reference to Exhibit 8(i)(d) to MetLife Investors Variable Annuity Account One's Registration Statement on Form N-4, File Nos. 333- 200247/811-05200, filed on November 17, 2014.) 8(i). Amended and Restated Participation Agreement Among The Travelers Insurance Company, Fidelity Distributors Corporation, VIP Fund, VIP Fund II and VIP Fund III effective May 1, 2001 and Amendments to the Amended and Restated Participation Agreement (respectively effective May 1, 2003, December 8, 2004, October 1, 2005, June 18, 2007 and April 28, 2008.) (Incorporated herein by reference to Exhibit 8(o) to Post-Effective Amendment No. 19 to the Registration Statement on Form N-4, File No. 333-101778, filed April 7, 2009.) 8(i)(i). Summary Prospectus Agreement among Fidelity Distributors Corporation and MetLife Insurance Company of Connecticut effective April 30, 2010. (Incorporated herein by reference to Exhibit 8(c)(i) to Post-Effective Amendment No. 3 to the Registration Statement on Form N-4, File No. 333-152189, filed April 5, 2011.) 8(i)(ii). Amendment to the Participation Agreement with Fidelity Variable Insurance Products Funds (effective November 17, 2014). (Incorporated herein by reference to Exhibit 8(vii)(c) to MetLife Investors Variable Annuity Account One's Registration Statement on Form N-4, File Nos. 333-200247/811-05200, filed on November 17, 2014.) 8(i)(iii). Amendments to the Participation Agreement Among MetLife Insurance Company USA (formerly MetLife Insurance Company of Connecticut), Fidelity Variable Insurance Products Funds and Fidelity Distributors Corporation (effective June 1, 2015, April 28, 2008, May 16, 2007 and October 1, 2005). (Incorporated herein by reference to Exhibit 8(l)(iii) to Post-Effective Amendment No. 27 to Brighthouse Separate Account Eleven for Variable Annuities' Registration Statement on Form N-4, File Nos. 333-101778/811-21262, filed on April 5, 2017.) 8(j). Participation Agreement Among Trust for Advised Portfolios, Quasar Distributors, LLC, 1919 Investment Counsel, LLC and MetLife Insurance Company USA (effective November 17, 2014). (Incorporated herein by reference to Exhibit 8(n) to Registrant's Post-Effective Amendment No. 25 to the Registration Statement on Form N-4, File EXHIBITNUMBER DESCRIPTION ------ ----------- Nos. 333-101778/811-21262, filed April 8, 2015.) 9. Opinion of Counsel as to the legality of securities being registered. (Incorporated herein by reference to Exhibit 9. to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File 333-152258/811-21262 filed November 20, 2008.) 10. Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm. (Filed herewith.) 11. Not Applicable 12. Not Applicable 13. Powers of Attorney for Eric T. Steigerwalt, Anant Bhalla, Myles J. Lambert, Kieran Mullins, John L. Rosenthal and Lynn A. Dumais. (Filed herewith.) ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR Principal Business Address: Brighthouse Life Insurance Company 11225 North Community House Road Charlotte, North Carolina 28277
NAME AND PRINCIPAL POSITIONS AND OFFICES BUSINESS ADDRESS WITH DEPOSITOR -------------------- ----------------------
Eric T. Steigerwalt Director, Chairman of the Board, President and Chief Executive Gragg Building Officer 11225 North Community House Road Charlotte, NC 28277
Anant Bhalla Director and Chief Financial Officer Gragg Building 11225 North Community House Road Charlotte, NC 28277
Myles Lambert Director and Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Kieran Mullins Director and Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
John Rosenthal Director, Vice President and Chief Investment Officer 334 Madison Avenue Morristown, NJ 07960
Kimberly Berwanger Vice President 11225 North Community House Road Charlotte, NC 28277
Patrisha Cox Vice President 11225 North Community House Road Charlotte, NC 28277
Mark Davis Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Andrew DeMarco Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
David Dooley Vice President and Chief Accounting Officer 334 Madison Avenue Morristown, NJ 07960
Meghan Doscher Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Tara Figard Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Jason Frain Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Gregory Illson Vice President Gragg Building 11225 North Community House Road Charlotte, NC 29277
James Hamalainen Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Donald Leintz Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Timothy J. McLinden Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Marc Pucci Vice President 334 Madison Avenue Morristown, NJ 07960
Mark Reilly Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Douglas Rodgers Vice President 11225 North Community House Road Charlotte, NC 28277
Kenneth Samuelson III Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Andrew Vigar Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
James Wiviott Vice President 334 Madison Avenue Morristown, NJ 07960
Natalie Wright Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Meredith Ratajczak Vice President and Appointed Actuary Gragg Building 11225 North Community House Road Charlotte, NC 28277
Jacob Jenkelowitz Vice President and Assistant Secretary 285 Madison Avenue New York, NY 10017
Lynn Dumais Vice President and Chief Accounting Officer Gragg Building 11225 North Community House Road Charlotte, NC 28277
Jeffrey Halperin Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
David Chamberlin Vice President and Controller 18205 Crane Nest Drive Tampa, FL 33647
Frans teGroen Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Alan Igielski Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
D. Burt Arrington Vice President and Secretary Gragg Building 11225 North Community House Road Charlotte, NC 28277
Phyllis Zanghi Vice President and Tax Director Gragg Building 11225 North Community House Road Charlotte, NC 28277
Christine DeBiase Vice President, General Counsel and Assistant Secretary Gragg Building 11225 North Community House Road Charlotte, NC 28277
Janet Morgan Vice President, Treasury Gragg Building 11225 North Community House Road Charlotte, NC 28277
Scott Peterson Vice President, Treasury Gragg Building 11225 North Community House Road Charlotte, NC 28277
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR REGISTRANT The Registrant is a separate account of Brighthouse Life Insurance Company under Delaware insurance law. The Depositor is a wholly owned subsidiary of MetLife, Inc., a publicly traded company. No person is controlled by the Registrant. The following outline indicates those entities that are controlled by MetLife, Inc. or are under the common control of MetLife, Inc. ORGANIZATIONAL STRUCTURE OF METLIFE, INC. AND SUBSIDIARIES AS OF December 31, 2016 The following is a list of subsidiaries of MetLife, Inc. updated as of December 31, 2016. Those entities which are listed at the left margin (labeled with capital letters) are direct subsidiaries of MetLife, Inc. Unless otherwise indicated, each entity which is indented under another entity is a subsidiary of that other entity and, therefore, an indirect subsidiary of MetLife, Inc. Certain inactive subsidiaries have been omitted from the MetLife, Inc. organizational listing. The voting securities (excluding directors' qualifying shares, if any) of the subsidiaries listed are 100% owned by their respective parent corporations, unless otherwise indicated. The jurisdiction of domicile of each subsidiary listed is set forth in the parenthetical following such subsidiary. A. MetLife Group, Inc. (NY) B. MetLife Home Loans LLC (DE) C. Metropolitan Tower Life Insurance Company (DE) 1. EntreCap Real Estate II LLC (DE) a) PREFCO Dix-Huit LLC (CT) b) PREFCO X Holdings LLC (CT) c) PREFCO Ten Limited Partnership (CT) - a 99.9% limited partnership interest of PREFCO Ten Limited Partnership is held by EntreCap Real Estate II LLC and 0.1% general partnership is held by PREFCO X Holdings LLC. d) PREFCO Vingt LLC (CT) e) PREFCO Twenty Limited Partnership (CT) - a 99% limited partnership interest of PREFCO Twenty Limited Partnership is held by EntreCap Real Estate II LLC and 1% general partnership is held by PREFCO Vingt LLC. 2. Plaza Drive Properties, LLC (DE) 3. MTL Leasing, LLC (DE) a) PREFCO IX Realty LLC (CT) b) PREFCO XIV Holdings LLC (CT) c) PREFCO Fourteen Limited Partnership (CT) - a 99.9% limited partnership interest of PREFCO Fourteen Limited Partnership is held by MTL Leasing, LLC and 0.1% general partnership is held by PREFCO XIV Holdings LLC. d) 1320 Venture LLC (DE) i) 1320 Owner LP (DE) - a 99.9% limited partnership of 1320 Owner LP is held by 1320 Venture LLC and 0.1% general partnership is held by 1320 GP LLC. e) 1320 GP LLC (DE) D. MetLife Chile Inversiones Limitada (Chile) - 72.35109659% is owned by MetLife, Inc., 24.8823628% by American Life Insurance Company ("ALICO"), 2.76654057% is owned by Inversiones MetLife Holdco Dos Limitada and 0.00000004% is owned by Natiloportem Holdings, LLC. 1. MetLife Chile Seguros de Vida S.A. (Chile) - 99.996% of MetLife Chile Seguros de Vida S.A. is held by MetLife Chile Inversiones Limitada and 0.003% by International Technical and Advisory Services Limited ("ITAS") and the rest by third parties. a) MetLife Chile Administradora de Mutuos Hipotecarios S.A. (Chile) - 99.9% of MetLife Chile Administradora de Mutuos Hipotecarios S.A. is held by MetLife Chile Seguros de Vida S.A. and 0.1% is held by MetLife Chile Inversiones Limitada. 2. Legal Chile S.A. (Chile) - 51% of Legal Chile S.A. is owned by MetLife Chile Inversiones Limitada and the remaining interest is owned by a third party. a) Legagroup S.A. (Chile) - 99% of Legagroup S.A. is owned by Legal Chile S.A. and the remaining interest is owned by a third party. 3. Inversiones MetLife Holdco Tres Limitada (Chile) - 97.13% of Inversiones MetLife Holdco Tres Limitada is owned by MetLife Chile Inversiones Limitada and 2.87% is owned by Inversiones MetLife Holdco Dos Limitada. a) AFP Provida S.A. (Chile) - 42.3815% of AFP Provida S.A. is owned by Inversiones MetLife Holdco Dos Limitada., 42.3815% is owned by Inversiones MetLife Holdco Tres Limitada, 10.9224% is owned by MetLife Chile Inversiones Limitada and the remainder is owned by the public. i) Provida Internacional S.A. (Chile) - 99.99% of Provida Internacional S.A. is owned by AFP Provida S.A and 0.01% is owned by MetLife Chile Inversiones Limitada. 1) AFP Genesis Administradora de Fondos y Fidecomisos S.A. (Ecuador) - 99.9% of AFP Genesis Administradora de Fondos y Fidecomisos S.A. is owned by Provida Internacional S.A. and 0.1% by AFP Provida S.A. 4. MetLife Chile Seguros Generales S.A. (Chile) - 99.98% of MetLife Chile Seguros Generales, S.A. is owned by MetLife Chile Inversiones Limitada and 0.02% is owned by Inversiones MetLife Holdco Dos Limitada. E. Enterprise General Insurance Agency, Inc. (DE) F. Metropolitan Property and Casualty Insurance Company (RI) 1. Metropolitan General Insurance Company (RI) 2. Metropolitan Casualty Insurance Company (RI) 3. Metropolitan Direct Property and Casualty Insurance Company (RI) 4. MetLife Auto & Home Insurance Agency, Inc. (RI) 5. Metropolitan Group Property and Casualty Insurance Company (RI) 6. Metropolitan Lloyds, Inc. (TX) a) Metropolitan Lloyds Insurance Company of Texas (TX)- Metropolitan Lloyds Insurance Company of Texas, an affiliated association, provides automobile, homeowner and related insurance for the Texas market. It is an association of individuals designated as underwriters. Metropolitan Lloyds, Inc., a subsidiary of Metropolitan Property and Casualty Insurance Company, serves as the attorney-in-fact and manages the association. 7. Economy Fire & Casualty Company (IL) a) Economy Preferred Insurance Company (IL) b) Economy Premier Assurance Company (IL) G. First MetLife Investors Insurance Company (NY) H. Newbury Insurance Company, Limited (DE) I. MetLife Investors Group, LLC (DE) 1. MetLife Investors Distribution Company (MO) 2. MetLife Investments Securities, LLC (DE) 1 J. Metropolitan Life Insurance Company ("MLIC") (NY) 1. 334 Madison Euro Investments, Inc. (DE) 2. St. James Fleet Investments Two Limited (Cayman Islands) a) Park Twenty Three Investments Company (United Kingdom) i) Convent Station Euro Investments Four Company (United Kingdom) 1) OMI MLIC Investments Limited (Cayman Islands) 3. Sandpiper Cove Associates II, LLC (DE) 4. MLIC Asset Holdings II LLC (DE) a) El Conquistador MAH II LLC (DE) b) Mansell Office, LLC (DE) - 73.0284% is owned by MLIC Asset Holdings II, LLC and 29.9716% is owned by MLIC CB Holdings LLC. i) Mansell Retail, LLC (DE) - 73.0284% is owned by MLIC Asset Holdings II, LLC and 29.9716% is owned by MLIC CB Holdings LLC. 5. CC Holdco Manager, LLC (DE) 6. Alternative Fuels I, LLC (DE) 7. Transmountain Land & Livestock Company (MT) 8. HPZ Assets LLC (DE) 9. Missouri Reinsurance, Inc. (Cayman Islands) 10. Metropolitan Tower Realty Company, Inc. (DE) a) Midtown Heights, LLC (DE) 11. ML New River Village III, LLC (DE) 12. MetLife RC SF Member, LLC (DE) 13. 23rd Street Investments, Inc. (DE) a) MetLife Capital Credit L.P. (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc. and 99% Limited Partnership interest is held by Metropolitan Life Insurance Company. b) MetLife Capital, Limited Partnership (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc. and 99% Limited Partnership interest is held by Metropolitan Life Insurance Company. i) Long Island Solar Farm, LLC ("LISF")(DE) - 9.61% membership interest is held by MetLife Renewables Holding, LLC and 90.39% membership interest is held by LISF Solar Trust in which MetLife Capital Limited Partnership has 100% beneficial interest. ii) Met Canada Solar ULC (Canada) 14. Hyatt Legal Plans, Inc. (DE) a) Hyatt Legal Plans of Florida, Inc. (FL) 15. MetLife Holdings, Inc. (DE) a) MetLife Credit Corp. (DE) b) MetLife Funding, Inc. (DE) 16. MetLife Investments Limited (United Kingdom)- 23rd Street Investments, Inc. holds one share of MetLife Investments Limited. 17. MetLife Latin America Asesorias e Inversiones Limitada (Chile)- 23rd Street Investments, Inc. holds 0.01% of MetLife Latin America Asesorias e Inversiones Limitada. 18. Corporate Real Estate Holdings, LLC (DE) 19. MetLife Tower Resources Group, Inc. (DE) 20. Headland-Pacific Palisades, LLC (CA) 21. Headland Properties Associates (CA) - 99% is owned by Metropolitan Life Insurance Company and 1% is owned by Headland-Pacific Palisades, LLC. 22. WFP 1000 Holding Company GP, LLC (DE) 23. White Oak Royalty Company (OK) 24. 500 Grant Street GP LLC (DE) 25. 500 Grant Street Associates Limited Partnership (CT) - 99% of 500 Grant Street Associates Limited Partnership is held by Metropolitan Life Insurance Company and 1% by 500 Grant Street GP LLC. 26. MetLife Mall Ventures Limited Partnership (DE) - 99% LP interest of MetLife Mall Ventures Limited Partnership is owned by MLIC and 1% GP interest is owned by Metropolitan Tower Realty Company, Inc. 27. MetLife Retirement Services LLC (NJ) 28. Euro CL Investments, LLC (DE) 29. MEX DF Properties, LLC (DE) a) LAR Vivienda XVII, S. de R.L. de C.V. (Mexico) - 99.99% of LAR Vivienda XVII S. de R.L. de C.V. is owned by MEX DF Properties, LLC and 0.01% is owned by Euro CL Investments LLC. 30. MSV Irvine Property, LLC (DE) - 4% of MSV Irvine Property, LLC is owned by Metropolitan Tower Realty Company, Inc. and 96% is owned by Metropolitan Life Insurance Company. 31. MetLife Properties Ventures, LLC (DE) a) Citypoint Holdings II Limited (United Kingdom) 32. Housing Fund Manager, LLC (DE) a) MTC Fund I, LLC (DE) - 0.01% of MTC Fund I, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. b) MTC Fund II, LLC (DE) - 0.01% of MTC Fund II, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. c) MTC Fund III, LLC (DE) - 0.01% of MTC Fund III, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. 33. MLIC Asset Holdings LLC (DE) 34. 85 Broad Street Mezzanine LLC (DE) 35. The Building at 575 Fifth Avenue Mezzanine LLC (DE) a) The Building at 575 Fifth Retail Holding LLC (DE) b) The Building at 575 Fifth Retail Owner LLC (DE) 36. ML Bridgeside Apartments LLC (DE) 37. Para-Met Plaza Associates (FL)- 75% of the General Partnership is held by Metropolitan Life Insurance Company and 25% of the General Partnership is held by Metropolitan Tower Realty Company, Inc. 38. MLIC CB Holdings LLC (DE) 39. MetLife CC Member, LLC (DE) - 95.122% of MetLife CC Member, LLC is owned by Metropolitan Life Insurance Company and 4.878% is owned by General American Life Insurance Company. 40. Oconee Hotel Company, LLC (DE) 41. Oconee Land Company, LLC (DE) a) Oconee Land Development Company, LLC (DE) b) Oconee Golf Company, LLC (DE) c) Oconee Marina Company, LLC (DE) 2 42. 1201 TAB Manager, LLC (DE) 43. MetLife 1201 TAB Member, LLC (DE) - 96.9% of MetLife 1201 TAB Member, LLC is owned by Metropolitan Life Insurance Company and 3.1% is owned by Metropolitan Property and Casualty Insurance Company. 44. MetLife LHH Member, LLC (DE) - 99% of MetLife LHH Member, LLC is owned by Metropolitan Life Insurance Company, and 1% is owned by General American Life Insurance Company. 45. 1001 Properties, LLC (DE) 46. Riverway Residential, LP (DE) - 99.9% LP interest of Riverway Residential, LP is owned by Metropolitan Life Insurance Company and 0.1% GP interest is owned by Metropolitan Tower Realty Company, Inc. 47. 6104 Hollywood, LLC (DE) 48. Boulevard Residential, LLC (DE) 49. ML-AI MetLife Member 3, LLC (DE) 50. Ashton Judiciary Square, LLC (DE) 51. Sandpiper Cove Associates, LLC (DE) - 90.59% membership interest of Sandpiper Cove Associates, LLC is owned by MLIC and 9.41% is owned by Metropolitan Tower Realty Company. 52. 1900 McKinney Properties, LP (DE) - 99.9% LP interest of 1900 McKinney Properties, LP is owned by MLIC and 0.1% GP interest is owned by Metropolitan Tower Realty Company, Inc. 53. Marketplace Residences, LLC (DE) 54. ML Swan Mezz, LLC (DE) a) ML Swan GP, LLC (DE) 55. ML Dolphin Mezz, LLC (DE) a) ML Dolphin GP, LLC (DE) 56. Haskell East Village, LLC (DE) 57. MetLife Cabo Hilton Member, LLC (DE) - 54.129% of MetLife Cabo Hilton Member, LLC is owned by MLIC, 16.9% by General American Life Insurance Company, 28.971% by MetLife Insurance Company USA 58. ML Terraces, LLC (DE) 59. Chestnut Flats Wind, LLC (DE) 60. MetLife 425 MKT Member, LLC (DE) 61. MetLife OFC Member, LLC (DE) 62. MetLife THR Investor, LLC (DE) 63. ML Southmore, LLC (DE) - 99% of ML Southmore, LLC is owned by MLIC and 1% by General American Life Insurance Company. 64. ML - AI MetLife Member 1, LLC (DE) - 95.199% of the membership interest is owned by MLIC and 4.801% by Metropolitan Property and Casualty Insurance Company. 65. MetLife CB W/A, LLC (DE) 66. MetLife Camino Ramon Member, LLC (DE) - 99% of MetLife Camino Ramon Member, LLC is owned by MLIC and 1% by General American Life Insurance Company. 67. 10700 Wilshire, LLC (DE) 68. Viridian Miracle Mile, LLC (DE) 69. MetLife 555 12th Member, LLC (DE) - 94.6% is owned by MLIC and 5.4% by General American Life Insurance Company 70. MetLife OBS Member, LLC (DE) 71. MetLife 1007 Stewart, LLC (DE) 72. ML-AI MetLife Member 2, LLC (DE) - 98.97% of ML-AI MetLife Member 2, LLC's ownership interest is owned by MLIC and 1.03% by General American Life Insurance Company. 73. MetLife Treat Towers Member, LLC (DE) 74. MetLife FM Hotel Member, LLC (DE) a) LHCW Holdings (U.S.) LLC (DE) i) LHC Holdings (U.S.) LLC (DE) 1) LHCW Hotel Holding LLC (DE) aa) LHCW Hotel Holding (2002) LLC (DE) bb) LHCW Hotel Operating Company (2002) LLC (DE) 75. ML Mililani Member, LLC (DE)- is owned at 95% by MLIC and 5% by General American Life Insurance Company. 76. MetLife SP Holdings, LLC (DE) a) MetLife Private Equity Holdings, LLC (DE) 77. Buford Logistics Center, LLC (DE) 78. ML North Brand Member, LLC (DE) 79. MetLife Park Tower Member, LLC (DE) a) Park Tower REIT, Inc. (DE) i) Park Tower JV Member, LLC (DE) 80. MCPP Owners, LLC (DE) - 84.503% is owned by MLIC, 0.603% by General American Life Insurance Company, 1.616% by Metropolitan Tower Life Insurance Company, and 13.278% by MTL Leasing, LLC. 81. MetLife HCMJV 1 GP, LLC (DE) 82. MetLife ConSquare Member, LLC (DE) 83. MetLife Ontario Street Member, LLC (DE) 84. 1925 WJC Owner, LLC (DE) K. MetLife Capital Trust IV (DE) L. MetLife Insurance Company USA (DE) 1. MetLife Property Ventures Canada ULC (Canada) 2. MetLife Canadian Property Ventures LLC (NY) 3. Metropolitan Connecticut Properties Ventures, LLC (DE) 4. Euro TI Investments LLC (DE) 5. One Financial Place Corporation (DE) - 100% is owned in the aggregate by MetLife Insurance Company USA. 6. MetLife USA Assignment Company (CT) 7. TIC European Real Estate LP, LLC (DE) 8. Euro TL Investments LLC (DE) 9. TLA Holdings LLC (DE) a) The Prospect Company (DE) 10. MetLife Renewables Holding, LLC (DE) a) Greater Sandhill I, LLC (DE) 11. TLA Holdings II LLC (DE) 12. TLA Holdings III LLC (DE) 13. Sino-US United MetLife Insurance Co., Ltd. (China) - Sino-US United MetLife Insurance Co., Ltd. is owned at 27.8% by MetLife Insurance Company USA, 22.2% by MLIC and 50% by a third party. 14. ML 1065 Hotel, LLC 15. Daniel/MetLife Midtown Atlanta Master Limited Liability Company (DE) a) 1075 Peachtree, LLC (DE) 16. Brighthouse Reinsurance Company of Delaware (DE) 3 M. MetLife Reinsurance Company of South Carolina (SC) N. MetLife Investment Advisors, LLC (DE) 1. MetLife Alternatives GP, LLC (DE) a) MetLife International PE Fund I, LP (Cayman Islands) - 92.593% of the Limited Partnership interests of this entity is owned by MetLife Insurance K.K., 4.115% is owned by MetLife Mexico S.A., 2.716% is owned by MetLife Limited (Hong Kong) and the remaining 0.576% is owned by Metropolitan Life Insurance Company of Hong Kong Limited. b) MetLife International PE Fund II, LP (Cayman Islands) - 94.54% of the limited partnership interests of MetLife International PE Fund II, LP is owned by MetLife Insurance K.K., 2.77% is owned by MetLife Limited (Hong Kong), 2.1% by MetLife Mexico, S.A. and 0.59% is owned by Metropolitan Life Insurance Company of Hong Kong Limited. c) MetLife International HF Partners, LP (Cayman Islands) - 88.22% of the Limited partnership interests of this entity is owned by MetLife Insurance K.K. and 9.47% is owned by MetLife Insurance Company of Korea Limited, 2.29% is owned by MetLife Limited (Hong Kong) and 0.02% is owned by MetLife Alternatives, GP d) MetLife International PE Fund III, LP - 88.93% of the limited partnership interests of MetLife International PE Fund III LP is owned by MetLife Insurance K.K, 7.91% is owned by MetLife Insurance Company of Korea Limited, 2.61% is owned by MetLife Limited (Hong Kong), and 0.55% is owned by Metropolitan Life Insurance Company of Hong Kong Limited. e) MetLife International PE Fund IV, LP (Cayman Islands) - 94.70% of the limited partnership interests of MetLife International PE Fund IV, LP is owned by MetLife Insurance K.K, 3.79% is owned by MetLife Insurance Company of Korea Limited, 1.51% is owned by Metlife Limited (Hong Kong). 2. MetLife Loan Asset Management LLC (DE) 3. MetLife Core Property Fund GP, LLC (DE) a) MetLife Core Property Fund, LP (DE) - MetLife Core Property Fund GP, LLC is the general partner of MetLife Core Property Fund, LP (the "Fund"). A substantial majority of the limited partnership interests in the Fund are held by third parties. The following affiliates hold a minority share of the limited partnership interests in the Fund: Metropolitan Life Insurance Company owns 20.06%, Metropolitan Life Insurance Company (on behalf of Separate Account 746) owns 3.24%, MetLife Insurance Company of Korea Limited owns 2.91%, General American Life Insurance Company owns 0.07% and MetLife Insurance Company USA owns 0.14%. i) MetLife Core Property REIT, LLC (DE) 1) MetLife Core Property Holdings, LLC - MetLife Core Property Holdings, LLC also holds the following single-property limited liability companies: MCP Alley 24 East, LLC, MCP Denver Pavilions Member, LLC, MCP SoCal Industrial-Springdale, LLC, MCP SoCal Industrial-Redondo, LLC, MCP SoCal Industrial-Concourse, LLC, MCP SoCal Industrial-Kellwood, LLC, MCP SoCal Industrial-Bernardo, LLC, MCP SoCal Industrial-Canyon, LLC, MCP SoCal Industrial-Anaheim, LLC, MCP SoCal Industrial-LAX, LLC, MCP SoCal Industrial-Fullerton, LLC, MCP SoCal Industrial-Ontario, LLC, MCP SoCal Industrial-Loker, LLC, MCP Paragon Point, LLC, MCP 4600 South Syracuse, LLC, MCP The Palms Doral, LLC, MCP Waterford Atrium, LLC, MCP EnV Chicago, LLC, MCP 100 Congress, LLC, MCP 1900 McKinney, LLC, MCP 550 West Washington, LLC, MCP Main Street Village, LLC, MCP Lodge At Lakecrest LLC, MCP Ashton South End, LLC, MCP 3040 Post Oak, LLC, MCP Plaza at Legacy, LLC, MCP VOA Holdings, LLC, MCP VOA I& III, LLC, MCP VOA II, LLC, MCP Highland Park Lender, LLC, MCP One Westside, LLC, MCP 7 Riverway, LLC, MCP Trimble Campus, LLC, MCP 9020 Murphy Road, LLC, MCP Buford Logistics Center 2 Member, LLC, and MCPF Acquisition, LLC, MCP 60 11th Street Member, LLC, MCP Magnolia Park Member, LLC, and MCP Fife Enterprise Member, LLC, MCP Northyards Holdco, LLC, MCP Northyards Owner, LLC, MCP Northyards Master Lessee, LLC, 60 11th Street, LLC, Magnolia Park Greenville,Venture, LLC, Magnolia Park Greenville, LLC, MCP 22745 & 22755 Relocation Drive, LLC, MCP DMCBP Phase II Member, LLC, MetLife Core Property TRS, LLC. aa) MCP Property Management, LLC (DE) 4. MIM Property Management, LLC (DE) 5. MetLife Commercial Mortgage Income Fund GP, LLC (DE) a) MetLife Commercial Mortgage Income Fund, LP (DE) - MetLife Commercial Mortgage Income Fund GP, LLC is the general partner of MetLife Commercial Mortgage Income Fund, LP (the "Fund"). A majority of the limited partnership interests in the Fund are held by third parties. The following affiliates hold a minority share of the limited partnership interests in the Fund: Metropolitan Life Insurance Company owns 28.83%, MetLife Insurance Company USA owns 9.61%, MetLife Insurance Company of Korea, Limited. owns 5.66%, MetLife Limited owns 3.81%, and Metropolitan Life Insurance Company of Hong Kong Limited owns 0.76%. i) MetLife Commercial Mortgage REIT, LLC (DE) 1) MetLife Commercial Mortgage Originator, LLC (DE) aa) MCMIF Holdco I, LLC (DE) O. MetLife Standby I, LLC (DE) P. MetLife Services and Solutions, LLC (DE) 1. MetLife Solutions Pte. Ltd. (Singapore) a) MetLife Services East Private Limited (India) b) MetLife Global Operations Support Center Private Limited (India) - 99.99999% is owned by MetLife Solutions Pte. Ltd. and 0.00001% is owned by Natiloportem Holdings, LLC. Q. SafeGuard Health Enterprises, Inc. (DE) 1. MetLife Health Plans, Inc. (DE) 2. SafeGuard Health Plans, Inc. (CA) 3. SafeHealth Life Insurance Company (CA) 4. SafeGuard Health Plans, Inc. (FL) 5. SafeGuard Health Plans, Inc. (NV) 6. SafeGuard Health Plans, Inc. (TX) R. MetLife Capital Trust X (DE) S. Cova Life Management Company (DE) T. MetLife Reinsurance Company of Charleston (SC) U. MetLife Reinsurance Company of Vermont (VT) V. Delaware American Life Insurance Company (DE) W. Federal Flood Certification LLC (TX) X. MetLife Global Benefits, Ltd. (Cayman Islands) Y. Inversiones Metlife Holdco Dos Limitada (Chile) - 99.99946% of Inversiones MetLife Holdco Dos Limitada is owned by MetLife, Inc., 0.000535% is owned by MetLife International Holdings, LLC and 0.0000054% is owned by Natiloportem Holdings, LLC. Z. MetLife Consumer Services, Inc. (DE) AA. MetLife Reinsurance Company of Delaware (DE) AB. MetLife Global, Inc. (DE) AC. Brighthouse Services, LLC (DE) AD. Brighthouse Holdings, LLC (DE) AE. Brighthouse Securities, LLC (DE) AF. Brighthouse Financial, Inc. (DE) AG. MetLife Insurance Brokerage, Inc. (NY) 4 AH. American Life Insurance Company (ALICO) (DE) 1. MetLife Insurance K.K. (Japan) a) Communication One Kabushiki Kaisha (Japan) 2. MetLife Global Holding Company I GmbH (Swiss I) (Switzerland) a) MetLife, Life Insurance Company (Egypt) - 84.125% of MetLife, Life Insurance Company is owned by MetLife Global Holding Company I GmbH and the remaining interests are owned by third parties. b) MetLife Global Holding Company II GmbH (Swiss II) (Switzerland) i) MetLife Emeklilik ve Hayat A.S. (Turkey) - 99.98% of MetLife Emeklilik ve Hayat A.S. is owned by Metlife Global Holding Company II GmbH (Swiss II) and the remainder by third parties. ii) ALICO European Holdings Limited (Ireland) 1) ZAO Master D (Russia) aa) Joint Stock Company MetLife Insurance Company (Russia) - 51% of Joint Stock Company MetLife Insurance Company is owned by ZAO Master D and 49% is owned by MetLife Global Holding Company II GmbH. iii) MetLife Asia Holding Company Pte. Ltd. (Singapore) 1) MetLife Innovation Centre Pte. Ltd. (Singapore) iv) MetLife Reinsurance Company of Bermuda Ltd. (Bermuda) v) MetLife Investment Management Limited (United Kingdom) vi) MM Global Operations Support Center, S.A. de C.V. (Mexico) - 99.999509% of MM Global Operations Support Center, S.A. de C.V. is held by MetLife Global Holding Company II GmbH (Swiss) and 0.000491% is held by MetLife Global Holding Company I GmbH (Swiss). 1. Fundacion MetLife Mexico, A.C. (Mexico) vii) MetLife Colombia Seguros de Vida S.A. (Colombia) - 89.999966393% of MetLife Colombia Seguros de Vida S.A. is owned by MetLife Global Holding Company II GmbH, 10.000029508% is owned by MetLife Global Holding Company I GmbH, 0.000001366% is owned by International Technical and Advisory Services Limited, 0.000001366% is owned by Borderland Investments Limited and 0.000001366% by Natiloportem Holdings, LLC. viii) PJSC MetLife (Ukraine) - 99.9988% of PJSC MetLife is owned by MetLife Global Holding Company II GmbH, .0006% is owned by ITAS and the remaining .0006% is owned by Borderland Investments Limited. ix) MetLife Innovation Centre Limited (Ireland) x) MetLife EU Holding Company Limited (Ireland) 1) MetLife Europe d.a.c (Ireland) - MetLife EU Holding Company Limited holds 96.00315040176985% of this entity. ALICO holds 3.996758255760741% and ITAS holds 0.000091342469407%. 1. MetLife Pension Trustees Limited (United Kingdom) 2) Agenvita S.r.l. (Italy) 3) MetLife Europe Insurance d.a.c (Ireland)- 93% of MetLife Europe Insurance d.a.c is owned by MetLife EU Holding Company Limited and 7% is owned by ALICO. 4) MetLife Europe Services Limited (Ireland) 5) MetLife Insurance Limited (United Kingdom) 6) MetLife Services, Sociedad Limitada (Spain) 7) MetLife Slovakia S.r.o. (Slovakia) - 99.956% of MetLife Slovakia S.r.o. is owned by MetLife EU Holding Company Limited and 0.044% is owned by ITAS. 8) MetLife Solutions S.A.S. (France) 9) Metropolitan Life Societate de Administrare a unui Fond de Pensii Administrat Privat S.A. (Romania) - 99.9836% of Metropolitan Life Societate de Administrare a unui Fond de Pensii Administrat Privat S.A. is owned by MetLife EU Holding Company Limited and 0.0164% is owned by MetLife Services Sp z.o.o. 10) MetLife Towarzystwo Ubezpieczen na Zycie I Reasekuracji S.A. (Poland) aa) MetLife Services Sp z.o.o. (Poland) bb) MetLife Towarzystwo Funduszy Inwestycyjnych, S.A. (Poland) cc) MetLife Powszechne Towarzystwo Emerytalne S.A. (Poland) 11) MetLife Services Cyprus Limited (Cyprus) aa) Hellenic Alico Life Insurance Company, Ltd. (Cyprus) - 27.5% of Hellenic Alico Life Insurance Company, Ltd. Is owned by MetLife Services Cyprus Limited and the remaining is owned by a third party. 12) MetLife Services EOOD (Bulgaria) 13) MetLife Life Insurance S.A. (Greece) aa) MetLife Mutual Fund Company (Greece) - 90% of MetLife Mutual Fund Company is owned by MetLife Life Insurance S.A. (Greece) and the remaining interests are owned by third parties. 14) First American-Hungarian Insurance Agency Limited (Hungary) 15) MetLife SK, s.r.o. (Slovakia) - 99.8788% of MetLife SK, s.r.o. is owned by MetLife EU Holding Company Limited, 0.1212% is owned by ITAS 16) UBB-MetLife Zhivotozastrahovatelno Drujestvo AD (Bulgaria) - 40% of UBB-MetLife Zhivotozastrahovatelno Drujestvo AD is owned by MetLife EU Holding Company Limited and the rest by third parties. xi) MetLife International Holdings, LLC (DE) 1. Natiloportem Holdings, LLC (DE) aa) Excelencia Operativa y Tecnologica, S.A. de C.V. (Mexico) - 99% of Excelencia Operativa y Tecnologica, S.A. de C.V. is held by Natiloportem Holdings, LLC and 1% by MetLife Mexico Servicios S.A. de C.V. i) MLA Comercial, S.A. de C.V. (Mexico) 99% is owned by Excelencia Operativa y Tecnologica, S.A. de C.V. and 1% is owned by MetLife Mexico Servicios, S.A. de C.V. ii) MLA Servicios, S.A. de C.V. (Mexico) 99% is owned by Excelencia Operativa y Tecnologica, S.A. de C.V. and 1% is owned by MetLife Mexico Servicios, S.A. de C.V. 2. PNB MetLife India Insurance Company Limited (India)- 26% is owned by MetLife International Holdings, LLC and 74% is owned by third parties. 3. Metropolitan Life Insurance Company of Hong Kong Limited (Hong Kong)- 99.99935% is owned by MetLife International Holdings, Inc. and 0.00065% is owned by Natiloporterm Holdings, LLC. 4. MetLife Seguros S.A. (Argentina)- 95.5242% is owned by MetLife International Holdings, LLC, 2.6753% is owned by Natiloportem Holdings, LLC and 1.8005% by ITAS. 5. Metropolitan Life Seguros e Previdencia Privada S.A. (Brazil)-66.662% is owned by MetLife International Holdings, LLC, 33.337% is owned by MetLife Worldwide Holdings, LLC and 0.001% is owned by Natiloportem Holdings, LLC. 6. MetLife Administradora de Fundos Multipatrocinados Ltda. (Brazil) - 99.99998% of MetLife Administradora de Fundos Multipatrocinados Ltda. is owned by MetLife International Holdings, LLC and 0.00002% by Natiloportem Holdings, LLC. 7. MetLife Seguros de Retiro S.A. (Argentina) - 96.8897% is owned by MetLife International Holdings, LLC, 3.1102% is owned by Natiloportem Holdings, LLC and 0.0001% by ITAS 8. Best Market S.A. (Argentina) - 5% of the shares are held by Natiloportem Holdings, LLC and 95% is owned by MetLife International Holdings, LLC. 9. Compania Inversora MetLife S.A. (Argentina) - 95.46% is owned by MetLife International Holdings, LLC and 4.54% is owned by Natiloportem Holdings, LLC. aa) MetLife Servicios S.A. (Argentina) - 18.87% of the shares of MetLife Servicios S.A. are held by Compania Inversora MetLife S.A., 79.88% is owned by MetLife Seguros S.A., 0.99% is held by Natiloportem Holdings, LLC and 0.26% is held by MetLife Seguros de Retiro S.A. 10. MetLife Worldwide Holdings, LLC (DE) aa) MetLife Limited (Hong Kong) i) BIDV MetLife Life Insurance Limited Liability Company (Vietnam) - 60% of BIDV MetLife Life Insurance Limited Liability Company is held by MetLife Limited (Hong Kong) and the remainder by third parties 11. MetLife International Limited, LLC (DE) 12. MetLife Planos Odontologicos Ltda. (Brazil) - 99.999% is owned by MetLife International Holdings, LLC and 0.001% is owned by Natiloportem Holdings, LLC. 13. MetLife Asia Limited (Hong Kong) 14. AmMetLife Insurance Berhad (Malaysia) - 50.000001% of AmMetLife Insurance Berhad is owned by MetLife International Holdings, LLC and the remainder is owned by a third party. 15. AmMetLife Takaful Berhad (Malaysia) - 49.999999% of AmMetLife Takaful Berhad is owned by MetLife International Holdings, LLC and the remainder is owned by a third party. 16. MAXIS GBN S.A.S. (France) - 50% of MAXIS GBN S.A.S. is held by MetLife International Holdings, LLC and the remainder by third parties. 17. MetLife Mas S.A. de C.V. (Mexico) - 99.99964399% MetLife Mas, SA de CV is owned by MetLife International Holdings, LLC and .00035601% is owned by International Technical and Advisory Services Limited. 5 18. MetLife Ireland Holdings One Limited (Ireland) aa) MetLife Global Holdings Corporation S.A. de C.V. (Mexico/Ireland) - 98.9% is owned by MetLife Ireland Holdings One Limited and 1.1% is owned by MetLife International Limited, LLC. i) MetLife Ireland Treasury d.a.c (Ireland) 1) MetLife General Insurance Limited (Australia) 2) MetLife Insurance Limited (Australia) - 91.16468% of MetLife Insurance Limited (Australia) is owned by MetLife Ireland Treasury Limited and 8.83532% is owned by MetLife Global Holdings Corp. S.A. de C.V. a) The Direct Call Centre PTY Limited (Australia) b) MetLife Investments PTY Limited (Australia) i) MetLife Insurance and Investment Trust (Australia) - MetLife Insurance and Investment Trust is a trust vehicle, the trustee of which is MetLife Investments PTY Limited ("MIPL"). MIPL is a wholly owned subsidiary of MetLife Insurance Limited. ii) Metropolitan Global Management, LLC (DE/Ireland) - 99.7% is owned by MetLife Global Holdings Corporation S.A. de C.V. and 0.3% is owned by MetLife International Holdings, LLC. aaa) MetLife Pensiones Mexico S.A. (Mexico)- 97.5125% is owned by Metropolitan Global Management, LLC and 2.4875% is owned by MetLife International Holdings, LLC. bbb) MetLife Mexico Servicios, S.A. de C.V. (Mexico) - 98% is owned by Metropolitan Global Management, LLC and 2% is owned by MetLife International Holdings, LLC. ccc) MetLife Mexico S.A. (Mexico)- 99.050271% is owned by Metropolitan Global Management, LLC and 0.949729% is owned by MetLife International Holdings, LLC. 1) MetLife Afore, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Mexico S.A. and 0.01% is owned by MetLife Pensiones Mexico S.A. aaaa) Met1 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. bbbb) Met2 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. cccc) MetA SIEFORE Adicional, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. dddd) Met3 SIEFORE Basica, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. eeee) Met4 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. ffff) Met0 SIEFORE, S.A. de C.V. (Mexico) - 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. 2) ML Capacitacion Comercial S.A. de C.V.(Mexico) - 99% is owned by MetLife Mexico S.A. and 1% is owned by MetLife Mexico Cares, S.A. de C.V. ddd) MetLife Insurance Company of Korea Limited (South Korea)- 14.64% is owned by MetLife Mexico, S.A. and 85.36% is owned by Metropolitan Global Management, LLC. 1) MetLife Financial Services, Co., Ltd. eee) MetLife Mexico Holdings, S. de R.L. de C.V. (Mexico) - 99.99995% is owned by Metropolitan Global Management, LLC, and the remainder is owned by Excelencia Operativa y Tecnologica, S.A. de C.V. xii) MetLife Investment Management Holding (Ireland) Limited aaa) MetLife Investment Asia Limited (Hong Kong) xiii) ALICO Operations LLC (DE) aaa) MetLife Asset Management Corp. (Japan) bbb) MetLife Seguros S.A. (Uruguay) 3. International Investment Holding Company Limited (Russia) 4. Borderland Investments Limited (USA-Delaware) a) ALICO Hellas Single Member Limited Liability Company (Greece) 5. International Technical and Advisory Services Limited ("ITAS") (USA-Delaware) 6. ALICO Properties, Inc. (USA-Delaware) - 51% of ALICO Properties, Inc. is owned by ALICO and the remaining interests are owned by third parties. a) Global Properties, Inc. (USA-Delaware) 7. Alpha Properties, Inc. (USA-Delaware) 8. Beta Properties, Inc. (USA-Delaware) 9. Delta Properties Japan, Inc. (USA-Delaware) 10. Epsilon Properties Japan, Inc. (USA-Delaware) 11. Iris Properties, Inc. (USA-Delaware) 12. Kappa Properties Japan, Inc. (USA-Delaware) 13. MetLife American International Group and Arab National Bank Cooperative Insurance Company (Saudi Arabia) - 30% of MetLife American International Group and Arab National Bank Cooperative Insurance Company is owned by ALICO and the remaining interest by third parties. The Delaware Department of Insurance approved a disclaimer of affiliation and therefore, this company is not considered an affiliate under Delaware Law. AI. General American Life Insurance Company (MO) a. GALIC Holdings LLC (DE) AJ. New England Life Insurance Company (MA) AK. MetLife European Holdings, LLC (DE) 1) The voting securities (excluding directors' qualifying shares, if any) of each subsidiary shown on the organizational chart are 100% owned by their respective parent corporation, unless otherwise indicated. 2) The Metropolitan Money Market Pool and MetLife Intermediate Income Pool are pass-through investment pools, of which Metropolitan Life Insurance Company and/or its subsidiaries and/or affiliates are general partners. 3) The MetLife, Inc. organizational chart does not include real estate joint ventures and partnerships of which MetLife, Inc. and/or its subsidiaries is an investment partner. In addition, certain inactive subsidiaries have also been omitted. 4) MetLife Services EEIG is a cost-sharing mechanism used in the EU for EU- affiliated members. 6 ITEM 27. NUMBER OF CONTRACT OWNERS As of January 31, 2017, there were 196,616 owners of qualified contracts and 43,167 owners of non-qualified contracts offered by the Registrant (Brighthouse Separate Account Eleven for Variable Annuities). ITEM 28. INDEMNIFICATION Pursuant to applicable provisions of Brighthouse Life Insurance Company's by-laws or internal corporate policies adopted by Brighthouse Life Insurance Company or MetLife, Inc. its ultimate parent, the directors, officers and other controlling persons of Brighthouse Life Insurance Company and of Brighthouse Life Insurance Company's affiliate and the underwriter, Brighthouse Securities, LLC, who are made or threatened to be made a party to an action or proceeding, may be eligible to obtain indemnification against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees, incurred as a result of such action or proceeding. Under the principal underwriting agreement between Brighthouse Life Insurance Company and Brighthouse Securities, the parties have agreed to indemnify each other against certain liabilities and expenses from legal proceedings arising out of Brighthouse Securities' distribution of the Contracts. MetLife, Inc. also maintains a Directors and Officers Liability and Corporate Reimbursement Insurance Policy under which the Registrant, the Depositor and the Underwriter, as well as certain other subsidiaries of MetLife, are covered. MetLife, Inc. also has secured a Financial Institutions Bond. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. ITEM 29. PRINCIPAL UNDERWRITER (a) Brighthouse Securities, LLC 11225 North Community House Road Charlotte, NC 28277 Brighthouse Securities, LLC serves as principal underwriter and distributor for the following investment companies (including the Registrant): Brighthouse Fund UL for Variable Life Insurance Brighthouse Fund UL III for Variable Life Insurance Brighthouse Funds Trust I Brighthouse Funds Trust II Brighthouse Separate Account A Brighthouse Separate Account Eleven for Variable Annuities Brighthouse Separate Account QPN for Variable Annuities Brighthouse Variable Annuity Account B Brighthouse Variable Annuity Account C Brighthouse Variable Life Account A Brighthouse Variable Life Account One New England Variable Annuity Separate Account New England Variable Life Separate Account (b) Brighthouse Securities, LLC is the principal underwriter for the Contracts. The following persons are officers and managers of Brighthouse Securities, LLC. The principal business address for Brighthouse Securities, LLC is 11225 North Community House Road, Charlotte, NC 28277.
NAME AND PRINCIPAL POSITIONS AND OFFICES BUSINESS ADDRESS WITH UNDERWRITER --------------------------------- --------------------------------------------------------- Myles Lambert Manager, Chairman, President and Chief Executive Officer 11225 North Community House Road Charlotte, NC 28277
Philip Beaulieu Manager and Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Gerard Nigro Manager and Senior Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Kieran R. Mullins Executive Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Jeffrey Halperin Senior Vice President and Chief Compliance Officer Gragg Building 11225 North Community House Road Charlotte, NC 28277
Phyllis Zanghi Senior Vice President and Tax Director Gragg Building 11225 North Community House Road Charlotte, NC 28277
Melissa Cox Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Michael Davis Vice President 11225 North Community House Road Charlotte, NC 28277
Donald Leintz Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Timothy McLinden Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Janet Morgan Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Matthew Quale Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Jacob Jenkelowitz Vice President and Assistant Secretary 285 Madison Avenue New York, NY 10017
D. Burt Arrington Vice President and Secretary Gragg Building 11225 North Community House Road Charlotte, NC 28277
Paul Scott Peterson Vice President and Treasurer Gragg Building 11225 North Community House Road Charlotte, NC 28277
(c) MetLife Investors Distribution Company served as principal underwriter prior to March 6, 2017. Compensation to the Distributor. The following aggregate amount of commissions and other compensation was received by the Distributor, directly or indirectly, from the Registrant and the other separate accounts of the Depositor, which also issue variable annuity contracts, during their last fiscal year:
(2) (1) NET UNDERWRITING (3) (4) NAME OF PRINCIPAL DISCOUNTS AND COMPENSATION ON BROKERAGE (5) UNDERWRITER COMMISSIONS REDEMPTION COMMISSIONS OTHER COMPENSATION --------------------------------------------- ------------------ ----------------- ------------- ------------------- MetLife Investors Distribution Company....... $568,161,672 $0 $0 $0
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS (a) Brighthouse Life Insurance Company, 11225 North Community House Road, Charlotte, NC 28277 (b) Brighthouse Financial Annuity Operations, 4700 Westown Parkway, Bldg. 4, Suite 200, West Des Moines, IA 50266 (c) Brighthouse Securities, LLC, 11225 North Community House Road, Charlotte, NC 28277 (d) Brighthouse Financial, 18205 Crane Nest Drive, Tampa, FL 33647 (e) Brighthouse Financial, One Financial Center, Boston, MA 02111 ITEM 31. MANAGEMENT SERVICES Not Applicable. ITEM 32. UNDERTAKINGS The undersigned Registrant hereby undertakes: (a) To file a post-effective amendment to this registration statement as frequently as is necessary to ensure that the audited financial statements in the registration statement are never more than sixteen months old for so long as payments under the variable annuity contracts may be accepted; (b) To include either (1) as part of any application to purchase a contract offered by the prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a post card or similar written communication affixed to or included in the prospectus that the applicant can remove to send for a Statement of Additional Information; and (c) To deliver any Statement of Additional Information and any financial statements required to be made available under this Form N-4 promptly upon written or oral request. The Brighthouse Life Insurance Company hereby represents: (a) That the aggregate charges under the Contracts of the Registrant described herein are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by Brighthouse Life Insurance Company. SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness of this registration statement and has caused this registration statement to be signed on its behalf, in the city of Charlotte, and state of North Carolina, on this 5th day of April, 2017. BRIGHTHOUSE SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES (Registrant) By: BRIGHTHOUSE LIFE INSURANCE COMPANY By: /s/ Gregory E. Illson --------------------------------- Gregory E. Illson, Vice President By: BRIGHTHOUSE LIFE INSURANCE COMPANY (Depositor) By: /s/ Gregory E. Illson --------------------------------- Gregory E. Illson, Vice President As required by the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on this 5th day of April, 2017. /s/ Eric T. Steigerwalt* Chairman of the Board, President, Chief Executive ------------------------ Officer and a Director Eric T. Steigerwalt /s/ Myles J. Lambert* Director and Vice President ------------------------ Myles J, Lambert /s/ Kieran Mullins* Director and Vice President ------------------------ Kieran Mullins /s/ John L. Rosenthal* Director, Vice President and Chief Investment ------------------------ Officer John L.Rosenthal /s/ Anant Bhalla* Director, Vice President and Chief Financial ------------------------ Officer Anant Bhalla /s/ Lynn A. Dumais* Vice President and Chief Accounting Officer ------------------------ Lynn A. Dumais
*By: /s/ Michele H. Abate ------------------------------ Michele H. Abate, Attorney-in-fact April 5, 2017 * Brighthouse Life Insurance Company. Executed by Michele H. Abate, Esquire on behalf of those indicated pursuant to powers of attorney filed herewith. EXHIBIT INDEX 10 Consent of Independent Registered Public Accounting Firm (Deloitte & Touche LLP) 13 Powers of Attorney