METLIFE INC - 10-K Annual Report

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 001-15787
METLIFE, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 13-4075851
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

ONE MADISON AVENUE
NEW YORK, NEW YORK 10010-3690
(212) 578-2211
(Address and telephone number of registrant's principal executive offices)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (sec. 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [X] No [ ]

The aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant as of June 30, 2003 was approximately $22
billion. As of March 1, 2004, 755,809,398 shares of the registrant's Common
Stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

THE INFORMATION REQUIRED TO BE FURNISHED PURSUANT TO PART OF ITEM 10, AND
ITEMS 11, 12, 13 AND 14 OF PART III OF THIS FORM 10-K IS SET FORTH IN, AND IS
HEREBY INCORPORATED BY REFERENCE HEREIN FROM, THE REGISTRANT'S DEFINITIVE PROXY
STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 27, 2004,
TO BE FILED BY THE REGISTRANT WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO REGULATION 14A NOT LATER THAN 120 DAYS AFTER THE YEAR ENDED DECEMBER
31, 2003.

TABLE OF CONTENTS

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, including the Management's Discussion and
Analysis of Financial Condition and Results of Operations, contains statements
which constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including statements relating to
trends in the operations and financial results and the business and the products
of the Registrant and its subsidiaries, as well as other statements including
words such as "anticipate," "believe," "plan," "estimate," "expect," "intend"
and other similar expressions. "MetLife" or the "Company" refers to MetLife,
Inc., a Delaware corporation (the "Holding Company"), and its subsidiaries,
including Metropolitan Life Insurance Company ("Metropolitan Life").
Forward-looking statements are made based upon management's current expectations
and beliefs concerning future developments and their potential effects on the
Company. Such forward-looking statements are not guarantees of future
performance.

Actual results may differ materially from those included in the
forward-looking statements as a result of risks and uncertainties including, but
not limited to, the following: (i) changes in general economic conditions,
including the performance of financial markets and interest rates; (ii)
heightened competition, including with respect to pricing, entry of new
competitors and the development of new products by new and existing competitors;
(iii) unanticipated changes in industry trends; (iv) MetLife, Inc.'s primary
reliance, as a holding company, on dividends from its subsidiaries to meet debt
payment obligations and the applicable regulatory restrictions on the ability of
the subsidiaries to pay such dividends; (v) deterioration in the experience of
the "closed block" established in connection with the reorganization of
Metropolitan Life; (vi) catastrophe losses; (vii) adverse results or other
consequences from litigation, arbitration or regulatory investigations; (viii)
regulatory, accounting or tax changes that may affect the cost of, or demand
for, the Company's products or services; (ix) downgrades in the Company's and
its affiliates' claims paying ability, financial strength or credit ratings; (x)
changes in rating agency policies or practices; (xi) discrepancies between
actual claims experience and assumptions used in setting prices for the
Company's products and establishing the liabilities for the Company's
obligations for future policy benefits and claims; (xii) discrepancies between
actual experience and assumptions used in establishing liabilities related to
other contingencies or obligations; (xiii) the effects of business disruption or
economic contraction due to terrorism or other hostilities; (xiv) the Company's
ability to identify and consummate on successful terms any future acquisitions,
and to successfully integrate acquired businesses with minimal disruption; and
(xv) other risks and uncertainties described from time to time in MetLife,
Inc.'s filings with the U.S. Securities and Exchange Commission, including its
S-1 and S-3 registration statements. The Company specifically disclaims any
obligation to update or revise any forward-looking statement, whether as a
result of new information, future developments or otherwise.

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PART I

ITEM 1. BUSINESS

As used in this Form 10-K, "MetLife" or the "Company" refers to MetLife,
Inc., a Delaware corporation (the "Holding Company"), and its subsidiaries,
including Metropolitan Life Insurance Company ("Metropolitan Life").

MetLife, Inc., through its affiliates and subsidiaries, is a leading
provider of insurance and other financial services to a broad spectrum of
individual and institutional customers. The Company offers life insurance,
annuities, automobile and homeowners insurance and mutual funds to individuals,
as well as group insurance, reinsurance, and retirement and savings products and
services to corporations and other institutions. The MetLife companies serve
approximately 13 million households in the U.S. and provide benefits to
approximately 37 million employees and family members through their plan
sponsors, including 88 of the FORTUNE 100 largest companies. MetLife, Inc. also
has direct international insurance operations in 10 countries serving
approximately 8 million customers.

MetLife is one of the largest insurance and financial services companies in
the U.S. The Company's unparalleled franchises and brand names uniquely position
it to be the preeminent provider of protection and savings and investment
products in the U.S. In addition, MetLife's international operations are focused
on emerging markets where the demand for insurance and savings and investment
products is expected to grow rapidly in the future.

MetLife's well-recognized brand names, leading market positions,
competitive and innovative product offerings and financial strength and
expertise should help drive future growth and enhance shareholder value,
building on a long history of fairness, honesty and integrity.

Over the course of the next several years, MetLife will pursue the
following specific strategies to achieve its goals:

- Build on widely recognized brand names

- Capitalize on large customer base

- Enhance capital efficiency

- Expand multiple distribution channels

- Continue to introduce innovative and competitive products

- Focus international operations on emerging markets

- Maintain balanced focus on asset accumulation and protection products

- Manage operating expenses commensurate with revenue growth

- Strengthen performance-oriented culture

- Further commitment to a diverse workplace

- Optimize operating returns from the Company's investment portfolio

MetLife is organized into six business segments: Institutional, Individual,
Auto & Home, International, Reinsurance and Asset Management. Financial
information, including revenues, expenses, income and loss, and total assets by
segment, is provided in Note 18 of Notes to Consolidated Financial Statements.

INSTITUTIONAL

The Company's Institutional segment offers a broad range of group insurance
and retirement and savings products and services to corporations and other
institutions.

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Group insurance products and services include group life insurance,
non-medical health insurance, such as short and long-term disability, long-term
care and dental insurance and related administrative services, as well as other
benefits, such as employer-sponsored auto and homeowners insurance provided
through the Auto & Home segment and prepaid legal services plans. The Company
offers these products either as an employer-paid benefit or as a voluntary
benefit in which the premiums are paid by the employee. Revenues applicable to
these group insurance products and services were $10.3 billion in 2003,
representing 72.5% of total Institutional revenues of $14.2 billion.

MetLife has built a leading position in the U.S. group insurance market
through long-standing relationships with many of the largest corporate employers
in the U.S. MetLife serves companies and institutions with approximately 37
million employees and family members through their plan sponsors, including 88
of the FORTUNE 100 largest companies.

MetLife's retirement and savings products and services include an array of
annuity and investment products, as well as bundled administrative and
investment services sold to sponsors of small- and mid-sized 401(k) and other
defined contribution plans, guaranteed interest products and other stable value
products, accumulation and income annuities, and separate account contracts for
the investment of defined benefit and defined contribution plan assets. Revenues
applicable to MetLife's retirement and savings products were $3.9 billion in
2003, representing 27.5% of total Institutional revenues.

The employee benefit market served by Institutional is a dynamic one.
Employers continue to seek ways to reduce costs and improve the productivity of
their workforces. The continued high annual increases in the cost of providing
employee medical care benefits have resulted in many employers reviewing all of
their employee benefit programs. Such reviews are designed to identify ways to
reduce costs while continuing to provide desirable benefit programs to attract
and retain valuable employees. The employee benefit market also reflects
employees' increasing concern about the future of government-funded retirement
and safety-net programs, an increasingly mobile workforce and the desire of
employers to share the market risk of retirement benefits with employees.
MetLife believes these trends are facilitating the introduction and increasing
employer support of "voluntary" products, such as supplemental group life,
long-term care insurance, annuities, auto and homeowners insurance, and certain
critical care products, as well as leading more employers to adopt defined
contribution pension arrangements, such as 401(k) plans.

MARKETING AND DISTRIBUTION

Institutional markets its products and services through separate sales
forces, comprised of MetLife employees, for both its group insurance and
retirement and savings lines.

MetLife distributes its group insurance products and services through a
regional sales force that is segmented by the size of the target customer.
Marketing representatives sell either directly to corporate and other
institutional customers or through an intermediary, such as a broker or a
consultant. Voluntary products are sold through the same sales channels, as well
as by specialists for these products. As of December 31, 2003, the group
insurance sales channels had approximately 795 marketing representatives.

MetLife group insurance products and services are distributed through the
following channels:

- The National Accounts unit focuses exclusively on MetLife's largest
customers, generally those having more than 25,000 employees. This unit
assigns account executives and other administrative and technical
personnel to a discrete customer or group of customers in order to
provide them with individualized products and services;

- The regional sales force operates from 30 offices and generally
concentrates on sales to employers with fewer than 25,000 employees,
through selected national and regional brokers, as well as through
consultants; and

- The Small Business Center focuses on improving MetLife's position in the
smaller end of the market. Currently, 27 individual offices staffed with
sales and administrative employees are located throughout the U.S. These
centers provide comprehensive support services on a local basis to
brokers and other

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intermediaries by providing an array of products and services designed
for smaller businesses, generally those with fewer than 1,000 employees.

MetLife's retirement and savings organization markets retirement, savings,
investment and payout products and services to sponsors and advisors of benefit
plans of all sizes. These products and services are offered to private and
public plans, collective bargaining units, nonprofit organizations, recipients
of structured settlements and the current and retired members of these and other
institutions.

MetLife distributes retirement and savings products and services through
dedicated sales teams and relationship managers located in 27 offices around the
country. In addition, the retirement and savings organization works with the
distribution channels in the Individual segment, group insurance and State
Street Research & Management Company, a subsidiary of MetLife, Inc., to better
reach and service customers, brokers, consultants and other intermediaries.

The Company has entered into several joint ventures and other arrangements
with third parties to expand the marketing and distribution opportunities of
institutional products and services. The Company also seeks to sell its
institutional products and services through sponsoring organizations and
affinity groups. For example, the Company is a preferred provider of long-term
care products for the American Association of Retired Persons and the National
Long-Term Care Coalition, a group of some of the nation's largest employers. In
addition, the Company, together with John Hancock Financial Services, Inc., is a
provider for the Federal Long-Term Care Insurance program. The program,
available to most federal employees and their families, is the largest
employer-sponsored long-term care insurance program in the country based on
enrollees.

GROUP INSURANCE PRODUCTS AND SERVICES

MetLife's group insurance products and services include:

Group life. Group life insurance products and services include group
term life, group universal life, group variable universal life, dependent
life and survivor benefits. These products and services can be standard
products or tailored to meet specific customer needs. This category also
includes specialized life insurance products designed specifically to
provide solutions for non-qualified benefit and retiree benefit funding
purposes.

Non-medical health. Non-medical health insurance consists of short
and long-term disability, long-term care, dental and accidental death and
dismemberment. MetLife also sells excess risk and administrative services
only arrangements to some employers.

Other products and services. Other products and services include
employer-sponsored auto and homeowners insurance provided through the Auto
& Home segment and prepaid legal plans.

RETIREMENT AND SAVINGS PRODUCTS AND SERVICES

MetLife's retirement and savings products and services include:

Guaranteed interest and stable value products. MetLife offers
guaranteed interest contracts ("GICs"), including separate account and
synthetic (trust) GICs, funding agreements and similar products.

Accumulation and income products. MetLife also sells fixed and
variable annuity products, generally in connection with defined
contribution plans, the termination of pension plans or the funding of
structured settlements.

Defined contribution plan services. MetLife provides full service
defined contribution programs to small- and mid-size companies.

Other retirement and savings products and services. Other retirement
and savings products and services include separate account contracts for
the investment management of defined benefit and defined contribution plans
on behalf of corporations and other institutions.

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INDIVIDUAL

MetLife's Individual segment offers a wide variety of protection and asset
accumulation products aimed at serving the financial needs of its customers
throughout their entire life cycle. Products offered by Individual include
insurance products, such as traditional, universal and variable life insurance
and variable and fixed annuities. In addition, Individual sales representatives
distribute disability insurance and long-term care insurance products offered
through the Institutional segment, investment products such as mutual funds, as
well as other products offered by the Company's other businesses. Individual's
principal distribution channels are the MetLife Financial Services career agency
system, the New England Financial general agency system, the GenAmerica
Financial independent general agency system and MetLife Investors Group.
Individual distributes its products through several additional distribution
channels, including Walnut Street Securities, MetLife Resources and Texas Life.
In total, Individual had approximately 11,200 active sales representatives at
December 31, 2003.

MetLife's broadly recognized brand names and strong distribution channels
have allowed it to become the third largest provider of individual life
insurance and annuities in the U.S., with $12.7 billion of total statutory
individual life and annuity premiums and deposits through September 30, 2003,
the latest period for which OneSource, a database that aggregates U.S. insurance
company statutory financial statements, is available. According to research
performed by the Life Insurance Marketing and Research Association ("LIMRA"),
based on sales through September 30, 2003, MetLife was the second largest issuer
of individual variable life insurance in the U.S. and the fifth largest issuer
of all individual life insurance products in the U.S. In addition, according to
research done by LIMRA and based on new annuity deposits through September 30,
2003, MetLife was the fourth largest annuity writer in the U.S.

Reflecting overall trends in the insurance industry, sales of MetLife's
traditional life insurance products have declined in recent years. However,
during the period from 1999 to 2003, the statutory deposits for annuity products
increased at a compound annual growth rate of approximately 23%. Annuity
deposits represented approximately 58% of total statutory premiums and deposits
for Individual in 2003. Individual had $12.4 billion of total revenues, or 34.7%
of MetLife's total revenues in 2003.

MARKETING AND DISTRIBUTION

The Company targets the large middle-income market, as well as affluent
individuals, owners of small businesses and executives of small- to medium-sized
companies. The Company has also been successful in selling its products in
various multicultural markets. Individual products are distributed nationwide
through multiple channels, with the primary distribution systems being the
MetLife Financial Services career agency system, the New England Financial
general agency system, the GenAmerica Financial independent general agency
system and MetLife Investors Group.

MetLife Financial Services career agency system. The MetLife Financial
Services career agency system had 5,531 agents under contract in 129 agencies at
December 31, 2003. The career agency sales force focuses on the large
middle-income and affluent markets, including multicultural markets. The Company
supports its efforts in multicultural markets through targeted advertising,
specially trained agents and sales literature written in various languages.
Multicultural markets represented approximately 26% of MetLife Financial
Services' individual life sales in 2003. The average face amount of a life
insurance policy sold through the career agency system in 2003 was approximately
$250,000.

Agents in the career agency system are full-time MetLife employees who are
compensated primarily with commissions based on sales. As MetLife employees,
they also receive certain benefits. Agents in the career agency system are not
authorized to sell other insurers' products without MetLife's approval. At
December 31, 2003, approximately 95% of the agents in the career agency system
were licensed to sell one or more of the following products: variable life
insurance, variable annuities and mutual funds.

From 1999 through 2003, the number of agents under contract in the MetLife
Financial Services career agency system declined from 6,766 to 5,531. This
decline was primarily the result of MetLife Financial Services' more stringent
standards for recruiting and retaining agents, the consolidation of sales
offices and

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modifications in compensation practices for its sales force. During the same
period, the career agency system increased productivity, with net sales credits
per agent, an industry measure for agent productivity, growing at a compound
annual rate of 3%.

New England Financial general agency system. New England Financial's
general agency system targets high net-worth individuals, owners of small
businesses and executives of small- to medium-sized companies. The average face
amount of a life insurance policy sold through the New England Financial general
agency system in 2003 was approximately $410,000.

At December 31, 2003, New England Financial's sales force included 71
general agencies providing support to 2,845 agents and a network of independent
brokers throughout the U.S. The compensation of agents who are independent
contractors and general agents who have exclusive contracts with New England
Financial is based on sales, although general agents are also provided with an
allowance for benefits and other expenses. At December 31, 2003, approximately
90% of New England Financial's agents were licensed to sell one or more of the
following products: variable life insurance, variable annuities and mutual
funds.

GenAmerica Financial independent general agency system. GenAmerica
Financial markets a portfolio of individual life insurance, annuity contracts,
securities, and related financial services to high net-worth individuals and
small- to medium-sized businesses through multiple distribution channels. These
distribution channels include independent general agents, financial advisors,
consultants, brokerage general agencies and other independent marketing
organizations. The average face amount of a life insurance policy sold through
the GenAmerica Financial independent general agency system in 2003 was
approximately $610,000.

The GenAmerica Financial distribution channel sells universal life,
variable universal life, and traditional life insurance products through
approximately 1,500 independent general agencies with which it has contractual
arrangements. This reflects a 47% increase in independent general agencies from
2002 to 2003. There are 429 independent general agents who produced at least
$25,000 in first-year insurance sales in 2003. These agents market GenAmerica
Financial products and are independent contractors who are generally responsible
for the expenses of operating their agencies, including office and overhead
expenses, and the recruiting, selection, contracting, training, and development
of agents and brokers in their agencies. Recruiting and wholesaling efforts are
directed from a nationwide network of regional offices. GenAmerica Financial is
actively developing and implementing programs designed to increase the scale and
productivity of its distribution channels.

In 2003, MetLife Investors Group's management became responsible for the
GenAmerica Financial distribution channel, building on its success in third
party distribution and taking advantage of its scale and established systems.

MetLife Investors Group. MetLife Investors Group is a wholesale
distribution channel dedicated to the distribution of variable and fixed
annuities and insurance products through financial intermediaries, including
regional broker/dealers, New York Stock Exchange brokerage firms, financial
planners and banks. For the year ended December 31, 2003, MetLife Investors
Group had 472 selling agreements, 411 for regional broker/ dealers and financial
planners, four for brokerage firms, 56 for banks and one for a third party
administrator. As of December 31, 2003, MetLife Investors Group's sales force
consisted of 86 regional vice presidents, or wholesalers.

MetLife Investors Group plans to continue growing existing distribution
relationships and acquiring new relationships by capitalizing on an experienced
management team, leveraging the MetLife brand and resources, and developing high
service, low-cost operations while also adding distribution of other MetLife
products.

Additional distribution channels: The Company distributes its individual
insurance and investment products through several additional distribution
channels, including Walnut Street Securities, MetLife Resources and Texas Life.

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Walnut Street Securities. Walnut Street Securities, Inc., a MetLife,
Inc. subsidiary, is a broker/ dealer that markets mutual funds and other
securities, as well as variable life insurance and variable annuity
products, through 1,462 independent registered representatives.

MetLife Resources. MetLife Resources, a division of MetLife, markets
retirement, annuity and other financial products on a national basis
through 401 agents and independent brokers. MetLife Resources targets the
nonprofit, educational and healthcare markets.

Texas Life. Texas Life Insurance Company, a MetLife, Inc. subsidiary,
markets whole life and universal life insurance products under the Texas
Life name through approximately 1,300 active independent insurance brokers.
These brokers are independent contractors who sell insurance for Texas Life
on a nonexclusive basis. A number of MetLife career agents also market
Texas Life products. Texas Life sells universal life insurance policies
with low cash values that are marketed through the use of brochures, as
well as payroll deduction life insurance products.

PRODUCTS

The Company offers a wide variety of individual insurance, as well as
annuities and investment-type products aimed at serving its customers' financial
needs throughout their entire life cycle.

INSURANCE PRODUCTS

The Company's individual insurance products include variable life products,
universal life products, traditional life products, including whole life and
term life, and other individual products, including individual disability and
long-term care insurance.

The Company continually reviews and updates its products. It has introduced
new products and features designed to increase the competitiveness of its
portfolio and the flexibility of its products to meet the broad range of asset
accumulation, life-cycle protection and distribution needs of its customers.
Some of these updates have included new universal life policies, updated
variable universal life products, an improved term insurance portfolio, and
enhancements to one of MetLife's whole life products.

Variable life. Variable life products provide insurance coverage through a
contract that gives the policyholder flexibility in investment choices and,
depending on the product, in premium payments and coverage amounts, with certain
guarantees. Most importantly, with variable life products, premiums and account
balances can be directed by the policyholder into a variety of separate accounts
or directed to the Company's general account. In the separate accounts, the
policyholder bears the entire risk of the investment results. MetLife collects
specified fees for the management of these various investment accounts and any
net return is credited directly to the policyholder's account. In some
instances, third-party money management firms manage investment accounts that
support variable insurance products. With some products, by maintaining a
certain premium level, policyholders may have the advantage of various
guarantees that may protect the death benefit from adverse investment
experience.

Universal life. Universal life products provide insurance coverage on the
same basis as variable life, except that premiums, and the resulting accumulated
balances, are allocated only to the MetLife general account. Universal life
products may allow the insured to increase or decrease the amount of death
benefit coverage over the term of the contract and the owner to adjust the
frequency and amount of premium payments. The Company credits premiums to an
account maintained for the policyholder. Premiums are credited net of specified
expenses and interest, at interest rates it determines, subject to specified
minimums. Specific charges are made against the policyholder's account for the
cost of insurance protection and for expenses. With some products, by
maintaining a certain premium level, policyholders may have the advantage of
various guarantees that may protect the death benefit from adverse investment
experience.

Whole life. Whole life products provide a guaranteed benefit upon the
death of the insured in return for the periodic payment of a fixed premium over
a predetermined period. Premium payments may be required for the entire life of
the contract period, to a specified age or period, and may be level or change in
accordance with a predetermined schedule. Whole life insurance includes policies
that provide a participation feature in

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the form of dividends. Policyholders may receive dividends in cash or apply them
to increase death benefits, increase cash values available upon surrender or
reduce the premiums required to maintain the contract in-force. Because the use
of dividends is specified by the policyholder, this group of products provides
significant flexibility to individuals to tailor the product to suit their
specific needs and circumstances, while at the same time providing guaranteed
benefits.

Term life. Term life provides a guaranteed benefit upon the death of the
insured for a specified time period in return for the periodic payment of
premiums. Specified coverage periods range from one year to 20 years, but in no
event are they longer than the period over which premiums are paid. Death
benefits may be level over the period or decreasing. Decreasing coverage is used
principally to provide for loan repayment in the event of death. Premiums may be
guaranteed at a level amount for the coverage period or may be non-level and
non-guaranteed. Term insurance products are sometimes referred to as pure
protection products, in that there are typically no savings or investment
elements. Term contracts expire without value at the end of the coverage period
when the insured party is still living.

Other individual products. Individual disability products provide a
benefit in the event of the disability of the insured. In most instances, this
benefit is in the form of monthly income paid until the insured reaches age 65.
In addition to income replacement, the product may be used to provide for the
payment of business overhead expenses for disabled business owners or mortgage
payment protection.

MetLife's long-term care insurance provides a fixed benefit for certain
costs associated with nursing home care and other services that may be provided
to individuals unable to perform the activities of daily living.

In addition to these products, MetLife's Individual segment supports a
group of low face amount life insurance policies, known as industrial policies,
that its agents sold until 1964.

ANNUITIES AND INVESTMENT PRODUCTS

The Company offers a variety of individual annuities and investment
products, including variable and fixed annuities, mutual funds, and securities.

Variable annuities. The Company offers variable annuities for both asset
accumulation and asset distribution needs. Variable annuities allow the
contractholder to make deposits into various investment accounts, as determined
by the contractholder. The investment accounts are separate accounts and risks
associated with such investments are borne entirely by the contractholder. In
certain variable annuity products, contractholders may also choose to allocate
all or a portion of their account to the Company's general account and are
credited with interest at rates the Company determines, subject to certain
minimums. In addition, contractholders may also elect certain minimum death
benefit and minimum living benefit guarantees for which additional premium and
fees are charged.

Fixed annuities. Fixed annuities are used for both asset accumulation and
asset distribution needs. Fixed annuities do not allow the same investment
flexibility provided by variable annuities, but provide guarantees related to
the preservation of principal and interest credited. Deposits made into these
contracts are allocated to the general account and are credited with interest at
rates the Company determines, subject to certain minimums. Credited interest
rates may be guaranteed not to change for certain limited periods of time,
ranging from one to ten years.

Mutual funds and securities. MetLife offers both proprietary and
non-proprietary mutual funds. Proprietary funds include those offered by State
Street Research & Management Company. MetLife also offers investment accounts
for mutual funds and securities that allow customers to buy, sell and retain
holdings in one centralized location, as well as brokerage accounts that offer
the accessibility and liquidity of a money market mutual fund. Of the mutual
funds sold by the Company in 2003, approximately $200 million of the deposited
assets were managed by State Street Research & Management Company and $3.5
billion by third parties.

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AUTO & HOME

Auto & Home, operating through Metropolitan Property and Casualty Insurance
Company and its subsidiaries, offers personal lines property and casualty
insurance directly to employees through employer-sponsored programs, as well as
through a variety of retail distribution channels, including the MetLife
Financial Services career agency system, independent agents, Auto & Home
specialists and direct response marketing. Auto & Home primarily sells auto
insurance, which represented 74.1% of Auto & Home's total net premiums earned in
2003, and homeowners insurance, which represented 24.1% of Auto & Home's total
net premiums earned in 2003. Auto insurance includes both standard and
non-standard policies. Non-standard policies provide insurance for risks having
higher loss experience or loss potential than risks covered by standard
insurance.

On September 30, 1999, the Auto & Home segment acquired the standard
personal lines property and casualty insurance operations of The St. Paul
Companies, which, at the time of the acquisition, had in-force premiums of
approximately $1.1 billion and approximately 3,000 independent agents and
brokers. The conversion of St. Paul's approximately one million policies to
MetLife Auto & Home policies was completed in 2002.

PRODUCTS

Auto & Home's insurance products include:

- auto, including both standard and non-standard private passenger;

- homeowners, renters, condominium and dwelling; and

- other personal lines, including umbrella (protection against losses in
excess of amounts covered by other liability insurance policies),
recreational vehicles and boat owners.

Auto coverages. Auto insurance policies include coverages for private
passenger automobiles, utility automobiles and vans, motorcycles, motor homes,
antique or classic automobiles and trailers. Auto & Home offers traditional
coverages such as liability, uninsured motorist, no fault or personal injury
protection and collision and comprehensive coverages. Auto & Home also offers
non-standard auto insurance, which accounted for approximately $96 million in
net premiums earned in 2003. This represents approximately 4% of total auto net
premiums earned in 2003.

Homeowners coverages. Homeowners insurance provides protection for
homeowners, renters, condominium owners and residential landlords against losses
arising out of damage to dwellings and contents from a wide variety of perils,
as well as coverage for liability arising from ownership or occupancy.

Traditional insurance policies for dwellings represent the majority of Auto
& Home's homeowners policies providing protection for loss on a "replacement
cost" basis. These policies provide additional coverage for reasonable, normal
living expenses incurred by policyholders who have been displaced from their
homes.

MARKETING AND DISTRIBUTION

Personal lines auto and homeowners insurance products are directly marketed
to employees through employer-sponsored programs. Auto & Home products are also
marketed and sold by the MetLife Financial Services career agency sales force,
independent agents, property and casualty specialists and through a direct
response channel.

EMPLOYER-SPONSORED PROGRAMS

Auto & Home is a leading provider of employer-sponsored auto and homeowners
products. Net premiums earned through Auto & Home's employer-sponsored
distribution channel grew at a compound annual rate of 12.9%, from $562 million
in 1999 to $913 million in 2003. At December 31, 2003, approximately 1,700
employers offered MetLife Auto & Home products to their employees.

10

Institutional marketing representatives market the employer-sponsored Auto
& Home products to employers through a variety of means, including broker
referrals and cross-selling to MetLife group customers. Once endorsed by the
employer, MetLife commences marketing efforts to employees. Employees who are
interested in the employer-sponsored auto and homeowners products can call a
toll-free number for a quote, purchase coverage and authorize payroll deduction
over the telephone. Auto & Home has also developed proprietary software that
permits an employee in most states to obtain a quote for employer-sponsored auto
insurance through Auto & Home's Internet website.

RETAIL DISTRIBUTION CHANNELS

MetLife markets and sells Auto & Home products through its career agency
sales force, independent agents and property and casualty specialists. In recent
years, MetLife has increased its use of independent agents and property and
casualty specialists to sell these products.

Independent agencies. At December 31, 2003, Auto & Home maintained
contracts with more than 4,000 agencies and brokers.

Property and casualty specialists. Auto & Home has 437 specialists that
sell products in 28 states. Auto & Home's strategy is to utilize property and
casualty specialists, who are MetLife employees, in geographic markets that are
underserved by its career agents.

MetLife Financial Services career agency system. The MetLife Financial
Services career agency system has 1,500 agents that sell Auto & Home insurance
products. Sales of Auto & Home products by these agents have been declining
since the early 1990s, due principally to the reduction in the number of agents
in the MetLife Financial Services career agency sales force. See
"-- Individual -- Marketing and Distribution."

Other distribution channels. The Company also utilizes a direct response
marketing channel which permits sales to be generated through sources such as
target mailings, career agent referrals and the Internet.

In 2003, Auto & Home's business was concentrated in the following states,
as measured by net premiums earned: New York $390 million or 13.4%,
Massachusetts $348 million or 12.0%, Illinois $219 million or 7.5%, Connecticut
$143 million or 4.9%, and Minnesota $140 million or 4.8%.

CLAIMS

Auto & Home's claims department includes approximately 2,160 employees
located in Auto & Home's Warwick, Rhode Island home office, 12 field claim
offices, six in-house counsel offices and drive-in inspection and other sites
throughout the United States. These employees include claim adjusters,
appraisers, attorneys, managers, medical specialists, investigators, customer
service representatives, claim financial analysts and support staff. Claim
adjusters, representing the majority of employees, investigate, evaluate and
settle over 775,000 claims annually, principally by telephone.

INTERNATIONAL

International provides life insurance, accident and health insurance,
annuities and savings and retirement products to both individuals and groups,
and auto and homeowners coverage to individuals. The Company focuses on emerging
markets in the geographic regions primarily within Latin America and
Asia/Pacific. The Company operates in international markets through subsidiaries
and joint ventures.

LATIN AMERICA

The Company operates in the Latin America region in the following
countries: Mexico, Chile, Brazil, Argentina and Uruguay. The operations in
Mexico and Chile represent approximately 94% of the total premiums and fees in
this region for the year ended December 31, 2003. The Mexican operation is the
leading life insurance company in both the individual and group businesses in
Mexico. The Chilean operation is the largest annuity company in Chile, based on
market share. The Chilean operation also offers individual life insurance and
group insurance products.

11

ASIA/PACIFIC

The Company operates in the Asia/Pacific region in the following countries:
South Korea, Taiwan, Hong Kong, Indonesia and India. The operations in South
Korea and Taiwan represent approximately 96% of the total premiums and fees in
this region for the year ended December 31, 2003. The South Korean operation
offers individual life insurance, savings and retirement and non-medical health
products, as well as group life and retirement products. The Taiwanese operation
offers individual life, accident and health, and personal travel insurance
products, as well as group life and group accident and health insurance
products. During 2003, the Company signed an agreement with a joint venture
partner in China and anticipates commencing operations during the first quarter
of 2004.

REINSURANCE

MetLife's Reinsurance segment is comprised of the life reinsurance business
of Reinsurance Group of America, Incorporated ("RGA"), a publicly traded company
(NYSE: RGA), and MetLife's ancillary life reinsurance business. MetLife owns
approximately 52% of RGA's outstanding common shares at December 31, 2003 as
compared to approximately 59% at December 31, 2002. This reduction is primarily
due to RGA's issuance of additional common shares in a public offering during
2003. MetLife purchased approximately 25% of these newly issued shares.

RGA's operations in North America are its largest and include operations of
its Canadian and U.S. subsidiaries. In addition to its North American
operations, RGA has subsidiary companies, branch offices, or representative
offices in Australia, Barbados, Hong Kong, India, Ireland, Japan, Mexico, South
Africa, South Korea, Spain, Taiwan and the United Kingdom.

In addition to its life reinsurance business, RGA provides reinsurance of
asset-intensive products and financial reinsurance. RGA and its predecessor, the
reinsurance division of General American Life Insurance Company ("General
American"), have been engaged in the business of life reinsurance since 1973. As
of December 31, 2003, RGA had approximately $12.1 billion in consolidated assets
and worldwide life reinsurance in-force of approximately $1,252 billion.

RGA'S PRODUCTS AND SERVICES

RGA's operational segments are segregated primarily by geographic region:
U.S., Canada, Asia/Pacific, Europe and South Africa, and Corporate and Other.
The U.S. operations, which represented 68% of RGA's 2003 net premiums, provide
traditional life, asset-intensive and financial reinsurance to domestic clients.
Traditional life reinsurance involves RGA indemnifying another insurance company
for all or a portion of the insurance risk, primarily mortality risk, it has
written. Asset-intensive products primarily include the reinsurance of
corporate-owned life insurance ("COLI") and annuities. Financial reinsurance
involves assisting RGA's clients (other insurance companies) in managing their
regulatory capital or in achieving other financial goals. The Canadian
operations, which represented 8% of RGA's 2003 net premiums, primarily provide
insurers with traditional life reinsurance. The Asia/Pacific and Europe and
South Africa operations, which represented 24% of RGA's 2003 net premiums,
provide primarily traditional life and critical illness reinsurance and, to a
lesser extent, financial reinsurance. Traditional life reinsurance pays upon the
death of the insured and critical illness coverage pays on the earlier of death
or diagnosis of a pre-defined illness. The Corporate and Other segment results
include RGA's corporate investment activity, general corporate expenses,
interest expense, and the income tax provision. Results related to certain
accident and health business, Argentine privatized pension business, and direct
insurance operations in Argentina are also reported in RGA's Corporate and Other
segment.

ASSET MANAGEMENT

Asset Management, through SSRM Holdings, Inc. ("State Street Research"),
provides a broad variety of asset management products and services to MetLife,
third-party institutions and individuals. State Street Research conducts its
operations through two subsidiaries, State Street Research & Management Company,
a full-service investment management firm, and SSR Realty Advisors, Inc., a
full-service real estate investment

12

advisor. State Street Research offers investment management services in all
major investment disciplines through multiple channels of distribution in both
the retail and institutional marketplaces. At December 31, 2003, State Street
Research had assets under management of $47.5 billion which consisted of fixed
income investments, equities, real estate and money market investments,
representing 54%, 34%, 11% and 1%, respectively, of State Street Research's
total assets under management. Assets under management from MetLife of $24
billion are included in the total assets under management of $47.5 billion
referred to above.

State Street Research has been an investment manager for many of the
largest U.S. corporate pension plans for over 30 years. The majority of State
Street Research's institutional business is concentrated in qualified retirement
funds, including both defined benefit and defined contribution plans. State
Street Research also provides investment management services to foundations,
endowments and union programs. In addition, State Street Research serves as an
advisor for 19 mutual funds with assets totaling $9.4 billion at December 31,
2003, as well as seven portfolios with assets totaling $7.4 billion at December
31, 2003, underlying MetLife's variable life and variable annuity products.

State Street Research distributes its investment products to institutions
through its own institutional sales force and pension consultants. State Street
Research's mutual fund products are distributed primarily through retail
brokerage firms (76% of mutual fund sales) and by the MetLife career agency
sales force (21% of mutual fund sales). State Street Research offers its
products to the defined contribution market directly, as well as through
Institutional's defined contribution group.

POLICYHOLDER LIABILITIES

MetLife establishes, and carries as liabilities, actuarially determined
amounts that are calculated to meet its policy obligations when an annuitant
takes income, a policy matures or surrenders or an insured dies or becomes
disabled. MetLife computes the amounts for actuarial liabilities reported in its
consolidated financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP").

In establishing these actuarial liabilities, MetLife distinguishes between
short duration and long duration contracts. Short duration contracts arise from
the group life, group dental and short-term disability businesses. The actuarial
liability for short duration contracts consists of gross unearned premiums as of
the valuation date and the discounted amount of the future payments on pending
and approved claims as of the valuation date. Long duration contracts consist of
traditional life, guaranteed renewable term life, non-participating whole life,
individual disability, group long-term disability and long-term care contracts.
MetLife determines actuarial liabilities for long duration contracts using
assumptions based on current experience, plus a margin for adverse deviation for
these policies. Where they exist, MetLife amortizes deferred policy acquisition
costs ("DAC"), including value of business acquired ("VOBA"), in relation to the
associated gross margins, profits or premium.

MetLife also distinguishes between investment contracts, limited pay
contracts and universal life-type contracts. The actuarial liabilities for these
products primarily consist of policyholders' account balances. The Company also
establishes actuarial liabilities for future policy benefits (associated with
base policies and riders, unearned mortality charges and future disability
benefits), for other policyholder funds (associated with unearned revenues and
claims payable) and for unearned revenue (the unamortized portion of front-end
loads charged). Investment contracts primarily consist of individual annuity and
certain group pension contracts that have limited or no mortality risk. MetLife
amortizes DAC on these contracts in relation to estimated gross profits. Limited
pay contracts primarily consist of single premium immediate individual and group
pension annuities. For limited pay contracts, the Company defers the excess of
the gross premium over the net premium and recognizes such excess into income in
relation to anticipated future benefit payments. Universal life-type contracts
consist of universal and variable life contracts. The Company amortizes DAC for
limited pay and universal life-type contracts using the product's estimated
gross profits. For universal life-type contracts with front-end loads, MetLife
defers the charge and amortizes the unearned revenue using the product's
estimated gross profits.

13

The liability for future policy benefits for participating traditional life
insurance is the net level reserve using the policy's guaranteed mortality rates
and the dividend fund interest rate or nonforfeiture interest rate, as
applicable. MetLife amortizes DAC in relation to the product's estimated gross
margins.

The Auto & Home segment establishes actuarial liabilities to account for
the estimated ultimate costs of losses and loss adjustment expenses for claims
that have been reported but not yet settled, and claims incurred but not
reported. It bases unpaid losses and loss adjustment expenses on:

- case estimates for losses reported on direct business, adjusted in the
aggregate for ultimate loss expectations;

- estimates of incurred but not reported losses based upon past experience;

- estimates of losses on insurance assumed primarily from involuntary
market mechanisms; and

- estimates of future expenses to be incurred in settlement of claims.

For the Auto & Home segment, MetLife deducts estimated amounts of salvage
and subrogation from unpaid losses and loss adjustment expenses. Implicit in all
these estimates are underlying assumptions about rates of inflation because
MetLife determines all estimates using expected amounts to be paid. MetLife
derives estimates for the development of reported claims and for incurred but
not reported claims principally from actuarial analyses of historical patterns
of claims and claims development for each line of business. Similarly, MetLife
derives estimates of unpaid loss adjustment expenses principally from actuarial
analyses of historical development patterns of the relationship of loss
adjustment expenses to losses for each line of business. MetLife anticipates
ultimate recoveries from salvage and subrogation principally on the basis of
historical recovery patterns.

Pursuant to state insurance laws, MetLife's insurance subsidiaries
establish statutory reserves, reported as liabilities, to meet their obligations
on their respective policies. These statutory reserves are established in
amounts sufficient to meet policy and contract obligations, when taken together
with expected future premiums and interest at assumed rates. Statutory reserves
generally differ from actuarial liabilities for future policy benefits
determined using GAAP.

The New York Insurance Law and regulations require certain MetLife entities
to submit to the New York Superintendent of Insurance or other state insurance
departments, with each annual report, an opinion and memorandum of a "qualified
actuary" that the statutory reserves and related actuarial amounts recorded in
support of specified policies and contracts, and the assets supporting such
statutory reserves and related actuarial amounts, make adequate provision for
their statutory liabilities with respect to these obligations. See
"-- Regulation -- Insurance Regulation -- Policy and contract reserve
sufficiency analysis."

Due to the nature of the underlying risks and the high degree of
uncertainty associated with the determination of its actuarial liabilities,
MetLife cannot precisely determine the amounts that it will ultimately pay with
respect to these actuarial liabilities, and the ultimate amounts may vary from
the estimated amounts, particularly when payments may not occur until well into
the future. Furthermore, the Company has experienced, and will likely in the
future experience, catastrophe losses and possibly acts of terrorism that may
have an adverse impact on its business, results of operations and financial
condition. Catastrophes can be caused by various events, including hurricanes,
windstorms, earthquakes, hail, tornadoes, explosions, severe winter weather
(including snow, freezing water, ice storms and blizzards) and fires. Due to
their nature, the Company cannot predict the incidence, timing and severity of
catastrophes and acts of terrorism, but the Company makes broad use of
catastrophic and non-catastrophic reinsurance to manage risk from these perils.
However, MetLife believes its actuarial liabilities for future benefits are
adequate to cover the ultimate benefits. MetLife periodically reviews its
estimates of actuarial liabilities for future benefits and compares them with
its actual experience. It revises estimates, when appropriate, if it determines
that future expected experience differs from assumptions used in the development
of actuarial liabilities.

14

UNDERWRITING AND PRICING

INSTITUTIONAL AND INDIVIDUAL

The Company's underwriting for the Institutional and Individual segments
involves an evaluation of applications for life, disability, dental, retirement
and savings, and long-term care insurance products and services by a
professional staff of underwriters and actuaries, who determine the type and the
amount of risk that the Company is willing to accept. The Company employs
detailed underwriting policies, guidelines and procedures designed to assist the
underwriter to properly assess and quantify risks before issuing policies to
qualified applicants or groups.

Individual underwriting considers not only an applicant's medical history,
but also other factors such as financial profiles, foreign travel, vocations and
alcohol, drug and tobacco use. The Company's group underwriters generally
evaluate the risk characteristics of each prospective insured group, although
with certain voluntary products, employees may be underwritten on an individual
basis. Generally, the Company is not obligated to accept any risk or group of
risks from, or to issue a policy or group of policies to, any employer or
intermediary. Requests for coverage are reviewed on their merits and generally a
policy is not issued unless the particular risk or group has been examined and
approved for underwriting. Underwriting is generally done by the Company's
employees, although some policies are reviewed by intermediaries under strict
guidelines established by the Company.

In order to maintain high standards of underwriting quality and
consistency, the Company engages in a multilevel series of ongoing internal
underwriting audits, and is subject to external audits by its reinsurers, at
both its remote underwriting offices and its corporate underwriting office.

The Company has established senior level oversight of the underwriting
process that facilitates quality sales and serving the needs of its customers,
while supporting its financial strength and business objectives. The Company's
goal is to achieve the underwriting, mortality and morbidity levels reflected in
the assumptions in its product pricing. This is accomplished by determining and
establishing underwriting policies, guidelines, philosophies and strategies that
are competitive and suitable for the customer, the agent and the Company.

Pricing for the Institutional and Individual segments reflects the
Company's insurance underwriting standards. Product pricing of insurance
products is based on the expected payout of benefits calculated through the use
of assumptions for mortality, morbidity, expenses, persistency and investment
returns, as well as certain macroeconomic factors, such as inflation. Product
specifications are designed to mitigate the risks of greater than expected
mortality, and the Company periodically monitors mortality and morbidity
assumptions. Investment-oriented products are priced based on various factors,
which may include investment return, expenses, persistency, and optionality.

Unique to the Institutional segment's pricing is experience rating. MetLife
employs both prospective and retrospective experience rating. Prospective
experience rating involves the evaluation of past experience for the purpose of
determining future premium rates. Retrospective experience rating involves the
evaluation of past experience for the purpose of determining the actual cost of
providing insurance for the customer for the period of time in question.

MetLife continually reviews its underwriting and pricing guidelines so that
its policies remain competitive and supportive of its marketing strategies and
profitability goals. Decisions are based on established actuarial pricing and
risk selection principles to ensure that MetLife's underwriting and pricing
guidelines are appropriate.

REINSURANCE

Reinsurance is written on a facultative basis or an automatic treaty basis.
Facultative reinsurance is individually underwritten by the reinsurer for each
policy to be reinsured. Factors considered in underwriting facultative
reinsurance are medical history, impairments, employment, hobbies and financial
information. An automatic reinsurance treaty provides that risks will be ceded
on specified blocks of business where the underlying policies meet the ceding
company's underwriting criteria. In contrast to facultative reinsurance, the

15

reinsurer does not approve each individual risk. Automatic reinsurance treaties
generally provide that the reinsurer will be liable for a portion of the risk
associated with specified policies written by the ceding company. Factors
considered in underwriting automatic reinsurance are the product's underwriting,
pricing, distribution and optionality, as well as the ceding company's retention
and financial strength.

AUTO & HOME

Auto & Home's underwriting function has six principal aspects:

- evaluating potential worksite marketing employer accounts and independent
agencies;

- establishing guidelines for the binding of risks by agents with binding
authority;

- reviewing coverage bound by agents;

- on a case by case basis, underwriting potential insureds presented by
agents outside the scope of their binding authority;

- pursuing information necessary in certain cases to enable Auto & Home to
issue a policy within the Company's guidelines; and

- ensuring that renewal policies continue to be written at rates
commensurate with risk.

Subject to very few exceptions, agents in each of Auto & Home's
distribution channels, as well as in MetLife's Institutional segment, have
binding authority for risks which fall within Auto & Home's published
underwriting guidelines. Risks falling outside the underwriting guidelines may
be submitted for approval to the underwriting department; alternatively, agents
in such a situation may call the underwriting department to obtain authorization
to bind the risk themselves. In most states, Auto & Home generally has the right
within a specified period (usually the first 60 days) to cancel any policy.

Auto & Home establishes prices for its major lines of insurance based on
its proprietary database, rather than relying on rating bureaus. Auto & Home
determines prices in part from a number of variables specific to each risk. The
pricing of personal lines insurance products takes into account, among other
things, the expected frequency and severity of losses, the costs of providing
coverage (including the costs of acquiring policyholders and administering
policy benefits and other administrative and overhead costs), competitive
factors and profit considerations.

The major pricing variables for personal lines automobile insurance include
characteristics of the automobile itself, such as age, make and model,
characteristics of insureds, such as driving record and experience, and the
insured's personal financial management. Auto & Home's ability to set and change
rates is subject to regulatory oversight.

As a condition of MetLife's license to do business in each state, Auto &
Home, like all other automobile insurers, is required to write or share the cost
of private passenger automobile insurance for higher risk individuals who would
otherwise be unable to obtain such insurance. This "involuntary" market, also
called the "shared market," is governed by the applicable laws and regulations
of each state, and policies written in this market are generally written at
rates higher than standard rates.

REINSURANCE ACTIVITY

MetLife cedes premiums to other insurers under various agreements that
cover individual risks, group risks or defined blocks of business, on a
coinsurance, yearly renewable term, excess or catastrophe excess basis. These
reinsurance agreements spread the risk and minimize the effect of losses. The
amount of each risk retained by MetLife depends on its evaluation of the
specific risk, subject, in certain circumstances, to maximum limits based on the
characteristics of coverages. The Company also reinsures low mortality risk
reinsurance treaties with other reinsurance companies. It also obtains
reinsurance when capital requirements and the economic terms of the reinsurance
make it appropriate to do so.

16

Under the terms of the reinsurance agreements, the reinsurer agrees to
reimburse MetLife for the ceded amount in the event the claim is paid. However,
MetLife remains liable to its policyholders with respect to ceded insurance if
any reinsurer fails to meet the obligations assumed by it. Since it bears the
risk of nonpayment by one or more of its reinsurers, MetLife cedes reinsurance
to well-capitalized, highly rated reinsurers.

INDIVIDUAL

MetLife currently reinsures up to 90% of the mortality risk for all new
individual life insurance policies that it writes through its various insurance
companies. This practice was initiated for different products starting at
various points in time between 1992 and 2000. In addition, in 1998, MetLife
reinsured most of the mortality risk on its universal life policies issued since
1983.

In addition to reinsuring mortality risk, MetLife reinsures other risks and
specific coverages. The Company routinely reinsures certain classes of risks in
order to limit its exposure to particular travel, vocation and lifestyle
hazards. MetLife's retention limits per life vary by franchise and according to
the characteristics of the particular risks.

MetLife reinsures its business through a diversified group of reinsurers.
Placement of reinsurance is done primarily on an automatic basis and also on a
facultative basis for risks with specific characteristics.

AUTO & HOME

Auto & Home purchases reinsurance to control the Company's exposure to
large losses (primarily catastrophe losses) and to protect surplus. Auto & Home
cedes to reinsurers a portion of risks and pays premiums based upon the risk and
exposure of the policies subject to reinsurance.

To control the Company's exposure to large property and casualty losses,
Auto & Home utilizes property catastrophe, casualty, and property per risk
excess loss agreements.

REGULATION

INSURANCE REGULATION

Metropolitan Life is licensed to transact insurance business in, and is
subject to regulation and supervision by, all 50 states, the District of
Columbia, Puerto Rico, the U.S. Virgin Islands and Canada. Each of MetLife's
other insurance subsidiaries is licensed and regulated in all U.S. and
international jurisdictions where it conducts insurance business. The extent of
such regulation varies, but most jurisdictions have laws and regulations
governing the financial aspects of insurers, including standards of solvency,
reserves, reinsurance and capital adequacy, and the business conduct of
insurers. In addition, statutes and regulations usually require the licensing of
insurers and their agents, the approval of policy forms and related materials
and, for certain lines of insurance, the approval of rates. Such statutes and
regulations also prescribe the permitted types and concentration of investments.

The New York Insurance Law limits the sales commissions and certain other
marketing expenses that may be incurred in connection with the sale of life
insurance policies and annuity contracts. MetLife's insurance subsidiaries are
each required to file reports, generally including detailed annual financial
statements, with insurance regulatory authorities in each of the jurisdictions
in which they do business, and their operations and accounts are subject to
periodic examination by such authorities. These subsidiaries must also file, and
in many jurisdictions and in some lines of insurance obtain regulatory approval
for, rules, rates and forms relating to the insurance written in the
jurisdictions in which they operate.

The National Association of Insurance Commissioners ("NAIC") has
established a program of accrediting state insurance departments. NAIC
accreditation permits accredited states to conduct periodic examinations of
insurers domiciled in such states. NAIC-accredited states will not accept
reports of examination of insurers from unaccredited states, except under
limited circumstances. As a direct result, insurers domiciled in unaccredited
states may be subject to financial examination by accredited states in which

17

they are licensed, in addition to any examinations conducted by their
domiciliary states. The New York Insurance Department (the "Department"),
Metropolitan Life's principal insurance regulator, has not received its
accreditation as a result of the New York legislature's failure to adopt certain
model NAIC laws. The Company does not believe that this will have a significant
impact upon its ability to conduct its insurance businesses.

State and federal insurance and securities regulatory authorities and other
state law enforcement agencies and attorneys general from time to time make
inquiries regarding compliance by MetLife's insurance subsidiaries with
insurance, securities and other laws and regulations regarding the conduct of
MetLife's insurance and securities businesses. MetLife cooperates with such
inquiries and takes corrective action when warranted.

Holding Company regulation. The Holding Company and its insurance
subsidiaries are subject to regulation under the insurance holding company laws
of various jurisdictions. The insurance holding company laws and regulations
vary from jurisdiction to jurisdiction, but generally require a controlled
insurance company (insurers that are subsidiaries of insurance holding
companies) to register with state regulatory authorities and to file with those
authorities certain reports, including information concerning their capital
structure, ownership, financial condition, certain intercompany transactions and
general business operations.

State insurance statutes also typically place restrictions and limitations
on the amount of dividends or other distributions payable by insurance company
subsidiaries to their parent companies, as well as on transactions between an
insurer and its affiliates. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources -- The Holding Company." The New York Insurance Law and the
regulations thereunder also restrict the aggregate amount of investments
Metropolitan Life may make in non-life insurance subsidiaries, and provide for
detailed periodic reporting on subsidiaries.

Guaranty associations and similar arrangements. Most of the jurisdictions
in which MetLife's insurance subsidiaries are admitted to transact business
require life and property and casualty 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 is engaged. Some
states permit member insurers to recover assessments paid through full or
partial premium tax offsets.

In the past five years, the aggregate assessments levied against MetLife's
insurance subsidiaries have not been material. While the amount and timing of
future assessments are not predictable, the Company has established liabilities
for guaranty fund assessments that it considers adequate for assessments with
respect to insurers that are currently subject to insolvency proceedings. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Insolvency Assessments."

Statutory insurance examination. As part of their regulatory oversight
process, state insurance departments conduct periodic detailed examinations of
the books, records, accounts, and business practices of insurers domiciled in
their states. On March 1, 2000, the Department completed an examination of
Metropolitan Life for each of the five years in the period ended December 31,
1998 which included recommendations for certain changes in recordkeeping
processes, but did not result in a fine. For the three-year period ended
December 31, 2003, MetLife, Inc. has not received any material adverse findings
resulting from state insurance department examinations of its insurance
subsidiaries.

Regulatory authorities in a small number of states have conducted
investigations or inquiries relating to Metropolitan Life's, New England Life
Insurance Company's ("New England Life") or General American's sales of
individual life insurance policies or annuities. Over the past several years,
these and other investigations by various regulatory authorities were resolved
by monetary payments and certain other relief. The Company may continue to
resolve investigations in a similar manner.

18

Policy and contract reserve sufficiency analysis. Under the New York
Insurance Law, Metropolitan Life is required to conduct annually an analysis of
the sufficiency of all life and health insurance and annuity statutory reserves.
Additionally, other life insurance affiliates are subject to similar
requirements in their states of domicile. In each case, a qualified actuary must
submit an opinion which states that the statutory reserves, when considered in
light of the assets held with respect to such reserves, make good and sufficient
provision for the associated contractual obligations and related expenses of the
insurer. If such an opinion cannot be provided, the insurer must set up
additional reserves by moving funds from surplus. Since inception of this
requirement, Metropolitan Life and all other insurance subsidiaries required by
other jurisdictions to provide similar opinions have provided them without
qualifications.

Surplus and capital. The New York Insurance Law requires New York domestic
stock life insurers to maintain minimum capital. At December 31, 2003,
Metropolitan Life's capital was in excess of such required minimum. Since its
demutualization, Metropolitan Life has continued to offer participating
policies. Metropolitan Life is subject to statutory restrictions that limit to
10% the amount of statutory profits on participating policies written after the
demutualization (measured before dividends to policyholders) that can inure to
the benefit of stockholders. Since the demutualization, the impact of these
restrictions on net income has not been, and Metropolitan Life believes that in
the future it will not be, significant.

MetLife's U.S. insurance subsidiaries are subject to the supervision of the
regulators in each jurisdiction in which they are licensed to transact business.
Regulators have discretionary authority, in connection with the continued
licensing of these insurance subsidiaries, to limit or prohibit sales to
policyholders if, in their judgment, the regulators determine that such insurer
has not maintained the minimum surplus or capital or that the further
transaction of business will be hazardous to policyholders. See "-- Risk-based
capital."

Risk-based capital ("RBC"). The New York Insurance Law requires that New
York domestic life insurers report their RBC based on a formula calculated by
applying factors to various asset, premium and statutory reserve items; similar
rules apply to each of the Holding Company's U.S. insurance subsidiaries
domiciled in other jurisdictions. The formula takes into account the risk
characteristics of the insurer, including asset risk, insurance risk, interest
rate risk and business risk. The Department uses the formula as an early warning
regulatory tool to identify possible inadequately capitalized insurers for
purposes of initiating regulatory action, and not as a means to rank insurers
generally. The New York Insurance Law imposes broad confidentiality requirements
on those engaged in the insurance business (including insurers, agents, brokers
and others) and on the Department as to the use and publication of RBC data.

The New York Insurance Law gives the New York Superintendent of Insurance
explicit regulatory authority to require various actions by, or take various
actions against, insurers whose total adjusted capital does not exceed certain
RBC levels. At December 31, 2003, Metropolitan Life's total adjusted capital was
in excess of each of those RBC levels.

Each of the U.S. insurance subsidiaries of the Holding Company is also
subject to certain RBC requirements. At December 31, 2003, the total adjusted
capital of each of these insurance subsidiaries also was in excess of each of
those RBC levels. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources -- The
Holding Company -- Liquidity Uses -- Support Agreements."

The NAIC adopted the Codification of Statutory Accounting Principles (the
"Codification") which is intended to standardize regulatory accounting and
reporting to state insurance departments and became effective January 1, 2001.
However, statutory accounting principles continue to be established by
individual state laws and permitted practices. The Department required adoption
of the Codification, with certain modifications, for the preparation of
statutory financial statements effective January 1, 2001. Effective December 31,
2002, the Department adopted a modification to its regulations to be consistent
with the Codification with respect to the admissibility of deferred income taxes
by New York insurers, subject to certain limitations. The adoption of the
Codification as modified by the Department, did not adversely affect
Metropolitan Life's statutory capital and surplus. Further modifications by
state insurance departments may impact the effect of the Codification on the
statutory capital and surplus of Metropolitan Life and the Holding Company's
other insurance subsidiaries.
19

Regulation of investments. Each of the Holding Company's insurance
subsidiaries is subject to state laws and regulations that require
diversification of its investment portfolios and limit the amount of investments
in certain asset categories, such as below investment grade fixed income
securities, equity real estate, other equity investments, and derivatives.
Failure to comply with these laws and regulations would cause investments
exceeding regulatory limitations to be treated as non-admitted assets for
purposes of measuring surplus, and, in some instances, would require divestiture
of such non-qualifying investments. The Company believes that the investments
made by each of its insurance subsidiaries complied with such regulations at
December 31, 2003.

Federal initiatives. Although the federal government generally does not
directly regulate the insurance business, federal initiatives often have an
impact on the business in a variety of ways. From time to time, federal measures
are proposed which may significantly affect the insurance business, including
the repeal of the federal estate tax, tax benefits associated with COLI, and the
creation of tax advantaged or tax exempt savings accounts that would favor
short-term savings over long-term savings. In addition, a bill reforming
asbestos litigation may be voted on by the Senate in 2004. The Company cannot
predict whether these initiatives will be adopted as proposed, or what impact,
if any, such proposals may have on the Company's business, results of operation
or financial condition.

Legislative Developments. On May 28, 2003, President Bush signed into law
the Jobs and Growth Tax Relief Reconciliation Act of 2003, which includes a
major reduction in rates for long term capital gains and cash dividends on
equity securities. It is unclear what the effect of this tax rate reduction may
have on the demand for products which do not benefit from such measures. In
2001, President Bush signed into law the Economic Growth and Taxpayer Relief
Reconciliation Act, which includes the repeal of the federal estate tax over a
10-year period. The Company believes that the repeal of the federal estate tax
has resulted in reduced sales and could continue to impact sales of some of the
Company's estate planning products, including survivorship/second to die life
insurance policies; however, the Company does not expect the repeal to have a
material adverse impact on its overall business.

Management cannot predict what other proposals may be made, what
legislation may be introduced or enacted or the impact of any such legislation
on the Company's business, results of operations and financial condition.

BROKER/DEALER AND SECURITIES REGULATION

Some of MetLife, Inc.'s subsidiaries and certain policies and contracts
offered by them, are subject to various levels of regulation under the federal
securities laws administered by the Securities and Exchange Commission. Some of
MetLife, Inc.'s subsidiaries are investment advisers registered under the
Investment Advisers Act of 1940, as amended. In addition, some separate accounts
and a variety of mutual funds are registered under the Investment Company Act of
1940, as amended. Some annuity contracts and insurance policies issued by the
Company are funded by separate accounts, the interests in which are registered
under the Securities Act of 1933, as amended. Some of MetLife, Inc.'s
subsidiaries are registered as broker/dealers under the Securities Exchange Act
of 1934, as amended, and are members of the National Association of Securities
Dealers, Inc. ("NASD"). These broker/dealers may also be registered under
various state securities laws.

Some of MetLife, Inc.'s subsidiaries also have certain pooled investment
vehicles that are exempt from registration under the Securities Act and the
Investment Company Act, but may be subject to certain other provisions of such
acts.

Federal and state securities regulatory authorities from time to time make
inquiries regarding compliance by MetLife, Inc. and its subsidiaries with
securities and other laws and regulations regarding the conduct of their
securities businesses. MetLife cooperates with such inquiries and takes
corrective action when warranted.

These laws and regulations are primarily intended to protect investors in
the securities markets and generally grant supervisory agencies broad
administrative powers, including the power to limit or restrict the conduct of
business for failure to comply with such laws and regulations. The Company may
also be subject to

20

similar laws and regulations in the states and foreign countries in which it
provides investment advisory services, offers the products described above or
conducts other securities-related activities.

ENVIRONMENTAL CONSIDERATIONS

As an owner and operator of real property, the Company is subject to
extensive federal, state and local environmental laws and regulations. Inherent
in such ownership and operation is also the risk that there may be potential
environmental liabilities and costs in connection with any required remediation
of such properties. In addition, the Company holds equity interests in companies
that could potentially be subject to environmental liabilities. The Company
routinely has environmental assessments performed with respect to real estate
being acquired for investment and real property to be acquired through
foreclosure. The Company cannot provide assurance that unexpected environmental
liabilities will not arise. However, based on information currently available to
management, management believes that any costs associated with compliance with
environmental laws and regulations or any remediation of such properties will
not have a material adverse effect on the Company's business, results of
operations or financial condition.

ERISA CONSIDERATIONS

The Company provides products and services to certain employee benefit
plans that are subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or the Internal Revenue Code of 1986, as amended (the
"Code"). As such, its activities are subject to the restrictions imposed by
ERISA and the Code, including the requirement under ERISA that fiduciaries must
perform their duties solely in the interests of ERISA plan participants and
beneficiaries and the requirement under ERISA and the Code that fiduciaries may
not cause a covered plan to engage in prohibited transactions with persons who
have certain relationships with respect to such plans. The applicable provisions
of ERISA and the Code are subject to enforcement by the Department of Labor, the
Internal Revenue Service and the Pension Benefit Guaranty Corporation.

In John Hancock Mutual Life Insurance Company v. Harris Trust and Savings
Bank (1993), the U.S. Supreme Court held that certain assets in excess of
amounts necessary to satisfy guaranteed obligations under a participating group
annuity general account contract are "plan assets." Therefore, these assets are
subject to certain fiduciary obligations under ERISA, which requires fiduciaries
to perform their duties solely in the interest of ERISA plan participants and
beneficiaries. On January 5, 2000, the Secretary of Labor issued final
regulations indicating, in cases where an insurer has issued a policy backed by
the insurer's general account to or for an employee benefit plan, the extent to
which assets of the insurer constitute plan assets for purposes of ERISA and the
Code. The regulations apply only with respect to a policy issued by an insurer
on or before December 31, 1998 ("Transition Policy"). No person will generally
be liable under ERISA or the Code for conduct occurring prior to July 5, 2001,
where the basis of a claim is that insurance company general account assets
constitute plan assets. An insurer issuing a new policy that is backed by its
general account and is issued to or for an employee benefit plan after December
31, 1998 will generally be subject to fiduciary obligations under ERISA, unless
the policy is a guaranteed benefit policy.

The regulations indicate the requirements that must be met so that assets
supporting a Transition Policy will not be considered plan assets for purposes
of ERISA and the Code. These requirements include detailed disclosures to be
made to the employee benefits plan and the requirement that the insurer must
permit the policyholder to terminate the policy on 90 day notice and receive
without penalty, at the policyholder's option, either (i) the unallocated
accumulated fund balance (which may be subject to market value adjustment) or
(ii) a book value payment of such amount in annual installments with interest.
The Company has taken and continues to take steps designed to ensure compliance
with these regulations, as appropriate.

FINANCIAL HOLDING COMPANY REGULATION

Regulatory agencies. In connection with its acquisition of a
federally-chartered commercial bank, the Holding Company became a bank holding
company and financial holding company on February 28, 2001. As such, the Holding
Company is subject to regulation under the Bank Holding Company Act of 1956, as

21

amended (the "BHC Act"), and to inspection, examination, and supervision by the
Board of Governors of the Federal Reserve System (the "FRB"). In addition, the
Holding Company's banking subsidiary is subject to regulation and examination
primarily by the Office of the Comptroller of the Currency ("OCC") and
secondarily by the FRB and the Federal Deposit Insurance Corporation.

Financial Holding Company Activities. As a financial holding company,
MetLife, Inc.'s activities and investments are restricted by the BHC Act, as
amended by the Gramm-Leach-Bliley Act of 1999 (the "GLB Act"), to those that are
"financial" in nature or "incidental" or "complementary" to such financial
activities. Activities that are financial in nature include securities
underwriting, dealing and market making, sponsoring mutual funds and investment
companies, insurance underwriting and agency, merchant banking and activities
that the FRB has determined to be closely related to banking. In addition, under
the insurance company investment portfolio provision of the GLB Act, financial
holding companies are authorized to make investments in other financial and
non-financial companies, through their insurance subsidiaries, that are in the
ordinary course of business and in accordance with state insurance law, provided
the financial holding company does not routinely manage or operate such
companies except as may be necessary to obtain a reasonable return on
investment.

Other Restrictions and Limitations on Bank Holding Companies and Financial
Holding Companies -- Capital. MetLife, Inc. and its insured depository
institution subsidiary, MetLife Bank, N.A. ("MetLife Bank"), a national bank,
are subject to risk-based and leverage capital guidelines issued by the federal
banking regulatory agencies for banks and financial holding companies. The
federal banking regulatory agencies are required by law to take specific prompt
corrective actions with respect to institutions that do not meet minimum capital
standards. At December 31, 2003, MetLife, Inc. and MetLife Bank were in
compliance with the aforementioned guidelines.

Other Restrictions and Limitations on Bank Holding Companies and Financial
Holding Companies -- Consumer Protection Laws. Numerous other federal and state
laws also affect the Holding Company's and MetLife Bank's earnings and
activities, including federal and state consumer protection laws. The GLB Act
included consumer privacy provisions that, among other things, require
disclosure of a financial institution's privacy policy to customers. In
addition, these provisions permit states to adopt more extensive privacy
protections through legislation or regulation.

Other Restrictions and Limitations on Bank Holding Companies and Financial
Holding Companies -- Change of Control. Because MetLife, Inc. is a "financial
holding company" and "bank holding company" under the federal banking laws, no
person may acquire control of MetLife, Inc. without the prior approval of the
FRB. A change of control is conclusively presumed upon acquisitions of 25% or
more of any class of voting securities and rebuttably presumed upon acquisitions
of 10% or more of any class of voting securities. Further, as a result of
MetLife, Inc.'s ownership of MetLife Bank, approval from the OCC would be
required in connection with a change of control (generally presumed upon the
acquisition of 10% or more of any class of voting securities) of MetLife, Inc.

COMPETITION

The Company believes that competition with its business segments is based
on a number of factors, including service, product features, scale, price,
commission structure, financial strength, claims-paying ratings, credit ratings,
ebusiness capabilities and name recognition. It competes with a large number of
other insurers, as well as non-insurance financial services companies, such as
banks, broker/dealers and asset managers, for individual consumers, employer and
other group customers and agents and other distributors of insurance and
investment products. Some of these companies offer a broader array of products,
have more competitive pricing or, with respect to other insurers, have higher
claims paying ability ratings. Some may also have greater financial resources
with which to compete. National banks, which may sell annuity products of life
insurers in some circumstances, also have pre-existing customer bases for
financial services products.

In 1999, the GLB Act was adopted, implementing fundamental changes in the
regulation of the financial services industry in the U.S. With the passage of
this Act, among other things, bank holding companies may acquire insurers, and
insurance holding companies may acquire banks. The ability of banks to affiliate
with
22

insurers may materially adversely affect all of the Company's product lines by
substantially increasing the number, size and financial strength of potential
competitors.

The Company must attract and retain productive sales representatives to
sell its insurance, annuities and investment products. Strong competition exists
among insurers for sales representatives with demonstrated ability. The Company
competes with other insurers for sales representatives primarily on the basis of
its financial position, support services and compensation and product features.
See "-- Individual -- Marketing and Distribution." MetLife continues to
undertake several initiatives to grow the MetLife Financial Services career
agency force while continuing to enhance the efficiency and production of the
existing sales force. The Company cannot provide assurance that these
initiatives will succeed in attracting and retaining new agents. Sales of
individual insurance, annuities and investment products and the Company's
results of operations and financial position could be materially adversely
affected if it is unsuccessful in attracting and retaining agents.

Many of the Company's insurance products, particularly those offered by its
Institutional segment, are underwritten annually, and, accordingly, there is a
risk that group purchasers may be able to obtain more favorable terms from
competitors rather than renewing coverage with the Company. The effect of
competition may, as a result, adversely affect the persistency of these and
other products, as well as the Company's ability to sell products in the future.

The investment management and securities brokerage businesses have
relatively few barriers to entry and continually attract new entrants. Many of
the Company's competitors in these businesses offer a broader array of
investment products and services and are better known than it as sellers of
annuities and other investment products.

Congress periodically considers reforms to the nation's health care system.
While the Company offers non-medical health insurance products (such as group
dental insurance, long-term care and disability insurance), it generally does
not offer medical indemnity products or managed care products, and, accordingly,
it does not expect to be directly affected by such proposals to any significant
degree. However, the uncertain environment resulting from health care reform
could cause group health insurance providers to enter some of the markets in
which the Company does business, thereby increasing competition. Increasing
healthcare costs are causing consumers to seek alternative financial protection
products. As a result, the Company is entering the fixed benefit critical care
marketplace. Changes to the health care system may make this market more or less
attractive in the future.

23

COMPANY RATINGS

Insurer financial strength ratings represent the opinions of rating
agencies regarding the financial ability of an insurance company to meet its
obligations under an insurance policy. Credit ratings represent the opinions of
rating agencies regarding an entity's ability to repay its indebtedness. The
Company's insurer financial strength ratings and credit ratings as of the date
of this filing are listed in the table below:

INSURER FINANCIAL STRENGTH RATINGS

CREDIT RATINGS

24

- ---------------

* The outlook for these ratings is negative.

(1) A.M. Best Company ("A.M. Best") insurer financial strength ratings range
from "A++ (superior)" to "F (in liquidation)." Ratings of "A+" and "A" are
in the "superior" and "excellent" categories, respectively.

A.M. Best long-term credit ratings range from "aaa (exceptional)" to "d (in
default)." A "+" or "-" may be appended to ratings from "aa" to "ccc" to
indicate relative position within a category. Ratings of "a" and "bbb" are
in the "strong" and "adequate" categories, respectively.

A.M. Best short-term credit ratings range from "AMB-1+ (strongest)" to "d
(in default)."

(2) Fitch Ratings ("Fitch") insurer financial strength ratings range from "AAA
(exceptionally strong)" to "D (distressed)." A "+" or "-" may be appended to
a rating to indicate relative position within a category. A rating of "AA"
is in the "very strong" category.

Fitch long-term credit ratings range from "AAA (highest credit quality)," to
"D (default)." A "+" or "-" may be appended to a rating to indicate relative
position within a category. Ratings of "A" and "BBB" are in the "high" and
"good" categories, respectively.

Fitch short-term credit ratings range from "F1+ (exceptionally strong credit
quality)" to "D (in default)." A rating of "F1" is in the "highest credit
quality" category.

(3) Moody's Investors Service ("Moody's") long-term insurer financial strength
ratings range from "Aaa (exceptional)" to "C (extremely poor)." A numeric
modifier may be appended to a rating to indicate relative position within a
category, with 1 being the highest and 3 being the lowest. A rating of "Aa"
is in the "excellent" category.

Moody's short-term insurer financial strength ratings range from "P-1
(superior)" to "NP (not prime)."

Moody's long-term credit ratings range from "Aaa (highest quality)" to "C
(typically in default)." A numeric modifier may be appended to a rating to
indicate relative position within a category, with 1 being the highest and 3
being the lowest. Ratings of "A" and "Baa" are in the "upper-medium grade"
and "medium-grade" categories, respectively.

Moody's short-term credit ratings range from "P-1 (superior)" to "NP (not
prime)."

(4) Standard & Poor's ("S&P") insurer financial strength ratings range from "AAA
(extremely strong)" to "R (regulatory supervision)." A "+" or "-" may be
appended to ratings from "AA" to "CCC" to indicate relative position within
a category. A rating of "AA" is in the "very strong" category.

S&P short-term insurer financial strength ratings range from "A-1+
(extremely strong)" to "R (regulatory supervision)."

S&P long-term credit ratings range from "AAA (extremely strong)" to "D (in
default)." A "+" or "-" may be appended to ratings from "AA" to "CCC" to
indicate relative position within a category. A rating of "A" is in the
"strong" category.

S&P short-term credit ratings range from "A-1+ (extremely strong)" to "D (in
default)." A rating of "A-1" is in the "strong" category.

The foregoing ratings reflect each rating agency's opinion of Metropolitan
Life and the Company's other insurance subsidiaries' financial strength,
operating performance and ability to meet policyholder obligations, and are not
evaluations directed toward the protection of MetLife, Inc.'s securityholders.

A ratings downgrade (or the potential for such a downgrade) of Metropolitan
Life or any of the Company's other insurance subsidiaries could, among other
things, increase the number of policies surrendered and withdrawals by
policyholders of cash values from their policies, adversely affect relationships
with broker/dealers, banks, agents, wholesalers and other distributors of the
Company's products and services, negatively impact new sales, and adversely
affect its ability to compete and thereby have a material adverse effect on its
business, results of operations and financial condition.

25

EMPLOYEES

At December 31, 2003, the Company employed approximately 49,000 employees.
The Company believes that its relations with its employees are satisfactory.

EXECUTIVE OFFICERS OF THE REGISTRANT

Set forth below is information regarding the executive officers of MetLife,
Inc. and Metropolitan Life:

ROBERT H. BENMOSCHE, age 59, has been a Director of MetLife, Inc.
since August 1999 and Chairman of the Board, President and Chief Executive
Officer of MetLife, Inc. since September 1999. He has been a Director of
Metropolitan Life since 1997 and Chairman of the Board, President and Chief
Executive Officer of Metropolitan Life since July 1998, was President and
Chief Operating Officer from November 1997 to June 1998, and was Executive
Vice President from September 1995 to October 1997. Previously, he was
Executive Vice President of PaineWebber Group Incorporated, a full service
securities and commodities firm, from 1989 to 1995.

DANIEL J. CAVANAGH, age 64, has been Executive Vice President of
Operations and Technology of MetLife, Inc. since March 1999. He was Senior
Vice President in charge of information systems from 1983 to 1991, Vice
President from 1975 to 1983, Assistant Vice President from 1973 to 1975, a
manager in electronic development from 1972 to 1975, and joined the Company
as an insurance trainee in the industrial insurance department in 1957. He
was appointed president of Metropolitan Property and Casualty Insurance
Company in 1991, its Chief Executive Officer from 1993 to March 1999 and
has been a director since 1986.

C. ROBERT HENRIKSON, age 56, has been President of the U.S. Insurance
and Financial Services businesses of MetLife, Inc. since July 2002. He
served as President of Institutional Business of MetLife, Inc. since
September 1999 and President of Institutional Business of Metropolitan Life
since May 1999. He was Senior Executive Vice President, Institutional
Business, of Metropolitan Life from December 1997 to May 1999, Executive
Vice President, Institutional Business, from January 1996 to December 1997,
and Senior Vice President, Pensions, from January 1991 to January 1995. He
is a director of a number of subsidiaries of Metropolitan Property and
Casualty Insurance Company.

LELAND C. LAUNER, JR., age 48, has been Executive Vice President and
Chief Investment Officer of MetLife, Inc. and Metropolitan Life since July
2003 prior to which he was a Senior Vice President of Metropolitan Life for
more than five years. Mr. Launer is a director of Reinsurance Group of
America, Incorporated.

JAMES L. LIPSCOMB, age 57, has been Executive Vice President and
General Counsel of MetLife, Inc. and Metropolitan Life since July 2003. Mr.
Lipscomb was Senior Vice President and Deputy General Counsel from July
2001 to July 2003. Mr. Lipscomb was President and Chief Executive Officer
of Conning Corporation, a former subsidiary of Metropolitan Life, from
March 2000 to July 2001, prior to which he served in various senior
management positions with Metropolitan Life for more than five years.

STEWART G. NAGLER, age 61, has been a Director and Vice Chairman of
the Board of MetLife, Inc. since September 1999 and served as Chief
Financial Officer of MetLife, Inc. from September 1999 to December 2003. He
has been a Director of Metropolitan Life since 1997 and Vice Chairman of
the Board of Metropolitan Life since July 1998 and he served as Chief
Financial Officer of that company from April 1993 to December 2003. Mr.
Nagler also serves as a director and Chairman of the Board of Reinsurance
Group of America, Incorporated.

CATHERINE A. REIN, age 61, has been Senior Executive Vice President of
MetLife, Inc. since September 1999 and President and Chief Executive
Officer of Metropolitan Property and Casualty Insurance Company since March
1999. She has been Senior Executive Vice President of Metropolitan Life
since February 1998 and was Executive Vice President from October 1989 to
February 1998.

WILLIAM J. TOPPETA, age 55, has been President of International of
MetLife, Inc. since June 2001. He was President of Client Services and
Chief Administrative Officer of MetLife, Inc. from September

26

1999 to June 2001 and President of Client Services and Chief Administrative
Officer of Metropolitan Life from May 1999 to June 2001. He was Senior
Executive Vice President, Head of Client Services, of Metropolitan Life
from March 1999 to May 1999, Senior Executive Vice President, Individual,
from February 1998 to March 1999, Executive Vice President, Individual
Business, from July 1996 to February 1998, Senior Vice President from
October 1995 to July 1996 and its President and Chief Executive Officer,
Canadian Operations, from July 1993 to October 1995.

LISA M. WEBER, age 41, has been Senior Executive Vice President and
Chief Administrative Officer of MetLife, Inc. and Metropolitan Life since
June 2001. She was Executive Vice President of MetLife, Inc. and
Metropolitan Life from December 1999 to June 2001 and was head of Human
Resources of Metropolitan Life from March 1998 to December 2003. She was
Senior Vice President of MetLife, Inc. from September 1999 to November 1999
and Senior Vice President of Metropolitan Life from March 1998 to November
1999. Previously, she was Senior Vice President of Human Resources of
PaineWebber Group Incorporated, where she was employed for ten years. Ms.
Weber is a director of Reinsurance Group of America, Incorporated.

WILLIAM J. WHEELER, age 42, has been Executive Vice President and
Chief Financial Officer of MetLife, Inc. and Metropolitan Life since
December 2003, prior to which he was a Senior Vice President of
Metropolitan Life from 1997 to December 2003. Previously, he was a Senior
Vice President of Donaldson, Lufkin & Jenrette for more than five years.

TRADEMARKS

MetLife has a worldwide trademark portfolio that it considers important in
the marketing of its products and services, including, among others, the
trademark "MetLife" and the license to use the Peanuts(R) characters. MetLife
has the exclusive right to use the Peanuts(R) characters in the area of
financial services and health care benefit services in the U.S. and some foreign
countries under an advertising and premium agreement with United Feature
Syndicate. The agreement with United Feature Syndicate expires on December 31,
2012. The Company believes that its rights in its trademarks are well protected.

AVAILABLE INFORMATION

MetLife, Inc. files periodic reports, proxy statements and other
information with the Securities and Exchange Commission ("SEC"). Such reports,
proxy statements and other information may be obtained by visiting the Public
Reference Room of the SEC at 450 Fifth Street, N.W., Washington D.C. 20549 or by
calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an internet
website (www.sec.gov) that contains reports, proxy statements, and other
information regarding issuers that file electronically with the SEC, including
MetLife, Inc.

MetLife makes available, free of charge, on its website (www.metlife.com)
through the Investor Relations page, its annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, and amendments to all those
reports, as soon as reasonably practicable after filing (furnishing) such
reports to the SEC. The information found on our website is not part of this or
any other report we file with or furnish to the SEC.

ITEM 2. PROPERTIES

One Madison Avenue in New York, New York currently serves as the Company's
headquarters, and it contains approximately 1.4 million rentable square feet of
space. The Company has leased approximately 1.1 million square feet of space at
One Madison Avenue to Credit Suisse First Boston (USA), Inc., under a long-term
lease. MetLife occupies the balance of the space, approximately 270,000 rentable
square feet as of December 31, 2003, which is expected to decline through 2004.

At December 31, 2003, the Company leased approximately 686,082 rentable
square feet in Long Island City, New York under a long-term lease arrangement.
Currently, approximately 1,250 associates are located in Long Island City with
the expectation that number will be increasing to in excess of 1,500 associates
in 2004.

27

The Company continues to own 16 other buildings in the U.S. that it uses in
the operation of its business. These buildings contain approximately 3.1 million
rentable square feet and are located in the following states: Florida, Illinois,
Massachusetts, Missouri, New Jersey, New York, Ohio, Oklahoma, Pennsylvania,
Rhode Island and Texas. The Company's computer center in Rensselaer, New York is
not owned in fee but rather is occupied pursuant to a long-term ground lease.
The Company leases space in approximately 692 other locations throughout the
U.S., and these leased facilities consist of approximately 8.1 million rentable
square feet. Approximately 52% of these leases are occupied as sales offices for
the Individual segment, and the Company uses the balance for its other business
activities. It also owns six buildings outside the U.S., comprising more than
448,000 rentable square feet. The Company leases approximately 1.8 million
rentable square feet in various locations outside the U.S. Management believes
that its properties are suitable and adequate for the Company's current and
anticipated business operations.

The Company arranges for property and casualty coverage on its properties,
taking into consideration its risk exposures and the cost and availability of
commercial coverages, including deductible loss levels. In connection with its
renewal of those coverages, the Company has arranged $850 million of annual
terrorist coverage on its real estate portfolio, effective January 1, 2004.

ITEM 3. LEGAL PROCEEDINGS

Sales Practices Claims

Over the past several years, Metropolitan Life, New England Mutual Life
Insurance Company ("New England Mutual") and General American Life Insurance
Company ("General American") have faced numerous claims, including class action
lawsuits, alleging improper marketing and sales of individual life insurance
policies or annuities. These lawsuits are generally referred to as "sales
practices claims."

In December 1999, a federal court approved a settlement resolving sales
practices claims on behalf of a class of owners of permanent life insurance
policies and annuity contracts or certificates issued pursuant to individual
sales in the United States by Metropolitan Life, Metropolitan Insurance and
Annuity Company or Metropolitan Tower Life Insurance Company between January 1,
1982 and December 31, 1997. The class includes owners of approximately six
million in-force or terminated insurance policies and approximately one million
in-force or terminated annuity contracts or certificates.

Similar sales practices class actions against New England Mutual, with
which Metropolitan Life merged in 1996, and General American, which was acquired
in 2000, have been settled. In October 2000, a federal court approved a
settlement resolving sales practices claims on behalf of a class of owners of
permanent life insurance policies issued by New England Mutual between January
1, 1983 through August 31, 1996. The class includes owners of approximately
600,000 in-force or terminated policies. A federal court has approved a
settlement resolving sales practices claims on behalf of a class of owners of
permanent life insurance policies issued by General American between January 1,
1982 through December 31, 1996. An appellate court has affirmed the order
approving the settlement. The class includes owners of approximately 250,000
in-force or terminated policies.

Certain class members have opted out of the class action settlements noted
above and have brought or continued non-class action sales practices lawsuits.
In addition, other sales practices lawsuits have been brought. As of December
31, 2003, there are approximately 366 sales practices lawsuits pending against
Metropolitan Life, approximately 40 sales practices lawsuits pending against New
England Mutual and approximately 25 sales practices lawsuits pending against
General American. Metropolitan Life, New England Mutual and General American
continue to defend themselves vigorously against these lawsuits. Some individual
sales practices claims have been resolved through settlement, won by dispositive
motions, or, in a few instances, have gone to trial. Most of the current cases
seek substantial damages, including in some cases punitive and treble damages
and attorneys' fees. Additional litigation relating to the Company's marketing
and sales of individual life insurance may be commenced in the future.

The Metropolitan Life class action settlement did not resolve two putative
class actions involving sales practices claims filed against Metropolitan Life
in Canada, and these actions remain pending.

28

The Company believes adequate provision has been made in its consolidated
financial statements for all probable and reasonably estimable losses for sales
practices claims against Metropolitan Life, New England Mutual and General
American.

Regulatory authorities in a small number of states have had investigations
or inquiries relating to Metropolitan Life's, New England Mutual's or General
American's sales of individual life insurance policies or annuities. Over the
past several years, these and a number of investigations by other regulatory
authorities were resolved for monetary payments and certain other relief. The
Company may continue to resolve investigations in a similar manner.

Asbestos-Related Claims

Metropolitan Life is also a defendant in thousands of lawsuits seeking
compensatory and punitive damages for personal injuries allegedly caused by
exposure to asbestos or asbestos-containing products. Metropolitan Life has
never engaged in the business of manufacturing, producing, distributing or
selling asbestos or asbestos-containing products nor has Metropolitan Life
issued liability or workers' compensation insurance to companies in the business
of manufacturing, producing, distributing or selling asbestos or
asbestos-containing products. Rather, these lawsuits have principally been based
upon allegations relating to certain research, publication and other activities
of one or more of Metropolitan Life's employees during the period from the
1920's through approximately the 1950's and have alleged that Metropolitan Life
learned or should have learned of certain health risks posed by asbestos and,
among other things, improperly publicized or failed to disclose those health
risks. Metropolitan Life believes that it should not have legal liability in
such cases.

Legal theories asserted against Metropolitan Life have included negligence,
intentional tort claims and conspiracy claims concerning the health risks
associated with asbestos. Although Metropolitan Life believes it has meritorious
defenses to these claims, and has not suffered any adverse monetary judgments in
respect of these claims, due to the risks and expenses of litigation, almost all
past cases have been resolved by settlements. Metropolitan Life's defenses
(beyond denial of certain factual allegations) to plaintiffs' claims include
that: (i) Metropolitan Life owed no duty to the plaintiffs -- it had no special
relationship with the plaintiffs and did not manufacture, produce, distribute or
sell the asbestos products that allegedly injured plaintiffs; (ii) plaintiffs
cannot demonstrate justifiable detrimental reliance; and (iii) plaintiffs cannot
demonstrate proximate causation. In defending asbestos cases, Metropolitan Life
selects various strategies depending upon the jurisdictions in which such cases
are brought and other factors which, in Metropolitan Life's judgment, best
protect Metropolitan Life's interests. Strategies include seeking to settle or
compromise claims, motions challenging the legal or factual basis for such
claims or defending on the merits at trial. In 2002 and 2003, trial courts in
California, Utah and Georgia granted motions dismissing claims against
Metropolitan Life on some or all of the above grounds. Other courts have denied
motions brought by Metropolitan Life to dismiss cases without the necessity of
trial. There can be no assurance that Metropolitan Life will receive favorable
decisions on motions in the future. Metropolitan Life intends to continue to
exercise its best judgment regarding settlement or defense of such cases,
including when trials of these cases are appropriate.

The following table sets forth the total number of asbestos personal injury
claims pending against Metropolitan Life as of the dates indicated, the number
of new claims during the years ended on those dates and the total settlement
payments made to resolve asbestos personal injury claims during those years:

29

- ---------------

(1) Settlement payments represent payments made by Metropolitan Life during the
year in connection with settlements made in that year and in prior years.
Amounts do not include Metropolitan Life's attorneys' fees and expenses and
do not reflect amounts received from insurance carriers.

The Company believes adequate provision has been made in its consolidated
financial statements for all probable and reasonably estimable losses for
asbestos-related claims. The ability of Metropolitan Life to estimate its
ultimate asbestos exposure is subject to considerable uncertainty due to
numerous factors. The availability of data is limited and it is difficult to
predict with any certainty numerous variables that can affect liability
estimates, including the number of future claims, the cost to resolve claims,
the disease mix and severity of disease, the jurisdiction of claims filed, tort
reform efforts and the impact of any possible future adverse verdicts and their
amounts.

Recent bankruptcies of other companies involved in asbestos litigation, as
well as advertising by plaintiffs' asbestos lawyers, may result in an increase
in the number of claims and the cost of resolving claims, as well as the number
of trials and possible adverse verdicts Metropolitan Life may experience.
Plaintiffs are seeking additional funds from defendants, including Metropolitan
Life, in light of such recent bankruptcies by certain other defendants. In
addition, publicity regarding legislative reform efforts may result in an
increase in the number of claims.

Metropolitan Life will continue to study its claims experience, review
external literature regarding asbestos claims experience in the United States
and consider numerous variables that can affect its asbestos liability exposure,
including bankruptcies of other companies involved in asbestos litigation and
legislative and judicial developments, to identify trends and to assess their
impact on the recorded asbestos liability.

The number of asbestos cases that may be brought or the aggregate amount of
any liability that Metropolitan Life may ultimately incur is uncertain.
Accordingly, it is reasonably possible that the Company's total exposure to
asbestos claims may be greater than the liability recorded by the Company in its
consolidated financial statements and that future charges to income may be
necessary. While the potential future charges could be material in particular
quarterly or annual periods in which they are recorded, based on information
currently known by management, it does not believe any such charges are likely
to have a material adverse effect on the Company's consolidated financial
position.

During the fourth quarter of 2002, Metropolitan Life analyzed its claims
experience and reviewed external publications and numerous variables to identify
trends and assessed their impact on its recorded asbestos liability. Certain
publications suggested a trend towards more asbestos-related claims and a
greater awareness of asbestos litigation generally by potential plaintiffs and
plaintiffs' lawyers. Plaintiffs' lawyers continue to advertise heavily with
respect to asbestos litigation. Bankruptcies and reorganizations of other
defendants in asbestos litigation may increase the pressures on remaining
defendants, including Metropolitan Life. Through the first nine months of 2002,
the number of new claims received by Metropolitan Life was lower than those
received during the comparable 2001 period. However, the number of new claims
received by Metropolitan Life during the fourth quarter of 2002 was
significantly higher than those received in the prior year quarter, resulting in
more new claims being received by Metropolitan Life in 2002 than in 2001.
Factors considered also included expected trends in filing cases, the dates of
initial exposure of plaintiffs to asbestos, the likely percentage of total
asbestos claims which included Metropolitan Life as a defendant and experience
in claims settlement negotiations.

Metropolitan Life also considered views derived from actuarial calculations
it made in the fourth quarter of 2002. These calculations were made using, among
other things, then current information regarding Metropolitan Life's claims and
settlement experience, information available in public reports, as well as a
study regarding the possible future incidence of mesothelioma. Based on all of
the above information, including greater than expected claims experience in
2000, 2001 and 2002, Metropolitan Life expected to receive more claims in the
future than it had previously expected. Previously, Metropolitan Life's
liability reflected that the increase in asbestos-related claims was a result of
an acceleration in the reporting of such

30

claims; the liability now reflects that such an increase is also the result of
an increase in the total number of asbestos-related claims expected to be
received by Metropolitan Life. Accordingly, Metropolitan Life increased its
recorded liability for asbestos-related claims by $402 million from
approximately $820 million to $1,225 million at December 31, 2002. This total
recorded asbestos-related liability (after the self-insured retention) is within
the coverage of the excess insurance policies discussed below. The
aforementioned analysis was updated through December 31, 2003.

During 1998, Metropolitan Life paid $878 million in premiums for excess
insurance policies for asbestos-related claims. The excess insurance policies
for asbestos-related claims provide for recovery of losses up to $1,500 million,
which is in excess of a $400 million self-insured retention. The
asbestos-related policies are also subject to annual and per-claim sublimits.
Amounts are recoverable under the policies annually with respect to claims paid
during the prior calendar year. Although amounts paid by Metropolitan Life in
any given year that may be recoverable in the next calendar year under the
policies will be reflected as a reduction in the Company's operating cash flows
for the year in which they are paid, management believes that the payments will
not have a material adverse effect on the Company's liquidity.

Each asbestos-related policy contains an experience fund and a reference
fund that provides for payments to Metropolitan Life at the commutation date if
the reference fund is greater than zero at commutation or pro rata reductions
from time to time in the loss reimbursements to Metropolitan Life if the
cumulative return on the reference fund is less than the return specified in the
experience fund. The return in the reference fund is tied to performance of the
Standard & Poor's 500 Index and the Lehman Brothers Aggregate Bond Index. A
claim was made under the excess insurance policies in 2003 for the amounts paid
with respect to asbestos litigation in excess of the retention. Based on
performance of the reference fund, at December 31, 2002, the loss reimbursements
to Metropolitan Life in 2003 and the recoverable with respect to later periods
was $42 million less than the amount of the recorded losses. Such foregone loss
reimbursements may be recovered upon commutation depending upon future
performance of the reference fund. The foregone loss reimbursements were
estimated to be $9 million with respect to 2002 claims and estimated to be $42
million in the aggregate.

The $402 million increase in the recorded liability for asbestos claims
less the foregone loss reimbursement adjustment of $42 million ($27 million, net
of income tax) resulted in an increase in the recoverable of $360 million. At
December 31, 2002, a portion ($136 million) of the $360 million recoverable was
recognized in income while the remainder ($224 million) was recorded as a
deferred gain which is expected to be recognized in income in the future over
the estimated settlement period of the excess insurance policies. The $402
million increase in the recorded liability, less the portion of the recoverable
recognized in income, resulted in a net expense of $266 million ($169 million,
net of income tax). The $360 million recoverable may change depending on the
future performance of the Standard & Poor's 500 Index and the Lehman Brothers
Aggregate Bond Index.

As a result of the excess insurance policies, $1,237 million is recorded as
a recoverable at December 31, 2002 ($224 million of which is recorded as a
deferred gain as mentioned above); the amount includes recoveries for amounts
paid in 2002. If at some point in the future, the Company believes the liability
for probable and estimable losses for asbestos-related claims should be
increased, an expense would be recorded and the insurance recoverable would be
adjusted subject to the terms, conditions and limits of the excess insurance
policies. Portions of the change in the insurance recoverable would be recorded
as a deferred gain and amortized into income over the estimated remaining
settlement period of the insurance policies.

In 2003, Metropolitan Life also has been named as a defendant in a small
number of silicosis, welding and mixed dust cases. The cases are pending in
Mississippi, Texas, Ohio, Pennsylvania, West Virginia, Louisiana, Kentucky,
Georgia, Alabama, Illinois and Arkansas. The Company intends to defend itself
vigorously against these cases.

Property and Casualty Actions

A purported class action has been filed against Metropolitan Property and
Casualty Insurance Company's subsidiary, Metropolitan Casualty Insurance
Company, in Florida alleging breach of contract and unfair trade

31

practices with respect to allowing the use of parts not made by the original
manufacturer to repair damaged automobiles. Discovery is ongoing and a motion
for class certification is pending. Two purported nationwide class actions have
been filed against Metropolitan Property and Casualty Insurance Company in
Illinois. One suit claims breach of contract and fraud due to the alleged
underpayment of medical claims arising from the use of a purportedly biased
provider fee pricing system. A motion for class certification has been filed and
discovery is ongoing. The second suit claims breach of contract and fraud
arising from the alleged use of preferred provider organizations to reduce
medical provider fees covered by the medical claims portion of the insurance
policy. A motion to dismiss has been filed. A purported class action has been
filed against Metropolitan Property and Casualty Insurance Company in Montana.
This suit alleges breach of contract and bad faith for not aggregating medical
payment and uninsured coverages provided in connection with the several vehicles
identified in insureds' motor vehicle policies. Metropolitan Property and
Casualty Insurance Company is vigorously defending itself against this lawsuit.
Certain plaintiffs' lawyers have alleged that the use of certain automated
databases to provide total loss vehicle valuation methods was improper.
Metropolitan Property and Casualty Insurance Company, along with a number of
other insurers, has tentatively agreed in January 2004 to resolve this issue in
a class action format. The amount to be paid in resolution of this matter will
not be material to Metropolitan Property and Casualty Insurance Company.

Demutualization Actions

Several lawsuits were brought in 2000 challenging the fairness of
Metropolitan Life's plan of reorganization, as amended (the "plan") and the
adequacy and accuracy of Metropolitan Life's disclosure to policyholders
regarding the plan. These actions name as defendants some or all of Metropolitan
Life, the Holding Company, the individual directors, the New York Superintendent
of Insurance (the "Superintendent") and the underwriters for MetLife, Inc.'s
initial public offering, Goldman Sachs & Company and Credit Suisse First Boston.
Five purported class actions pending in the New York state court in New York
County were consolidated within the commercial part. In addition, there remained
a separate purported class action in New York state court in New York County. On
February 21, 2003, the defendants' motions to dismiss both the consolidated
action and separate action were granted; leave to replead as a proceeding under
Article 78 of New York's Civil Practice Law and Rules has been granted in the
separate action. Plaintiffs in the consolidated action and separate action have
filed notices of appeal. Another purported class action in New York state court
in Kings County has been voluntarily held in abeyance by plaintiffs. The
plaintiffs in the state court class actions seek injunctive, declaratory and
compensatory relief, as well as an accounting and, in some instances, punitive
damages. Some of the plaintiffs in the above described actions also have brought
a proceeding under Article 78 of New York's Civil Practice Law and Rules
challenging the Opinion and Decision of the Superintendent who approved the
plan. In this proceeding, petitioners seek to vacate the Superintendent's
Opinion and Decision and enjoin him from granting final approval of the plan.
This case also is being held in abeyance by plaintiffs. Three purported class
actions were filed in the United States District Court for the Eastern District
of New York claiming violation of the Securities Act of 1933. The plaintiffs in
these actions, which have been consolidated, claim that the Policyholder
Information Booklets relating to the plan failed to disclose certain material
facts and seek rescission and compensatory damages. Metropolitan Life's motion
to dismiss these three cases was denied in 2001. On February 4, 2003, plaintiffs
filed a consolidated amended complaint adding a fraud claim under the Securities
Exchange Act of 1934. Metropolitan Life has served a motion to dismiss the
consolidated amended complaint and a motion for summary judgment in this action.
Metropolitan Life, the Holding Company and the individual defendants believe
they have meritorious defenses to the plaintiffs' claims and are contesting
vigorously all of the plaintiffs' claims in these actions.

In 2001, a lawsuit was filed in the Superior Court of Justice, Ontario,
Canada on behalf of a proposed class of certain former Canadian policyholders
against the Holding Company, Metropolitan Life, and Metropolitan Life Insurance
Company of Canada. Plaintiffs' allegations concern the way that their policies
were treated in connection with the demutualization of Metropolitan Life; they
seek damages, declarations, and other non-pecuniary relief. The defendants
believe they have meritorious defenses to the plaintiffs' claims and will
contest vigorously all of plaintiffs' claims in this matter.

32

In July 2002, a lawsuit was filed in the United States District Court for
the Eastern District of Texas on behalf of a proposed class comprised of the
settlement class in the Metropolitan Life sales practices class action
settlement approved in December 1999 by the United States District Court for the
Western District of Pennsylvania. After the defendants' motion to transfer the
lawsuit to the Western District of Pennsylvania was granted, plaintiffs filed an
amended complaint alleging that the treatment of the cost of the sales practices
settlement in connection with the demutualization of Metropolitan Life breached
the terms of the settlement. Plaintiffs sought compensatory and punitive
damages, as well as attorneys' fees and costs. In October 2003, the court
granted defendants' motion to dismiss the action. Plaintiffs filed a notice of
appeal to the United States Court of Appeals for the Third Circuit. In January
2004, the appeal was dismissed.

Race-Conscious Underwriting Claims

Insurance departments in a number of states initiated inquiries in 2000
about possible race-conscious underwriting of life insurance. These inquiries
generally have been directed to all life insurers licensed in their respective
states, including Metropolitan Life and certain of its affiliates. The New York
Insurance Department has concluded its examination of Metropolitan Life
concerning possible past race-conscious underwriting practices. Four purported
class action lawsuits filed against Metropolitan Life in 2000 and 2001 alleging
racial discrimination in the marketing, sale, and administration of life
insurance policies have been consolidated in the United States District Court
for the Southern District of New York. On April 28, 2003, the United States
District Court approved a class-action settlement of the consolidated actions.
Several persons filed notices of appeal from the order approving the settlement,
but subsequently the appeals were dismissed. Metropolitan Life also has entered
into settlement agreements to resolve the regulatory examination. Metropolitan
Life recorded a charge in the fourth quarter of 2001 in connection with the
anticipated resolution of these matters. The Company believes the remaining
portion of the previously recorded charge is adequate to cover the costs
associated with the resolution of these matters.

Sixteen lawsuits involving approximately 130 plaintiffs have been filed in
federal and state court in Alabama, Mississippi and Tennessee alleging federal
and/or state law claims of racial discrimination in connection with the sale,
formation, administration or servicing of life insurance policies. Metropolitan
Life is contesting vigorously plaintiffs' claims in these actions.

Other

In 2001, a putative class action was filed against Metropolitan Life in the
United States District Court for the Southern District of New York alleging
gender discrimination and retaliation in the MetLife Financial Services unit of
the Individual segment. The plaintiffs were seeking unspecified compensatory
damages, punitive damages, a declaration that the alleged practices were
discriminatory and illegal, injunctive relief requiring Metropolitan Life to
discontinue the alleged discriminatory practices, an order restoring class
members to their rightful positions (or appropriate compensation in lieu
thereof), and other relief. Plaintiffs filed a motion for class certification.
Opposition papers were filed by Metropolitan Life. In August 2003, the court
granted preliminary approval to a settlement of the lawsuit. At the fairness
hearing held on November 6, 2003, the court approved the settlement of the
lawsuit. Implementation of the settlement has commenced in 2004.

A putative class action lawsuit is pending in the United States District
Court for the District of Columbia, in which plaintiffs allege that they were
denied certain ad hoc pension increases awarded to retirees under the
Metropolitan Life retirement plan. The ad hoc pension increases were awarded
only to retirees (i.e., individuals who were entitled to an immediate retirement
benefit upon their termination of employment) and not available to individuals
like these plaintiffs whose employment, or whose spouses' employment, had
terminated before they became eligible for an immediate retirement benefit. The
plaintiffs seek to represent a class consisting of former Metropolitan Life
employees, or their surviving spouses, who are receiving deferred vested annuity
payments under the retirement plan and who were allegedly eligible to receive
the ad hoc pension increases awarded in 1977, 1980, 1989, 1992, 1996 and 2001,
as well as increases awarded in earlier years. Metropolitan Life is vigorously
defending itself against these allegations.

33

A lawsuit was filed against Metropolitan Life in Ontario, Canada by Clarica
Life Insurance Company regarding the sale of the majority of Metropolitan Life's
Canadian operation to Clarica in 1998. Clarica alleged that Metropolitan Life
breached certain representations and warranties contained in the sale agreement,
that Metropolitan Life made misrepresentations upon which Clarica relied during
the negotiations and that Metropolitan Life was negligent in the performance of
certain of its obligations and duties under the sale agreement. The parties
settled the matter in January 2004. The settlement will have no material impact
on the Company's consolidated financial results in 2004.

A reinsurer of universal life policy liabilities of Metropolitan Life and
certain of its affiliates commenced an arbitration proceeding and sought
rescission, claiming that, during underwriting, material misrepresentations or
omissions were made to the reinsurer. The reinsurer also sent a notice
purporting to increase reinsurance premium rates. In December 2003, the
arbitration panel denied the reinsurer's attempt to rescind the contract and
granted the reinsurer's request to raise rates. As a result of the panel's
rulings, liabilities ceded to the reinsurer were recaptured effective May 5,
2003. The recapture had no material impact on the Company's consolidated
financial results in 2003.

As previously reported, the SEC is conducting a formal investigation of New
England Securities Corporation ("NES"), an indirect subsidiary of New England
Life Insurance Company ("NELICO"), in response to NES informing the SEC that
certain systems and controls relating to one NES advisory program were not
operating effectively. NES is cooperating fully with the SEC.

Prior to filing the Company's June 30, 2003 Form 10-Q, MetLife announced a
$31 million after-tax charge resulting from certain improperly deferred expenses
at an affiliate, New England Financial. MetLife notified the SEC about the
nature of this charge prior to its announcement. The SEC is pursuing a formal
investigation of the matter and MetLife is fully cooperating with the
investigation.

The American Dental Association and two individual providers have sued
MetLife, Mutual of Omaha and Cigna in a purported class action lawsuit brought
in a Florida federal district court. The plaintiffs purport to represent a
nationwide class of in-network providers who allege that their claims are being
wrongfully reduced by downcoding, bundling, and the improper use and programming
of software. The complaint alleges federal racketeering and various state law
theories of liability. MetLife is vigorously defending the case and a motion to
dismiss has been filed.

A purported class action in which a policyholder seeks to represent a class
of owners of participating life insurance policies is pending in state court in
New York. Plaintiff asserts that Metropolitan Life breached her policy in the
manner in which it allocated investment income across lines of business during a
period ending with the 2000 demutualization. In August 2003, an appellate court
affirmed the dismissal of fraud claims in this action. MetLife is vigorously
defending the case.

Regulatory bodies have contacted the Company and have requested information
relating to market timing and late trading of mutual funds and variable
insurance products. The Company believes that these inquiries are similar to
those made to many financial services companies as part of an industry-wide
investigation by various regulatory agencies into the practices, policies and
procedures relating to trading in mutual fund shares. State Street Research
Investment Services, one of the Company's indirect broker/dealer subsidiaries,
has entered into a settlement with the NASD resolving all outstanding issues
relating to its investigation. The SEC has commenced an investigation with
respect to market timing and late trading in a limited number of
privately-placed variable insurance contracts that were sold through General
American. The Company is in the process of responding and is fully cooperating
with regard to these information requests and investigations. The Company at the
present time is not aware of any systemic problems with respect to such matters
that may have a material adverse effect on the Company's consolidated financial
position.

Various litigation, claims and assessments against the Company, in addition
to those discussed above and those otherwise provided for in 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, employer, investor, investment advisor and taxpayer. Further, state
insurance regulatory authorities and other federal and

34

state authorities regularly make inquiries and conduct investigations concerning
the Company's compliance with applicable insurance and other laws and
regulations.

Summary

It is not feasible to predict or determine the ultimate outcome of all
pending investigations and legal proceedings or provide reasonable ranges of
potential losses, except as noted above in connection with specific matters. In
some of the matters referred to above, very 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 adverse effect upon the Company's consolidated 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 adverse effect on the
Company's consolidated net income or cash flows in particular quarterly or
annual periods.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of security holders during the fourth
quarter of 2003.

35

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MetLife, Inc.'s common stock, par value $0.01 per share (the "Common
Stock"), began trading on the New York Stock Exchange ("NYSE") under the symbol
"MET" on April 5, 2000.

The following table presents high and low closing prices for the Common
Stock on the NYSE for the periods indicated, and the dividends declared per
share:

As of March 1, 2004, there were 39,368 shareholders of record of Common
Stock.

On October 21, 2003, the Holding Company's Board of Directors approved an
annual dividend for 2003 of $0.23 per share. The dividend was paid on December
15, 2003 to shareholders of record on November 7, 2003. On October 22, 2002, the
Holding Company's Board of Directors approved an annual dividend for 2002 of
$0.21 per share. The dividend was paid on December 13, 2002 to shareholders of
record on November 8, 2002. Future dividend decisions will be determined by the
Holding Company's Board of Directors after taking into consideration factors
such as the Holding Company's current earnings, expected medium- and long-term
earnings, financial condition, regulatory capital position, and applicable
governmental regulations and policies. See "Business -- Regulation",
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources" and Note 14 to Notes to
Consolidated Financial Statements.

36

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth selected consolidated financial information
for the Company. The selected consolidated financial information for the years
ended December 31, 2003, 2002, and 2001 and at December 31, 2003 and 2002 has
been derived from the Company's audited consolidated financial statements
included elsewhere herein. The selected consolidated financial information for
the years ended December 31, 2000 and 1999 and at December 31, 2001, 2000 and
1999 has been derived from the Company's audited consolidated financial
statements not included elsewhere herein. The following information should be
read in conjunction with and is qualified in its entirety by the information
contained in "Management's Discussion and Analysis of Financial Condition and
Results of Operations," and the consolidated financial statements appearing
elsewhere herein. Some previously reported amounts have been reclassified to
conform with the presentation at and for the year ended December 31, 2003.

- ---------------

(1) In accordance with Statement of Financial Accounting Standards ("SFAS") No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets, income
related to real estate sold or classified as held-for-sale for transactions
initiated on or after January 1, 2002 is presented as discontinued
operations. The following table presents the components of income from
discontinued operations:

39

(2) Investment gains and losses are presented net of related policyholder
amounts. The amounts netted against investment gains and losses are the
following:

Investment gains and losses have been reduced by (i) amortization of DAC,
to the extent that such amortization results from investment gains and
losses, (ii) adjustments to participating contractholder accounts when
amounts equal to such investment gains and losses are applied to the
contractholder's accounts, and (iii) adjustments to the policyholder
dividend obligation resulting from investment gains and losses. This
presentation may not be comparable to presentations made by other insurers.

(3) Net investment gains and losses presented include scheduled periodic
settlement payments on derivative instruments that do not qualify for hedge
accounting under SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities, as amended, of $84 million, $32 million and $24 million
for the years ended December 31, 2003, 2002 and 2001, respectively.

(4) Includes the following combined financial statement data of Conning
Corporation ("Conning"), which was sold in 2001 and the Company's
controlling interest in Nvest Companies, L.P. and its affiliates ("Nvest"),
which was sold in 2000:

As a result of these sales, investment gains of $25 million and $663
million were recorded for the years ended December 31, 2001 and 2000,
respectively.

(5) In July 1998, Metropolitan Life sold a substantial portion of its Canadian
operations to Clarica Life Insurance Company ("Clarica Life"). As part of
that sale, a large block of policies in effect with Metropolitan Life in
Canada were transferred to Clarica Life, and the holders of the transferred
Canadian policies became policyholders of Clarica Life. Those transferred
policyholders were no longer policyholders of Metropolitan Life and,
therefore, were not entitled to compensation under the plan of
reorganization. However, as a result of a commitment made in connection
with obtaining Canadian regulatory approval of that sale and in connection
with the demutualization, in 2000, Metropolitan Life's Canadian branch made
cash payments to those who were, or were deemed to be, holders of these
transferred Canadian policies. The payments were determined in a manner
that is consistent with the treatment of, and fair and equitable to,
eligible policyholders of Metropolitan Life.

(6) Included in total revenues and total expenses for the year ended December
31, 2002 are $421 million and $358 million, respectively, related to
Aseguradora Hidalgo S.A., which was acquired in June 2002. Included in
total revenues and total expenses for the year ended December 31, 2000 are
$3,739 million and $3,561 million, respectively, related to GenAmerica,
which was acquired in January 2000.

40

(7) Policyholder benefits and claims exclude ($184) million, ($150) million,
($159) million, $41 million, and ($21) million for the years ended December
31, 2003, 2002, 2001, 2000 and 1999, respectively, of adjustments to
participating contractholder accounts and changes in the policyholder
dividend obligation that have been netted against net investment gains and
losses as such amounts are directly related to such gains and losses. This
presentation may not be comparable to presentations made by other insurers.

(8) Other expenses exclude ($31) million, $5 million, $25 million, ($95)
million, and ($46) million for the years ended December 31, 2003, 2002,
2001, 2000 and 1999 respectively, of amortization of DAC that have been
netted against net investment gains and losses as such amounts are directly
related to such gains and losses. This presentation may not be comparable
to presentations made by other insurers.

(9) Provision for income taxes includes ($145) million and $125 million for
surplus tax (credited) accrued by Metropolitan Life for the years ended
December 31, 2000 and 1999, respectively. Prior to its demutualization,
Metropolitan Life was subject to surplus tax imposed on mutual life
insurance companies under Section 809 of the Internal Revenue Code.

(10) Policyholder liabilities include future policy benefits and other
policyholder funds. Life and health policyholder liabilities also include
policyholder account balances, policyholder dividends payable and the
policyholder dividend obligation.

(11) For additional information regarding these items, see Notes 1 and 14 of
Notes to Consolidated Financial Statements.

(12) Return on equity is defined as net income divided by average total equity,
excluding accumulated other comprehensive income (loss).

(13) Includes MetLife's general account and separate account assets managed on
behalf of third parties. Includes $21 billion of assets under management
managed by Conning at December 31, 2000, which was sold in 2001. Includes
$133 billion of assets under management managed by Nvest at December 31,
1999 which was sold in 2000.

(14) Based on earnings subsequent to the date of demutualization. For additional
information regarding net income per share data, see Note 16 of Notes to
Consolidated Financial Statements.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

For purposes of this discussion, the terms "MetLife" or the "Company"
refers to MetLife, Inc., a Delaware corporation (the "Holding Company"), and its
subsidiaries, including Metropolitan Life Insurance Company ("Metropolitan
Life"). Following this summary is a discussion addressing the consolidated
results of operations and financial condition of the Company for the periods
indicated. This discussion should be read in conjunction with the Company's
consolidated financial statements included elsewhere herein.

ECONOMIC CAPITAL

Beginning in 2003, the Company changed its methodology of allocating
capital to its business segments from Risk-Based Capital ("RBC") to Economic
Capital. Prior to 2003, the Company's business segments' allocated equity was
primarily based on RBC, an internally developed formula based on applying a
multiple to the National Association of Insurance Commissioners Statutory
Risk-Based Capital and included certain adjustments in accordance with
accounting principles generally accepted in the United States of America
("GAAP"). Economic Capital is an internally developed risk capital model, the
purpose of which is to measure the risk in the business and to provide a basis
upon which capital is deployed. The Economic Capital model accounts for the
unique and specific nature of the risks inherent in MetLife's businesses. This
is in contrast to the standardized regulatory RBC formula, which is not as
refined in its risk calculations with respect to the nuances of the Company's
businesses.

The change in methodology is being applied prospectively. This change has
and will continue to impact the level of net investment income and net income of
each of the Company's business segments. A portion of net investment income is
credited to the segments based on the level of allocated equity. This change in

41

methodology of allocating equity does not impact the Company's consolidated net
investment income or net income.

The following table presents actual and pro forma net investment income
with respect to the Company's segments for the years ended December 31, 2002 and
2001. The amounts shown as pro forma reflect net investment income that would
have been reported in these years had the Company allocated capital based on
Economic Capital rather than on the basis of RBC.

ACQUISITIONS AND DISPOSITIONS

In September 2003, a subsidiary of the Company, Reinsurance Group of
America, Incorporated ("RGA"), announced a coinsurance agreement under which it
assumed the traditional U.S. life reinsurance business of Allianz Life Insurance
Company of North America. The transaction closed during the fourth quarter of
2003 with an effective date retroactive to July 1, 2003. The transaction added
approximately $278 billion of life reinsurance in-force, $246 million of premium
and $11 million of income before income tax expense, excluding minority interest
expense, to the fourth quarter of 2003.

In June 2002, the Company acquired Aseguradora Hidalgo S.A. ("Hidalgo"), an
insurance company based in Mexico with approximately $2.5 billion in assets as
of the date of acquisition. The Company's existing Mexico subsidiary and Hidalgo
now operate as a combined entity under the name MetLife Mexico.

In November 2001, the Company acquired Compania de Seguros de Vida
Santander S.A. and Compania de Reaseguros de Vida Soince Re S.A., wholly-owned
subsidiaries of Santander Central Hispano in Chile. These acquisitions marked
MetLife's entrance into the Chilean insurance market.

In July 2001, the Company completed its sale of Conning Corporation
("Conning"), an affiliate acquired in the acquisition of GenAmerica Financial
Corporation ("GenAmerica") in 2000. Conning specialized in asset management for
insurance company investment portfolios and investment research.

SUMMARY OF CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with GAAP requires
management to adopt accounting policies and make estimates and assumptions that
affect amounts reported in the consolidated financial statements. The critical
accounting policies, estimates and related judgments underlying the Company's
consolidated financial statements are summarized below. In applying these
policies, management makes subjective and complex judgments that frequently
require estimates 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 businesses
and operations.

42

INVESTMENTS

The Company's principal investments are in fixed maturities, mortgage loans
and real estate, all of which are exposed to three primary sources of investment
risk: credit, interest rate and market valuation. The financial statement risks
are those associated with the recognition of impairments and income, as well as
the determination of fair values. The assessment of whether impairments have
occurred is based on management's case-by-case evaluation of the underlying
reasons for the decline in fair value. 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 by the Company
in the impairment evaluation process include, but are not limited to: (i) the
length of time and the extent to which the market value has been below cost;
(ii) the potential for impairments of securities when the issuer is experiencing
significant financial difficulties; (iii) the potential for impairments in an
entire industry sector or sub-sector; (iv) the potential for impairments in
certain economically depressed geographic locations; (v) the potential for
impairments of securities where the issuer, series of issuers or industry has
suffered a catastrophic type of loss or has exhausted natural resources; (vi)
unfavorable changes in forecasted cash flows on asset-backed securities; and
(vii) other subjective factors, including concentrations and information
obtained from regulators and rating agencies. In addition, the earnings on
certain investments are dependent upon market conditions, which could result in
prepayments and changes in amounts to be earned due to changing interest rates
or equity markets. The determination of fair values in the absence of quoted
market values is based on: (i) valuation methodologies; (ii) securities the
Company deems to be comparable; and (iii) assumptions deemed appropriate given
the circumstances. The use of different methodologies and assumptions may have a
material effect on the estimated fair value amounts. In addition, the Company
enters into certain structured investment transactions, real estate joint
ventures and limited partnerships for which the Company may be deemed to be the
primary beneficiary and, therefore, may be required to consolidate such
investments. The accounting rules for the determination of the primary
beneficiary are complex and require evaluation of the contractual rights and
obligations associated with each party involved in the entity, an estimate of
the entity's expected losses and expected residual returns and the allocation of
such estimates to each party.

DERIVATIVES

The Company enters into freestanding derivative transactions primarily to
manage the risk associated with variability in cash flows or changes in fair
values related to the Company's financial assets and liabilities or to changing
fair values. The Company also uses derivative instruments to hedge its currency
exposure associated with net investments in certain foreign operations. The
Company also purchases investment securities, issues certain insurance policies
and engages in certain reinsurance contracts that embed derivatives. The
associated financial statement risk is the volatility in net income which can
result from (i) changes in fair value of derivatives not qualifying as
accounting hedges; (ii) ineffectiveness of designated hedges; and (iii)
counterparty default. In addition, there is a risk that embedded derivatives
requiring bifurcation are not identified and reported at fair value in the
consolidated financial statements. Accounting for derivatives is complex, as
evidenced by significant authoritative interpretations of the primary accounting
standards which continue to evolve, as well as the significant judgments and
estimates involved in determining fair value in the absence of quoted market
values. These estimates are based on valuation methodologies and assumptions
deemed appropriate in the circumstances. Such assumptions include estimated
volatility and interest rates used in the determination of fair value where
quoted market values are not available. The use of different assumptions may
have a material effect on the estimated fair value amounts.

DEFERRED POLICY ACQUISITION COSTS

The Company incurs significant costs in connection with acquiring new and
renewal insurance business. These costs, which vary with and are primarily
related to the production of that business, are deferred. The recovery of such
costs is dependent upon the future profitability of the related business. The
amount of future profit is dependent principally on investment returns in excess
of the amounts credited to policyholders,

43

mortality, morbidity, persistency, interest crediting rates, 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 are most likely to impact the rate of
amortization of such costs. The aforementioned factors enter into management's
estimates of gross margins and profits, which generally are used to amortize
such costs. Revisions to estimates result in changes to the amounts expensed in
the reporting period in which the revisions are made and could result in the
impairment of the asset and a charge to income if estimated future gross margins
and profits are less than amounts deferred. In addition, the Company utilizes
the reversion to the mean assumption, a standard industry practice, in its
determination of the amortization of deferred policy acquisition costs ("DAC"),
including value of business acquired ("VOBA"). This practice assumes that the
expectation for long-term appreciation in equity markets is not changed by minor
short-term market fluctuations, but that it does change when large interim
deviations have occurred.

FUTURE POLICY BENEFITS

The Company establishes liabilities for amounts payable under insurance
policies, including traditional life insurance, annuities and disability
insurance. Generally, amounts are payable over an extended period of time and
liabilities are established based on methods and underlying assumptions in
accordance with GAAP and applicable actuarial standards. Principal assumptions
used in the establishment of liabilities for future policy benefits are
mortality, morbidity, expenses, persistency, investment returns and inflation.

The Company also establishes liabilities for unpaid claims and claims
expenses for property and casualty insurance. Liabilities for property and
casualty insurance are dependent on estimates of amounts payable for claims
reported but not settled and claims incurred but not reported. These estimates
are influenced by historical experience and actuarial assumptions with respect
to current developments, anticipated trends and risk management strategies.

Differences between the actual experience and assumptions used in pricing
these policies and in the establishment of liabilities result in variances in
profit and could result in losses.

REINSURANCE

The Company enters into reinsurance transactions as both a provider and a
purchaser of reinsurance. 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 previously. Additionally,
for each of its reinsurance contracts, the Company must determine if the
contract provides indemnification against loss or liability relating to
insurance risk, in accordance with applicable accounting standards. The Company
must review all contractual features, particularly those that may limit the
amount of insurance risk to which the reinsurer is subject or features that
delay the timely reimbursement of claims. If the Company determines that a
reinsurance contract does not expose the reinsurer to a reasonable possibility
of a significant loss from insurance risk, the Company records the contract
using the deposit method of accounting.

LITIGATION

The Company is a party to a number of legal actions. Given the inherent
unpredictability of litigation, it is difficult to estimate the impact of
litigation on the Company's consolidated 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. Liabilities related to certain lawsuits,
including the Company's asbestos-related liability, are especially difficult to
estimate due to the limitation of available data and uncertainty regarding
numerous variables used to determine amounts recorded. The data and variables
that impact the assumption used to estimate the Company's asbestos-related
liability include the number of future claims, the cost to resolve claims, the
disease mix and severity of disease, the jurisdiction of claims filed, tort
reform efforts and the

44

impact of any possible future adverse verdicts and their amounts. It is possible
that an adverse outcome in certain of the Company's litigation, including
asbestos-related cases, or the use of different assumptions in the determination
of amounts recorded could have a material effect upon the Company's consolidated
net income or cash flows in particular quarterly or annual periods.

EMPLOYEE BENEFIT PLANS

The Company sponsors pension and other retirement plans in various forms
covering employees who meet specified eligibility requirements. The reported
expense and liability associated with these plans requires an extensive use of
assumptions which include the discount rate, expected return on plan assets and
rate of future compensation increases as determined by the Company. Management
determines these assumptions based upon currently available market and industry
data, historical performance of the plan and its assets, and consultation with
an independent consulting actuarial firm to aid it in selecting appropriate
assumptions and valuing its related liabilities. The actuarial assumptions used
in the calculation of the Company's aggregate projected benefit obligation may
vary and include an expectation of long-term market appreciation in equity
markets which is not changed by minor short-term market fluctuations, but does
change when large interim deviations occur. These assumptions used by the
Company may differ materially from actual results due to changing market and
economic conditions, higher or lower withdrawal rates or longer or shorter life
spans of the participants. These differences may have a significant effect on
the Company's consolidated financial statements and liquidity.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2003 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2002 -- THE COMPANY

EXECUTIVE SUMMARY

MetLife, Inc., through its affiliates and subsidiaries, is a leading
provider of insurance and other financial services to a broad spectrum of
individual and institutional customers. The Company offers life insurance,
annuities, automobile and homeowners insurance and mutual funds to individuals,
as well as group insurance, reinsurance, and retirement and savings products and
services to corporations and other institutions. The MetLife companies serve
approximately 13 million households in the U.S. and provide benefits to
approximately 37 million employees and family members through their plan
sponsors including 88 of the FORTUNE 100 largest companies. MetLife, Inc. also
has direct international insurance operations in 10 countries serving
approximately 8 million customers. MetLife is organized into six business
segments: Institutional, Individual, Auto & Home, International, Reinsurance and
Asset Management.

The marketplace for financial services is extremely competitive. MetLife,
the largest life insurer in the United States, reported $2.2 billion in net
income and diluted earnings per share of $2.94 for the year ended December 31,
2003. In 2003, after a three-year economic slowdown, there were improvements in
both the credit and equity markets. At the same time, interest rates remained at
historic lows and the S&P 500 Index was up 26% for the year. Total premiums and
fees increased to $23.2 billion, up 9% over the prior year, which primarily
stems from continued sales growth across most of the Company's segments, as well
as the positive impact of the U.S. financial markets on policy fees. Assets
under management grew to $350.2 billion, up 17% over the prior year, and
Individual annuity deposits grew to $11.2 billion, up 42% over the prior year.
MetLife generated over $11 billion of net investment income while adhering to
rigorous asset-liability management principles and portfolio diversification. An
increase in expenses year over year is primarily attributable to
employee-related expenses, including pension and postretirement benefit expense
and severance, expenses associated with strengthening the Company's distribution
systems and taking action in consolidating office space and reducing
redundancies, while continuing to invest heavily in infrastructure. In addition,
regulatory capital increased and the Company repurchased stock through its
buyback program.

45

INDUSTRY TRENDS

The Company's segments continue to be influenced by a variety of industry
trends and it is the Company's belief that each of its businesses is well
positioned to capitalize on those trends.

In general, the Company is seeing more employers, both large and small,
outsourcing their benefits functions. Further, companies are offering broader
new arrays of voluntary benefits to help retain employees while adding little to
their overall benefits costs. These trends will likely continue and in fact
expand across companies of all sizes. Employers are also demanding substantial
online access for their employees for various self-service functions. This
functionality requires substantial information technology investment that
smaller companies will find difficult to absorb. This will put pressure on those
smaller and mid-size companies to gain scale quickly or exit the business.

In addition, alternative benefit structures, such as simple fixed benefit
products, are becoming more popular as the traditional medical indemnity
products costs have continued to increase rapidly. These low cost fixed benefit
products can provide effective catastrophic protection for high cost illnesses
to supplement the basic health coverage provided by medical indemnity insurance.

From a demographics standpoint, the bulk of the U.S. population is moving
from an asset accumulation phase to an asset distribution phase. People within
ten years of retirement hold significant assets. With continually lengthening
lifespans and unstructured asset distribution, the Company believes many of
these people may outlive their retirement savings and/or require long-term care.
As a result, the Company expects that the demand for retirement payout solutions
with guarantees will increase dramatically over the next decade.

The combination of these trends will favor those with scale, breadth of
distribution and product, ability to provide advice and financial strength to
support the long-term guarantees.

DISCUSSION OF RESULTS

Income from continuing operations increased by $809 million, or 71%, to
$1,943 million for the year ended December 31, 2003 from $1,134 million in the
comparable 2002 period. Income from continuing operations for the years 2003 and
2002 includes the impact of certain transactions or events that result in net
income not being indicative of future earnings, which are described in the
applicable segment's results of operations discussions. These items contributed
an after-tax benefit of $159 million in 2003 and an after-tax charge of $150
million in 2002. Excluding the impact of these items, income from continuing
operations increased by $500 million in 2003 compared to the prior year.
Declines in after-tax net investment losses account for $220 million of this
increase with the balance being contributed by the Company's operations. The
decline in net investment losses is largely attributable to less credit-related
losses, which is consistent with the U.S. financial market environment. The
Company anticipates net investment losses in 2004 to be comparable with 2003
levels and continues to reflect a concentration of interest-related losses
rather than credit-related losses.

Premiums, fees and other revenues increased 9% over the prior year
primarily as a result of growth in the annuities, retirement and savings and
variable and universal life product lines. This increase stems in part from
policy fee income earned on annuity deposits, which were $11.2 billion in 2003,
increasing 42% from the prior year. In addition, the annuity separate account
balance was $28.7 billion at December 31, 2003, up 57% versus the prior year
end. Growth in retirement & savings is primarily attributable to higher sales in
structured settlement products. Fee income from variable and universal life
products increased 12% over the prior year primarily as a result of a 25% growth
in separate account balances. In addition, the coinsurance agreement with
Allianz Life in the Reinsurance segment contributed approximately 1% to the year
over year increase. Partially offsetting these increases is a decline in
traditional life premiums, which is largely attributable to run off in the
Company's closed block of business.

Investment margins, which represent the spread between net investment
income and interest credited to policyholder account balances, remained
favorable in 2003 as the Company took appropriate crediting rate reductions in
most products in an effort to keep pace with the market environment. In several
product lines, where investment margins are a substantial part of earnings, the
Company still has a reasonable amount of flexibility to reduce crediting rates
further if portfolio yields were to decline from year-end 2003 levels.
Investment margins in 2003 did benefit from higher than expected levels of
prepayments, a trend that is not expected to continue in 2004.

47

Underwriting results varied in 2003. The group life mortality ratio
continues to be favorable at 92%. The Individual life mortality ratio was also
solid at 88%, which includes the impact of several large claims in the variable
and universal product line, some of which had lower levels of reinsurance. Group
disability's morbidity ratio increased to 98.5%, from 97.9% in the prior year
but is still within management's expected range. The Auto & Home combined ratio,
which is a measure of both the loss and loss adjustment expense ratio, as well
as the expense ratio, remained favorable at 97.1% excluding catastrophes. The
Company's International segment increased its loss recognition reserve in Taiwan
as a result of low interest rates relative to product guarantees. This action
resulted in a $19 million after-tax charge.

Other expenses increased 4% over the prior year period primarily as a
result of an increase of $133 million in pension and postretirement expenses. As
a result of contributions made to the pension plan in late 2003 and early 2004,
which totaled approximately $750 million, and the stronger performance of the
pension plan assets in 2003, the Company anticipates the pension and
postretirement expenses to moderate in 2004. Other expenses in 2003 also include
the impact of several actions taken by management in the fourth quarter,
including lease terminations, office consolidations and closures, and asset
impairments. In addition, severance costs and expenses associated with strategic
initiatives at New England Financial contributed to the increase in expenses
year over year. Also, there was an increase in many of the product lines'
volume-related expenses, which are in line with 2003 business growth.

Net investment losses decreased by $393 million, or 52%, to $358 million
for the year ended December 31, 2003 from $751 million for the comparable 2002
period. This decrease reflects total investment losses, before offsets, of $573
million. The Company's investment gains and losses are net of related
policyholder amounts. The amounts netted against investment gains and losses are
(i) amortization of DAC, to the extent that such amortization results from
investment gains and losses, (ii) adjustments to participating contractholder
accounts when amounts equal to such investment gains and losses are applied to
the contractholder's accounts, and (iii) adjustments to the policyholder
dividend obligation resulting from investment gains and losses. Offsets include
the amortization of DAC of $31 million and ($5) million in 2003 and 2002,
respectively, and changes in the policyholder dividend obligation of $144
million and $157 million in 2003 and 2002, respectively, and adjustments to
participating contracts of $40 million and ($7) million in 2003 and 2002,
respectively. The dollar amount of the offsets may vary disproportionately with
net investment gains and losses based on the relationship of the underlying sold
securities to certain insurance products.

The Company believes its policy of netting related policyholder amounts
against investment gains and losses provides important information in evaluating
its performance. Investment gains and losses are often excluded by investors
when evaluating the overall financial performance of insurers. The Company
believes its presentation enables readers to easily exclude investment gains and
losses and the related effects on the consolidated statements of income when
evaluating its performance. The Company's presentation of investment gains and
losses, net of policyholder amounts, may be different from the presentation used
by other insurance companies and, therefore, amounts in its consolidated
statements of income may not be comparable to amounts reported by other
insurers.

Income tax expense for the year ended December 31, 2003 was $687 million,
or 26% of income from continuing operations before provision for income taxes
and cumulative effect of change in accounting, compared with $502 million, or
31%, for the comparable 2002 period. The 2003 effective tax rate differs from
the corporate tax rate of 35% primarily due to the impact of non-taxable
investment income, tax credits for investments in low income housing, a recovery
of prior year tax overpayments on tax-exempt bonds, and an adjustment consisting
primarily of a revision in the estimate of income taxes for 2002. In addition,
the 2003 effective tax rate includes a reduction of the deferred tax valuation
allowance related to certain foreign net operating loss carryforwards, and tax
benefits related to the sale and merger of foreign subsidiaries reflected in the
International segment. The 2002 effective tax rate differs from the corporate
tax rate of 35% primarily due to the impact of non-taxable investment income,
partially offset by the inability to utilize tax benefits on certain foreign
capital losses.

Income from discontinued operations declined $171 million, or 36%, to $300
million for the year ended December 31, 2003 from $471 million in the comparable
prior year period. The decrease is primarily due to

48

lower recognized net investment gains from real estate properties sold in 2003
as compared to the prior year. The income from discontinued operations is
comprised of net investment income and net investment gains related to
properties that the Company began marketing for sale on or after January 1,
2002. For the years ended December 31, 2003 and 2002, the Company recognized
$421 million and $582 million of net investment gains, respectively, from
discontinued operations related to real estate properties sold or held-for-
sale.

The Company changed its method of accounting for embedded derivatives in
certain insurance products as required by new accounting guidance which became
effective on October 1, 2003, and recorded the impact as a cumulative effect of
a change in accounting principle.

49

INSTITUTIONAL

The following table presents consolidated financial information for the
Institutional segment for the years indicated:

YEAR ENDED DECEMBER 31, 2003 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2002 -- INSTITUTIONAL

The Company's Institutional segment offers a broad range of group insurance
and retirement and savings products and services to corporations and other
institutions. Group insurance products are offered as either an employer-paid
benefit, or as a voluntary benefit with premiums paid by the employee.
Retirement and savings products and services include an array of annuity and
investment products, as well as bundled administrative and investment services
sold to sponsors of small- and mid-sized 401(k) and other defined contribution
plans.

Income from continuing operations increased by $207 million, or 32%, to
$845 million for the year ended December 31, 2003 from $638 million for the
comparable 2002 period. Revenue growth combined with favorable underwriting
results and interest margins contributed to the year over year increase. Lower
net investment losses in 2003 versus 2002 contributed $185 million after-tax to
the year over year increase. Favorable underwriting experience was partially
offset by an increase in expenses associated with office closures and other
consolidations, as well as an increase in pension and postretirement benefit
costs. In addition, the prior year period includes a $20 million after-tax
benefit from the release of a previously established liability for the Company's
2001 business realignment initiatives and a $17 million after-tax benefit from
the release of a previously established liability for disability
insurance-related losses from the September 11, 2001 tragedies.

50

Total revenues, excluding net investment gains and losses, increased by
$962 million, or 7%, to $14,358 million for the year ended December 31, 2003
from $13,396 million for the comparable 2002 period. The increase is
attributable to both the group insurance and the retirement and savings product
lines. Within group insurance, life insurance premiums and fees increased by
$238 million, or 5%, which is in line with management's expectations. This
increase is attributable primarily to higher sales and favorable persistency.
The late 2003 acquisition of the John Hancock block of group life business
contributed $72 million to this increase. In addition, the long-term care,
dental, and disability products experienced continued growth at a combined rate
of approximately 14%, which is in line with management's expectations.
Retirement and savings revenues increased approximately 12% primarily due to
higher sales in the structured settlement products partially offset by the
impact of a sale of a significant, single premium contract in the second quarter
of 2002. Premiums and fees from retirement and saving products are significantly
influenced by large transactions and, as a result, can fluctuate from period to
period. These increases were partially offset by a decrease in revenues
primarily due to a decline in retirement and savings administrative fees from
the Company's 401(k) business. This decline resulted from the exit from the
large market 401(k) business in late 2001. Consequently, revenue decreased as
business was transferred to other carriers throughout 2002.

Total expenses increased by $912 million, or 8%, to $12,829 million for the
year ended December 31, 2003 from $11,917 million for the comparable 2002
period. Policyholder-related expenses increased $659 million primarily as a
function of the growth in business. The increase in expenses is offset by
favorable underwriting results in the term life insurance, dental, long-term
care, and retirement and savings products. The term life mortality incurred loss
ratio, which represents actual life claims as a percentage of assumed claims
incurred used in the determination of future policy benefits, was 92% for 2003
as compared to 93.6% in 2002. Underwriting results declined in disability as the
morbidity incurred loss ratio, which represents actual disability claims as a
percentage of assumed claims incurred used in the determination of future policy
benefits, increased to 98.5% in 2003 from 97.9% in the prior year. The 2003
ratio was within management's expected range. In addition, the 2002 period
includes a $28 million release of a previously established liability for
disability insurance-related losses from the September 11, 2001 tragedies. Other
expenses increased by $253 million over the prior year period. Group insurance
and retirement and savings expenses increased $115 million primarily due to an
increase in non-deferrable expenses associated with the aforementioned revenue
growth, $77 million from an increase in pension and postretirement benefit
expense, and a $33 million increase in expenses associated with office closures
and other consolidations. In addition, the prior year period includes a $30
million release of a previously established liability for the Company's 2001
business realignment initiatives.

51

INDIVIDUAL

The following table presents consolidated financial information for the
Individual segment for the years indicated:

YEAR ENDED DECEMBER 31, 2003 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2002 -- INDIVIDUAL

MetLife's Individual segment offers a wide variety of protection and asset
accumulation products aimed at serving the financial needs of its customers
throughout their entire life cycle. Products offered by Individual include
insurance products, such as traditional, universal and variable life insurance
and variable and fixed annuities. In addition, Individual sales representatives
distribute disability insurance and long-term care insurance products offered
through the Institutional segment, investment products, such as mutual funds, as
well as other products offered by the Company's other businesses.

Income from continuing operations decreased by $56 million, or 9%, to $571
million for the year ended December 31, 2003 from $627 million for the
comparable 2002 period. The decrease year over year is primarily driven by an
increase in expenses of $144 million, or 1%, which is largely attributable to an
increase in expenses associated with office closures and other consolidations,
pension and postretirement benefit costs, an increase in legal-related costs and
an adjustment related to certain improperly deferred expenses at New England
Financial. Although revenues are essentially flat year over year, policy fees
from variable life and annuity and investment-type products grew 15% year over
year. In addition, there is a slight increase in premiums related to other
traditional life products. These increases are offset by a 5% decline in
premiums from the Company's closed block business, which consists of
participating policies issued prior to the

52

Company's demutualization. Premiums on the closed block represent approximately
80% of this segment's premiums for the year ended December 31, 2003.

Total revenues, excluding net investment gains and losses, decreased by $7
million, or less than 1%, to $12,541 million for the year ended December 31,
2003 from $12,548 million for the comparable 2002 period. Policy fees from
variable life and annuity and investment-type products grew by 15% over the
prior year period. This growth is primarily a result of an 18% increase in the
average separate account balances, which is largely attributable to improvements
in the U.S. financial markets. Additionally, this increase is associated with
the aging of the in-force policies, as well as an increase in the sales of the
enterprise variable annuity product through non-traditional distribution
channels. Policy fees from variable life and annuity and investment-type
products are typically calculated as a percentage of average assets. The value
of these assets can fluctuate depending on equity market performance. This
increase in policy fee income was almost entirely offset by declines in premiums
and net investment income. Premiums associated with the Company's closed block
of business declined by $186 million, or 5%, which is in line with management's
expectations, as this business continues to run-off. Partially offsetting this
decline is a slight increase in the other traditional life products. The decline
in net investment income is mainly due to the change in capital allocation
methodology and lower investment yields year over year.

Total expenses increased by $144 million, or 1%, to $11,556 million for the
year ended December 31, 2003 from $11,412 million for the comparable 2002
period. Other expenses increased by $251 million over the prior year period
primarily as a result of expenses associated with certain efficiency initiatives
and events. The most significant items include an increase of $67 million from
pension and postretirement benefit expense, a $48 million expense recorded in
the second quarter of 2003 for an adjustment related to certain improperly
deferred expenses at New England Financial, $42 million in expenses associated
with office closures and other consolidations, $42 million increase in
legal-related costs, and other expenses associated with strategic initiatives at
New England Financial. Offsetting these expense increases are a decline in
policyholder benefits consistent with the aforementioned decline in the closed
block and a decrease in dividends due to the reduction of the dividend scale in
the fourth quarter of 2002, reflecting the impact of the low U.S. interest rate
environment on the asset portfolios supporting these policies.

53

AUTO & HOME

The following table presents consolidated financial information for the
Auto & Home segment for the years indicated:

YEAR ENDED DECEMBER 31, 2003 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2002 -- AUTO & HOME

Auto & Home, operating through Metropolitan Property and Casualty Insurance
Company and its subsidiaries, offers personal lines property and casualty
insurance directly to employees through employer-sponsored programs, as well as
through a variety of retail distribution channels. Auto & Home primarily sells
auto and homeowners insurance.

Net income increased by $25 million, or 19%, to $157 million for the year
ended December 31, 2003 from $132 million for the comparable 2002 period. The
increase in earnings year over year is mainly due to premium growth, lower
investment losses and a reduction in expenses, partially offset by adverse
claims development.

Total revenues, excluding net investment gains and losses, increased by $67
million, or 2%, to $3,098 million for the year ended December 31, 2003 from
$3,031 million for the comparable 2002 period. This variance is mainly due to
increases in the average earned premium due to rate increases, partially offset
by lower investment income primarily resulting from the change in capital
allocation methodology.

Total expenses increased by $84 million, or 3%, to $2,896 million for the
year ended December 31, 2003 from $2,812 million for the comparable 2002 period.
Adverse claims development related to prior accident years, resulting mostly
from bodily injury and uninsured motorists claims, accounted for $46 million of
the increase in policyholder benefits. Also contributing to this increase are
higher catastrophe losses of $22 million. Partially offsetting these increases
are improved non-catastrophe homeowners claims frequencies, a reduction in the
number of auto and homeowners policies in-force, and underwriting and agency
management actions. In addition, there was a $23 million reduction in expenses
resulting from the completion of the St. Paul integration and a $35 million
reduction in the cost associated with the New York assigned risk plan. The
combined ratio, excluding catastrophes, which represents losses and total
expenses including claims as a percentage of premiums, declined to 97.1% for the
year ended December 31, 2003 versus 97.4% for the comparable 2002 period.

54

INTERNATIONAL

The following table presents consolidated financial information for the
International segment for the years indicated:

YEAR ENDED DECEMBER 31, 2003 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2002 -- INTERNATIONAL

International provides life insurance, accident and health insurance,
annuities and savings and retirement products to both individuals and groups,
and auto and homeowners coverage to individuals. The Company focuses on emerging
markets in the Latin America and Asia/Pacific regions.

Net income increased by $124 million, or 148%, to $208 million for the year
ended December 31, 2003 from $84 million for the comparable 2002 period. The
acquisition of Hidalgo accounted for $48 million of this increase. Also
contributing to the increase in earnings during 2003 is a $62 million after-tax
benefit from the merger of the Mexican operations and a reduction in
policyholder liabilities resulting from a change in reserve methodology, a $12
million tax benefit in Chile and an $8 million after-tax benefit related to
reinsurance treaties. These increases are partially offset by a $19 million
after-tax charge in Taiwan related to an increased loss recognition reserve due
to low interest rates relative to product guarantees.

Total revenues, excluding net investment gains and losses, increased by
$402 million, or 19%, to $2,532 million for the year ended December 31, 2003
from $2,130 million for the comparable 2002 period. This increase is primarily
due to the acquisition of Hidalgo, which accounted for $469 million of the
variance, partially offset by decreases in Canada of $106 million attributable
to a non-recurring sale of an annuity contract and $28 million relating to the
restructuring of a pension contract from an investment-type product to a
long-term annuity, both of which occurred in 2002. In addition, South Korea's,
Chile's and Taiwan's revenues increased by $102 million, $60 million and $36
million, respectively, primarily due to business growth. These increases are
partially offset by a $161 million decrease in Mexico, excluding Hidalgo.
Anticipated actions taken by the Mexican government adversely impacted the
insurance and annuities market

55

and resulted in a decline in premiums in Mexico's group and individual life
businesses. In addition, the cancellation of a large broker-sponsored case at
the end of 2002 and the weakening of the peso also contributed to the 2003
decline in Mexico.

Total expenses increased by $302 million, or 15%, to $2,311 million for the
year ended December 31, 2003 from $2,009 million for the comparable 2002 period.
The acquisition of Hidalgo contributed $394 million to this increase. Partially
offsetting this is a decrease of $106 million for the aforementioned
non-recurring sale of an annuity contract and a decrease of $28 million for the
restructuring of a pension contract, both of which occurred in 2002. In
addition, South Korea's, Chile's and Taiwan's expenses increased by $95 million,
$65 million and $64 million, respectively, commensurate with the revenue
increases in each country. Additionally, Taiwan's expenses include a $30 million
pre-tax charge due to an increased loss recognition reserve as a result of low
interest rates relative to product guarantees. These increases are partially
offset by a $251 million decrease in Mexico, other than Hidalgo, primarily as a
result of the impact on expenses from the aforementioned revenue decline in
Mexico and a reduction in policyholder liabilities related to a change in
reserve methodology.

REINSURANCE

The following table presents consolidated financial information for the
Reinsurance segment for the years indicated:

YEAR ENDED DECEMBER 31, 2003 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2002 -- REINSURANCE

MetLife's Reinsurance segment is comprised of the life reinsurance business
of Reinsurance Group of America, Incorporated ("RGA"), a publicly traded
company, and MetLife's ancillary life reinsurance business. RGA has operations
in North America and has subsidiary companies, branch offices, or representative
offices in Australia, Barbados, Hong Kong, India, Ireland, Japan, Mexico, South
Africa, South Korea, Spain, Taiwan and the United Kingdom.

Net income increased by $8 million, or 10%, to $92 million for the year
ended December 31, 2003 from $84 million for the comparable 2002 period. The
increase in earnings year over year is primarily attributable to new business
growth, additional renewal premiums, as well as a large coinsurance agreement
with Allianz Life Insurance Company of North America ("Allianz Life") under
which RGA assumed 100% of Allianz Life's U.S. traditional life reinsurance
business.

56

Total revenues, excluding net investment gains and losses, increased by
$721 million, or 29%, to $3,190 million for the year ended December 31, 2003
from $2,469 million for the comparable 2002 period. This increase is primarily
due to new premiums from facultative and automatic treaties and renewal premiums
on existing blocks of business, particularly in the U.S. and United Kingdom
reinsurance operations. In addition, there was a $252 million increase in
revenues due to the transaction with Allianz Life in late 2003.

Total expenses increased by $737 million, or 31%, to $3,081 million for the
year ended December 31, 2003 from $2,344 million for the comparable 2002 period.
This increase is consistent with the growth in revenues and is primarily
attributable to policyholder benefits and claims and allowances paid on assumed
reinsurance, particularly on certain higher commission business in the United
Kingdom. The aforementioned transaction with Allianz Life contributed $242
million to this increase.

ASSET MANAGEMENT

The following table presents consolidated financial information for the
Asset Management segment for the years indicated:

YEAR ENDED DECEMBER 31, 2003 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2002 -- ASSET MANAGEMENT

Asset Management, through SSRM Holdings, Inc. ("State Street Research"),
provides a broad variety of asset management products and services to MetLife,
third-party institutions and individuals. State Street Research offers
investment management services in all major investment disciplines through
multiple channels of distribution in both the retail and institutional
marketplaces.

Net income increased by $16 million, or 267%, to $22 million for the year
ended December 31, 2003 from $6 million for the comparable 2002 period. The
increase year over year is mainly due to expense reductions and an increase in
net investment gains in 2003. These improvements were partially offset by lower
revenues earned as a result of a reduction in average assets under management.

Total revenues, excluding net investment gains and losses, decreased by $16
million, or 7%, to $209 million for the year ended December 31, 2003 from $225
million for the comparable 2002 period. This decrease is primarily attributable
to a decline in revenues earned on lower average assets under management,
despite an increase in ending assets under management of 7% to $47.5 billion for
the year ended December 31, 2003 from $44.6 billion for the comparable 2002
period. In addition, performance fees of $10 million earned during 2003 on
certain investment products, were lower than the $14 million earned during the
comparable 2002 period.

Other expenses decreased by $29 million, or 14%, to $182 million for the
year ended December 31, 2003 from $211 million for the comparable 2002 period.
Compensation-related expenses declined $17 million primarily as a result of
staff reductions undertaken in the third and fourth quarters of 2002.
Additionally,

57

variable expenses declined $6 million largely as a result of lower average
assets under management. General and administrative expenses declined $6 million
due to lower spending.

CORPORATE & OTHER

YEAR ENDED DECEMBER 31, 2003 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2002 -- CORPORATE & OTHER

Corporate & Other contains the excess capital not allocated to the business
segments, as well as expenses associated with the resolution of proceedings
alleging race-conscious underwriting practices, sales practices and asbestos
related claims, and interest expense related to the majority of the Company's
outstanding debt.

Income and loss from continuing operations increased by $485 million, or
111%, to $48 million for the year ended December 31, 2003 from a loss of $437
million for the comparable 2002 period. The 2003 period includes a $92 million
after-tax benefit from a reduction of a previously established liability related
to the Company's race conscious underwriting settlement and a $36 million
benefit from a revision of the estimate of income tax for 2002. The 2002 period
includes a $169 million after-tax charge to cover costs associated with
asbestos-related claims, a $48 million after-tax charge to cover costs
associated with the resolution of a federal government investigation of General
American Life Insurance Company's ("General American") former Medicare business,
and a $30 million after-tax reduction of a previously established liability
related to the Company's sales practice class action settlement in 1999.
Excluding the impact of these items, the increase in earnings year over year is
mainly due to higher investment income.

Total revenues, excluding net investment gains and losses, increased by
$201 million, or 1,117%, to $219 million for the year ended December 31, 2003
from $18 million for the comparable 2002 period. This variance is mainly due to
higher investment income resulting from the change in capital allocation
methodology, as well as increases in income from corporate joint ventures,
equity-linked notes and securities lending.

Total expenses decreased by $421 million, or 58%, to $304 million for the
year ended December 31, 2003 from $725 million for the comparable 2002 period.
The 2003 period includes a $144 million reduction of a previously established
liability related to the Company's race-conscious underwriting settlement. The
2002 period includes a $266 million charge to increase the Company's
asbestos-related liability and expenses to cover costs associated with the
resolution of federal government investigations of General American's former
Medicare business.

58

YEAR ENDED DECEMBER 31, 2002 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2001 -- THE COMPANY

The following table presents consolidated financial information for the
years indicated:

Premiums increased by $1,865 million, or 11%, to $19,077 million for the
year ended December 31, 2002 from $17,212 million for the comparable 2001
period. This variance is primarily attributable to increases in the
Institutional, International and Reinsurance segments. A $957 million increase
in Institutional is largely due to sales growth in its group life, dental,
disability and long-term care businesses, a sale of a significant retirement and
savings contract in the second quarter of 2002, as well as new sales throughout
2002 in this segment's structured settlements and traditional annuity products.
The June 2002 acquisition of Hidalgo, the 2001 acquisitions in Chile and Brazil
and the sale of an annuity contract in the first quarter of 2002 to a Canadian
trust company are the primary drivers of a $665 million increase in
International. A portion of the increase in International is also attributable
to business growth in South Korea, Mexico (excluding Hidalgo) and Taiwan. In
addition, an increase in Canada due to the restructuring of a pension contract
from an investment-type product to a long-term annuity contributed to this
variance. New premiums from facultative and automatic treaties, and renewal
premiums on existing blocks of business contributed to a $243 million increase
in the Reinsurance segment.

Universal life and investment-type product policy fees increased by $258
million, or 14%, to $2,147 million for the year ended December 31, 2002 from
$1,889 million for the comparable 2001 period. This variance is primarily
attributable to the Individual, International and Institutional segments. A $119
million favorable variance in Individual is due to an increase in policy fees
from insurance products, primarily due to higher revenue from insurance fees,
which increase as the average separate account asset base supporting the
underlying minimum death benefits declines. The average separate account asset
base has declined in 2002 in
59

response to poor equity market performance. These increases are partially offset
by lower policy fees from annuity and investment-type products generally
resulting from poor equity market performance despite growth in annuity
deposits. A $106 million increase in International is largely due to the
acquisition of Hidalgo and the acquisitions in Chile, partially offset by the
cessation of product lines offered through a joint venture with Banco Santander
Central Hispano, S.A., ("Banco Santander") in 2001. A $32 million increase in
Institutional is principally due to a fee related to the renegotiation of a
portion of a bank-owned life insurance contract, as well as growth in existing
business in the group universal life product.

Net investment income increased by $74 million, or 1%, to $11,261 million
for the year ended December 31, 2002 from $11,187 million for the comparable
2001 period. This variance is primarily attributable to increases of (i) $58
million, or 1%, in income from fixed maturities, (ii) $62 million, or 15%, in
income from real estate and real estate joint ventures held-for-investment, net
of investment expenses and depreciation, (iii) $35 million, or 2%, in income on
mortgage loans on real estate, (iv) $7 million, or 1%, in interest income on
policy loans, and (v) lower investment expenses of $9 million, or 4%. These
variances are partially offset by decreases of (i) $47 million, or 17%, in
income on cash, cash equivalents and short-term investments, (ii) $39 million,
or 17%, in income on other invested assets, and (iii) $11 million, or 10%, in
income from equity securities and other limited partnership interests.

The increase in income from fixed maturities to $8,076 million in 2002 from
$8,018 million in 2001 is largely due to a higher asset base, primarily
resulting from increased cash flows from sales of insurance and the acquisitions
in Mexico and Chile. In addition, securities lending income was higher due to
increased activity and a more favorable cost of funds. The increases in income
from fixed maturities are partially offset by decreases resulting from lower
reinvestment rates and a decline in bond prepayment fees. The increase in income
from real estate and real estate joint ventures held-for-investment to $477
million in 2002 from $415 million in 2001 is primarily due to the transfer of
the Company's One Madison Avenue, New York property from a company use property
to an investment property in 2002. The increase in income on mortgage loans on
real estate to $1,883 million in 2002 from $1,848 million in 2001 is due
primarily to a higher asset base from new loan production, partially offset by
lower mortgage rates. The increase in interest income from policy loans to $543
million in 2002 from $536 million in 2001 is largely due to increased loans
outstanding. The decrease in income from cash, cash equivalents and short-term
investments to $232 million in 2002 from $279 million in 2001 is due to
declining interest rates coupled with a decrease in the asset base. The decrease
in net investment income from other invested assets to $186 million in 2002 from
$225 million in 2001 is largely due to lower derivative income, partially offset
by an increase in reinsurance contracts' funds withheld at interest. The decline
in income from equity securities and other limited partnership interests to $99
million in 2002 from $110 million in 2001 primarily resulted from lower dividend
income from equity securities, partially offset by higher limited corporate
partnership distributions.

The increase in net investment income is attributable to increases in the
International, Individual and Reinsurance segments, partially offset by
decreases in Corporate & Other, and the Institutional and Auto & Home segments.
A $194 million increase in International is due to a higher asset base resulting
from the acquisitions in Mexico and Chile. Individual increased by $79 million
primarily due to higher income from securities lending and limited corporate
partnership distributions, partially offset by lower bond prepayment fee income.
The Reinsurance segment increased $31 million largely resulting from an increase
in reinsurance contracts' funds withheld at interest. The decrease in Corporate
& Other of $146 million is due to a lower asset base, resulting from funding
International's acquisitions in Mexico and Chile, as well as the Company's
common stock repurchases, partially offset by higher income from securities
lending. Institutional decreased $49 million predominantly as a result of
decreased limited partnership, equity-linked note and bond prepayment fee
income. Auto & Home decreased $23 million primarily due to lower reinvestment
rates.

Other revenues decreased by $175 million, or 12%, to $1,332 million for the
year ended December 31, 2002 from $1,507 million for the comparable 2001 period.
This variance is primarily attributable to decreases in the Individual,
Institutional, Asset Management segments and Corporate & Other. Individual
decreased by $77 million resulting from lower commission and fee income
associated with decreased volume in the broker/dealer and other subsidiaries as
a result of the depressed equity markets. A $40 million decrease in
Institutional is primarily due to a $73 million reduction in administrative fees
as a result of the Company's exit
60

from the large market 401(k) business in late 2001, as well as lower fees earned
on investments in separate accounts resulting generally from poor equity market
performance. This reduction is partially offset by a $33 million increase in
group insurance due to growth in the administrative service businesses and a
settlement received in 2002 related to the Company's former medical business. A
$32 million decrease in Asset Management is primarily due to the sale of Conning
in July 2001. In addition, Corporate & Other decreased by $29 million
principally due to the remeasurement of the Company's reinsurance recoverable
associated with the sales practices reinsurance treaty in 2001, as well as an
increase in the elimination of intersegment activity. This was partially offset
from a gain on the sale of a company-occupied building, and income earned on
corporate-owned life insurance ("COLI") purchased during 2002.

The Company's investment gains and losses are net of related policyholder
amounts. The amounts netted against investment gains and losses are (i)
amortization of DAC, to the extent that such amortization results from
investment gains and losses, (ii) adjustments to participating contractholder
accounts when amounts equal to such investment gains and losses are applied to
the contractholder's accounts, and (iii) adjustments to the policyholder
dividend obligation resulting from investment gains and losses.

Net investment gains and losses increased by $172 million, or 30%, to $751
million for the year ended December 31, 2002 from $579 million for the
comparable 2001 period. This increase reflects total investment gains (losses),
before offsets, of $896 million (including gross gains of $1,836 million, gross
losses of $1,091 million, writedowns of $1,501 million, and a net loss from
derivatives of $140 million which includes scheduled periodic settlement
payments on derivatives that do not qualify for hedge accounting of $32
million), an increase of $183 million, or 26%, from $713 million in 2001.
Offsets include the amortization of DAC of ($5) million and ($25) million in
2002 and 2001, respectively, and changes in the policyholder dividend obligation
of $157 million and $159 million in 2002 and 2001, respectively, and adjustments
to participating contracts of ($7) million in 2002. Refer to "-- Investments"
beginning on page 86 for a discussion of the Company's investment portfolio.

The Company believes its policy of netting related policyholder amounts
against investment gains and losses provides important information in evaluating
its performance. Investment gains and losses are often excluded by investors
when evaluating the overall financial performance of insurers. The Company
believes its presentation enables readers to easily exclude investment gains and
losses and the related effects on the consolidated statements of income when
evaluating its performance. The Company's presentation of investment gains and
losses, net of policyholder amounts, may be different from the presentation used
by other insurance companies and, therefore, amounts in its consolidated
statements of income may not be comparable to amounts reported by other
insurers.

Policyholder benefits and claims increased by $1,069 million, or 6%, to
$19,523 million for the year ended December 31, 2002 from $18,454 million for
the comparable 2001 period. This variance is attributable to increases in the
International, Institutional and Reinsurance segments, partially offset by a
decrease in the Auto & Home segment. A $699 million increase in International is
primarily due to the acquisition of Hidalgo, the acquisitions in Chile and
Brazil, the aforementioned sale of an annuity contract, the restructuring of a
Canadian pension contract and business growth in South Korea, Mexico (excluding
Hidalgo) and Taiwan. An increase in Institutional of $415 million is
commensurate with the growth in premiums as discussed above, largely offset by
the establishment of a liability in 2001 related to the September 11, 2001
tragedies and the 2001 fourth quarter business realignment initiatives. An
increase in Reinsurance of $70 million is commensurate with the growth in
premiums discussed above. These increases were partially offset by a decrease of
$102 million in the Auto & Home segment. The variance in Auto & Home is largely
due to improved claim frequency resulting from milder winter weather, lower
catastrophe levels and fewer personal umbrella claims, partially offset by an
increase in current year bodily injury and no-fault severities and costs
associated with the processing of the New York assigned risk business.

Interest credited to policyholder account balances decreased by $134
million, or 4%, to $2,950 million for the year ended December 31, 2002 from
$3,084 million for the comparable 2001 period. This variance is attributable to
decreases in the Individual and Institutional segments, partially offset by
increases in the International and Reinsurance segments. A $105 million decrease
in Individual is primarily due to the

61

establishment in 2001 of a policyholder liability with respect to certain group
annuity contracts at New England Financial. Excluding this policyholder
liability, interest credited expense increased slightly in response to an
increase in policyholder account balances, which is primarily attributable to
sales growth despite declines in interest crediting rates. An $81 million
decrease in Institutional is primarily due to a decline in average crediting
rates resulting from the current interest rate environment. These variances are
partially offset by a net increase of $28 million in International. This
increase is principally due to the acquisition of Hidalgo, partially offset by a
reduction in the number of investment-type policies in-force in Argentina. In
addition, a $24 million increase in Reinsurance is primarily due to several new
annuity reinsurance agreements executed during 2002.

Policyholder dividends decreased by $144 million, or 7%, to $1,942 million
for the year ended December 31, 2002 from $2,086 million for the comparable 2001
period. This variance is attributable to a decrease in the Institutional segment
resulting from unfavorable mortality experience of several large group clients.
Institutional policyholder dividends vary from period to period based on
participating contract experience, which is recorded in policyholder benefits
and claims.

Other expenses decreased by $7 million, or less than 1%, to $7,015 million
for the year ended December 31, 2002 from $7,022 million for the comparable 2001
period. Excluding the capitalization and amortization of DAC, which are
discussed below, other expenses increased by $68 million, or 1%, to $7,716
million in 2002 from $7,648 million in 2001. Excluding the capitalization and
amortization of DAC and the change in accounting as prescribed by Statement of
Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible
Assets, ("SFAS 142"), which eliminates the amortization of goodwill and certain
other intangibles, other expenses increased by $115 million. This variance is
primarily attributable to increases in the Reinsurance and International
segments, as well as in Corporate & Other, partially offset by decreases in the
Institutional, Individual and Asset Management segments. A $209 million increase
in Reinsurance is primarily attributable to increases in allowances paid,
primarily driven by high-allowance business in the United Kingdom along with
strong growth in the U.S. and Asia/Pacific regions. An increase of $166 million
in International expenses is primarily due to the acquisition of Hidalgo, the
acquisitions in Chile and Brazil, as well as business growth in South Korea,
Mexico (excluding Hidalgo), and Hong Kong. An increase in Corporate & Other of
$65 million is primarily due to increases in legal and interest expenses. The
2002 period includes a $266 million charge to increase the Company's
asbestos-related liability, expenses to cover costs associated with the
resolution of federal government investigations of General American's former
Medicare business and a reduction of a previously established liability related
to the Company's sales practices class action settlement. The 2001 period
includes a $250 million charge recorded in the fourth quarter of 2001 to cover
costs associated with the resolution of class action lawsuits and a regulatory
inquiry pending against Metropolitan Life involving alleged race-conscious
insurance underwriting practices prior to 1973. The increase in interest
expenses is primarily due to increases in long-term debt resulting from the
issuance of $1.25 billion and $1 billion of senior debt in November 2001 and
December 2002, respectively, partially offset by a decrease in commercial paper
in 2002. In addition, a decrease in the elimination of intersegment activity
contributed to the variance. A decrease of $181 million in Institutional is due
to higher expenses resulting from the business realignment initiatives accrual
in the fourth quarter 2001 (primarily the Company's exit from the large market
401(k) business), $30 million of which was released into income in the fourth
quarter of 2002. This decrease is partially offset by an increase in 2002
operational expenses for dental and disability and group insurance's
non-deferrable expenses commensurate with the aforementioned premium growth, as
well as higher pension and postretirement benefit expenses. A decrease of $105
million in Individual is due to continued expense management initiatives,
including reduced compensation-related expenses, a decline in business
realignment expenses that were incurred in 2001 and reductions in volume-related
commission expenses in the broker/dealer and other subsidiaries. These declines
are partially offset by higher pension and postretirement benefit expenses and
an increase in expenses stemming from sales growth in new annuity and
investment-type products. In addition, a decrease of $39 million in Asset
Management is primarily due to the sale of Conning in July 2001.

DAC is principally amortized in proportion to gross margins and profits,
including investment gains or losses. The amortization is allocated to
investment gains and losses to provide consolidated statement of

62

income information regarding the impact of investment gains and losses on the
amount of the amortization, and other expenses to provide amounts related to
gross margins and profits originating from transactions other than investment
gains and losses.

Capitalization of DAC increased by $301 million, or 15%, to $2,340 million
for the year ended December 31, 2002 from $2,039 million for the comparable 2001
period. This variance is primarily due to increases in the Reinsurance,
Individual, International and Institutional segments. A $125 million increase in
Reinsurance is commensurate with the increase in allowances paid. A $111 million
increase in Individual is due to higher sales of annuity and investment-type
products, resulting in higher commissions and other deferrable expenses. A $51
million increase in International is primarily due to the 2002 acquisition of
Hidalgo and overall business growth in South Korea, partially offset by a
decrease in Argentina due to the reduction in business caused by the overall
economic environment. A $22 million increase in Institutional is primarily due
to growth in sales commissions and fees for disability products sold by
Institutional. Total amortization of DAC increased by $206 million, or 14%, to
$1,644 million in 2002 from $1,438 million in 2001. Amortization of DAC of
$1,639 million and $1,413 million are allocated to other expenses in 2002 and
2001, respectively, while the remainder of the amortization in each period is
allocated to investment gains and losses. The increase in amortization allocated
to other expenses is attributable to increases in the Individual, International
and Reinsurance segments. An increase of $111 million in Individual is due to
the impact of the depressed equity markets and changes in the estimates of
future gross profits. In 2002, estimates of future dividend scales, future
maintenance expenses, future rider margins, and future reinsurance recoveries
were revised. In 2001, estimates of future fixed account interest spreads,
future gross margins and profits related to separate accounts and future
mortality margins were revised. An increase in International of $64 million is
primarily due to loss recognition in Argentina as a result of the economic
environment, primarily the devaluation of its currency. The remaining increase
was due to new business in South Korea, Taiwan, and the June 2002 acquisition of
Hidalgo. An increase in Reinsurance of $55 million is due to growth in the
business, commensurate with the growth in premiums described above.

Income tax expense for the year ended December 31, 2002 was $502 million,
or 31% of income from continuing operations before provision for income taxes,
compared with $204 million, or 36%, for the comparable 2001 period. The 2002
effective tax rate differs from the federal corporate tax rate of 35% primarily
due to the impact of non-taxable investment income. The 2001 effective tax rate
differs from the federal corporate tax rate of 35%, due to an increase in prior
year income taxes on capital gains.

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal
of Long-Lived Assets ("SFAS 144"), income related to the Company's real estate
which was identified as held-for-sale on or after January 1, 2002 is presented
as discontinued operations for the years ended December 31, 2002 and 2001. The
income from discontinued operations is comprised of net investment income and
net investment gains related to 47 properties that the Company began marketing
for sale on or after January 1, 2002. For the year ended December 31, 2002, the
Company recognized $582 million of net investment gains from discontinued
operations due primarily to the sale of 36 properties.

63

INSTITUTIONAL

The following table presents consolidated financial information for the
Institutional segment for the years indicated:

YEAR ENDED DECEMBER 31, 2002 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2001 -- INSTITUTIONAL

Premiums increased by $957 million, or 13%, to $8,245 million for the year
ended December 31, 2002 from $7,288 million for the comparable 2001 period.
Group insurance premiums increased by $496 million as a result of growth in this
segment's group life, dental, disability and long-term care businesses.
Retirement and savings premiums increased by $461 million primarily due to the
sale of a significant contract in the second quarter of 2002, as well as new
sales throughout 2002 from structured settlements and traditional annuity
products. Retirement and savings premium levels are significantly influenced by
large transactions and, as a result, can fluctuate from period to period.

Universal life and investment-type product policy fees increased by $32
million, or 5%, to $624 million for the year ended December 31, 2002 from $592
million for the comparable 2001 period. This increase is primarily attributable
to a fee resulting from the renegotiation of a portion of a bank-owned life
insurance contract, as well as growth in existing business in the group
universal life product line.

Other revenues decreased by $40 million, or 6%, to $609 million for the
year ended December 31, 2002 from $649 million for the comparable 2001 period.
Retirement and savings other revenues decreased $73 million primarily due to a
reduction in administrative fees as a result of the Company's exit from the
large market 401(k) business in late 2001, and lower fees earned on investments
in separate accounts resulting generally from poor equity market performance.
This decrease is partially offset by a $33 million increase in

64

group insurance due to growth in the administrative service businesses and a
settlement received in 2002 related to the Company's former medical business.

Policyholder benefits and claims increased by $415 million, or 5%, to
$9,339 million for the year ended December 31, 2002 from $8,924 million for the
comparable 2001 period. This variance is attributable to increases of $238
million and $177 million in group insurance and retirement and savings,
respectively. Excluding $291 million of 2001 claims related to the September 11,
2001 tragedies, group insurance policyholder benefits and claims increased by
$529 million commensurate with the aforementioned premium growth in this
segment's group life, dental, disability, and long-term care businesses.
Excluding $215 million of 2001 policyholder benefits related to the fourth
quarter 2001 business realignment initiatives, retirement and savings
policyholder benefits increased $392 million, commensurate with the
aforementioned premium growth.

Interest credited to policyholders decreased by $81 million, or 8%, to $932
million for the year ended December 31, 2002 from $1,013 million for the
comparable 2001 period. Decreases of $42 million and $39 million in retirement
and savings and group insurance, respectively, are primarily attributable to
declines in the average crediting rates in 2002 as a result of the current low
interest rate environment.

Policyholder dividends decreased by $144 million, or 56%, to $115 million
for the year ended December 31, 2002 from $259 million for the comparable 2001
period. This decline is largely attributable to unfavorable mortality experience
of several large group clients. Policyholder dividends vary from period to
period based on participating contract experience, which are generally recorded
in policyholder benefits and claims.

Other expenses decreased by $215 million, or 12%, to $1,531 million for the
year ended December 31, 2002 from $1,746 million in the comparable 2001 period.
Retirement and savings decreased by $293 million, primarily attributable to $184
million of accrued expenses related to business realignment initiatives recorded
in the fourth quarter of 2001 (predominantly related to the Company's exit from
the large market 401(k) business), $30 million of which was released into income
in the fourth quarter of 2002. In addition, ongoing expenses for the defined
contribution product have steadily decreased throughout 2002. The net reduction
in retirement and savings is partially offset by an increase in pension and
postretirement costs. Group insurance other expenses increased by $78 million.
This increase is mainly attributable to growth in operational expenses for the
dental and disability products, as well as group insurance's non-deferrable
expenses, including a certain portion of premium taxes and commissions. These
variances are commensurate with the aforementioned premium growth. In addition,
an increase in pension and postretirement costs contributed to the variance.

65

INDIVIDUAL

The following table presents consolidated financial information for the
Individual segment for the years indicated:

YEAR ENDED DECEMBER 31, 2002 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2001 -- INDIVIDUAL

Premiums decreased by $56 million, or 1%, to $4,507 million for the year
ended December 31, 2002 from $4,563 million for the comparable 2001 period.
Premiums from insurance products decreased by $94 million, primarily resulting
from a third quarter 2002 amendment of a reinsurance agreement to increase the
amount of insurance ceded from 50% to 100%. This amendment was effective January
1, 2002. The Company also believes the decline is the result of a continued
shift in policyholders' preference from traditional policies to annuity and
investment-type products. These decreases are partially offset by policyholders
expanding their traditional life insurance coverage through the purchase of
additional insurance with dividend proceeds in 2002. Premiums from annuity
products increased by $38 million as a result of higher sales of fixed annuities
and supplementary contracts with life contingencies.

Universal life and investment-type product policy fees increased by $119
million, or 9%, to $1,379 million for the year ended December 31, 2002 from
$1,260 million for the comparable 2001 period. Policy fees from insurance
products increased by $144 million primarily due to higher revenue from
insurance fees, which increase as the average separate account asset base
supporting the underlying minimum death benefit declines. The average separate
account asset base has declined in response to poor equity market performance.
Additionally, this variance reflects the acceleration of the recognition of
unearned fees associated with future reinsurance recoveries. Policy fees from
annuity and investment-type products decreased by $25 million
66

primarily due to declines in the average separate account asset base resulting
generally from poor equity market performance, partially offset by an increase
in fees resulting from growth in annuity deposits. Policy fees from annuity and
investment-type products are typically calculated as a percentage of average
separate account assets. Such assets can fluctuate depending on equity market
performance.

Other revenues decreased by $77 million, or 16%, to $418 million for the
year ended December 31, 2002 from $495 million for the comparable 2001 period,
largely due to lower commission and fee income associated with a volume decline
in the broker/dealer and other subsidiaries which is principally due to the
depressed equity markets.

The Company's investment gains and losses are net of related policyholder
amounts. The amounts netted against investment gains and losses are (i)
amortization of DAC, to the extent that such amortization results from
investment gains and losses, (ii) adjustments to participating contractholder
accounts when amounts equal to such investment gains and losses are applied to
the contractholder's accounts, and (iii) adjustments to the policyholder
dividend obligation resulting from investment gains and losses.

The Company believes its policy of netting related policyholder amounts
against investment gains and losses provides important information in evaluating
its performance. Investment gains and losses are often excluded by investors
when evaluating the overall financial performance of insurers. The Company
believes its presentation enables readers to easily exclude investment gains and
losses and the related effects on the consolidated statements of income when
evaluating its performance. The Company's presentation of investment gains and
losses, net of policyholder amounts, may be different from the presentation used
by other insurance companies and, therefore, amounts in its consolidated
statements of income may not be comparable to amounts reported by other
insurers.

Policyholder benefits and claims decreased by $13 million, or less than 1%,
to $5,220 million for the year ended December 31, 2002 from $5,233 million for
the comparable 2001 period. Policyholder benefits and claims for insurance
products decreased by $119 million, primarily due to the impact of the
aforementioned reinsurance transaction and the establishment of liabilities for
the September 11, 2001 tragedies in the previous year. Policyholder benefits and
claims for annuity and investment-type products increased by $106 million
primarily due to an increase in fixed and immediate annuity liabilities,
resulting from business growth and an increase in the liability associated with
guaranteed minimum death benefits on variable annuities.

Interest credited to policyholder account balances decreased by $105
million, or 6%, to $1,793 million for the year ended December 31, 2002 compared
with $1,898 for the comparable 2001 period. This decrease was primarily due to
the establishment of a $118 million policyholder liability with respect to
certain group annuity contracts at New England Financial in 2001. Excluding this
policyholder liability, interest credited increased slightly due to an increase
in policyholder account balances which is primarily attributable to sales growth
partially offset by declines in interest crediting rates.

Policyholder dividends increased by $3 million, or less than 1%, to $1,770
million for the year ended December 31, 2002 from $1,767 million for the
comparable 2001 period due to the increase in the invested assets supporting the
policies associated with this segment's large block of traditional life
insurance business. This increase is partially offset by the approval by the
Company's Board of Directors in the fourth quarter of 2002 of a reduction in the
dividend scale to reflect the impact of the current low interest rate
environment on the asset portfolios supporting these policies.

Other expenses decreased by $118 million, or 4%, to $2,629 million for the
year ended December 31, 2002 million from $2,747 for the comparable 2001 period.
Excluding the capitalization and amortization of DAC, which are discussed below,
other expenses decreased by $118 million, or 4%, to $2,922 million in 2002 from
$3,040 million in 2001. Other expenses related to insurance products decreased
by $129 million, which is attributable to continued expense management,
reductions in volume-related commission expenses in the broker/dealer and other
subsidiaries and a reduction of $62 million related to business realignment
expenses incurred in 2001. These decreases are partially offset by increased
pension and postretirement benefit expenses over the comparable period. Other
expenses related to annuity and investment-type products increased by

67

$11 million. This increase is commensurate with the rise in sales of new annuity
and investment-type products, as well as increased pension and postretirement
benefit expenses. This increase is partially offset by the reduction of $37
million of business realignment expenses incurred in 2001.

DAC is principally amortized in proportion to gross margins or gross
profits, including investment gains or losses. The amortization is allocated to
investment gains and losses to provide consolidated statement of income
information regarding the impact of investment gains and losses on the amount of
the amortization, and other expenses to provide amounts related to gross margins
or profits originating from transactions other than investment gains and losses.

Capitalization of DAC increased by $111 million, or 12%, to $1,037 million
for the year ended December 31, 2002 from $926 million for the comparable 2001
period due to higher sales of annuity and investment-type products, resulting in
higher commissions and other deferrable expenses. Total amortization of DAC
increased by $100 million, or 15%, to $754 million in 2002 from $654 million in
2001. Amortization of DAC of $744 million and $633 million is allocated to other
expenses in 2002 and 2001, respectively, while the remainder of the amortization
in each year is allocated to investment gains and losses. Increases in
amortization of DAC allocated to other expenses of $84 million and $27 million
related to insurance products and annuity and investment-type products,
respectively, are due to the impact of the depressed equity markets and changes
in the estimates of future gross profits. In 2002, estimates of future dividend
scales, future maintenance expenses, future rider margins, and future
reinsurance recoveries were revised. In 2001, estimates of future fixed account
interest spreads, future gross margins and profits related to separate accounts
and future mortality margins were revised.

AUTO & HOME

The following table presents consolidated financial information for the
Auto & Home segment for the years indicated:

YEAR ENDED DECEMBER 31, 2002 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2001 -- AUTO & HOME

Premiums increased by $73 million, or 3%, to $2,828 million for the year
ended December 31, 2002 from $2,755 million for the comparable 2001 period. Auto
and property premiums increased by $66 million and $1 million, respectively,
primarily due to increases in average premium earned per policy resulting from
rate increases. The impact on premiums from rate increases was partially offset
by an expected reduction in retention and a reduction in new business sales.
Premiums from other personal lines increased by $6 million.

68

Other revenues increased by $4 million, or 18%, to $26 million for the year
ended December 31, 2002 from $22 million for the comparable 2001 period. This
increase was primarily due to income earned on a COLI policy purchased in the
second quarter of 2002, as well as higher fees on installment payments. These
increases were partially offset by an adjustment to a deferred gain related to
the disposition of this segment's reinsurance business in 1990.

Policyholder benefits and claims decreased by $102 million, or 5%, to
$2,019 million for the year ended December 31, 2002 from $2,121 million for the
comparable 2001 period. Property policyholder benefits and claims decreased by
$120 million due to improved claim frequency, underwriting and agency management
actions, and a $41 million reduction in catastrophe losses. Property
catastrophes represented 7.4% of the property loss ratio in 2002 compared to
13.5% in 2001. Other policyholder benefits and claims decreased by $10 million
due to fewer personal umbrella claims. Fluctuations in these policyholder
benefits and claims may not be commensurate with the change in premiums for a
given period due to low premium volume and high liability limits. Auto
policyholder benefits and claims increased by $28 million largely due to an
increase in current year bodily injury and no-fault severities. Costs associated
with the processing of the New York assigned risk business also contributed to
this increase. These increases were partially offset by improved claim frequency
resulting from milder winter weather, underwriting and agency management
actions, as well as lower catastrophe losses.

Other expenses decreased by $7 million, or 1%, to $793 million for the year
ended December 31, 2002 from $800 million for the comparable 2001 period. This
decrease is primarily due to reduced employee head-count and reduced expenses
associated with the consolidation of The St. Paul business acquired in 1999.
These declines are partially offset by an increase in expenses related to the
outsourced New York assigned risk business.

The effective income tax rates for the year ended December 31, 2002 and
2001 differ from the federal corporate tax rate of 35% due to the impact of
non-taxable investment income.

69

INTERNATIONAL

The following table presents consolidated financial information for the
International segment for the years indicated:

YEAR ENDED DECEMBER 31, 2002 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2001 -- INTERNATIONAL

Premiums increased by $665 million, or 79%, to $1,511 million for the year
ended December 31, 2002 from $846 million for the comparable 2001 period. The
June 2002 acquisition of Hidalgo and the 2001 acquisitions in Chile and Brazil
increased premiums by $228 million, $102 million and $8 million, respectively.
In addition, a portion of the increase in premiums is attributable to a $108
million increase due to the sale of an annuity contract in the first quarter of
2002 to a Canadian trust company. South Korea's premiums increased by $91
million primarily due to a larger professional sales force and improved agent
productivity. Mexico's premiums (excluding Hidalgo), increased by $66 million,
primarily due to increases in its group life, major medical and individual life
businesses. Excluding the aforementioned sale of an annuity contract, Canada's
premiums increased by $26 million due to the restructuring of a pension contract
from an investment-type product to a long-term annuity. Taiwan's premiums
increased by $13 million due primarily to continued growth in the individual
life insurance business. Hong Kong's premiums increased $5 million primarily due
to continued growth in the group life and traditional life businesses. These
increases are partially offset by a decrease in Argentina's premiums of $9
million due to the reduction in business caused by the Argentine economic
environment. The remainder of the variance is attributable to minor fluctuations
in other countries.

Universal life and investment type-product policy fees increased by $106
million, or 279%, to $144 million for the year ended December 31, 2002 from $38
million for the comparable 2001 period. The acquisition of Hidalgo and the
acquisitions in Chile resulted in increases of $102 million and $5 million,
respectively. These increases were partially offset by a $9 million decrease in
Spain due to a reduction in fees caused by a decline in assets under management,
as a result of the cessation of product lines offered through a joint venture
with Banco Santander in 2001. The remainder of the variance is attributable to
minor fluctuations in several countries.

70

Other revenues decreased by $2 million, or 13%, to $14 million for the year
ended December 31, 2002 from $16 million for the comparable 2001 period.
Canada's other revenues in 2001 included $1 million due primarily to the
settlement of two legal cases in 2001. The remainder of the variance is
attributable to minor fluctuations in several countries. The acquisition of
Hidalgo and the acquisitions in Chile and Brazil had no material impact on this
variance.

Policyholder benefits and claims increased by $699 million, or 101%, to
$1,388 million for the year ended December 31, 2002 from $689 million for the
comparable 2001 period. The acquisition of Hidalgo and the acquisitions in Chile
increased policyholder benefits and claims by $224 million and $169 million,
respectively. In addition, $108 million of this increase in policyholder
benefits and claims is attributable to the aforementioned sale of an annuity
contract in Canada. South Korea's, Mexico's (excluding Hidalgo), Taiwan's and
Spain's policyholder benefits and claims increased by $69 million, $67 million,
$18 million and $15 million, respectively, commensurate with the overall premium
increases discussed above. Excluding the aforementioned sale of an annuity
contract, Canada's policyholder benefits and claims increased by $32 million
primarily due to the restructuring of a pension contract from an investment-type
product to a long-term annuity. The remainder of the variance is attributable to
minor fluctuations in several countries.

Interest credited to policyholder account balances increased by $28
million, or 55%, to $79 million for the year ended December 31, 2002 from $51
million for the comparable 2001 period. The acquisition of Hidalgo contributed
$51 million. This increase was partially offset by a decrease of $17 million in
Argentina. This decrease is primarily due to modifications to policy contracts
as authorized by the Argentinean government and a reduction of investment-type
policies in-force. In addition, Spain's interest credited decreased by $7
million primarily due to a decrease in the assets under management for life
products with guarantees associated with the sale of a block of policies to
Banco Santander in May 2001. The remainder of the variance is attributable to
minor fluctuations in several countries.

Policyholder dividends remained essentially unchanged at $35 million for
the year ended December 31, 2002 versus $36 million for the comparable 2001
period. The acquisition of Hidalgo and the acquisitions in Chile and Brazil had
no material impact on this variance.

Other expenses increased by $178 million, or 54%, to $507 million for the
year ended December 31, 2002 from $329 million for the comparable 2001 period.
The acquisition of Hidalgo and the acquisitions in Chile and Brazil contributed
$82 million, $21 million and $5 million, respectively. South Korea's, Mexico's
(excluding Hidalgo), and Hong Kong's other expenses increased by $29 million,
$19 million and $7 million, respectively. These increases are primarily due to
increased non-deferrable commissions from higher sales as discussed above,
particularly in South Korea where fixed sales compensation is paid to new sales
management as part of the professional agency expansion. Argentina's other
expenses increased by $9 million due to additional loss recognition in
connection with ongoing economic circumstances in the country. Poland's other
expenses increased by $5 million primarily due to costs incurred in the fourth
quarter of 2002 associated with the closing of this operation. The remainder of
the variance is attributable to minor fluctuations in several countries.

71

REINSURANCE

The following table presents consolidated financial information for the
Reinsurance segment for the years indicated:

YEAR ENDED DECEMBER 31, 2002 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2001 -- REINSURANCE

Premiums increased by $243 million, or 14%, to $2,005 million for the year
ended December 31, 2002 from $1,762 million for the comparable 2001 period. New
premiums from facultative and automatic treaties and renewal premiums on
existing blocks of business, particularly in the U.S. and United Kingdom
reinsurance operations, all contributed to the premium growth. Premium levels
are significantly influenced by large transactions and reporting practices of
ceding companies and, as a result, can fluctuate from period to period.

Other revenues remained essentially unchanged at $43 million for the year
ended December 31, 2002 versus $42 million for the comparable 2001 period.

Policyholder benefits and claims increased by $70 million, or 5%, to $1,554
million for the year ended December 31, 2002 from $1,484 million for the
comparable 2001 period. Policyholder benefits and claims were 78% of premiums
for the year ended December 31, 2002 compared to 84% in the comparable 2001
period. The decrease in policyholder benefits and claims as a percentage of
premiums is primarily attributable to higher than expected mortality in the U.S.
reinsurance operations during the first and fourth quarters of 2001, favorable
claims experience in 2002 and the 2001 impact of claims associated with the
September 11, 2001 tragedies. In addition, increases in the liabilities for
future policyholder benefits and adverse results on the reinsurance of Argentine
pension business during 2001 contributed to the decrease. The level of claims
may fluctuate from period to period, but exhibits less volatility over the long
term.

Interest credited to policyholder account balances increased by $24
million, or 20%, to $146 million for the year ended December 31, 2002 from $122
million for the comparable 2001 period. Contributing to this growth were several
new annuity reinsurance agreements executed during 2002. The crediting rate on
certain blocks of annuities is based on the performance of the underlying
assets.

Policyholder dividends were essentially unchanged at $22 million for the
year ended December 31, 2002, versus $24 million for the 2001 comparable period.

72

Other expenses increased by $131 million, or 27%, to $622 million for the
year ended December 31, 2002 from $491 million for the comparable 2001 period.
The increase in other expenses is primarily attributable to an increase in
reinsurance business in the United Kingdom, which is characterized by higher
initial reinsurance allowances than those historically experienced in the
segment. These expenses fluctuate depending on the mix of the underlying
insurance products being reinsured as allowances paid and the related
capitalization and amortization can vary significantly based on the type of
business and the reinsurance treaty.

ASSET MANAGEMENT

The following table presents consolidated financial information for the
Asset Management segment for the years indicated:

YEAR ENDED DECEMBER 31, 2002 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2001 -- ASSET MANAGEMENT

Other revenues, which primarily consist of management and advisory fees
from third parties, decreased by $32 million, or 16%, to $166 million for the
year ended December 31, 2002 from $198 million for the comparable 2001 period.
The most significant factor contributing to this decline is a $31 million
decrease resulting from the sale of Conning, which occurred in July 2001.
Excluding the impact of this transaction, other revenues remained essentially
unchanged at $166 million for the year ended December 31, 2002 as compared to
$167 million for the year ended December 31, 2001. Despite lower average assets
under management, revenues remained constant due to performance and incentive
fees earned on certain real estate and hedge fund products. The lower assets
under management are primarily due to institutional client withdrawals, and the
downturn in the equity market. In addition, fourth quarter 2002 product closings
and business exits also contributed to this decline.

Other expenses decreased by $41 million, or 16%, to $211 million for the
year ended December 31, 2002 from $252 million for the comparable 2001 period.
Excluding the impact of the sale of Conning, other expenses decreased by $6
million, or 3%, to $211 million in 2002 from $217 million in 2001. This decrease
is due to reductions in marketing-related expenses and expenses related to fund
reimbursements. In addition, a decrease in amortization of deferred sales
commissions resulted from a reduction in sales. These decreases were partially
offset by a $5 million increase in employee compensation attributable to
severance-related expenses resulting from third and fourth quarter 2002 staff
reductions.

CORPORATE & OTHER

YEAR ENDED DECEMBER 31, 2002 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2001 -- CORPORATE & OTHER

Other revenues decreased by $29 million, or 34%, to $56 million for the
year ended December 31, 2002 from $85 million for the comparable 2001 period.
This is primarily attributable to the remeasurement of the Company's reinsurance
recoverable associated with the sales practices reinsurance treaty in 2001, as
well as

73

an increase in the elimination of intersegment activity. This is partially
offset from a gain on the sale of a company-occupied building, and income earned
on COLI purchased during 2002.

Other expenses increased by $65 million, or 10%, to $722 million for the
year ended December 31, 2002 from $657 million for the comparable 2001 period,
primarily due to increases in legal and interest expenses. The 2002 period
includes a $266 million charge to increase the Company's asbestos-related
liability, expenses to cover costs associated with the resolution of federal
government investigations of General American's former Medicare business and a
reduction of a previously established liability related to the Company's sales
practices class action settlement. The 2001 period includes a $250 million
charge recorded in the fourth quarter of 2001 to cover costs associated with the
resolution of class action lawsuits and a regulatory inquiry pending against
Metropolitan Life, involving alleged race-conscious insurance underwriting
practices prior to 1973. The increase in interest expenses is primarily due to
increases in long-term debt resulting from the issuance of $1.25 billion and $1
billion of senior debt in November 2001 and December 2002, respectively,
partially offset by a decrease in commercial paper in 2002. In addition, a
decrease in the elimination of intersegment activity contributed to the
variance.

BUSINESS REALIGNMENT INITIATIVES

During the fourth quarter of 2001, the Company implemented several business
realignment initiatives, which resulted from a strategic review of operations
and an ongoing commitment to reduce expenses. The impact of these actions on a
segment basis were charges of $399 million in Institutional, $97 million in
Individual and $3 million in Auto & Home. The liability at December 31, 2003 and
2002 was $27 million and $40 million, in the Institutional segment and $9
million and $18 million, in the Individual segment, respectively. The remaining
liability is due to certain contractual obligations.

SEPTEMBER 11, 2001 TRAGEDIES

On September 11, 2001, terrorist attacks occurred in New York, Washington,
D.C. and Pennsylvania (the "tragedies") triggering a significant loss of life
and property, which had an adverse impact on certain of the Company's
businesses. The Company's original estimate of the total insurance losses
related to the tragedies, which was recorded in the third quarter of 2001, was
$208 million, net of income taxes of $117 million. As of December 31, 2003 and
2002, the Company's remaining liability for unpaid and future claims associated
with the tragedies was $9 million and $47 million, respectively, principally
related to disability coverages. This estimate has been and will continue to be
subject to revision in subsequent periods, as claims are received from insureds
and processed. Any revision to the estimate of losses in subsequent periods will
affect net income in such periods.

METLIFE CAPITAL TRUST I

In connection with MetLife, Inc.'s, initial public offering in April 2000,
the Holding Company and MetLife Capital Trust I (the "Trust") issued equity
security units (the "units"). Each unit originally consisted of (i) a contract
to purchase, for $50, shares of the Holding Company's common stock (the
"purchase contracts") on May 15, 2003; and (ii) a capital security of the Trust,
with a stated liquidation amount of $50.

In accordance with the terms of the units, the Trust was dissolved on
February 5, 2003, and $1,006 million aggregate principal amount of 8.00%
debentures of the Holding Company (the "MetLife debentures"), the sole assets of
the Trust, were distributed to the owners of the Trust's capital securities in
exchange for their capital securities. The MetLife debentures were remarketed on
behalf of the debenture owners on February 12, 2003 and the interest rate on the
MetLife debentures was reset as of February 15, 2003 to 3.911% per annum for a
yield to maturity of 2.876%. As a result of the remarketing, the debenture
owners received $21 million ($0.03 per diluted common share) in excess of the
carrying value of the capital securities. This excess was recorded by the
Company as a charge to additional paid-in capital and, for the purpose of
calculating earnings per share, is subtracted from net income to arrive at net
income available to common shareholders.

74

On May 15, 2003, the purchase contracts associated with the units were
settled. In exchange for $1,006 million, the Company issued 2.97 shares of
MetLife, Inc. common stock per purchase contract, or approximately 59.8 million
shares of treasury stock. The excess of the Company's cost of the treasury stock
($1,662 million) over the contract price of the stock issued to the purchase
contract holders ($1,006 million) was $656 million, which was recorded as a
direct reduction to retained earnings.

Interest expense on the capital securities is included in other expenses
and was $10 million, $81 million and $81 million for the years ended December
31, 2003, 2002 and 2001, respectively.

LIQUIDITY AND CAPITAL RESOURCES

THE HOLDING COMPANY

Capital

Restrictions and Limitations on Bank Holding Companies and Financial
Holding Companies -- Capital. MetLife, Inc. and its insured depository
institution subsidiary, MetLife Bank, N.A. ("MetLife Bank"), a national bank,
are subject to risk-based and leverage capital guidelines issued by the federal
banking regulatory agencies for banks and financial holding companies. The
federal banking regulatory agencies are required by law to take specific prompt
corrective actions with respect to institutions that do not meet minimum capital
standards. At December 31, 2003, MetLife, Inc. and MetLife Bank were in
compliance with the aforementioned guidelines.

The following table contains the RBC ratios as of December 31, 2003 and
2002 and the regulatory requirements for MetLife Inc., as a bank holding
company, and MetLife Bank:

METLIFE, INC.
RBC RATIOS -- BANK HOLDING COMPANY

METLIFE BANK
RBC RATIOS -- BANK

Liquidity

Liquidity refers to a company's ability to generate adequate amounts of
cash to meet its needs. It is managed to preserve stable, reliable and
cost-effective sources of cash to meet all current and future financial
obligations and is provided by a variety of sources, including a portfolio of
liquid assets, a diversified mix of short and long-term funding sources from the
wholesale financial markets and the ability to borrow through committed credit
facilities. The Holding Company is an active participant in the global financial
markets through which it obtains a significant amount of funding. These markets,
which serve as cost-effective sources of funds, are critical components of the
Holding Company's liquidity management. Decisions to access these

75

markets are based upon relative costs, prospective views of balance sheet
growth, and a targeted liquidity profile. A disruption in the financial markets
could limit the Holding Company's access to liquidity.

The Holding Company's ability to maintain regular access to competitively
priced wholesale funds is fostered by its current debt ratings from the major
credit rating agencies. Management views its capital ratios, credit quality,
stable and diverse earnings streams, diversity of liquidity sources and its
liquidity monitoring procedures as critical to retaining high credit ratings.

Liquidity is monitored through the use of internal liquidity risk metrics,
including the composition and level of the liquid asset portfolio, timing
differences in short-term cash flow obligations, access to the financial markets
for capital and term-debt transactions, and exposure to contingent draws on the
Holding Company's liquidity.

Liquidity Sources

Dividends. The primary source of the Holding Company's liquidity is
dividends it receives from Metropolitan Life. Under the New York Insurance Law,
Metropolitan Life is permitted, without prior insurance regulatory clearance, to
pay a cash dividend to the Holding Company as long as the aggregate amount of
all such dividends in any calendar year does not exceed the lesser of (i) 10% of
its statutory surplus as of the immediately preceding calendar year; and (ii)
its statutory net gain from operations for the immediately preceding calendar
year (excluding realized capital gains). Metropolitan Life will be permitted to
pay a cash dividend to the Holding Company in excess of the lesser of such two
amounts only if it files notice of its intention to declare such a dividend and
the amount thereof with the New York Superintendent of Insurance (the
"Superintendent") and the Superintendent does not disapprove the distribution.
Under the New York Insurance Law, the Superintendent 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. The New York
Insurance Department (the "Department") has established informal guidelines for
such determinations. The guidelines, among other things, focus on the insurer's
overall financial condition and profitability under statutory accounting
practices. Management of the Holding Company cannot provide assurance that
Metropolitan Life will have statutory earnings to support payment of dividends
to the Holding Company in an amount sufficient to fund its cash requirements and
pay cash dividends or that the Superintendent will not disapprove any dividends
that Metropolitan Life must submit for the Superintendent's consideration. In
addition, the Holding Company receives dividends from its other subsidiaries.
The Holding Company's other insurance subsidiaries are also subject to similar
restrictions on the payment of dividends to their respective parent companies.

The dividend limitation is based on statutory financial results. Statutory
accounting practices, as prescribed by insurance regulators of various states in
which the Company conducts business, differ in certain respects from accounting
principles used in financial statements prepared in conformity with GAAP. The
significant differences relate to the treatment of DAC, certain deferred income
taxes, required investment reserves, reserve calculation assumptions, goodwill
and surplus notes.

As of December 31, 2003, the maximum amount of the dividend which may be
paid to the Holding Company by Metropolitan Life, Metropolitan Property and
Casualty Insurance Company and Metropolitan Insurance and Annuity Company in
2004, without prior regulatory approval, is $798 million, $200 million and $185
million, respectively.

Liquid Assets. An integral part of the Holding Company's liquidity
management is the amount of liquid assets that it holds. Liquid assets include
cash, cash equivalents, short-term investments and marketable fixed maturity and
equity securities. Liquid assets exclude assets relating to securities lending
and dollar roll activities. At December 31, 2003 and 2002, the Holding Company
had $1,320 million and $846 million in liquid assets, respectively.

Global Funding Sources. Liquidity is also provided by a variety of both
short and long-term instruments, including repurchase agreements, commercial
paper, medium and long-term debt, capital securities

76

and stockholders' equity. The diversification of the Holding Company's funding
sources enhances funding flexibility and limits dependence on any one source of
funds, and generally lowers the cost of funds.

At December 31, 2003 and 2002, the Holding Company had $106 million and
$249 million of short-term debt outstanding, and $3.96 billion and $3.27 billion
in long-term debt outstanding, respectively.

The Holding Company filed a $5.0 billion shelf registration statement with
the U.S. Securities and Exchange Commission ("SEC"), which became effective on
March 4, 2004. The shelf registration will permit the registration and issuance
of a wide range of debt and equity securities, including preferred securities of
a subsidiary trust guaranteed by MetLife Inc., as described more fully therein.
Approximately $44 million of registered but unissued securities remaining from
the Company's 2001 $4.0 billion shelf registration statement has been carried
over to this shelf registration.

The Holding Company issued and remarketed senior debt and debentures in the
amount of $3.96 billion under the 2001 $4.0 billion shelf registration
statement. The following table summarizes the Holding Company's senior debt
issuances:

In addition, in February 2003, the Holding Company remarketed $1,006
million aggregate principal amount of debentures previously issued in connection
with the issuance of equity security units. See "-- MetLife Capital Trust I --."

Other sources of the Holding Company's liquidity include programs for short
and long-term borrowing, as needed, arranged through Metropolitan Life.

Credit Facilities. The Holding Company maintains a committed and unsecured
credit facility, which expires in 2005, for approximately $1.25 billion which it
shares with Metropolitan Life and MetLife Funding, Inc. ("MetLife Funding"). In
April 2003, Metropolitan Life and MetLife Funding replaced an expiring $1
billion five-year credit facility with a $1 billion 364-day credit facility and
the Holding Company was added as a borrower. Drawdowns under these facilities
bear interest at varying rates stated in the agreements. These facilities are
primarily used for general corporate purposes and as back-up lines of credit for
the borrowers' commercial paper programs. At December 31, 2003, neither the
Holding Company, Metropolitan Life nor MetLife Funding had drawn against these
credit facilities.

Liquidity Uses

The primary uses of liquidity of the Holding Company include cash dividends
on common stock, service on debt, capital contributions to subsidiaries, payment
of general operating expenses and the repurchase of the Holding Company's common
stock.

Dividends. On October 21, 2003, the Holding Company's Board of Directors
approved an annual dividend for 2003 of $0.23 per share. The dividend was paid
on December 15, 2003 to shareholders of record on November 7, 2003. The 2003
dividend represents an increase of $0.02 per share from the 2002 annual dividend
of $0.21 per share. Future dividend decisions will be determined by the Holding
Company's Board of Directors after taking into consideration factors such as the
Holding Company's current earnings, expected medium and long-term earnings,
financial condition, regulatory capital position, and applicable governmental
regulations and policies.

77

Capital Contributions to Subsidiaries. During the years ended December 31,
2003 and 2002, the Holding Company contributed an aggregate of $239 million and
$500 million to various subsidiaries, respectively.

Share Repurchase. On February 19, 2002, the Holding Company's Board of
Directors authorized a $1 billion common stock repurchase program. This program
began after the completion of the March 28, 2001 and June 27, 2000 repurchase
programs, each of which authorized the repurchase of $1 billion of common stock.
Under these authorizations, the Holding Company may purchase its common stock
from the MetLife Policyholder Trust, in the open market and in privately
negotiated transactions. The following table summarizes the 2003, 2002 and 2001
repurchase activity:

At December 31, 2003, the Holding Company had approximately $709 million
remaining on its existing share repurchase program.

In the fourth quarter of 2003, RGA offered to the public 12,075,000 shares
of its common stock at $36.65 per share. MetLife and its affiliates purchased
3,000,000 shares of the common stock being offered by RGA. As a result of this
offering, MetLife's ownership percentage of outstanding shares of RGA common
stock was reduced from approximately 59% at December 31, 2002 to approximately
52% at December 31, 2003.

Support Agreements. In 2002, the Holding Company entered into a net worth
maintenance agreement with three of its insurance subsidiaries, MetLife
Investors Insurance Company, First MetLife Investors Insurance Company and
MetLife Investors Insurance Company of California. Under the agreements, the
Holding Company agreed, without limitation as to the amount, to cause each of
these subsidiaries to have a minimum capital and surplus of $10 million (or,
with respect to MetLife Investors Insurance Company of California, $5 million),
total adjusted capital at a level not less than 150% of the company action level
RBC, as defined by state insurance statutes, and liquidity necessary to enable
it to meet its current obligations on a timely basis. At December 31, 2003, the
capital and surplus of each of these subsidiaries was in excess of the minimum
capital and surplus amounts referenced above, and their total adjusted capital
was in excess of the most recent referenced RBC-based amount calculated at
December 31, 2003.

Based on management's analysis and comparison of its current and future
cash inflows from the dividends it receives from subsidiaries, including
Metropolitan Life, that are permitted to be paid without prior insurance
regulatory approval and its portfolio of liquid assets and other anticipated
cash flows, management believes there will be sufficient liquidity to enable the
Holding Company to make payments on debt, make cash dividend payments on its
common stock, contribute capital to its subsidiaries, pay all operating expenses
and meet its other obligations.

THE COMPANY

Capital

RBC. Section 1322 of the New York Insurance Law requires that New York
domestic life insurers report their RBC based on a formula calculated by
applying factors to various asset, premium and statutory reserve items; similar
rules apply to each of the Company's domestic insurance subsidiaries. The
formula takes into account the risk characteristics of the insurer, including
asset risk, insurance risk, interest rate risk and business risk. Section 1322
gives the Superintendent explicit regulatory authority to require various
actions by, or to take various actions against, insurers whose total adjusted
capital does not exceed certain RBC levels. At December 31, 2003, Metropolitan
Life's and each of the Holding Company's domestic insurance subsidiaries' total
adjusted capital was in excess of each of the RBC levels required by each state
of domicile.

78

The National Association of Insurance Commissioners ("NAIC") adopted
Codification of Statutory Accounting Principles ("Codification"), which is
intended to standardize regulatory accounting and reporting to state insurance
departments and became effective January 1, 2001. However, statutory accounting
principles continue to be established by individual state laws and permitted
practices. The Department required adoption of Codification with certain
modifications for the preparation of statutory financial statements of insurance
companies domiciled in New York effective January 1, 2001. Effective December
31, 2002, the Department adopted a modification to its regulations to be
consistent with Codification with respect to the admissibility of deferred
income taxes by New York insurers, subject to certain limitations. The adoption
of Codification, as modified by the Department, did not adversely affect
Metropolitan Life's statutory capital and surplus. Further modifications by
state insurance departments may impact the effect of Codification on the
statutory capital and surplus of Metropolitan Life and the Holding Company's
other insurance subsidiaries.

Liquidity Sources

Cash Flow from Operations. The Company's principal cash inflows from its
insurance activities come from insurance premiums, annuity considerations and
deposit funds. A primary liquidity concern with respect to these cash inflows is
the risk of early contractholder and policyholder withdrawal. The Company seeks
to include provisions limiting withdrawal rights on many of its products,
including general account institutional pension products (generally group
annuities, including guaranteed interest contracts and certain deposit fund
liabilities) sold to employee benefit plan sponsors.

The Company's principal cash inflows from its investment activities come
from repayments of principal, proceeds from maturities and sales of invested
assets and investment income. The primary liquidity concerns with respect to
these cash inflows are the risk of default by debtors and market volatilities.
The Company closely monitors and manages these risks through its credit risk
management process.

Liquid Assets. An integral part of the Company's liquidity management is
the amount of liquid assets it holds. Liquid assets include cash, cash
equivalents, short-term investments and marketable fixed maturity and equity
securities. Liquid assets exclude assets relating to securities lending and
dollar roll activities. At December 31, 2003 and 2002, the Company had $125
billion and $108 billion in liquid assets, respectively.

Global Funding Sources. Liquidity is also provided by a variety of both
short and long-term instruments, including repurchase agreements, commercial
paper, medium and long-term debt, capital securities and stockholders' equity.
The diversification of the Company's funding sources enhances funding
flexibility, limits dependence on any one source of funds and generally lowers
the cost of funds.

At December 31, 2003 and 2002, the Company had $3,642 million and $1,161
million in short-term debt outstanding, and $5,703 million and $4,425 million in
long-term debt outstanding, respectively. On November 1, 2003, the Company
redeemed the $300 million of 7.45% Surplus Notes outstanding scheduled to mature
on November 1, 2023 at a redemption price of $311 million. See "-- The Holding
Company -- Global Funding Sources."

MetLife Funding serves as a centralized finance unit for Metropolitan Life.
Pursuant to a support agreement, Metropolitan Life has agreed to cause MetLife
Funding to have a tangible net worth of at least one dollar. At December 31,
2003 and 2002, MetLife Funding had a tangible net worth of $10.8 million and
$10.7 million, respectively. MetLife Funding raises funds from various funding
sources and uses the proceeds to extend loans, through MetLife Credit Corp., a
subsidiary of Metropolitan Life, to the Holding Company, Metropolitan Life and
other affiliates. MetLife Funding manages its funding sources to enhance the
financial flexibility and liquidity of Metropolitan Life and other affiliated
companies. At December 31, 2003 and 2002, MetLife Funding had total outstanding
liabilities, including accrued interest payable, of $1,042 million and $400
million, respectively, consisting primarily of commercial paper.

Credit Facilities. The Company maintains committed and unsecured credit
facilities aggregating $2.5 billion ($1 billion expiring in 2004, $1.3 billion
expiring in 2005 and $175 million expiring in 2006). If these facilities were
drawn upon, they would bear interest at varying rates in accordance with the
respective

79

agreements. The facilities can be used for general corporate purposes and also
as back-up lines of credit for the Company's commercial paper programs. At
December 31, 2003, the Company had drawn approximately $49 million under the
facilities expiring in 2005 at interest rates ranging from 4.08% to 5.48% and
approximately $50 million under a facility expiring in 2006 at an interest rate
of 1.69%. In April 2003, the Company replaced an expiring $1 billion five-year
credit facility with a $1 billion 364-day credit facility. In May 2003, the
Company replaced an expiring $140 million three-year credit facility with a $175
million three-year credit facility, which expires in 2006.

Liquidity Uses

Insurance Liabilities. The Company's principal cash outflows primarily
relate to the liabilities associated with its various life insurance, property
and casualty, annuity and group pension products, operating expenses and income
taxes, as well as principal and interest on its outstanding debt obligations.
Liabilities arising from its insurance activities primarily relate to benefit
payments under the aforementioned products, as well as payments for policy
surrenders, withdrawals and loans.

Investment and Other. Additional cash outflows include those related to
obligations of securities lending and dollar roll activities, investments in
real estate, limited partnerships and joint ventures, as well as
litigation-related liabilities.

The following table summarizes the Company's major contractual obligations
as of December 31, 2003:

- ---------------

(1) Other long-term liabilities include guaranteed interest contracts,
structured settlements, pension closeouts and certain annuity policies.

(2) Amounts differ from the balances presented on the consolidated balance
sheets. The amounts above do not include related premiums and discounts or
capital leases which are presented separately.

(3) The Company anticipates that these amounts could be invested in these
partnerships any time over the next five years, but are presented in the
current period, as the timing of the fulfillment of the obligation cannot be
predicted.

As of December 31, 2003, the Company had no material, individually or in
the aggregate, purchase obligations and pension and other postretirement benefit
obligations.

On April 11, 2003, an affiliate of the Company elected not to make future
payments required by the terms of a non-recourse loan obligation. The book value
of this loan was $15 million at December 31, 2003. The Company's exposure under
the terms of the applicable loan agreement is limited solely to its investment
in certain securities held by an affiliate.

Letters of Credit. At December 31, 2003 and 2002, the Company had
outstanding approximately $828 million and $625 million, respectively, in
letters of credit from various banks, all of which expire within one year. Since
commitments associated with letters of credit and financing arrangements may
expire unused, these amounts do not necessarily reflect the actual future cash
funding requirements.

80

Support Agreements. In addition to the support agreements described above,
Metropolitan Life entered into a net worth maintenance agreement with New
England Life Insurance Company ("NELICO") at the time Metropolitan Life merged
with New England Mutual Life Insurance Company. Under the agreement,
Metropolitan Life agreed, without limitation as to the amount, to cause NELICO
to have a minimum capital and surplus of $10 million, total adjusted capital at
a level not less than the company action level RBC, as defined by state
insurance statutes, and liquidity necessary to enable it to meet its current
obligations on a timely basis. At December 31, 2003, the capital and surplus of
NELICO was in excess of the minimum capital and surplus amount referenced above,
and its total adjusted capital was in excess of the most recent referenced
RBC-based amount calculated at December 31, 2003.

In connection with the Company's acquisition of GenAmerica, Metropolitan
Life entered into a net worth maintenance agreement with General American. Under
the agreement, Metropolitan Life agreed, without limitation as to amount, to
cause General American to have a minimum capital and surplus of $10 million,
total adjusted capital at a level not less than 180% of the company action level
RBC, as defined by state insurance statutes, and liquidity necessary to enable
it to meet its current obligations on a timely basis. The agreement was
subsequently amended to provide that, for the five year period from 2003 through
2007, total adjusted capital must be maintained at a level not less than 200% of
the company action level RBC, as defined by state insurance statutes. At
December 31, 2003, the capital and surplus of General American was in excess of
the minimum capital and surplus amount referenced above, and its total adjusted
capital was in excess of the most recent referenced RBC-based amount calculated
at December 31, 2003.

Metropolitan Life has also entered into arrangements for the benefit of
some of its other subsidiaries and affiliates to assist such subsidiaries and
affiliates in meeting various jurisdictions' regulatory requirements regarding
capital and surplus and security deposits. In addition, Metropolitan Life has
entered into a support arrangement with respect to a subsidiary under which
Metropolitan Life may become responsible, in the event that the subsidiary
becomes the subject of insolvency proceedings, for the payment of certain
reinsurance recoverables due from the subsidiary to one or more of its cedents
in accordance with the terms and conditions of the applicable reinsurance
agreements.

General American has agreed to guarantee the obligations of its subsidiary,
Paragon Life Insurance Company, and certain obligations of its former
subsidiaries, MetLife Investors Insurance Company ("MetLife Investors"), First
MetLife Investors Insurance Company and MetLife Investors Insurance Company of
California. In addition, General American has entered into a contingent
reinsurance agreement with MetLife Investors. Under this agreement, in the event
that MetLife Investors' statutory capital and surplus is less than $10 million
or total adjusted capital falls below 150% of the company action level RBC, as
defined by state insurance statutes, General American would assume as assumption
reinsurance, subject to regulatory approvals and required consents, all of
MetLife Investors' life insurance policies and annuity contract liabilities. At
December 31, 2003, the capital and surplus of MetLife Investors was in excess of
the minimum capital and surplus amount referenced above, and its total adjusted
capital was in excess of the most recent referenced RBC-based amount calculated
at December 31, 2003.

Management does not anticipate that these arrangements will place any
significant demands upon the Company's liquidity resources.

Litigation. Various litigation claims and assessments against the Company
have arisen in the course of the Company's business, including, but not limited
to, in connection with its activities as an insurer, employer, investor,
investment advisor 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 feasible to predict or determine the ultimate outcome of all
pending investigations and legal proceedings or provide reasonable ranges of
potential losses except with respect to certain matters. In some of the matters,
very 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 adverse effect upon the
Company's consolidated financial position, based on information currently known
by the Company's management, in its opinion, the outcomes of such pending
investigations and legal
81

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 adverse effect on the
Company's consolidated net income or cash flows in particular quarterly or
annual periods.

Based on management's analysis of its expected cash inflows from operating
activities, the dividends it receives from subsidiaries, including Metropolitan
Life, that are permitted to be paid without prior insurance regulatory approval
and its portfolio of liquid assets and other anticipated cash flows, management
believes there will be sufficient liquidity to enable the Company to make
payments on debt, make cash dividend payments on its common stock, pay all
operating expenses and meet its other obligations. The nature of the Company's
diverse product portfolio and customer base lessen the likelihood that normal
operations will result in any significant strain on liquidity.

Consolidated cash flows. Net cash provided by operating activities was
$7,363 million and $4,168 million for the years ended December 31, 2003 and
2002, respectively. The $3,195 million increase in operating cash flow in 2003
over the comparable 2002 period is primarily attributable to sales growth in the
group life, dental, disability and long-term care businesses, as well as higher
sales in retirement and savings' structured settlement products. The acquisition
of John Hancock's group business also contributed to sales growth in the 2003
period. In addition, growth in MetLife Bank's customer deposits, accelerated
prepayments of mortgage-backed securities that have been previously purchased at
a premium, and an increase in funds withheld related to reinsurance activity
contributed to the increase in operating cash flows. These items were partially
offset by the Company's contribution to its qualified defined benefit plans in
December 2003.

Net cash provided by operating activities was $4,168 million and $4,258
million for the years ended December 31, 2002 and 2001, respectively. The $90
million decrease in operating cash flow in 2002 over the 2001 comparable period
is primarily due to a contribution by the Company to its defined benefit pension
plans and a decrease in recoverables due from reinsurance in December 2002. This
was partially offset by sales growth in the group life, dental, disability and
long-term care businesses, the sale of a significant retirement and savings
contract in the second quarter of 2002, as well as additional sales of
structured settlements and traditional annuity products.

Net cash used in investing activities was $17,688 million and $16,213
million for the years ended December 31, 2003 and 2002, respectively. The $1,475
million increase in net cash used in investing activities in 2003 over the
comparable 2002 period is primarily attributable to an increase in the purchase
of fixed maturities and commercial mortgage loan origination, as well as an
increase in the amount of securities lending cash collateral invested, which
resulted from an expansion of the program. In addition, the Company invested
income generated from operations and cash raised through the issuance of
guaranteed investment contracts. These items were partially offset by lower
income resulting from lower market rates and the June 2002 acquisition of
Hidalgo. In addition, the 2003 period had less proceeds from sales of equity
securities and real estate to use in investing activities. The 2002 period
included proceeds from a significant sale of equity securities and cash
generated by the Company's real estate sales program.

Net cash used in investing activities was $16,213 million and $2,970
million for the years ended December 31, 2002 and 2001, respectively. Net cash
used in investing activities increased $13,243 million in 2002 over the
comparable 2001 period, primarily due to an increase in the amount of securities
lending cash collateral invested in connection with the program. In addition,
the Company invested income generated from operations, cash raised through the
issuance of guaranteed investment contracts and cash generated by the Company's
real estate sales program in various financial instruments, including fixed
maturities and mortgage loans on real estate. At December 31, 2001, the Company
held cash equivalents that were subsequently invested in bonds and U.S. treasury
notes in the first quarter of 2002. Additionally, certain contractholders
transferred investments from the separate account to the general account. Net
cash used in investing activities also increased due to the acquisition of
Hidalgo.

Net cash provided by financing activities was $11,735 million and $6,895
million for the years ended December 31, 2003 and 2002, respectively. The $4,840
million increase in net cash provided by financing activities in 2003 over the
comparable 2002 period is due to an increase in policyholder account balances
82

primarily from sales of annuity products, as well as additional short-term debt
issued related to dollar roll activity. In 2003, the Company received $1,006
million on the settlement of common stock purchase contracts (see "-- The
Holding Company -- Liquidity Sources -- Global Funding Sources"), issued $700
million of senior notes and had a decrease in cash used in the stock repurchase
program as compared to 2002. These cash flows were partially offset by
additional repayments of long-term debt and a 10% increase in cash dividends per
share in 2003 as compared to 2002.

Net cash provided by financing activities was $6,895 million and $2,751
million for the years ended December 31, 2002 and 2001, respectively. The $4,144
million increase in financing activities in 2002 over the comparable 2001 period
was due to an increase in policyholder account balances primarily from sales of
annuity products and the issuance of short-term debt. In addition, the Company
had a decrease in cash used in the stock repurchase program for 2002 as compared
to 2001. These cash flows were partially offset by a decrease in long-term debt
issued.

INSOLVENCY ASSESSMENTS

Most of the jurisdictions in which the Company is admitted to transact
business require life 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 life 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. Assessments levied against the Company from January 1, 2001
through December 31, 2003 aggregated $7 million. The Company maintained a
liability of $70 million at December 31, 2003 for future assessments in respect
of currently impaired, insolvent or failed insurers.

In the past five years, none of the aggregate assessments levied against
MetLife's insurance subsidiaries has been material. The Company has established
liabilities for guaranty fund assessments that it considers adequate for
assessments with respect to insurers that are currently subject to insolvency
proceedings.

EFFECTS OF INFLATION

The Company does not believe that inflation has had a material effect on
its consolidated results of operations, except insofar as inflation may affect
interest rates.

APPLICATION OF RECENT ACCOUNTING STANDARDS

Effective December 31, 2003, the Company adopted Emerging Issues Task Force
("EITF") Issue No. 03-1, The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments, ("EITF 03-1"). EITF 03-1 provides guidance
on the disclosure requirements for other-than-temporary impairments of debt and
marketable equity investments that are accounted for under Statement of
Financial Accounting Standards ("SFAS") No. 115, Accounting for Certain
Investments in Debt and Equity Securities. The adoption of EITF 03-1 requires
the Company to include certain quantitative and qualitative disclosures for debt
and marketable equity securities classified as available-for-sale or
held-to-maturity under SFAS 115 that are impaired at the balance sheet date but
for which an other-than-temporary impairment has not been recognized. The
initial adoption of EITF 03-1, which only required additional disclosures, did
not have a material impact on the Company's consolidated financial statements.

In December, 2003, the Financial Accounting Standards Board ("FASB")
revised SFAS No. 132, Employers' Disclosures about Pensions and Other
Postretirement Benefits -- an Amendment of FASB Statements No. 87, 88 and 106
("SFAS 132(r)"). SFAS 132(r) retains most of the disclosure requirements of SFAS
132 and requires additional disclosure about assets, obligations, cash flows and
net periodic benefit cost of defined benefit pension plans and other defined
postretirement plans. SFAS 132(r) is primarily effective for fiscal years ending
after December 15, 2003; however, certain disclosures about foreign plans and
estimated future benefit payments are effective for fiscal years ending after
June 15, 2004. The Company's adoption of SFAS 132(r) on December 31, 2003 did
not have a significant impact on its consolidated financial
83

statements since it only revises disclosure requirements. In January 2004, the
FASB issued FASB Staff Position ("FSP") No. 106-1, Accounting and Disclosure
Requirements Related to the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 ("FSP 106-1"), which permits a sponsor of a
postretirement health care plan that provides a prescription drug benefit to
make a one-time election to defer accounting for the effects of the new
legislation. The Company has elected to defer the accounting until further
guidance is issued by the FASB. The measurements of the Company's postretirement
accumulated benefit plan obligation and net periodic benefit cost do not reflect
the effects of the new legislation. The guidance, when issued, could require the
Company to change previously reported information.

In July 2003, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position 03-1,
Accounting and Reporting by Insurance Enterprises for Certain Nontraditional
Long-Duration Contracts and for Separate Accounts ("SOP 03-1"). SOP 03-1
provides guidance on (i) the classification and valuation of long-duration
contract liabilities, (ii) the accounting for sales inducements, and (iii)
separate account presentation and valuation. SOP 03-1 is effective for fiscal
years beginning after December 15, 2003. As of January 1, 2004, the Company
increased future policyholder benefits for various guaranteed minimum death and
income benefits net of DAC and unearned revenue liability offsets under certain
variable annuity and universal life contracts of approximately $40 million, net
of income tax, which will be reported as a cumulative effect of a change in
accounting. Industry standards and practices continue to evolve relating to the
valuation of liabilities relating to these types of benefits, which may result
in further adjustments to the Company's measurement of liabilities associated
with such benefits in subsequent accounting periods. Effective with the adoption
of SOP 03-1, costs associated with enhanced or bonus crediting rates to
contractholders will be deferred and amortized over the life of the related
contract using assumptions consistent with the amortization of DAC. Prior to
adoption of SOP 03-1, the costs associated with these sales inducements have
been deferred and amortized over the contingent sales inducement period. This
provision of SOP 03-1 will be applied prospectively to contracts. Effective
January 1, 2004, the Company reclassified $115 million of ownership in its own
separate accounts from other assets to fixed maturities available-for-sale and
equity securities. This reclassification will have no effect on net income or
other comprehensive income. In accordance with SOP 03-1's revised definition of
a separate account, effective January 1, 2004, the Company also reclassified
$1,678 million of separate account assets to general account investments and
$1,678 million of separate account liabilities to future policy benefits and
policyholder account balances. The net cumulative effect of this
reclassification was insignificant.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity ("SFAS 150").
SFAS 150 clarifies the accounting for certain financial instruments with
characteristics of both liabilities and equity and requires that those
instruments be classified as a liability or, in certain circumstances, an asset.
SFAS 150 is effective for financial instruments entered into or modified after
May 31, 2003 and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003. The adoption of SFAS 150, as of July 1,
2003, required the Company to reclassify $277 million of company-obligated
mandatorily redeemable securities of subsidiary trusts from mezzanine equity to
liabilities.

In April 2003, the FASB cleared Statement 133 Implementation Issue No. B36,
Embedded Derivatives: Modified Coinsurance Arrangements and Debt Instruments
That Incorporate Credit Risk Exposures That Are Unrelated or Only Partially
Related to the Creditworthiness of the Obligor under Those Instruments ("Issue
B36"). Issue B36 concluded that (i) a company's funds withheld payable and/or
receivable under certain reinsurance arrangements, and (ii) a debt instrument
that incorporates credit risk exposures that are unrelated or only partially
related to the creditworthiness of the obligor include an embedded derivative
feature that is not clearly and closely related to the host contract. Therefore,
the embedded derivative feature must be measured at fair value on the balance
sheet and changes in fair value reported in income. Issue B36 became effective
on October 1, 2003 and required the Company to increase policyholder account
balances by $40 million, to decrease other invested assets by $1 million and to
increase DAC by $2 million. These amounts, net of income tax of $13 million,
were recorded as a cumulative effect of a change in accounting. As a result of
the adoption of Issue B36, the Company recognized investment gains of $9
million, net of income tax, for the three month period ended December 31, 2003.

84

In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities ("SFAS 149"). SFAS 149 amends and
clarifies the accounting and reporting for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities. Except for certain implementation guidance that is incorporated in
SFAS 149 and already effective, SFAS 149 is effective for contracts entered into
or modified after June 30, 2003. The Company's adoption of SFAS 149 on July 1,
2003 did not have a significant impact on the consolidated financial statements.

During 2003, the Company adopted FASB Interpretation No. 46 Consolidation
of Variable Interest Entities -- An Interpretation of ARB No. 51 ("FIN 46") and
its December 2003 revision ("FIN 46(r)"). Certain of the Company's asset-backed
securitizations, collateralized debt obligations, structured investment
transactions, and investments in real estate joint ventures and other limited
partnership interests meet the definition of a variable interest entity ("VIE")
and must be consolidated, in accordance with the transition rules and effective
dates, if the Company is deemed to be the primary beneficiary. A VIE is defined
as (i) any entity in which the equity investments at risk in such entity do not
have the characteristics of a controlling financial interest, or (ii) any entity
that does not have sufficient equity at risk to finance its activities without
additional subordinated support from other parties. Effective February 1, 2003,
the Company adopted FIN 46 for VIEs created or acquired on or after February 1,
2003 and, effective December 31, 2003, the Company adopted FIN 46(r) with
respect to interests in entities formerly considered special purpose entities
("SPEs"), including interests in asset-backed securities and collateralized debt
obligations. In accordance with the provisions of FIN 46(r), the Company has
elected to defer until March 31, 2004 the consolidation of interests in VIEs for
non SPEs acquired prior to February 1, 2003 for which it is the primary
beneficiary. The adoption of FIN 46 as of February 1, 2003 did not have a
significant impact on the Company's consolidated financial statements. The
adoption of the provisions of FIN 46(r) at December 31, 2003 did not require the
Company to consolidate any additional VIEs that were not previously
consolidated.

During 2003, the Company adopted or applied the following accounting
standards and/or interpretations: (i) FASB Interpretation ("FIN") No. 45,
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others; (ii) SFAS No. 148, Accounting for
Stock-Based Compensation -- Transition and Disclosure; (iii) SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal Activities; and (iv) SFAS
No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections. None of the accounting standards
and/or interpretations described in this paragraph had a significant impact on
the Company's consolidated financial statements.

During 2002, the Company adopted or applied the following accounting
standards: (i) SFAS No. 141, Business Combinations ("SFAS 141"), (ii) SFAS No.
142, and (iii) SFAS No. 144. In accordance with SFAS 141, the elimination of $5
million of negative goodwill was reported in net income in the first quarter of
2002 as a cumulative effect of a change in accounting. On January 1, 2002, the
Company adopted SFAS 142. Amortization of goodwill prior to the adoption of SFAS
142 was $47 million for the year ended December 31, 2001. Amortization of other
intangible assets was not material for the years December 31, 2003, 2002 and
2001. The Company completed the required impairment tests of goodwill and
indefinite-lived intangible assets in the third quarter of 2002 and recorded a
$5 million charge to earnings relating to the impairment of certain goodwill
assets as a cumulative effect of a change in accounting. There was no impairment
of identified intangible assets or significant reclassifications between
goodwill and other intangible assets at January 1, 2002. Adoption of SFAS 144
did not have a material impact on the Company's consolidated financial
statements other than the presentation as discontinued operations of net
investment income and net investment gains related to operations of real estate
on which the Company initiated disposition activities subsequent to January 1,
2002 and the classification of such real estate as held-for-sale on the
consolidated balance sheets.

INVESTMENTS

The Company had total cash and invested assets at December 31, 2003 and
2002 of $221.8 billion and $190.7 billion, respectively. In addition, the
Company had $75.8 billion and $59.7 billion held in its separate

85

accounts, for which the Company generally does not bear investment risk, as of
December 31, 2003 and 2002, respectively.

The Company's primary investment objective is to maximize net investment
income consistent with acceptable risk parameters. The Company is exposed to
three primary sources of investment risk:

- credit risk, relating to the uncertainty associated with the continued
ability of a given obligor to make timely payments of principal and
interest;

- interest rate risk, relating to the market price and cash flow
variability associated with changes in market interest rates; and

- market valuation risk.

The Company manages risk through in-house fundamental analysis of the
underlying obligors, issuers, transaction structures and real estate properties.
The Company also manages credit risk and market valuation risk through industry
and issuer diversification and asset allocation. For real estate and
agricultural assets, the Company manages credit risk and valuation risk through
geographic, property type, and product type diversification and asset
allocation. The Company manages interest rate risk as part of its asset and
liability management strategies, product design, such as the use of market value
adjustment features and surrender charges, and proactive monitoring and
management of certain non-guaranteed elements of its products, such as the
resetting of credited interest and dividend rates for policies that permit such
adjustments.

The following table summarizes the Company's cash and invested assets at:

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INVESTMENT RESULTS

Net investment income, including net investment income from discontinued
operations and scheduled periodic settlement payments on derivative instruments
that do not qualify for hedge accounting under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, as amended ("SFAS 133"), on
general account cash and invested assets totaled $11,772 million, $11,453
million and $11,380 million for the years ended December 31, 2003, 2002 and
2001, respectively. The annualized yields on general account cash and invested
assets, including net investment income from discontinued operations and
scheduled periodic settlement payments on derivative instruments that do not
qualify for hedge accounting under SFAS No. 133, and excluding all net
investment gains and losses, were 6.67%, 7.20% and 7.56% for the years ended
December 31, 2003, 2002 and 2001, respectively. The decline in annualized yields
is due primarily to the decline in interest rates during these years.

The following table illustrates the net investment income and annualized
yields on average assets for each of the components of the Company's investment
portfolio for the years ended December 31, 2003, 2002 and 2001:

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(1) Yields are based on quarterly average asset carrying values, excluding
recognized and unrealized gains and losses, and for yield calculation
purposes, average assets exclude collateral associated with the Company's
securities lending program.

(2) Included in fixed maturities are equity-linked notes of $880 million, $834
million, and $1,004 million at December 31, 2003, 2002 and 2001,
respectively, which include an equity-like component as part of the notes'
return. Investment income for fixed maturities includes prepayment fees and
income from the securities lending program. Fixed maturity investment income
has been reduced by rebates paid under the securities lending program.

(3) Investment income from mortgage loans on real estate includes prepayment
fees.

(4) Real estate and real estate joint venture income is shown net of
depreciation of $183 million, $227 million and $220 million for the years
ended December 31, 2003, 2002 and 2001, respectively. Real estate and real
estate joint venture income includes amounts classified as discontinued
operations of $52 million, $160 million and $169 million for the years ended
December 31, 2003, 2002 and 2001, respectively. These amounts are net of
depreciation of $15 million, $66 million and $93 million for the years ended
December 31, 2003, 2002 and 2001, respectively. Net investment gains and
losses include $421 million and $582 million of gains classified as
discontinued operations for the years ended December 31, 2003 and 2002,
respectively. There were no net investment gains and losses classified as
discontinued operations for the year ended December 31, 2001.

(5) Investment income from other invested assets includes scheduled periodic
settlement payments on derivative instruments that do not qualify for hedge
accounting under SFAS 133 of $84 million, $32 million and $24 million for
the years ended December 31, 2003, 2002 and 2001, respectively. These
amounts are excluded from net investment gains and losses from other
invested assets.

(6) Adjustments to investment gains and losses include amortization of DAC,
charges and credits to participating contracts and adjustments to the
policyholder dividend obligation resulting from investment gains and losses.

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FIXED MATURITIES

Fixed maturities consist principally of publicly traded and privately
placed debt securities, and represented 75.6% and 73.6% of total cash and
invested assets at December 31, 2003 and 2002, respectively. Based on estimated
fair value, public fixed maturities represented $147,489 million, or 87.9%, and
$121,191 million, or 86.4%, of total fixed maturities at December 31, 2003 and
2002, respectively. Based on estimated fair value, private fixed maturities
represented $20,263 million, or 12.1%, and $19,097 million, or 13.6%, of total
fixed maturities at December 31, 2003 and 2002, respectively. The Company
invests in privately placed fixed maturities to (i) obtain higher yields than
can ordinarily be obtained with comparable public market securities; (ii)
provide the Company with protective covenants, call protection features and,
where applicable, a higher level of collateral; and (iii) increase
diversification. However, the Company may not freely trade its privately placed
fixed maturities because of restrictions imposed by federal and state securities
laws and illiquid markets.

In cases where quoted market prices are not available, fair values are
estimated using present value or valuation techniques. The fair value estimates
are made at a specific point in time, based on available market information and
judgments about the financial instruments, including estimates of the timing and
amounts of expected future cash flows and the credit standing of the issuer or
counter-party. Factors considered in estimating fair value include: coupon rate,
maturity, estimated duration, call provisions, sinking fund requirements, credit
rating, industry sector of the issuer and quoted market prices of comparable
securities.

The Securities Valuation Office of the NAIC evaluates the fixed maturity
investments of insurers for regulatory reporting purposes and assigns securities
to one of six investment categories called "NAIC designations." The NAIC ratings
are similar to the rating agency designations of the Nationally Recognized
Statistical Rating Organizations for marketable bonds. NAIC ratings 1 and 2
include bonds generally considered investment grade (rated "Baa3" or higher by
Moody's Investors Services ("Moody's"), or rated "BBB-" or higher by Standard &
Poor's ("S&P")) by such rating organizations. NAIC ratings 3 through 6 include
bonds generally considered below investment grade (rated "Ba1" or lower by
Moody's, or rated "BB+" or lower by S&P).

The following table presents the Company's total fixed maturities by
Nationally Recognized Statistical Rating Organizations designation and the
equivalent ratings of the NAIC, as well as the percentage, based on estimated
fair value, that each designation comprises at:

- ---------------

(1) Amounts presented are based on rating agency designations. Comparisons
between NAIC ratings and rating agency designations are published by the
NAIC. The rating agency designations are based on the availability and the
lower of the applicable ratings between Moody's and S&P. The current period
ratings are now presented so that the consolidated rating will be equal to
the Moody's or S&P rating, whichever is more conservative. If no rating is
available from a rating agency, then the MetLife rating will be used. Prior
period ratings have been restated to conform with this presentation.
89

Based on estimated fair values, investment grade fixed maturities comprised
92.0% and 91.4% of total fixed maturities in the general account at December 31,
2003 and 2002, respectively.

The following table shows the amortized cost and estimated fair value of
fixed maturities, by contractual maturity dates (excluding scheduled sinking
funds) at:

Bonds not due at a single maturity date have been included in the above
table in the year of final maturity. Actual maturities may differ from
contractual maturities due to the exercise of prepayment options.

The fixed maturities portfolio is diversified across a broad range of asset
sectors, and the asset mix did not change significantly in 2003. The following
tables set forth the amortized cost, gross unrealized gain and loss, and
estimated fair value of the Company's fixed maturities by sector, as well as the
percentage of the total fixed maturities holdings that each sector is comprised
of at:

Potential Problem, Problem and Restructured Fixed Maturities. The Company
monitors fixed maturities to identify investments that management considers to
be potential problems or problems. The Company also monitors investments that
have been restructured.

The Company defines potential problem securities in the fixed maturity
category as securities of an issuer deemed to be experiencing significant
operating problems or difficult industry conditions. The Company uses various
criteria, including the following, to identify potential problem securities:

- debt service coverage or cash flow falling below certain thresholds which
vary according to the issuer's industry and other relevant factors;

- significant declines in revenues or margins;

- violation of financial covenants;

- public securities trading at a substantial discount as a result of
specific credit concerns; and

- other subjective factors.

The Company defines problem securities in the fixed maturities category as
securities with principal or interest payments in default, securities to be
restructured pursuant to commenced negotiations, or securities issued by a
debtor that has entered into bankruptcy.

The Company defines restructured securities in the fixed maturities
category as securities to which the Company has granted a concession that it
would not have otherwise considered but for the financial difficulties of the
obligor. The Company enters into a restructuring when it believes it will
realize a greater economic value under the new terms rather than through
liquidation or disposition. The terms of the restructuring may involve some or
all of the following characteristics: a reduction in the interest rate, an
extension of the maturity date, an exchange of debt for equity or a partial
forgiveness of principal or interest.

91

The following table presents the estimated fair value of the Company's
total fixed maturities classified as performing, potential problem, problem and
restructured at:

Fixed Maturity Impairment. The Company classifies all of its fixed
maturities as available-for-sale and marks them to market through other
comprehensive income. All securities with gross unrealized losses at the
consolidated balance sheet date are subjected to the Company's process for
identifying other-than-temporary impairments. The Company writes down to fair
value securities that it deems to be other-than-temporarily impaired in the
period the securities are deemed to be so impaired. The assessment of whether
such impairment has occurred is based on management's case-by-case evaluation of
the underlying reasons for the decline in fair value. Management considers a
wide range of factors, as described below, 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 by the Company in the impairment evaluation process
include, but are not limited to, the following:

- length of time and the extent to which the market value has been below
amortized cost;

- potential for impairments of securities when the issuer is experiencing
significant financial difficulties, including a review of all securities
of the issuer, including its known subsidiaries and affiliates,
regardless of the form of the Company's ownership;

- potential for impairments in an entire industry sector or sub-sector;

- potential for impairments in certain economically depressed geographic
locations;

- potential for impairments of securities where the issuer, series of
issuers or industry has suffered a catastrophic type of loss or has
exhausted natural resources; and

- other subjective factors, including concentrations and information
obtained from regulators and rating agencies.

The Company's review of its fixed maturities for impairments includes an
analysis of the total gross unrealized losses by three categories of securities:
(i) securities where the estimated fair value had declined and remained below
amortized cost by less than 20%; (ii) securities where the estimated fair value
had declined and remained below amortized cost by 20% or more for less than six
months; and (iii) securities where the estimated value had declined and remained
below amortized cost by 20% or more for six months or greater. The first two
categories have generally been adversely impacted by the downturn in the
financial markets and overall economic conditions. While all of these securities
are monitored for potential impairment, the Company's experience indicates that
the first two categories do not present as great a risk of impairment, and
often, fair values recover over time as the factors that caused the declines
improve.

The Company records writedowns as investment losses and adjusts the cost
basis of the fixed maturities accordingly. The Company does not change the
revised cost basis for subsequent recoveries in value. Writedowns of fixed
maturities were $338 million and $1,264 million for the years ended December 31,
2003 and 2002, respectively. The Company's three largest writedowns totaled $125
million and $352 million for the

92

years ended December 31, 2003 and 2002, respectively. The circumstances that
gave rise to these impairments were either financial restructurings or
bankruptcy filings. During the years ended December 31, 2003 and 2002, the
Company sold fixed maturities with a fair value of $30,714 million and $14,597
million at a loss of $486 million and $894 million, respectively.

The following table presents the total gross unrealized losses for fixed
maturities where the estimated fair value had declined and remained below
amortized cost by:

The gross unrealized loss related to the Company's fixed maturities at
December 31, 2003 was $743 million. These fixed maturities mature as follows: 1%
due in one year or less; 23% due in greater than one year to five years; 18% due
in greater than five years to ten years; and 58% due in greater than ten years
(calculated as a percentage of amortized cost). Additionally, such securities
are concentrated by sector in U.S. corporates (34%), mortgage-backed (17%) and
foreign corporates (11%); and are concentrated by industry in mortgage-backed
(13%), utilities (12%) and finance (8%) (calculated as a percentage of gross
unrealized loss). Non-investment grade securities represent 6% of the $30,881
million fair value and 20% of the $743 million gross unrealized loss on fixed
maturities.

The following table presents the amortized cost, gross unrealized losses
and number of securities for fixed maturities where the estimated fair value had
declined and remained below amortized cost by less than 20%, or 20% or more for:

The category of fixed maturity securities where the estimated fair value
has declined and remained below amortized cost by less than 20% is comprised of
1,951 securities with an amortized cost of $31,408 million and a gross
unrealized loss of $677 million at December 31, 2003. These fixed maturities
mature as follows: 1% due in one year or less; 23% due in greater than one year
to five years; 18% due in greater than five years to ten years; and 58% due in
greater than ten years (calculated as a percentage of amortized cost).
Additionally, such securities are concentrated by sector in U.S. corporates
(33%) and mortgage-backed (18%); and are concentrated by industry in
mortgage-backed (14%), utilities (13%) and finance (7%) (calculated as a
percentage of gross unrealized loss). Non-investment grade securities represent
5% of the $30,731 million fair value and 15% of the $677 million gross
unrealized loss.

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The category of fixed maturity securities where the estimated fair value
has declined and remained below amortized cost by 20% or more for less than six
months is comprised of 18 securities with an amortized cost of $67 million and a
gross unrealized loss of $22 million at December 31, 2003. These fixed
maturities mature as follows: 1% due in greater than one year to five years; 64%
due in greater than five years to ten years; and 35% due in greater than ten
years (calculated as a percentage of amortized cost). Additionally, such
securities are concentrated by sector in foreign governments (41%) and
asset-backed (35%); and are concentrated by industry in asset-backed (35%) and
finance (23%) (calculated as a percentage of gross unrealized loss). Non-
investment grade securities represent 83% of the $45 million fair value and 82%
of the $22 million gross unrealized loss.

The total of fixed maturity securities where the estimated fair value has
declined and remained below amortized cost by 20% or more for six months or
greater is comprised of 24 securities with an amortized cost of $149 million and
a gross unrealized loss of $44 million at December 31, 2003. These fixed
maturities mature as follows: 27% due in greater than five years to ten years;
and 73% due in greater than ten years (calculated as a percentage of amortized
cost). Additionally, such securities are concentrated by security type in U.S.
corporates (57%) and asset-backed (18%); and are concentrated by industry in
transportation (53%), finance (24%) and asset-backed (18%) (calculated as a
percentage of gross unrealized loss). Non-investment grade securities represent
48% of the $105 million fair value and 60% of the $44 million gross unrealized
loss.

The Company held two fixed maturity securities each with a gross unrealized
loss at December 31, 2003 greater than $10 million. One of these securities
represents 25% of the gross unrealized loss on fixed maturities where the
estimated fair value had declined and remained below amortized cost by 20% or
more for six months or greater. The security is in the U.S. corporate sector,
and the estimated fair value and gross unrealized loss at December 31, 2003 was
$14 million and $11 million, respectively. The Company analyzed this fixed
maturity security as of December 31, 2003 to determine whether this security was
other-than-temporarily impaired. The Company believes that the estimated fair
value of this security, which is in the transportation industry, was depressed
as a result of generally difficult economic and market conditions. The Company
believes that the analysis of the security indicated that the financial
strength, liquidity, leverage, future outlook and/or recent management actions
supports the view that the security was not other-than-temporarily impaired as
of December 31, 2003.

Corporate Fixed Maturities. The table below shows the major industry types
that comprise the corporate bond holdings at:

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(1) Includes publicly traded, U.S. dollar-denominated debt obligations of
foreign obligors, known as Yankee bonds, and other foreign investments.

The Company maintains a diversified corporate bond portfolio across
industries and issuers. The portfolio does not have exposure to any single
issuer in excess of 1% of the total invested assets of the portfolio. At
December 31, 2003 and 2002, the Company's combined holdings in the ten issuers
to which it had the greatest exposure totaled $4,683 million and $2,973 million,
respectively, which was less than 3% and 2%, respectively, of the Company's
total invested assets at such date. The exposure to the largest single issuer of
corporate bonds held at December 31, 2003 and 2002 was $618 million and $385
million, respectively.

94

At December 31, 2003 and 2002, investments of $16,572 million and $14,778
million, respectively, or 69.5% and 76.9%, respectively, of the Yankee/Foreign
sector, represented exposure to traditional Yankee bonds. This exposure was U.S.
dollar-denominated and was concentrated by security type in industrial and
financial institutions. The Company diversifies the Yankee/Foreign portfolio by
country and issuer.

The Company has hedged all of its material exposure to foreign currency
risk in its invested assets. In the Company's international insurance
operations, both its assets and liabilities are generally denominated in local
currencies. Foreign currency denominated securities supporting U.S. dollar
liabilities are generally swapped back into U.S. dollars.

Mortgage-Backed Securities. The following table shows the types of
mortgage-backed securities the Company held at:

At December 31, 2003 and 2002, pass-through and collateralized mortgage
obligations totaled $31,454 million and $28,026 million, respectively, or 74.0%
and 80.4%, respectively, of total mortgage-backed securities, and a majority of
these amounts represented agency-issued pass-through and collateralized mortgage
obligations guaranteed or otherwise supported by the Federal National Mortgage
Association, the Federal Home Loan Mortgage Corporation or the Government
National Mortgage Association. At December 31, 2003 and 2002, approximately
$6,992 million and $3,598 million, respectively, or 63.4% and 52.5%,
respectively, of the commercial mortgage-backed securities, and $31,210 million
and $27,590 million, respectively, or 99.2% and 98.4%, respectively, of the
pass-through securities and collateralized mortgage obligations, were rated
Aaa/AAA by Moody's or S&P.

The principal risks inherent in holding residential mortgage-backed
securities are prepayment and extension risks, which will affect the timing of
when cash will be received and are dependent on the level of mortgage interest
rates. Prepayment risk is the unexpected increase in principal payments
primarily as a result of homeowner refinancing. Extension risk relates to the
unexpected slowdown in principal payments. The Company's active monitoring of
its residential mortgage-backed securities mitigates exposure to the cash flow
uncertainties associated with these risks.

The principal risks in owning commercial mortgage-backed securities are
related to structural, credit and capital market risks. Structural risks include
the security's priority in the issuer's capital structure and the adequacy of
and ability to realize proceeds from the underlying real estate collateral.
Credit risk results from potential defaults on the underlying commercial
mortgages. Capital market risks include the general level of interest rates and
the liquidity for these securities in the marketplace.

Asset-Backed Securities. Asset-backed securities, which include home
equity loans, credit card receivables, collateralized debt obligations and
automobile receivables, are purchased both to diversify the overall risks of the
Company's fixed maturity assets and to provide income. The Company's
asset-backed securities are diversified both by sector and by issuer. Credit
card and home equity loan securitizations, each accounting for about 29% of the
total holdings, constitute the largest exposures in the Company's asset-backed
securities portfolio. Asset-backed securities generally have limited sensitivity
to changes in interest rates. Approximately $7,528 million and $4,912 million,
or 63.5% and 51.7%, of total asset-backed securities were rated Aaa/AAA by
Moody's or S&P at December 31, 2003 and 2002, respectively.

95

The principal risks in holding asset-backed securities are related to
structural, credit and capital market risks. Structural risks include the
security's priority in the issuer's capital structure, the adequacy of and
ability to realize proceeds from the collateral and the potential for
prepayments. Credit risks include consumer or corporate credits, such as credit
card holders, equipment lessees, and corporate obligors. Capital market risks
include the general level of interest rates and the liquidity for these
securities in the marketplace.

Structured Investment Transactions. The Company participates in structured
investment transactions, primarily asset securitizations and structured notes.
These transactions enhance the Company's total return of the investment
portfolio principally by generating management fee income on asset
securitizations and by providing equity-based returns on debt securities through
structured notes and similar instruments.

The Company sponsors financial asset securitizations of high yield debt
securities, investment grade bonds and structured finance securities and also is
the collateral manager and a beneficial interest holder in such transactions. As
the collateral manager, the Company earns management fees on the outstanding
securitized asset balance, which are recorded in income as earned. When the
Company transfers assets to a bankruptcy-remote SPE and surrenders control over
the transferred assets, the transaction is accounted for as a sale. Gains or
losses on securitizations are determined with reference to the carrying amount
of the financial assets transferred, which is allocated to the assets sold and
the beneficial interests retained based on relative fair values at the date of
transfer. Beneficial interests in securitizations are carried at fair value in
fixed maturities. Income on these beneficial interests is recognized using the
prospective method in accordance with EITF Issue No. 99-20, Recognition of
Interest Income and Impairment on Certain Investments ("EITF 99-20"). The SPEs
used to securitize assets are not consolidated by the Company because the
Company has determined that it is not the primary beneficiary of these entities
based on the framework provided in FASB Interpretation No. 46 (revised December
31, 2003), Consolidation of Variable Interest Entities, An Interpretation of ARB
No. 51 ("FIN 46(r)"). Prior to the adoption of FIN 46(r), such SPEs were not
consolidated because they did not meet the criteria for consolidation under
previous accounting guidance.

The Company purchases or receives beneficial interests in SPEs, which
generally acquire financial assets, including corporate equities, debt
securities and purchased options. The Company has not guaranteed the
performance, liquidity or obligations of the SPEs and the Company's exposure to
loss is limited to its carrying value of the beneficial interests in the SPEs.
The Company uses the beneficial interests as part of its risk management
strategy, including asset-liability management. These SPEs are not consolidated
by the Company because the Company has determined that it is not the primary
beneficiary of these entities based on the framework provided in FIN 46(r).
Prior to the adoption of FIN 46(r), such SPEs were not consolidated because they
did not meet the criteria for consolidation under previous accounting guidance.
These beneficial interests are generally structured notes, as defined by EITF
Issue No. 96-12, Recognition of Interest Income and Balance Sheet Classification
of Structured Notes, which are included in fixed maturities, and their income is
recognized using the retrospective interest method or the level yield method, as
appropriate. Impairments of these beneficial interests are included in net
investment gains and losses.

MORTGAGE LOANS ON REAL ESTATE

The Company's mortgage loans on real estate are collateralized by
commercial, agricultural and residential properties. Mortgage loans on real
estate comprised 11.8% and 13.2% of the Company's total cash and invested assets
at December 31, 2003 and 2002, respectively. The carrying value of mortgage
loans on real estate is stated at original cost net of repayments, amortization
of premiums, accretion of discounts and

96

valuation allowances. The following table shows the carrying value of the
Company's mortgage loans on real estate by type at:

Commercial Mortgage Loans. The Company diversifies its commercial mortgage
loans by both geographic region and property type, and manages these investments
through a network of regional offices overseen by its investment department. The
following table presents the distribution across geographic regions and property
types for commercial mortgage loans at:

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The following table presents the scheduled maturities for the Company's
commercial mortgage loans at:

Potential Problem, Problem and Restructured Mortgage Loans. The Company
monitors its mortgage loan investments on an ongoing basis. Through this
monitoring process, the Company reviews loans that are restructured, delinquent
or under foreclosure and identifies those that management considers to be
potentially delinquent. These loan classifications are consistent with those
used in industry practice.

The Company defines potentially delinquent loans as loans that, in
management's opinion, have a high probability of becoming delinquent. The
Company defines delinquent mortgage loans, consistent with industry practice, as
loans in which two or more interest or principal payments are past due. The
Company defines mortgage loans under foreclosure as loans in which foreclosure
proceedings have formally commenced. The Company defines restructured mortgage
loans as loans in which the Company, for economic or legal reasons related to
the debtor's financial difficulties, grants a concession to the debtor that it
would not otherwise consider.

The Company reviews all mortgage loans on an ongoing basis. These reviews
may include an analysis of the property financial statements and rent roll,
lease rollover analysis, property inspections, market analysis and tenant
creditworthiness. The Company also reviews loan-to-value ratios and debt
coverage ratios for restructured loans, delinquent loans, loans under
foreclosure, potentially delinquent loans, loans with an existing valuation
allowance, loans maturing within two years and loans with a loan-to-value ratio
greater than 90% as determined in the prior year.

The principal risks in holding commercial mortgage loans are property
specific, supply and demand, financial and capital market risks. Property
specific risks include the geographic location of the property, the physical
condition of the property, the diversification of tenants and the rollover of
their leases and the ability of the property manager to attract tenants and
manage expenses. Supply and demand risks include changes in the supply and/or
demand for rental space, which cause changes in vacancy rates and/or rental
rates. Financial risks include the overall level of debt on the property and the
amount of principal repaid during the loan term. Capital market risks include
the general level of interest rates, the liquidity for these securities in the
marketplace and the capital available for loan refinancing.

The Company establishes valuation allowances for loans that it deems
impaired, as determined through its mortgage review process. The Company's
valuation allowance is established both on a loan specific basis for those loans
where a property or market specific risk has been identified that could likely
result in a future default, as well as for pools of loans with similar high risk
characteristics where a property specific or market risk has not been
identified. Loans that are individually reviewed are evaluated based on the
definition of impaired loans consistent with SFAS No. 114, Accounting by
Creditors for Impairments of a Loan ("SFAS 114"), as loans on which it probably
will not collect all amounts due according to applicable contractual terms of
the agreement. The Company bases valuation allowances upon the present value of
expected future cash flows discounted at the loan's original effective interest
rate or the value of the loan's collateral. The Company records valuation
allowances as investment losses. The Company records subsequent adjustments to
allowances as investment gains or losses. The allowance for loan loss for pools
of other loans with similar characteristics is established in accordance with
SFAS No. 5, Accounting for Contingencies
98

("SFAS 5"), when a loss contingency exists. A loss contingency exists when the
likelihood that a future event will occur is probable based on past events. SFAS
5 works in conjunction with, but does not overlap with, SFAS 114. The Company
applies SFAS 5 to groups of loans with similar characteristics based on property
types and loan to value risk factors. The Company records adjustments to its
loan loss allowance as investment losses.

The following table presents the amortized cost and valuation allowance for
commercial mortgage loans distributed by loan classification at:

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(1) Amortized cost is equal to carrying value before valuation allowances.

The following table presents the changes in valuation allowances for
commercial mortgage loans for the:

Agricultural Mortgage Loans. The Company diversifies its agricultural
mortgage loans by both geographic region and product type. The Company manages
these investments through a network of regional offices and field professionals
overseen by its investment department.

Approximately 67% of the $5,327 million of agricultural mortgage loans
outstanding at December 31, 2003 were subject to rate resets prior to maturity.
A substantial portion of these loans generally is successfully renegotiated and
remains outstanding to maturity. The process and policies for monitoring the
agricultural mortgage loans and classifying them by performance status are
generally the same as those for the commercial loans.

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The following table presents the amortized cost and valuation allowances
for agricultural mortgage loans distributed by loan classification at:

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(1) Amortized cost is equal to carrying value before valuation allowances.

The following table presents the changes in valuation allowances for
agricultural mortgage loans for the:

The principal risks in holding agricultural mortgage loans are property
specific, supply and demand, financial and capital market risks. Property
specific risks include the geographic location of the property, soil types,
weather conditions and the other factors that may impact the borrower's
guaranty. Supply and demand risks include the supply and demand for the
commodities produced on the specific property and the related price for those
commodities. Financial risks include the overall level of debt on the property
and the amount of principal repaid during the loan term. Capital market risks
include the general level of interest rates, the liquidity for these securities
in the marketplace and the capital available for loan refinancing.

REAL ESTATE AND REAL ESTATE JOINT VENTURES

The Company's real estate and real estate joint venture investments consist
of commercial, residential and agricultural properties located primarily
throughout the U.S. The Company manages these investments through a network of
regional offices overseen by its investment department. At December 31, 2003 and
2002, the carrying value of the Company's real estate, real estate joint
ventures and real estate held-for-sale was $4,803 million and $4,725 million,
respectively, or 2.2%, and 2.5% of total cash and invested assets, respectively.
The carrying value of real estate is stated at depreciated cost net of
impairments and valuation allowances. The carrying value of real estate joint
ventures is stated at the Company's equity in the real estate joint ventures net
of impairments and valuation allowances. The following table presents the
carrying value of

100

the Company's real estate, real estate joint ventures, real estate held-for-sale
and real estate acquired upon foreclosure at:

Office properties represent 58% of the Company's equity real estate
portfolio at both December 31, 2003 and 2002. The average occupancy level of
office properties was 89% and 92% at December 31, 2003 and 2002, respectively.

Ongoing management of these investments includes quarterly valuations, as
well as an annual market update and review of each property's budget, financial
returns, lease rollover status and the Company's exit strategy.

The Company adjusts the carrying value of real estate and real estate joint
ventures held-for-investment for impairments whenever events or changes in
circumstances indicate that the carrying value of the property may not be
recoverable. The Company writes down impaired real estate to estimated fair
value, when the carrying value of the real estate exceeds the sum of the
undiscounted cash flow expected to result from the use and eventual disposition
of the real estate. The Company records writedowns as investment losses and
reduces the cost basis of the properties accordingly. The Company does not
change the revised cost basis for subsequent recoveries in value.

The Company's real estate equity portfolio at December 31, 2003 was mainly
comprised of a core portfolio of multi-tenanted office buildings with high
tenant credit quality, net leased properties and apartments. The objective is to
maximize earnings by building upon and strengthening the core portfolio through
selective acquisitions and dispositions. The Company took advantage of a
significant demand for Class A, institutional grade properties and sold certain
real estate holdings in its portfolio mostly during the fourth quarter of 2002.
This sales program did not represent any fundamental change in the Company's
investment strategy.

Once the Company identifies a property that is expected to be sold within
one year and commences a firm plan for marketing the property, in accordance
with SFAS 144, the Company, if applicable, classifies the property as
held-for-sale and reports the related net investment income and any resulting
investment gains and losses as discontinued operations. Further, the Company
establishes and periodically revises, if necessary, a valuation allowance to
adjust the carrying value of the property to its expected sales value, less
associated selling costs, if it is lower than the property's carrying value. The
Company records valuation allowances as investment losses and subsequent
adjustments as investment gains or losses. If circumstances arise that were
previously considered unlikely and, as a result, the property is expected to be
on the market longer than anticipated, a held-for-sale property is generally
reclassified to held-for-investment and measured as such.

The Company's carrying value of real estate held-for-sale, including real
estate acquired upon foreclosure of commercial and agricultural mortgage loans,
in the amounts of $89 million and $799 million at December 31, 2003 and 2002,
respectively, are net of valuation allowances of $12 million and $11 million,

101

respectively. There were no impairments at December 31, 2003; however, the
December 31, 2002 amount included a net impairment of $5 million.

The Company records real estate acquired upon foreclosure of commercial and
agricultural mortgage loans at the lower of estimated fair value or the carrying
value of the mortgage loan at the date of foreclosure.

Certain of the Company's investments in real estate joint ventures meet the
definition of a VIE under FIN 46(r). See "-- Variable Interest Entities."

On August 28, 2003, the Company (through one of its subsidiaries) acquired
the Sears Tower building through the acquisition of a controlling interest in a
partnership holding title to the building. Subsequent to December 31, 2003,
MetLife entered into a marketing agreement to sell one of its real estate
investments, the Sears Tower, and reclassified the property from Real
Estate -- Held-for Investments to Real Estate -- Held-for Sale. The carrying
value of the property as of December 31, 2003 is approximately $700 million.

EQUITY SECURITIES AND OTHER LIMITED PARTNERSHIP INTERESTS

The Company's carrying value of equity securities, which primarily consist
of investments in common and preferred stocks and mutual fund interests, was
$1,598 million and $1,613 million at December 31, 2003 and 2002, respectively.
Substantially all of the common stock is publicly traded on major securities
exchanges. The carrying value of the other limited partnership interests (which
primarily represent ownership interests in pooled investment funds that make
private equity investments in companies in the U.S. and overseas) was $2,477
million and $2,395 million at December 31, 2003 and 2002, respectively. The
Company classifies its investments in common stocks as available-for-sale and
marks them to market, except for non-marketable private equities, which are
generally carried at cost. The Company uses the equity method of accounting for
investments in limited partnership interests in which it has more than a minor
interest, has influence over the partnership's operating and financial policies
and does not have a controlling interest. The Company uses the cost method for
minor interest investments and when it has virtually no influence over the
partnership's operating and financial policies. The Company's investments in
equity securities excluding partnerships represented 0.7% and 0.8% of cash and
invested assets at December 31, 2003 and 2002, respectively.

Equity securities include private equity securities with an estimated fair
value of $432 million and $443 million at December 31, 2003 and 2002,
respectively. The Company may not freely trade its private equity securities
because of restrictions imposed by federal and state securities laws and
illiquid markets.

The Company makes commitments to fund partnership investments in the normal
course of business. The amounts of these unfunded commitments were $1,380
million and $1,667 million at December 31, 2003 and 2002, respectively. The
Company anticipates that these amounts could be invested in these partnerships
any time over the next five years.

Some of the Company's investments in other limited partnership interests
meet the definition of a VIE under FIN 46(r). See " -- Variable Interest
Entities."

102

The following tables set forth the cost, gross unrealized gain or loss and
estimated fair value of the Company's equity securities, as well as the
percentage of the total equity securities at:

Potential Problem and Problem Equity Securities and Other Limited
Partnership Interests. The Company monitors its equity securities and other
limited partnership interests on a continual basis. Through this monitoring
process, the Company identifies investments that management considers to be
problems or potential problems.

Potential problem equity securities and other limited partnership interests
are defined as securities issued by a company that is experiencing significant
operating problems or difficult industry conditions. Criteria generally
indicative of these problems or conditions are (i) cash flows falling below
varying thresholds established for the industry and other relevant factors; (ii)
significant declines in revenues and/or margins; (iii) public securities trading
at a substantial discount compared to original cost as a result of specific
credit concerns; and (iv) other information that becomes available.

Problem equity securities and other limited partnership interests are
defined as securities (i) in which significant declines in revenues and/or
margins threaten the ability of the issuer to continue operating; or (ii) where
the issuer has entered into bankruptcy.

Equity Security Impairment. The Company classifies all of its equity
securities as available-for-sale and marks them to market through other
comprehensive income. All securities with gross unrealized losses at the
consolidated balance sheet date are subjected to the Company's process for
identifying other-than-temporary impairments. The Company writes down to fair
value securities that it deems to be other-than-temporarily impaired in the
period the securities are deemed to be so impaired. The assessment of whether
such impairment has occurred is based on management's case-by-case evaluation of
the underlying reasons for the decline in fair value. Management considers a
wide range of factors, as described below, 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.

103

Considerations used by the Company in the impairment evaluation process
include, but are not limited to, the following:

- length of time and the extent to which the market value has been below
cost;

- potential for impairments of securities when the issuer is experiencing
significant financial difficulties, including a review of all securities
of the issuer, including its known subsidiaries and affiliates,
regardless of the form of the Company's ownership;

- potential for impairments in an entire industry sector or sub-sector;

- potential for impairments in certain economically depressed geographic
locations;

- potential for impairments of securities where the issuer, series of
issuers or industry has suffered a catastrophic type of loss or has
exhausted natural resources; and

- other subjective factors, including concentrations and information
obtained from regulators and rating agencies.

Equity securities or other limited partnership interests which are deemed
to be other-than-temporarily impaired are written down to fair value. The
Company records writedowns as investment losses and adjusts the cost basis of
the equity securities accordingly. The Company does not change the revised cost
basis for subsequent recoveries in value. Writedowns of equity securities and
other limited partnership interests were $108 million and $191 million years
ended December 31, 2003 and 2002, respectively. During the years ended December
31, 2003 and 2002, the Company sold equity securities with an estimated fair
value of $62 million and $915 million, at a loss of $13 million and $85 million,
respectively.

The gross unrealized loss related to the Company's equity securities at
December 31, 2003 was $6 million. Such securities are concentrated by security
type in common stock (36%) and preferred stock (63%); and are concentrated by
industry in financial (57%) and domestic broad market mutual funds (7%)
(calculated as a percentage of gross unrealized loss).

The following table presents the cost, gross unrealized losses and number
of securities for equity securities where the estimated fair value had declined
and remained below cost by less than 20%, or 20% or more for:

The Company's review of its equity security exposure includes the analysis
of total gross unrealized losses by three categories of securities: (i)
securities where the estimated fair value had declined and remained below cost
by less than 20%; (ii) securities where the estimated fair value had declined
and remained below cost by 20% or more for less than six months; and (iii)
securities where the estimated fair value had declined and remained below cost
by 20% or more for six months or greater. While all of these securities are
monitored for potential impairment, the Company's experience indicates that the
first two categories do not present as great a risk of impairment, and often,
fair values recover over time as the factors that caused the declines improve.

104

The following table presents the total gross unrealized losses for equity
securities at December 31, 2003 where the estimated fair value had declined and
remained below cost by:

The category of equity securities where the estimated fair value has
declined and remained below cost by less than 20% is comprised of 33 equity
securities with a cost of $80 million and a gross unrealized loss of $6 million.
These securities are concentrated by security type in common stock (33%) and
preferred stock (65%); and concentrated by industry in financial (59%) and
communications (3%) (calculated as a percentage of gross unrealized loss). The
significant factors considered at December 31, 2003 in the review of equity
securities for other-than-temporary impairment were as a result of generally
difficult economic and market conditions.

The Company did not hold any equity securities with a gross unrealized loss
at December 31, 2003 greater than $5 million.

OTHER INVESTED ASSETS

The Company's other invested assets consist principally of leveraged leases
and funds withheld at interest of $3.9 billion and $3.1 billion at December 31,
2003 and 2002, respectively. The leveraged leases are recorded net of
non-recourse debt. The Company participates in lease transactions, which are
diversified by industry, asset type and geographic area. The Company regularly
reviews residual values and writes down residuals to expected values as needed.
Funds withheld represent amounts contractually withheld by ceding companies in
accordance with reinsurance agreements. For agreements written on a modified
coinsurance basis and certain agreements written on a coinsurance basis, assets
supporting the reinsured policies equal to the net statutory reserves are
withheld and continue to be legally owned by the ceding company. Other invested
assets also include the fair value of embedded derivatives related to funds
withheld and modified coinsurance contracts. Interest accrues to these funds
withheld at rates defined by the treaty terms and may be contractually specified
or directly related to the investment portfolio. The Company's other invested
assets represented 2.1% and 1.9% of cash and invested assets at December 31,
2003 and 2002, respectively.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses derivative instruments to manage risk through one of five
principal risk management strategies: the hedging of (i) liabilities; (ii)
invested assets; (iii) portfolios of assets or liabilities; (iv) net investment
in certain foreign operations; and (v) firm commitments and forecasted
transactions. Additionally, the Company enters into income generation and
replication derivative transactions as permitted by its insurance subsidiaries'
Derivatives Use Plans approved by the applicable state insurance departments.
The Company's derivative hedging strategy employs a variety of instruments,
including financial futures, financial forwards, interest rate, credit default
and foreign currency swaps, foreign currency forwards and options, including
caps and floors.

105

The table below provides a summary of the notional amount and fair value of
derivative financial instruments held at December 31, 2003 and 2002:

VARIABLE INTEREST ENTITIES

The Company has adopted the provisions of FIN 46 and FIN 46(r). See
"-- Recent Accounting Standards." At December 31, 2003, FIN 46(r) did not
require the Company to consolidate any additional VIEs that were not previously
consolidated.

The following table presents the total assets of and maximum exposure to
loss relating to VIEs for which the Company has concluded that (i) it is the
primary beneficiary and which will be consolidated in the Company's financial
statements beginning March 31, 2004, and (ii) it holds significant valuable
interests but it is not the primary beneficiary and which will not be
consolidated:

- ---------------

(1) Had the Company consolidated these VIEs at December 31, 2003, the
transition adjustments would have been $10 million, net of income tax.

(2) The assets of the asset-backed securitizations and collateralized debt
obligations are reflected at fair value as of December 31, 2003. The assets
of the real estate joint ventures and other limited partnerships are
reflected at the carrying amounts at which such assets would have been
reflected on the Company's balance sheet had the Company consolidated the
VIE from the date of its initial investment in the entity.

106

(3) The maximum exposure to loss of the asset-backed securitizations and
collateralized debt obligations is equal to the carrying amounts of
retained interests. In addition, the Company provides collateral management
services for certain of these structures for which it collects a management
fee. The maximum exposure to loss relating to real estate joint ventures
and other limited partnerships is equal to the carrying amounts plus any
unfunded commitments, reduced by amounts guaranteed by other partners.

(4) Real estate joint ventures include partnerships and other ventures, which
engage in the acquisition, development, management and disposal of real
estate investments.

(5) Other limited partnerships include partnerships established for the purpose
of investing in public and private debt and equity securities, as well as
limited partnerships established for the purpose of investing in low-income
housing that qualifies for federal tax credits.

SECURITIES LENDING

The Company participates in a securities lending program whereby blocks of
securities, which are included in investments, are loaned to third parties,
primarily major brokerage firms. The Company requires a minimum of 102% of the
fair value of the loaned securities to be separately maintained as collateral
for the loans. Securities with a cost or amortized cost of $25,121 million and
$16,196 million and an estimated fair value of $26,387 million and $17,625
million were on loan under the program at December 31, 2003 and 2002,
respectively. The Company was liable for cash collateral under its control of
$27,083 million and $17,862 million at December 31, 2003 and 2002, respectively.
Security collateral on deposit from customers may not be sold or repledged and
is not reflected in the consolidated financial statements.

SEPARATE ACCOUNT ASSETS

The Company manages each separate account's assets in accordance with the
prescribed investment policy that applies to that specific separate account. The
Company establishes separate accounts on a single client and multi-client
commingled basis in conformity with insurance laws. Generally, separate accounts
are not chargeable with liabilities that arise from any other business of the
Company. Separate account assets are subject to the Company's general account
claims only to the extent that the value of such assets exceeds the separate
account liabilities, as defined by the account's contract. The Company reports
separately as assets and liabilities investments held in separate accounts and
liabilities of the separate accounts. The Company reports substantially all
separate account assets at their fair market value. Investment income and gains
or losses on the investments of separate accounts accrue directly to
contractholders, and, accordingly, the Company does not reflect them in its
consolidated statements of income and cash flows. The Company reflects in its
revenues fees charged to the separate accounts by the Company, including
mortality charges, risk charges, policy administration fees, investment
management fees and surrender charges. Effective January 1, 2004, in accordance
with new accounting guidance, approximately $1,678 million of separate account
assets will be transferred to investments with a corresponding transfer of
separate account liabilities to future policy benefits and policyholder account
balances.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company must effectively manage, measure and monitor the market risk
associated with its invested assets and interest rate sensitive insurance
contracts. It has developed an integrated process for managing risk, which it
conducts through its Corporate Risk Management Department, several
asset/liability committees and additional specialists at the business segment
level. The Company has established and implemented comprehensive policies and
procedures at both the corporate and business segment level to minimize the
effects of potential market volatility.

107

MARKET RISK EXPOSURES

The Company has exposure to market risk through its insurance operations
and investment activities. For purposes of this disclosure, "market risk" is
defined as the risk of loss resulting from changes in interest rates, equity
prices and foreign currency exchange rates.

Interest rates. The Company's exposure to interest rate changes results
from its significant holdings of fixed maturities, as well as its interest rate
sensitive liabilities. The fixed maturities include U.S. and foreign government
bonds, securities issued by government agencies, corporate bonds and
mortgage-backed securities, all of which are mainly exposed to changes in medium
and long-term treasury rates. The interest rate sensitive liabilities for
purposes of this disclosure include guaranteed interest contracts and fixed
annuities, which have the same interest rate exposure (medium- and long-term
treasury rates) as the fixed maturities. The Company employs product design,
pricing and asset/liability management strategies to reduce the adverse effects
of interest rate volatility. Product design and pricing strategies include the
use of surrender charges or restrictions on withdrawals in some products.
Asset/liability management strategies include the use of derivatives, the
purchase of securities structured to protect against prepayments, prepayment
restrictions and related fees on mortgage loans and consistent monitoring of the
pricing of the Company's products in order to better match the duration of the
assets and the liabilities they support.

Equity prices. The Company's investments in equity securities expose it to
changes in equity prices. It manages this risk on an integrated basis with other
risks through its asset/liability management strategies. The Company also
manages equity price risk through industry and issuer diversification and asset
allocation techniques.

Foreign currency exchange rates. The Company's exposure to fluctuations in
foreign currency exchange rates against the U.S. dollar results from its
holdings in non-U.S. dollar denominated fixed maturity securities and equity
securities and through its investments in foreign subsidiaries. The principal
currencies which create foreign currency exchange rate risk in the Company's
investment portfolios are Canadian dollars, Mexican pesos, Chilean pesos and
British pounds. The Company mitigates the majority of its fixed maturities'
foreign currency exchange rate risk through the utilization of foreign currency
swaps and forward contracts. Through its investments in foreign subsidiaries,
the Company is primarily exposed to the Mexican peso and South Korean won. The
Company has denominated substantially all assets and liabilities of its foreign
subsidiaries in their respective local currencies, thereby minimizing its risk
to foreign currency exchange rate fluctuations.

RISK MANAGEMENT

Corporate risk management. MetLife has established several financial and
non-financial senior management committees as part of its risk management
process. These committees manage capital and risk positions, approve
asset/liability management strategies and establish appropriate corporate
business standards.

MetLife also has a separate Corporate Risk Management Department, which is
responsible for risk throughout MetLife and reports to MetLife's Chief Financial
Officer. The Corporate Risk Management Department's primary responsibilities
consist of:

- implementing a board of directors-approved corporate risk framework,
which outlines the Company's approach for managing risk on an
enterprise-wide basis;

- developing policies and procedures for managing, measuring and monitoring
those risks identified in the corporate risk framework;

- establishing appropriate corporate risk tolerance levels;

- deploying capital on an economic capital basis; and

- reporting on a periodic basis to the Governance Committee of the Holding
Company's Board of Directors and various financial and non-financial
senior management committees.

108

Asset/liability management. At MetLife, asset/liability management is the
responsibility of the General Account Portfolio Management Department ("GAPM"),
the operating business segments and various GAPM boards. The GAPM boards are
comprised of senior officers from the investment department, senior managers
from each business segment and the Executive Vice-President in charge of risk
management at MetLife. The GAPM boards' duties include setting broad
asset/liability management policy and strategy, reviewing and approving target
portfolios, establishing investment guidelines and limits, and providing
oversight of the portfolio management process.

The portfolio managers and asset sector specialists, who have
responsibility on a day-to-day basis for risk management of their respective
investing activities, implement the goals and objectives established by the GAPM
boards. The goals of the investment process are to optimize after-tax,
risk-adjusted investment income and after-tax, risk-adjusted total return while
ensuring that the assets and liabilities are managed on a cash flow and duration
basis. The risk management objectives established by the GAPM boards stress
quality, diversification, asset/liability matching, liquidity and investment
return.

Each of MetLife's business segments has an asset/liability officer who
works with portfolio managers in the investment department to monitor
investment, product pricing, hedge strategy and liability management issues.
MetLife establishes target asset portfolios for each major insurance product,
which represent the investment strategies used to profitably fund its
liabilities within acceptable levels of risk. These strategies include
objectives for effective duration, yield curve sensitivity, convexity,
liquidity, asset sector concentration and credit quality.

To manage interest rate risk, the Company performs periodic projections of
asset and liability cash flows to evaluate the potential sensitivity of its
securities investments and liabilities to interest rate movements. These
projections involve evaluating the potential gain or loss on most of the
Company's in-force business under various increasing and decreasing interest
rate environments. The Company has developed models of its in-force business
that reflect specific product characteristics and include assumptions based on
current and anticipated experience regarding lapse, mortality and interest
crediting rates. In addition, these models include asset cash flow projections
reflecting interest payments, sinking fund payments, principal payments, bond
calls, mortgage prepayments and defaults. New York Insurance Department
regulations require that MetLife perform some of these analyses annually as part
of the annual proof of the sufficiency of its regulatory reserves to meet
adverse interest rate scenarios.

Hedging activities. MetLife's risk management strategies incorporate the
use of various interest rate derivatives that are used to adjust the overall
duration and cash flow profile of its invested asset portfolios to better match
the duration and cash flow profile of its liabilities to reduce interest rate
risk. Such instruments include financial futures, financial forwards, interest
rate and credit default swaps, floors, options, written covered calls and caps.
MetLife also uses foreign currency swaps and foreign currency forwards to hedge
its foreign currency denominated fixed income investments.

Economic Capital. Beginning in 2003, the Company changed its methodology
of allocating capital to its business segments from RBC to Economic Capital.
Prior to 2003, the Company's business segments' allocated equity was primarily
based on RBC, an internally developed formula based on applying a multiple to
the NAIC Statutory Risk-Based Capital and includes certain GAAP accounting
adjustments. Economic Capital is an internally developed risk capital model, the
purpose of which is to measure the risk in the business and to provide a basis
upon which capital is deployed. The Economic Capital model accounts for the
unique and specific nature of the risks inherent in MetLife's businesses. This
is in contrast to the standardized regulatory RBC formula, which is not as
refined in its risk calculations with respect to the nuances of the Company's
businesses.

This change in methodology is being applied prospectively. This change has
and will continue to impact the level of net investment income and net income of
each of the Company's business segments. A portion of net investment income is
credited to the segments based on the level of allocated equity. This change in
methodology of allocating equity does not impact the Company's consolidated net
investment income or net income.

109

RISK MEASUREMENT; SENSITIVITY ANALYSIS

The Company measures market risk related to its holdings of invested assets
and other financial instruments, including certain market risk sensitive
insurance contracts ("other financial instruments"), based on changes in
interest rates, equity prices and currency exchange rates, utilizing a
sensitivity analysis. This analysis estimates the potential changes in fair
value, cash flows and earnings based on a hypothetical 10% change (increase or
decrease) in interest rates, equity prices and currency exchange rates. The
Company believes that a 10% change (increase or decrease) in these market rates
and prices is reasonably possible in the near-term. In performing this analysis,
the Company used market rates at December 31, 2003 to re-price its invested
assets and other financial instruments. The sensitivity analysis separately
calculated each of MetLife's market risk exposures (interest rate, equity price
and foreign currency exchange rate) related to its non-trading invested assets
and other financial instruments. The Company does not maintain a trading
portfolio.

The sensitivity analysis performed included the market risk sensitive
holdings described above. The Company modeled the impact of changes in market
rates and prices on the fair values of its invested assets, earnings and cash
flows as follows:

Fair values. The Company bases its potential change in fair values on an
immediate change (increase or decrease) in:

- the net present values of its interest rate sensitive exposures resulting
from a 10% change (increase or decrease) in interest rates;

- the U.S. dollar equivalent balances of the Company's currency exposures
due to a 10% change (increase or decrease) in currency exchange rates;
and

- the market value of its equity positions due to a 10% change (increase or
decrease) in equity prices.

Earnings and cash flows. MetLife calculates the potential change in
earnings and cash flows on the change in its earnings and cash flows over a
one-year period based on an immediate 10% change (increase or decrease) in
market rates and equity prices. The following factors were incorporated into the
earnings and cash flows sensitivity analyses:

- the reinvestment of fixed maturity securities;

- the reinvestment of payments and prepayments of principal related to
mortgage-backed securities;

- the re-estimation of prepayment rates on mortgage-backed securities for
each 10% change (increase or decrease) in the interest rates; and

- the expected turnover (sales) of fixed maturities and equity securities,
including the reinvestment of the resulting proceeds.

The sensitivity analysis is an estimate and should not be viewed as
predictive of the Company's future financial performance. The Company cannot
assure that its actual losses in any particular year will not exceed the amounts
indicated in the table below. Limitations related to this sensitivity analysis
include:

- the market risk information is limited by the assumptions and parameters
established in creating the related sensitivity analysis, including the
impact of prepayment rates on mortgages;

- the analysis excludes other significant real estate holdings and
liabilities pursuant to insurance contracts; and

- the model assumes that the composition of assets and liabilities remains
unchanged throughout the year.

Accordingly, the Company uses such models as tools and not substitutes for
the experience and judgment of its corporate risk and asset/liability management
personnel.

Based on its analysis of the impact of a 10% change (increase or decrease)
in market rates and prices, MetLife has determined that such a change could have
a material adverse effect on the fair value of its interest

110

rate sensitive invested assets. The equity and foreign currency portfolios do
not expose the Company to material market risk.

The table below illustrates the potential loss in fair value of the
Company's interest rate sensitive financial instruments at December 31, 2003 and
2002. In addition, the potential loss with respect to the fair value of currency
exchange rates and the Company's equity price sensitive positions at December
31, 2003 and 2002 is set forth in the table below.

The potential loss in fair value for each market risk exposure of the
Company's portfolio, all of which is non-trading, for the periods indicated was:

The change in potential loss in fair value related to market risk exposure
between December 31, 2003 and 2002 was primarily attributable to a shift in the
yield curve.

111

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

112

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders of
MetLife, Inc.:

We have audited the accompanying consolidated balance sheets of MetLife,
Inc. and subsidiaries (the "Company") as of December 31, 2003 and 2002, and the
related consolidated statements of income, stockholders' equity, and cash flows
for each of the three years in the period ended December 31, 2003. Our audits
also included the financial statement schedules listed in the Index to
Consolidated Financial Statements and Schedules. These financial statements and
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on the financial
statements and financial statement schedules based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes 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 consolidated financial position of MetLife, Inc. and
subsidiaries as of December 31, 2003 and 2002, and the consolidated results of
their operations and their consolidated cash flows for each of the three years
in the period ended December 31, 2003, 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.

As discussed in Note 1, the Company changed its method of accounting for
embedded derivatives in certain insurance products as required by new accounting
guidance which became effective on October 1, 2003, and recorded the impact as a
cumulative effect of a change in accounting principle.

/s/ DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP

New York, New York
March 5, 2004

F-1

METLIFE, INC.

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2003 AND 2002

(DOLLARS IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

See accompanying notes to consolidated financial statements.
F-2

METLIFE, INC.

CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

See accompanying notes to consolidated financial statements.
F-3

METLIFE, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

(DOLLARS IN MILLIONS)

See accompanying notes to consolidated financial statements.
F-4

METLIFE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

(DOLLARS IN MILLIONS)

F-5

METLIFE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

(DOLLARS IN MILLIONS)

See accompanying notes to consolidated financial statements.
F-6

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF ACCOUNTING POLICIES

BUSINESS

"MetLife" or the "Company" refers to MetLife, Inc., a Delaware corporation
(the "Holding Company"), and its subsidiaries, including Metropolitan Life
Insurance Company ("Metropolitan Life") is a leading provider of insurance and
other financial services to a broad spectrum of individual and institutional
customers. The Company offers life insurance, annuities, automobile and
homeowners insurance and mutual funds to individuals, as well as group
insurance, reinsurance and retirement and savings products and services to
corporations and other institutions.

BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of
(i) the Holding Company and its subsidiaries: (ii) partnerships and joint
ventures in which the Company has a majority voting interest; and (iii) variable
interest entities ("VIEs") created or acquired on or after February 1, 2003 of
which the Company is deemed to be the primary beneficiary. Closed block assets,
liabilities, revenues and expenses are combined on a line by line basis with the
assets, liabilities, revenues and expenses outside the closed block based on the
nature of the particular item. See Note 6. Intercompany accounts and
transactions have been eliminated.

The Company uses the equity method of accounting for investments in real
estate joint ventures and other limited partnership interests in which it has
more than a minor equity interest or more than minor influence over the
partnership's operations, but does not have a controlling interest. The Company
uses the cost method of accounting for interests in which it has a minor equity
investment and virtually no influence over the partnership's operations.

Minority interest related to consolidated entities included in other
liabilities was $950 million and $491 million at December 31, 2003 and 2002,
respectively. This increase was the direct result of the change in MetLife's
ownership of RGA to approximately 52% in 2003 compared to 59% in 2002.

Certain amounts in the prior years' consolidated financial statements have
been reclassified to conform with the 2003 presentation.

SUMMARY OF CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with GAAP requires
management to adopt accounting policies and make estimates and assumptions that
affect amounts reported in the consolidated financial statements. The critical
accounting policies, estimates and related judgments underlying the Company's
consolidated financial statements are summarized below. In applying these
policies, management makes subjective and complex judgments that frequently
require estimates 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 businesses
and operations.

Investments

The Company's principal investments are in fixed maturities, mortgage loans
and real estate, all of which are exposed to three primary sources of investment
risk: credit, interest rate and market valuation. The financial statement risks
are those associated with the recognition of impairments and income, as well as
the determination of fair values. The assessment of whether impairments have
occurred is based on management's case-by-case evaluation of the underlying
reasons for the decline in fair value. 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

F-7

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

management's evaluation of the security are assumptions and estimates about the
operations of the issuer and its future earnings potential. Considerations used
by the Company in the impairment evaluation process include, but are not limited
to: (i) the length of time and the extent to which the market value has been
below cost; (ii) the potential for impairments of securities when the issuer is
experiencing significant financial difficulties; (iii) the potential for
impairments in an entire industry sector or sub-sector; (iv) the potential for
impairments in certain economically depressed geographic locations; (v) the
potential for impairments of securities where the issuer, series of issuers or
industry has suffered a catastrophic type of loss or has exhausted natural
resources; (vi) unfavorable changes in forecasted cash flows on asset-backed
securities; and (vii) other subjective factors, including concentrations and
information obtained from regulators and rating agencies. In addition, the
earnings on certain investments are dependent upon market conditions, which
could result in prepayments and changes in amounts to be earned due to changing
interest rates or equity markets. The determination of fair values in the
absence of quoted market values is based on: (i) valuation methodologies; (ii)
securities the Company deems to be comparable; and (iii) assumptions deemed
appropriate given the circumstances. The use of different methodologies and
assumptions may have a material effect on the estimated fair value amounts. In
addition, the Company enters into certain structured investment transactions,
real estate joint ventures and limited partnerships for which the Company may be
deemed to be the primary beneficiary and, therefore, may be required to
consolidate such investments. The accounting rules for the determination of the
primary beneficiary are complex and require evaluation of the contractual rights
and obligations associated with each party involved in the entity, an estimate
of the entity's expected losses and expected residual returns and the allocation
of such estimates to each party.

Derivatives

The Company enters into freestanding derivative transactions primarily to
manage the risk associated with variability in cash flows or changes in fair
values related to the Company's financial assets and liabilities or to changing
fair values. The Company also uses derivative instruments to hedge its currency
exposure associated with net investments in certain foreign operations. The
Company also purchases investment securities, issues certain insurance policies
and engages in certain reinsurance contracts that embed derivatives. The
associated financial statement risk is the volatility in net income which can
result from (i) changes in fair value of derivatives not qualifying as
accounting hedges; (ii) ineffectiveness of designated hedges; and (iii)
counterparty default. In addition, there is a risk that embedded derivatives
requiring bifurcation are not identified and reported at fair value in the
consolidated financial statements. Accounting for derivatives is complex, as
evidenced by significant authoritative interpretations of the primary accounting
standards which continue to evolve, as well as the significant judgments and
estimates involved in determining fair value in the absence of quoted market
values. These estimates are based on valuation methodologies and assumptions
deemed appropriate in the circumstances. Such assumptions include estimated
volatility and interest rates used in the determination of fair value where
quoted market values are not available. The use of different assumptions may
have a material effect on the estimated fair value amounts.

Deferred Policy Acquisition Costs

The Company incurs significant costs in connection with acquiring new and
renewal insurance business. These costs, which vary with and are primarily
related to the production of that business, are deferred. The recovery of such
costs is dependent upon the future profitability of the related business. The
amount of future profit is dependent principally on investment returns in excess
of the amounts credited to policyholders, mortality, morbidity, persistency,
interest crediting rates, 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 are most
likely to impact the rate of amortization of such costs. The aforementioned
factors enter into management's estimates of gross margins and profits, which
generally are used to amortize such costs. Revisions to estimates result in
changes to the amounts expensed in the reporting

F-8

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

period in which the revisions are made and could result in the impairment of the
asset and a charge to income if estimated future gross margins and profits are
less than amounts deferred. In addition, the Company utilizes the reversion to
the mean assumption, a standard industry practice, in its determination of the
amortization of deferred policy acquisition cost ("DAC"), including value of
business acquired ("VOBA"). This practice assumes that the expectation for
long-term appreciation in equity markets is not changed by minor short-term
market fluctuations, but that it does change when large interim deviations have
occurred.

Future Policy Benefits

The Company establishes liabilities for amounts payable under insurance
policies, including traditional life insurance, annuities and disability
insurance. Generally, amounts are payable over an extended period of time and
liabilities are established based on methods and underlying assumptions in
accordance with GAAP and applicable actuarial standards. Principal assumptions
used in the establishment of liabilities for future policy benefits are
mortality, morbidity, expenses, persistency, investment returns and inflation.

The Company also establishes liabilities for unpaid claims and claims
expenses for property and casualty insurance. Liabilities for property and
casualty insurance are dependent on estimates of amounts payable for claims
reported but not settled and claims incurred but not reported. These estimates
are influenced by historical experience and actuarial assumptions with respect
to current developments, anticipated trends and risk management strategies.

Differences between the actual experience and assumptions used in pricing
these policies and in the establishment of liabilities result in variances in
profit and could result in losses.

Reinsurance

The Company enters into reinsurance transactions as both a provider and a
purchaser of reinsurance. 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 previously. Additionally,
for each of its reinsurance contracts, the Company must determine if the
contract provides indemnification against loss or liability relating to
insurance risk, in accordance with applicable accounting standards. The Company
must review all contractual features, particularly those that may limit the
amount of insurance risk to which the reinsurer is subject or features that
delay the timely reimbursement of claims. If the Company determines that a
reinsurance contract does not expose the reinsurer to a reasonable possibility
of a significant loss from insurance risk, the Company records the contract
using the deposit method of accounting.

Litigation

The Company is a party to a number of legal actions. Given the inherent
unpredictability of litigation, it is difficult to estimate the impact of
litigation on the Company's consolidated 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. Liabilities related to certain lawsuits,
including the Company's asbestos-related liability, are especially difficult to
estimate due to the limitation of available data and uncertainty regarding
numerous variables used to determine amounts recorded. The data and variables
that impact the assumption used to estimate the Company's asbestos-related
liability include the number of future claims, the cost to resolve claims, the
disease mix and severity of disease, the jurisdiction of claims filed, tort
reform efforts and the impact of any possible future adverse verdicts and their
amounts. It is possible that an adverse outcome in certain of the Company's
litigation, including asbestos-related cases, or the use of different
assumptions in the

F-9

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

determination of amounts recorded could have a material effect upon the
Company's consolidated net income or cash flows in particular quarterly or
annual periods.

Employee Benefit Plans

The Company sponsors pension and other retirement plans in various forms
covering employees who meet specified eligibility requirements. The reported
expense and liability associated with these plans requires an extensive use of
assumptions which include the discount rate, expected return on plan assets and
rate of future compensation increases as determined by the Company. Management
determines these assumptions based upon currently available market and industry
data, historical performance of the plan and its assets, and consultation with
an independent consulting actuarial firm to aid it in selecting appropriate
assumptions and valuing its related liabilities. The actuarial assumptions used
in the calculation of the Company's aggregate projected benefit obligation may
vary and include an expectation of long-term market appreciation in equity
markets which is not changed by minor short-term market fluctuations, but does
change when large interim deviations occur. These assumptions used by the
Company may differ materially from actual results due to changing market and
economic conditions, higher or lower withdrawal rates or longer or shorter life
spans of the participants. These differences may have a significant effect on
the Company's consolidated financial statements and liquidity.

SIGNIFICANT ACCOUNTING POLICIES

Investments

The Company's fixed maturity and equity securities are classified as
available-for-sale and are reported at their estimated fair value. Unrealized
investment gains and losses on securities are recorded as a separate component
of other comprehensive income or loss, net of policyholder related amounts and
deferred income taxes. The cost of fixed maturity and equity securities is
adjusted for impairments in value deemed to be other-than-temporary. These
adjustments are recorded as investment losses. Investment gains and losses on
sales of securities are determined on a specific identification basis. All
security transactions are recorded on a trade date basis.

Mortgage loans on real estate are stated at amortized cost, net of
valuation allowances. Valuation allowances are established for the excess
carrying value of the mortgage loan over its estimated fair value when it is
probable that, based upon current information and events, the Company will be
unable to collect all amounts due under the contractual terms of the loan
agreement. Such valuation allowances are based upon the present value of
expected future cash flows discounted at the loan's original effective interest
rate or the collateral value if the loan is collateral dependent. The Company
also establishes allowances for loan loss when a loss contingency exists for
pools of loans with similar characteristics based on property types and loan to
value risk factors. A loss contingency exists when the likelihood that a future
event will occur is probable based on past events. Changes in valuation
allowances are included in net investment gains and losses. Interest income
earned on impaired loans is accrued on the principal amount of the loan based on
the loan's contractual interest rate. However, interest ceases to be accrued for
loans on which interest is generally more than 60 days past due and/or where the
collection of interest is not considered probable. Cash receipts on impaired
loans are recorded as a reduction of the recorded investment.

Real estate held-for-investment, including related improvements, is stated
at cost less accumulated depreciation. Depreciation is provided on a
straight-line basis over the estimated useful life of the asset (typically 20 to
40 years). Once the Company identifies a property that is expected to be sold
within one year and commences a firm plan for marketing the property, in
accordance with SFAS 144, the Company, if applicable, classifies the property as
held-for-sale and reports the related net investment income and any resulting
investment gains and losses as discontinued operations. Real estate
held-for-sale is stated at the lower of depreciated cost or fair value less
expected disposition costs. Real estate is not depreciated while it is
classified as held-for-sale. Cost of real estate held-for-investment is adjusted
for impairment whenever events
F-10

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

or changes in circumstances indicate the carrying amount of the asset may not be
recoverable. Impaired real estate is written down to estimated fair value with
the impairment loss being included in net investment gains and losses.
Impairment losses are based upon the estimated fair value of real estate, which
is generally computed using the present value of expected future cash flows from
the real estate discounted at a rate commensurate with the underlying risks.
Real estate acquired upon foreclosure of commercial and agricultural mortgage
loans is recorded at the lower of estimated fair value or the carrying value of
the mortgage loan at the date of foreclosure.

Policy loans are stated at unpaid principal balances.

Short-term investments are stated at amortized cost, which approximates
fair value.

Other invested assets consist principally of leveraged leases and funds
withheld at interest. The leveraged leases are recorded net of non-recourse
debt. The Company participates in lease transactions which are diversified by
industry, asset type and geographic area. The Company regularly reviews residual
values and impairs residuals to expected values as needed. Funds withheld
represent amounts contractually withheld by ceding companies in accordance with
reinsurance agreements. For agreements written on a modified coinsurance basis
and certain agreements written on a coinsurance basis, assets supporting the
reinsured policies and equal to the net statutory reserves are withheld and
continue to be legally owned by the ceding companies. Other invested assets also
includes the fair value of embedded derivatives related to funds withheld and
modified coinsurance contracts. The Company recognizes interest on funds
withheld in accordance with the treaty terms as investment income is earned on
the assets supporting the reinsured policies.

Structured Investment Transactions

The Company participates in structured investment transactions, primarily
asset securitizations and structured notes. These transactions enhance the
Company's total return of the investment portfolio principally by generating
management fee income on asset securitizations and by providing equity-based
returns on debt securities through structured notes and similar instruments.

The Company sponsors financial asset securitizations of high yield debt
securities, investment grade bonds and structured finance securities and also is
the collateral manager and a beneficial interest holder in such transactions. As
the collateral manager, the Company earns management fees on the outstanding
securitized asset balance, which are recorded in income as earned. When the
Company transfers assets to a bankruptcy-remote special purpose entity ("SPE")
and surrenders control over the transferred assets, the transaction is accounted
for as a sale. Gains or losses on securitizations are determined with reference
to the carrying amount of the financial assets transferred, which is allocated
to the assets sold and the beneficial interests retained based on relative fair
values at the date of transfer. Beneficial interests in securitizations are
carried at fair value in fixed maturities. Income on these beneficial interests
is recognized using the prospective method in accordance with Emerging Issues
Task Force ("EITF") Issue No. 99-20, Recognition of Interest Income and
Impairment on Certain Investments ("EITF 99-20"). The SPEs used to securitize
assets are not consolidated by the Company because the Company has determined
that it is not the primary beneficiary of these entities based on the framework
provided in FASB Interpretation No. 46 (revised December 31, 2003),
Consolidation of Variable Interest Entities, An Interpretation of ARB No. 51
("FIN 46(r)"). Prior to the adoption of FIN 46(r), such SPEs were not
consolidated because they did not meet the criteria for consolidation under
previous accounting guidance.

The Company purchases or receives beneficial interests in SPEs, which
generally acquire financial assets, including corporate equities, debt
securities and purchased options. The Company has not guaranteed the
performance, liquidity or obligations of the SPEs and the Company's exposure to
loss is limited to its carrying value of the beneficial interests in the SPEs.
The Company uses the beneficial interests as part of its risk management
strategy, including asset-liability management. These SPEs are not consolidated
by the Company because the Company has determined that it is not the primary
beneficiary of these entities based

F-11

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

on the framework provided in FIN 46(r). Prior to the adoption of FIN 46(r), such
SPEs were not consolidated because they did not meet the criteria for
consolidation under previous accounting guidance. These beneficial interests are
generally structured notes, as defined by EITF Issue No. 96-12, Recognition of
Interest Income and Balance Sheet Classification of Structured Notes, which are
included in fixed maturities, and their income is recognized using the
retrospective interest method or the level yield method, as appropriate.
Impairments of these beneficial interests are included in net investment gains
and losses.

Derivative Financial Instruments

The Company uses derivative instruments to manage risk through one of five
principal risk management strategies, the hedging of: (i) liabilities; (ii)
invested assets; (iii) portfolios of assets or liabilities; (iv) net investments
in certain foreign operations; and (v) firm commitments and forecasted
transactions. Additionally, the Company enters into income generation and
replication derivative transactions as permitted by its insurance subsidiaries'
Derivatives Use Plans approved by the applicable state insurance departments.
The Company's derivative hedging strategy employs a variety of instruments,
including financial futures, financial forwards, interest rate, credit default
and foreign currency swaps, foreign currency forwards, and options, including
caps and floors.

On the date the Company enters into a derivative contract, management
designates the derivative as a hedge of the identified exposure (fair value,
cash flow or foreign currency). If a derivative does not qualify for hedge
accounting, according to Statement of Financial Accounting Standards ("SFAS")
No. 133, Accounting for Derivative Instruments and Hedging Activities, as
amended ("SFAS 133"), the changes in its fair value and all scheduled periodic
settlement receipts and payments are reported in net investment gains or losses.

The Company formally documents all relationships between hedging
instruments and hedged items, as well as its risk management objective and
strategy for undertaking various hedge transactions. In this documentation, the
Company specifically identifies the asset, liability, firm commitment, foreign
operation, or forecasted transaction that has been designated as a hedged item,
states how the hedging instrument is expected to hedge the 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 hedge ineffectiveness. The Company generally determines
hedge effectiveness based on total changes in fair value of a derivative
instrument. The Company discontinues hedge accounting prospectively when: (i) it
is determined that the derivative is no longer effective in offsetting changes
in the fair value or cash flows of a hedged item; (ii) the derivative expires or
is sold, terminated, or exercised; (iii) the derivative is de-designated as a
hedge instrument; (iv) it is probable that the forecasted transaction will not
occur; (v) a hedged firm commitment no longer meets the definition of a firm
commitment; or (vi) management determines that designation of the derivative as
a hedge instrument is no longer appropriate.

The Company designates and accounts for the following as cash flow hedges,
when they have met the effectiveness requirements of SFAS 133: (i) various types
of interest rate swaps to convert floating rate investments to fixed rate
investments; (ii) various types of interest rate swaps to convert floating rate
liabilities into fixed rate liabilities; (iii) receive U.S. dollar fixed on
foreign currency swaps to hedge the foreign currency cash flow exposure of
foreign currency denominated investments; (iv) foreign currency forwards to
hedge the exposure of future payments or receipts in foreign currencies; and (v)
other instruments to hedge the cash flows of various other forecasted
transactions. For all qualifying and highly effective cash flow hedges, the
effective portion of changes in fair value of the derivative instrument is
reported in other comprehensive income or loss. The ineffective portion of
changes in fair value of the derivative instrument is reported in net investment
gains or losses. Hedged forecasted transactions, other than the receipt or
payment of variable interest payments, are not expected to occur more than 12
months after hedge inception.

The Company designates and accounts for the following as fair value hedges
when they have met the effectiveness requirements of SFAS 133: (i) various types
of interest rate swaps to convert fixed rate
F-12

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

investments to floating rate investments; (ii) receive U.S. dollar floating on
foreign currency swaps to hedge the foreign currency fair value exposure of
foreign currency denominated investments; (iii) pay U.S. dollar floating on
foreign currency swaps to hedge the foreign currency fair value exposure of
foreign currency denominated liabilities, and (iv) other instruments to hedge
various other fair value exposures of investments. For all qualifying and highly
effective fair value hedges, the changes in fair value of the derivative
instrument are reported as net investment gains or losses. In addition, changes
in fair value attributable to the hedged portion of the underlying instrument
are reported in net investment gains and losses. In addition, changes in fair
value attributable to the hedged portion of the underlying instrument are
reported in net investment gains and losses.

When hedge accounting is discontinued because it is determined that the
derivative no longer qualifies as an effective fair value hedge, the derivative
continues to be carried on the consolidated balance sheet at its fair value, but
the hedged asset or liability will no longer be adjusted for changes in fair
value. When hedge accounting is discontinued because the hedged item no longer
meets the definition of a firm commitment, the derivative continues to be
carried on the consolidated balance sheet at its fair value, and any asset or
liability that was recorded pursuant to recognition of the firm commitment is
removed from the consolidated balance sheet and recognized as a net investment
gain or loss in the current period. When hedge accounting is discontinued
because it is probable that a forecasted transaction will not occur, the
derivative continues to be carried on the consolidated balance sheet at its fair
value, and gains and losses that were accumulated in other comprehensive income
or loss are recognized immediately in net investment gains or losses. When the
hedged forecasted transaction is no longer probable, but is reasonably possible,
the accumulated gain or loss remains in other comprehensive income or loss and
is recognized when the transaction affects net income or loss; however,
prospective hedge accounting for the transaction is terminated. In all other
situations in which hedge accounting is discontinued, the derivative is carried
at its fair value on the consolidated balance sheet, with changes in its fair
value recognized in the current period as net investment gains or losses.

The Company uses forward exchange contracts that provide an economic hedge
on portions of its net investments in foreign operations against adverse
movements in foreign currency exchange rates. Unrealized losses on instruments
so designated are recorded as components of accumulated other comprehensive
income.

The Company may enter into contracts that are not themselves derivative
instruments but contain embedded derivatives. For each contract, the Company
assesses whether the economic characteristics of the embedded derivative are
clearly and closely related to those of the host contract and determines whether
a separate instrument with the same terms as the embedded instrument would meet
the definition of a derivative instrument.

If it is determined that the embedded derivative possesses economic
characteristics that are not clearly and closely related to the economic
characteristics of the host contract, and that a separate instrument with the
same terms would qualify as a derivative instrument, the embedded derivative is
separated from the host contract and accounted for as a stand-alone derivative.
Such embedded derivatives are recorded on the consolidated balance sheet at fair
value and changes in their fair value are recognized in the current period in
net investment gains or losses. 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 consolidated balance sheet at fair value, with
changes in fair value recognized in the current period as net investment gains
or losses.

The Company also uses derivatives to synthetically create investments that
are either more expensive to acquire or otherwise unavailable in the cash
markets. These securities, called replication synthetic asset transactions
("RSATs"), are a combination of a credit default swap and a U.S. Treasury or
Agency security, synthetically creating a third replicated security. These
derivatives are not designated as hedges. As of December 31, 2003 and 2002, 24
and 16, respectively, of such RSATs, with notional amounts totaling $489 million
and $240 million, respectively, were outstanding. The Company records both the
premiums

F-13

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

received on the credit default swaps over the life of the contracts and changes
in their fair value in net investment gains and losses.

The Company enters into written covered calls to generate additional
investment income on the underlying assets it holds. These derivatives are not
designated as hedges. The Company records the premiums received over the life of
the contract and changes in fair value of such options as net investment gains
and losses.

Cash and Cash Equivalents

The Company considers all investments purchased with an original maturity
of three months or less to be cash equivalents.

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 either the straight-line or
sum-of-the-years-digits method over the estimated useful lives of the assets.
The estimated life for company occupied real estate property is generally 40
years. Estimated lives range from five to ten years for leasehold improvements
and three to five years for all other property and equipment. Accumulated
depreciation and amortization of property, equipment and leasehold improvements
was $527 million and $428 million at December 31, 2003 and 2002, respectively.
Related depreciation and amortization expense was $119 million, $85 million and
$99 million for the years ended December 31, 2003, 2002 and 2001, respectively.

Computer software, which is included in other assets, is stated at cost,
less accumulated amortization. Purchased software costs, as well as 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 three-year period using the straight-line method. Accumulated
amortization of capitalized software was $432 million and $317 million at
December 31, 2003 and 2002, respectively. Related amortization expense was $150
million, $155 million and $110 million for the years ended December 31, 2003,
2002 and 2001, respectively.

Deferred Policy Acquisition Costs

The costs of acquiring new and renewal insurance business that vary with,
and are primarily related to, the production of that business are deferred. Such
costs, which consist principally of commissions, agency and policy issue
expenses, are amortized with interest over the expected life of the contract for
participating traditional life, universal life and investment-type products.
Generally, DAC is amortized in proportion to the present value of estimated
gross margins or profits from investment, mortality, expense margins and
surrender charges. Interest rates are based on rates in effect at the inception
or acquisition of the contracts.

Actual gross margins or profits can vary from management's estimates
resulting in increases or decreases in the rate of amortization. Management
utilizes the reversion to the mean assumption, a standard industry practice, in
its determination of the amortization of DAC. This practice assumes that the
expectation for long-term equity investment appreciation is not changed by minor
short-term market fluctuations, but that it does change when large interim
deviations have occurred. Management periodically updates these estimates and
evaluates the recoverability of DAC. When appropriate, management revises its
assumptions of the estimated gross margins or profits of these contracts, and
the cumulative amortization is reestimated and adjusted by a cumulative charge
or credit to current operations.

DAC for non-participating traditional life, non-medical health and annuity
policies with life contingencies is amortized in proportion to anticipated
premiums. Assumptions as to anticipated premiums are made at the date of policy
issuance or acquisition and are consistently applied during the lives of the
contracts.
F-14

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Deviations from estimated experience are included in operations when they occur.
For these contracts, the amortization period is typically the estimated life of
the policy.

Policy acquisition costs related to internally replaced contracts are
expensed at the date of replacement.

DAC for property and casualty insurance contracts, which is primarily
comprised of commissions and certain underwriting expenses, are deferred and
amortized on a pro rata basis over the applicable contract term or reinsurance
treaty.

VOBA, included as part of DAC, represents the present value of future
profits generated from existing insurance contracts in-force at the date of
acquisition and is amortized over the expected policy or contract duration in
relation to the estimated gross profits or premiums from such policies and
contracts.

Goodwill

The excess of cost over the fair value of net assets acquired ("goodwill")
is included in other assets. On January 1, 2002, the Company adopted the
provisions of SFAS No. 142, Goodwill and Other Intangible Assets, ("SFAS 142").
In accordance with SFAS 142, goodwill is not amortized but is tested for
impairment at least annually to determine whether a writedown of the cost of the
asset is required. Impairments are recognized in operating results when the
carrying amount of goodwill exceeds its implied fair value. Prior to the
adoption of SFAS 142, goodwill was amortized on a straight-line basis over a
period ranging from ten to 30 years and impairments were recognized in operating
results when permanent diminution in value was deemed to have occurred.

Changes in goodwill were as follows:

Recognition of Insurance Revenue and Related Benefits

Premiums related to traditional life and annuity policies with life
contingencies are recognized as revenues when due. Benefits and expenses are
provided against such revenues to recognize profits over the estimated lives of
the policies. When premiums are due over a significantly shorter period than the
period over which benefits are provided, any excess profit is deferred and
recognized into operations in a constant relationship to insurance in-force or,
for annuities, the amount of expected future policy benefit payments.

Premiums related to non-medical health contracts are recognized on a pro
rata basis over the applicable contract term.

Deposits related to universal life and investment-type products are
credited to policyholder account balances. Revenues from such contracts consist
of amounts assessed against policyholder account balances for mortality, policy
administration and surrender charges and are recognized in the period in which
services are provided. Amounts that are charged to operations include interest
credited and benefit claims incurred in excess of related policyholder account
balances.

F-15

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Premiums related to property and casualty contracts are recognized as
revenue on a pro rata basis over the applicable contract term. Unearned premiums
are included in other liabilities.

Other Revenues

Other revenues include asset management and advisory fees, broker/dealer
commissions and fees, and administrative service fees. Such fees and commissions
are recognized in the period in which services are performed. Other revenues
also include changes in account value relating to corporate-owned life insurance
("COLI"). Under certain COLI contracts, if the Company reports certain unlikely
adverse results in its consolidated financial statements, withdrawals would not
be immediately available and would be subject to market value adjustment, which
could result in a reduction of the account value.

Policyholder Dividends

Policyholder dividends are approved annually by the insurance subsidiaries'
boards of directors. The aggregate amount of policyholder dividends is related
to actual interest, mortality, morbidity and expense experience for the year, as
well as management's judgment as to the appropriate level of statutory surplus
to be retained by the insurance subsidiaries.

Participating Business

Participating business represented approximately 14% and 16% of the
Company's life insurance in-force, and 57% and 55% of the number of life
insurance policies in-force, at December 31, 2003 and 2002, respectively.
Participating policies represented approximately 38% and 38%, 39% and 41%, and
43% and 45% of gross and net life insurance premiums for the years ended
December 31, 2003, 2002 and 2001, respectively. The percentages indicated are
calculated excluding the business of the Reinsurance segment.

Income Taxes

The Holding Company and its includable life insurance and non-life
insurance subsidiaries file a consolidated U.S. federal income tax return in
accordance with the provisions of the Internal Revenue Code of 1986, as amended
(the "Code"). Non-includable subsidiaries file either separate tax returns or
separate consolidated tax returns. The future tax consequences of temporary
differences between financial reporting and tax bases of assets and liabilities
are measured at the balance sheet dates and are recorded as deferred income tax
assets and liabilities.

Reinsurance

The Company has reinsured certain of its life insurance and property and
casualty insurance contracts with other insurance companies under various
agreements. Amounts due from reinsurers are estimated based upon assumptions
consistent with those used in establishing the liabilities related to the
underlying reinsured contracts. Policy and contract liabilities are reported
gross of reinsurance credits. DAC is reduced by amounts recovered under
reinsurance contracts. Amounts received from reinsurers for policy
administration are reported in other revenues.

The Company assumes and retrocedes financial reinsurance contracts, which
represent low mortality risk reinsurance treaties. These contracts are reported
as deposits and are included in other assets. The amount of revenue reported on
these contracts represents fees and the cost of insurance under the terms of the
reinsurance agreement and is reported in other revenues.

F-16

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Separate Accounts

Separate accounts are established in conformity with insurance laws and are
generally not chargeable with 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.
Investments (stated at estimated fair value) and liabilities of the separate
accounts are reported separately as assets and liabilities. Deposits to separate
accounts, investment income and recognized and unrealized gains and losses on
the investments of the separate accounts accrue directly to contractholders and,
accordingly, are not reflected in the revenues of the Company. Fees charged to
contractholders, principally mortality, policy administration and surrender
charges, are included in universal life and investment-type products fees. See
"-- Application of Recent Accounting Pronouncements."

Stock-Based Compensation

Effective January 1, 2003, the Company accounts for stock-based
compensation plans using the prospective fair value accounting method prescribed
by SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), as
amended by SFAS 148, Accounting for Stock-Based Compensation -- Transition and
Disclosure ("SFAS 148").

Stock-based compensation grants prior to January 1, 2003 are accounted for
using the accounting method prescribed by Accounting Principles Board Opinion
("APB") No. 25, Accounting for Stock Issued to Employees ("APB 25") and Note 14
includes the pro forma disclosures required by SFAS No. 123, as amended.

Foreign Currency

Balance sheet accounts of foreign operations are translated at the exchange
rates in effect at each year-end and income and expense accounts are translated
at the average rates of exchange prevailing during the year. The local
currencies of foreign operations are the functional currencies unless the local
economy is highly inflationary. Translation adjustments are charged or credited
directly to other comprehensive income or loss. Gains and losses from foreign
currency transactions are reported in earnings.

Discontinued Operations

The results of operations of a component of the Company that either has
been disposed of or is classified as held-for-sale on or after January 1, 2002
are reported in discontinued operations if the operations and cash flows of the
component have been or will be eliminated from the ongoing operations of the
Company as a result of the disposal transaction and the Company will not have
any significant continuing involvement in the operations of the component after
the disposal transaction.

Earnings Per Share

Basic earnings per share is computed based on the weighted average number
of shares outstanding during the period. Diluted earnings per share includes the
dilutive effect of the assumed: (i) conversion of forward purchase contracts;
(ii) exercise of stock options, and (iii) issuance under deferred stock
compensation using the treasury stock method. Under the treasury stock method,
forward purchase contracts, exercise of the stock options and issuance under
deferred stock compensation is assumed with the proceeds used to purchase common
stock at the average market price for the period. The difference between the
number of shares assumed issued and number of shares assumed purchased
represents the dilutive shares.

F-17

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DEMUTUALIZATION AND INITIAL PUBLIC OFFERING

On April 7, 2000 (the "date of demutualization"), Metropolitan Life
Insurance Company ("Metropolitan Life") converted from a mutual life insurance
company to a stock life insurance company and became a wholly-owned subsidiary
of MetLife, Inc. The conversion was pursuant to an order by the New York
Superintendent of Insurance (the "Superintendent") approving Metropolitan Life's
plan of reorganization, as amended (the "plan").

On the date of demutualization, policyholders' membership interests in
Metropolitan Life were extinguished and eligible policyholders received, in
exchange for their interests, trust interests representing 494,466,664 shares of
common stock of MetLife, Inc. to be held in a trust, cash payments aggregating
$2,550 million and adjustments to their policy values in the form of policy
credits aggregating $408 million, as provided in the plan. In addition,
Metropolitan Life's Canadian branch made cash payments of $327 million in the
second quarter of 2000 to holders of certain policies transferred to Clarica
Life Insurance Company in connection with the sale of a substantial portion of
Metropolitan Life's Canadian operations in 1998, as a result of a commitment
made in connection with obtaining Canadian regulatory approval of that sale.

APPLICATION OF RECENT ACCOUNTING PRONOUNCEMENTS

Effective December 31, 2003, the Company adopted EITF Issue No. 03-1, The
Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments ("EITF 03-1"). EITF 03-1 provides guidance on the disclosure
requirements for other-than-temporary impairments of debt and marketable equity
investments that are accounted for under Statement of Financial Accounting
Standards ("SFAS") No. 115, Accounting for Certain Investments in Debt and
Equity Securities. The adoption of EITF 03-1 requires the Company to include
certain quantitative and qualitative disclosures for debt and marketable equity
securities classified as available-for-sale or held-to-maturity under SFAS 115
that are impaired at the balance sheet date but for which an
other-than-temporary impairment has not been recognized. (See Note 2). The
initial adoption of EITF 03-1, which only required additional disclosures, did
not have a material impact on the Company's consolidated financial statements.

In December 2003, the Financial Accounting Standards Board ("FASB") revised
SFAS No. 132, Employers' Disclosures about Pensions and Other Postretirement
Benefits -- an Amendment of FASB Statements No. 87, 88 and 106 ("SFAS 132(r)").
SFAS 132(r) retains most of the disclosure requirements of SFAS 132 and requires
additional disclosure about assets, obligations, cash flows and net periodic
benefit cost of defined benefit pension plans and other defined postretirement
plans. SFAS 132(r) is primarily effective for fiscal years ending after December
15, 2003; however, certain disclosures about foreign plans and estimated future
benefit payments are effective for fiscal years ending after June 15, 2004. The
Company's adoption of SFAS 132(r) on December 31, 2003 did not have a
significant impact on its consolidated financial statements since it only
revises disclosure requirements. In January 2004, the FASB issued FASB Staff
Position ("FSP") No. 106-1, Accounting and Disclosure Requirements Related to
the Medicare Prescription Drug, Improvement and Modernization Act of 2003 ("FSP
106-1"), which permits a sponsor of a postretirement health care plan that
provides a prescription drug benefit to make a one-time election to defer
accounting for the effects of the new legislation. The Company has elected to
defer the accounting until further guidance is issued by the FASB. The
measurements of the Company's postretirement accumulated benefit plan obligation
and net periodic benefit cost disclosed in Note 13 do not reflect the effects of
the new legislation. The guidance, when issued, could require the Company to
change previously reported information.

In July 2003, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position 03-1,
Accounting and Reporting by Insurance Enterprises for Certain Nontraditional
Long-Duration Contracts and for Separate Accounts ("SOP 03-1"). SOP 03-1
provides guidance on (i) the classification and valuation of long-duration
contract liabilities, (ii) the accounting for sales inducements, and (iii)
separate account presentation and valuation. SOP 03-1 is effective
F-18

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

for fiscal years beginning after December 15, 2003. As of January 1, 2004, the
Company increased future policyholder benefits for various guaranteed minimum
death and income benefits net of DAC and unearned revenue liability offsets
under certain variable annuity and universal life contracts of approximately $40
million, net of income tax, which will be reported as a cumulative effect of a
change in accounting. Industry standards and practices continue to evolve
relating to the valuation of liabilities relating to these types of benefits,
which may result in further adjustments to the Company's measurement of
liabilities associated with such benefits in subsequent accounting periods.
Effective with the adoption of SOP 03-1, costs associated with enhanced or bonus
crediting rates to contractholders will be deferred and amortized over the life
of the related contract using assumptions consistent with the amortization of
DAC. Prior to adoption of SOP 03-1, the costs associated with these sales
inducements have been deferred and amortized over the contingent sales
inducement period. This provision of SOP 03-1 will be applied prospectively to
contracts. Effective January 1, 2004, the Company reclassified $115 million of
ownership in its own separate accounts from other assets to fixed maturities
available-for-sale and equity securities. This reclassification will have no
effect on net income or other comprehensive income. In accordance with SOP
03-1's revised definition of a separate account, effective January 1, 2004, the
Company also reclassified $1,678 million of separate account assets to general
account investments and $1,678 million of separate account liabilities to future
policy benefits and policyholder account balances. The net cumulative effect of
this reclassification was insignificant.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity ("SFAS 150").
SFAS 150 clarifies the accounting for certain financial instruments with
characteristics of both liabilities and equity and requires that those
instruments be classified as a liability or, in certain circumstances, an asset.
SFAS 150 is effective for financial instruments entered into or modified after
May 31, 2003 and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003. The adoption of SFAS 150, as of July 1,
2003, required the Company to reclassify $277 million of company-obligated
mandatorily redeemable securities of subsidiary trusts from mezzanine equity to
liabilities.

In April 2003, the FASB cleared Statement 133 Implementation Issue No. B36,
Embedded Derivatives: Modified Coinsurance Arrangements and Debt Instruments
That Incorporate Credit Risk Exposures That Are Unrelated or Only Partially
Related to the Creditworthiness of the Obligor under Those Instruments ("Issue
B36"). Issue B36 concluded that (i) a company's funds withheld payable and/or
receivable under certain reinsurance arrangements, and (ii) a debt instrument
that incorporates credit risk exposures that are unrelated or only partially
related to the creditworthiness of the obligor include an embedded derivative
feature that is not clearly and closely related to the host contract. Therefore,
the embedded derivative feature must be measured at fair value on the balance
sheet and changes in fair value reported in income. Issue B36 became effective
on October 1, 2003 and required the Company to increase policyholder account
balances by $40 million, to decrease other invested assets by $1 million and to
increase DAC by $2 million. These amounts, net of income tax of $13 million,
were recorded as a cumulative effect of a change in accounting. As a result of
the adoption of Issue B36, the Company recognized investment gains of $9
million, net of income tax, for the three month period ended December 31, 2003.

In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities ("SFAS 149"). SFAS 149 amends and
clarifies the accounting and reporting for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities. Except for certain implementation guidance that is incorporated in
SFAS 149 and already effective, SFAS 149 is effective for contracts entered into
or modified after June 30, 2003. The Company's adoption of SFAS 149 on July 1,
2003 did not have a significant impact on the consolidated financial statements.

During 2003, the Company adopted FASB Interpretation No. 46 Consolidation
of Variable Interest Entities -- An Interpretation of ARB No. 51 ("FIN 46") and
its December 2003 revision ("FIN 46(r)"). Certain of the Company's asset-backed
securitizations, collateralized debt obligations, structured investment

F-19

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

transactions, and investments in real estate joint ventures and other limited
partnership interests meet the definition of a variable interest entity ("VIE")
and must be consolidated, in accordance with the transition rules and effective
dates, if the Company is deemed to be the primary beneficiary. A VIE is defined
as (i) any entity in which the equity investments at risk in such entity do not
have the characteristics of a controlling financial interest, or (ii) any entity
that does not have sufficient equity at risk to finance its activities without
additional subordinated support from other parties. Effective February 1, 2003,
the Company adopted FIN 46 for VIEs created or acquired on or after February 1,
2003 and, effective December 31, 2003, the Company adopted FIN 46(r) with
respect to interests in entities formerly considered special purpose entities
("SPEs"), including interests in asset-backed securities and collateralized debt
obligations. In accordance with the provisions of FIN 46(r), the Company has
elected to defer until March 31, 2004 the consolidation of interests in VIEs for
non SPEs acquired prior to February 1, 2003 for which it is the primary
beneficiary. The adoption of FIN 46 as of February 1, 2003 did not have a
significant impact on the Company's consolidated financial statements. The
adoption of the provisions of FIN 46(r) at December 31, 2003 did not require the
Company to consolidate any additional VIEs that were not previously
consolidated.

Effective January 1, 2003, the Company adopted FIN No. 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others ("FIN 45"). FIN 45 requires entities to
establish liabilities for certain types of guarantees and expands financial
statement disclosures for others. The initial recognition and initial
measurement provisions of FIN 45 are applicable on a prospective basis to
guarantees issued or modified after December 31, 2002. The adoption of FIN 45
did not have a significant impact on the Company's consolidated financial
statements. See Note 12.

Effective January 1, 2003, the Company adopted SFAS No. 148, Accounting for
Stock-Based Compensation -- Transition and Disclosure ("SFAS 148"), which
provides guidance on how to apply the fair value method of accounting and use
the prospective transition method for stock options granted by the Company
subsequent to December 31, 2002. As permitted under SFAS 148, options granted
prior to January 1, 2003 will continue to be accounted for under Accounting
Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to
Employees ("APB 25"), and the pro forma impact of accounting for these options
at fair value will continue to be disclosed in the consolidated financial
statements until the last of those options vest in 2005. See Note 14.

Effective January 1, 2003, the Company adopted SFAS No. 146, Accounting for
Costs Associated with Exit or Disposal Activities ("SFAS 146"). SFAS 146
requires that a liability for a cost associated with an exit or disposal
activity be recorded and measured initially at fair value only when the
liability is incurred rather than at the date of an entity's commitment to an
exit plan as required by EITF Issue No. 94-3, Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity Including
Certain Costs Incurred in a Restructuring ("EITF 94-3"). The Company's
activities subject to this guidance in 2003 were not significant.

Effective January 1, 2003, the Company adopted SFAS No. 145, Rescission of
FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections ("SFAS 145"). In addition to amending or rescinding other
existing authoritative pronouncements to make various technical corrections,
clarify meanings, or describe their applicability under changed conditions, SFAS
145 generally precludes companies from recording gains and losses from the
extinguishment of debt as an extraordinary item. SFAS 145 also requires
sale-leaseback treatment for certain modifications of a capital lease that
result in the lease being classified as an operating lease. The adoption of SFAS
145 did not have a significant impact on the Company's consolidated financial
statements.

Effective January 1, 2002, the Company adopted SFAS No. 144, Accounting for
the Impairment or Disposal of Long-Lived Assets ("SFAS 144"). SFAS 144 provides
a single model for accounting for long-lived assets to be disposed of by
superseding SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of ("SFAS 121"), and the accounting and
reporting
F-20

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

provisions of APB Opinion No. 30, Reporting the Results of
Operations -- Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions ("APB
30"). Under SFAS 144, discontinued operations are measured at the lower of
carrying value or fair value less costs to sell, rather than on a net realizable
value basis. Future operating losses relating to discontinued operations also
are no longer recognized before they occur. SFAS 144 (i) broadens the definition
of a discontinued operation to include a component of an entity (rather than a
segment of a business); (ii) requires long-lived assets to be disposed of other
than by sale to be considered held and used until disposed; and (iii) retains
the basic provisions of (a) APB 30 regarding the presentation of discontinued
operations in the statements of income, (b) SFAS 121 relating to recognition and
measurement of impaired long-lived assets (other than goodwill), and (c) SFAS
121 relating to the measurement of long-lived assets classified as
held-for-sale. Adoption of SFAS 144 did not have a material impact on the
Company's consolidated financial statements other than the presentation as
discontinued operations of net investment income and net investment gains
related to operations of real estate on which the Company initiated disposition
activities subsequent to January 1, 2002 and the classification of such real
estate as held-for-sale on the consolidated balance sheets. See Note 20.

Effective January 1, 2002, the Company adopted SFAS No. 142. SFAS 142
eliminates the systematic amortization and establishes criteria for measuring
the impairment of goodwill and certain other intangible assets by reporting
unit. Amortization of goodwill, prior to the adoption of SFAS 142 was $47
million for the year ended December 31, 2001. Amortization of other intangible
assets was not material for the years ended December 31, 2003, 2002 and 2001.
The Company completed the required impairment tests of goodwill and
indefinite-lived intangible assets in the third quarter of 2002 and recorded a
$5 million charge to earnings relating to the impairment of certain goodwill
assets as a cumulative effect of a change in accounting. There was no impairment
of identified intangible assets or significant reclassifications between
goodwill and other intangible assets at January 1, 2002.

Effective July 1, 2001, the Company adopted SFAS No. 141, Business
Combinations ("SFAS 141"). SFAS 141 requires the purchase method of accounting
for all business combinations and separate recognition of intangible assets
apart from goodwill if such intangible assets meet certain criteria. In
accordance with SFAS 141, the elimination of $5 million of negative goodwill was
reported in net income in the first quarter of 2002 as a cumulative effect of a
change in accounting.

In July 2001, the U.S. Securities and Exchange Commission ("SEC") released
Staff Accounting Bulletin ("SAB") No. 102, Selected Loan Loss Allowance and
Documentation Issues ("SAB 102"). SAB 102 summarizes certain of the SEC's views
on the development, documentation and application of a systematic methodology
for determining allowances for loan and lease losses. The application of SAB 102
by the Company did not have a material impact on the Company's consolidated
financial statements.

Effective April 1, 2001, the Company adopted certain additional accounting
and reporting requirements of SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities -- a
Replacement of FASB Statement No. 125, relating to the derecognition of
transferred assets and extinguished liabilities and the reporting of servicing
assets and liabilities. The initial adoption of these requirements did not have
a material impact on the Company's consolidated financial statements.

Effective April 1, 2001, the Company adopted EITF 99-20, Recognition of
Interest Income and Impairment on Certain Investments. This pronouncement
requires investors in certain asset-backed securities to record changes in their
estimated yield on a prospective basis and to apply specific evaluation methods
to these securities for an other-than-temporary decline in value. The initial
adoption of EITF 99-20 did not have a material impact on the Company's
consolidated financial statements.

Effective January 1, 2001, the Company adopted SFAS 133 which established
new accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other

F-21

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

contracts, and for hedging activities. The cumulative effect of the adoption of
SFAS 133, as of January 1, 2001, resulted in a $33 million increase in other
comprehensive income, net of income taxes of $18 million, and had no material
impact on net income. The increase to other comprehensive income is attributable
to net gains on cash flow-type hedges at transition. Also at transition, the
amortized cost of fixed maturities decreased and other invested assets increased
by $22 million, representing the fair value of certain interest rate swaps that
were accounted for prior to SFAS 133 using fair value-type settlement
accounting. During the year ended December 31, 2001, $18 million of the pre-tax
gain reported in accumulated other comprehensive income at transition was
reclassified into net investment income. The FASB continues to issue additional
guidance relating to the accounting for derivatives under SFAS 133, which may
result in further adjustments to the Company's treatment of derivatives in
subsequent accounting periods.

2. INVESTMENTS

FIXED MATURITIES AND EQUITY SECURITIES

Fixed maturities and equity securities at December 31, 2003 were as
follows:

F-22

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Fixed maturities and equity securities at December 31, 2002 were as
follows:

The Company held foreign currency derivatives with notional amounts of
$4,273 million and $2,371 million to hedge the exchange rate risk associated
with foreign bonds and loans at December 31, 2003 and 2002, respectively.

The Company held fixed maturities at estimated fair values that were below
investment grade or not rated by an independent rating agency that totaled
$12,825 million and $11,619 million at December 31, 2003 and 2002, respectively.
These securities had a net unrealized gain of $888 million and a loss of $422
million at December 31, 2003 and 2002, respectively. Non-income producing fixed
maturities were $371 million and $479 million at December 31, 2003 and 2002,
respectively.

F-23

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The cost or amortized cost and estimated fair value of bonds at December
31, 2003, by contractual maturity date (excluding scheduled sinking funds), are
shown below:

Gross investment losses above exclude writedowns recorded during 2003, 2002
and 2001 for other-than-temporarily impaired available-for-sale fixed maturities
and equity securities of $355 million, $1,375 million and $278 million,
respectively.

Excluding investments in U.S. Treasury securities and obligations of U.S.
government corporations and agencies, the Company is not exposed to any
significant concentration of credit risk in its fixed maturities portfolio.

F-24

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table shows the estimated fair values and gross unrealized
losses of the Company's fixed maturities, aggregated by sector and length of
time that the securities have been in a continuous unrealized loss position at
December 31, 2003:

At December 31, 2003, the Company had gross unrealized losses of $6 million
from equity securities that had been in an unrealized loss position for less
than twelve months. The amount of unrealized losses from equity securities that
had been in an unrealized loss position for twelve months or greater is less
than $1 million at December 31, 2003. The fair value of those equity securities
that had been in an unrealized loss position for less than twelve months and for
twelve months or greater at December 31, 2003, is $53 million and $22 million,
respectively.

SECURITIES LENDING PROGRAM

The Company participates in a securities lending program whereby blocks of
securities, which are included in investments, are loaned to third parties,
primarily major brokerage firms. The Company requires a minimum of 102% of the
fair value of the loaned securities to be separately maintained as collateral
for the loans. Securities with a cost or amortized cost of $25,121 million and
$16,196 million and an estimated fair value of $26,387 million and $17,625
million were on loan under the program at December 31, 2003 and 2002,
respectively. The Company was liable for cash collateral under its control of
$27,083 million and $17,862 million at December 31, 2003 and 2002, respectively.
Security collateral on deposit from customers may not be sold or repledged and
is not reflected in the consolidated financial statements.

ASSETS ON DEPOSIT AND HELD IN TRUST

The Company had investment assets on deposit with regulatory agencies with
a fair market value of $1,353 million and $975 million at December 31, 2003 and
2002, respectively. Company securities held in trust to satisfy collateral
requirements had an amortized cost of $2,276 million and $1,949 million at
December 31, 2003 and 2002, respectively.

F-25

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

MORTGAGE LOANS ON REAL ESTATE

Mortgage loans on real estate were categorized as follows:

Mortgage loans on real estate are collateralized by properties primarily
located throughout the United States. At December 31, 2003, approximately 21%,
7% and 7% of the properties were located in California, New York and Florida,
respectively. Generally, the Company (as the lender) requires that a minimum of
one-fourth of the purchase price of the underlying real estate be paid by the
borrower.

Certain of the Company's real estate joint ventures have mortgage loans
with the Company. The carrying values of such mortgages were $639 million and
$620 million at December 31, 2003 and 2002, respectively.

Changes in mortgage loan valuation allowances were as follows:

A portion of the Company's mortgage loans on real estate was impaired and
consisted of the following:

The average investment in impaired mortgage loans on real estate was $652
million, $1,088 million and $947 million for the years ended December 31, 2003,
2002 and 2001, respectively. Interest income on impaired mortgage loans was $58
million, $91 million and $103 million for the years ended December 31, 2003,
2002 and 2001, respectively.

F-26

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The investment in restructured mortgage loans on real estate was $191
million and $414 million at December 31, 2003 and 2002, respectively. Interest
income of $19 million, $44 million and $76 million was recognized on
restructured loans for the years ended December 31, 2003, 2002 and 2001,
respectively. Gross interest income that would have been recorded in accordance
with the original terms of such loans amounted to $24 million, $41 million and
$60 million for the years ended December 31, 2003, 2002 and 2001, respectively.

Mortgage loans on real estate with scheduled payments of 60 days (90 days
for agriculture mortgages) or more past due or in foreclosure had an amortized
cost of $51 million and $40 million at December 31, 2003 and 2002, respectively.

REAL ESTATE AND REAL ESTATE JOINT VENTURES

Real estate and real estate joint ventures consisted of the following:

Accumulated depreciation on real estate was $1,955 million and $1,951
million at December 31, 2003 and 2002, respectively. The related depreciation
expense was $183 million, $227 million and $220 million for the years ended
December 31, 2003, 2002 and 2001, respectively. These amounts include $15
million, $66 million and $93 million of depreciation expense related to
discontinued operations for the years ended December 31, 2003, 2002 and 2001,
respectively.

Real estate and real estate joint ventures were categorized as follows:

F-27

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company's real estate holdings are primarily located throughout the
United States. At December 31, 2003, approximately 28%, 17% and 16% of the
Company's real estate holdings were located in New York, California and
Illinois, respectively.

Changes in real estate and real estate joint ventures held-for-sale
valuation allowance were as follows:

Investment income related to impaired real estate and real estate joint
ventures held-for-investment was $35 million, $48 million and $34 million for
the years ended December 31, 2003, 2002 and 2001, respectively. There was no
investment income related to impaired real estate and real estate joint ventures
held-for-sale for the year ended December 31, 2003. Investment income related to
impaired real estate and real estate joint ventures held-for-sale was $3 million
and $19 million for the years ended December 31, 2002 and 2001, respectively.
The carrying value of non-income producing real estate and real estate joint
ventures was $77 million and $63 million at December 31, 2003 and 2002,
respectively.

The Company owned real estate acquired in satisfaction of debt of $3
million and $10 million at December 31, 2003 and 2002, respectively.

LEVERAGED LEASES

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

The investment amounts set forth above are generally due in monthly
installments. The payment periods generally range from one to 15 years, but in
certain circumstances are as long as 30 years. These receivables are generally
collateralized by the related property. The Company's deferred tax liability
related to leveraged leases was $870 million and $981 million at December 31,
2003 and 2002, respectively.

F-28

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NET INVESTMENT INCOME

The components of net investment income were as follows:

- ---------------

(1) Excludes amounts related to real estate held-for-sale presented as
discontinued operations in accordance with SFAS 144.

NET INVESTMENT GAINS (LOSSES)

Net investment gains (losses), including changes in valuation allowances,
and related policyholder amounts were as follows:

F-29

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

- ---------------

(1) The amounts presented exclude amounts related to sales of real estate
held-for-sale presented as discontinued operations in accordance with SFAS
144.

(2) The amounts presented include scheduled periodic settlement payments on
derivative instruments that do not qualify for hedge accounting under SFAS
133.

Investment gains and losses are net of related policyholder amounts. The
amounts netted against investment gains and losses are (i) amortization of DAC
to the extent that such amortization results from investment gains and losses;
(ii) adjustments to participating contractholder accounts when amounts equal to
such investment gains and losses are applied to the contractholder's accounts;
and (iii) adjustments to the policyholder dividend obligation resulting from
investment gains and losses. This presentation may not be comparable to
presentations made by other insurers.

NET UNREALIZED INVESTMENT GAINS

The components of net unrealized investment gains, included in accumulated
other comprehensive income, were as follows:

F-30

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The changes in net unrealized investment gains were as follows:

STRUCTURED INVESTMENT TRANSACTIONS

The Company securitizes high yield debt securities, investment grade bonds
and structured finance securities. The Company has sponsored four
securitizations with a total of approximately $1,431 million in financial assets
as of December 31, 2003. The Company's beneficial interests in these SPEs as of
December 31, 2003 and 2002 and the related investment income for the years ended
December 31, 2003, 2002 and 2001 were insignificant.

The Company also invests in structured notes and similar type instruments,
which generally provide equity-based returns on debt securities. The carrying
value of such investments was approximately $880 million and $870 million at
December 31, 2003 and 2002, respectively. The related income recognized was $78
million, $1 million and $44 million for the years ended December 31, 2003, 2002
and 2001, respectively.

VARIABLE INTEREST ENTITIES

As discussed in Note 1, the Company has adopted the provisions of FIN 46
and FIN 46(r). At December 31, 2003, FIN 46(r) did not require the Company to
consolidate any additional VIEs that were not previously consolidated.

The following table presents the total assets of and maximum exposure to
loss relating to VIEs for which the Company has concluded that (i) it is the
primary beneficiary and which will be consolidated in the

F-31

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company's financial statements beginning March 31, 2004, and (ii) it holds
significant valuable interests but it is not the primary beneficiary and which
will not be consolidated:

The following is a reconciliation of the notional amounts by derivative
type and strategy at December 31, 2003 and 2002:

F-33

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table presents the notional amounts of derivative financial
instruments by maturity at December 31, 2003:

The following table presents the notional amounts and fair values of
derivatives by type of hedge designation at December 31, 2003 and 2002:

The Company recognized net investment expense of $63 million and net
investment income of $9 million and $9 million, from the periodic settlement of
interest rate caps and interest rate, foreign currency and credit default swaps
that qualify as accounting hedges under SFAS No. 133, as amended, for the years
ended December 31, 2003, 2002 and 2001, respectively.

During the years ended December 31 2003 and 2002, the Company recognized
$191 million and $30 million, respectively, in net investment losses related to
qualifying fair value hedging instruments. Accordingly, $159 million and $34
million of net unrealized gains on fair value hedged investments were recognized
in net investment gains and losses during the years ended December 31, 2003 and
2002, respectively. There were no discontinued fair value hedges during the
years ended December 31, 2003 or 2002. There were no derivatives designated as
fair value hedges during the year ended December 31, 2001.

For the years ended December 31, 2003 and 2002, the net amounts accumulated
in other comprehensive income relating to cash flow hedges were losses of $417
million and $24 million, respectively. For the years ended December 31, 2003 and
2002, the market value of cash flow hedges decreased by $456 million and

F-34

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$145 million, respectively. During the years ended December 31, 2003 and 2002,
the Company recognized other comprehensive net losses of $387 million and $142
million, respectively, relating to the effective portion of cash flow hedges.
During the year ended December 31, 2003, other comprehensive expense of $2
million was reclassified to net investment income. During the year ended
December 31, 2002 other comprehensive losses of $57 million were reclassified to
net investment losses. During the year ended December 31, 2003, insignificant
amounts were recognized in net investment losses related to discontinued cash
flow hedges. During the years ended December 31, 2002 and 2001, no cash flow
hedges were discontinued. For the years ended December 31, 2003, 2002 and 2001,
$8 million, $10 million and $19 million of other comprehensive income was
reclassified to net investment income, respectively, related to the SFAS 133
transition adjustment.

Approximately $2 million of net investment expense and $40 million of net
losses reported in accumulated other comprehensive income at December 31, 2003
are expected to be reclassified during the year ending December 31, 2004 into
net investment income and net investment loss, respectively, as the derivatives
and underlying investments mature or expire according to their original terms.

For the years ended December 31, 2003, 2002 and 2001, the Company
recognized as net investment gains, the scheduled periodic settlement payments
on derivative instruments of $84 million, $32 million and $24 million,
respectively, and net investment losses from changes in fair value of $218
million and $172 million and net investment gains of $100 million, respectively,
related to derivatives not qualifying as accounting hedges.

The Company uses forward exchange contracts that provide an economic hedge
on portions of its net investments in foreign operations against adverse
movements in foreign currency exchange rates. For the year ended December 31,
2003, the Company experienced net unrealized foreign currency losses of $10
million related to hedges of its net investments in foreign operations. These
unrealized losses were recorded as components of accumulated other comprehensive
income.

F-35

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. INSURANCE

DEFERRED POLICY ACQUISITION COSTS

Information regarding VOBA and DAC for the years ended December 31, 2003,
2002 and 2001 is as follows:

The estimated future amortization expense allocated to other expenses for
VOBA is $135 million in 2004, $128 million in 2005, $122 million in 2006, $117
million in 2007 and $114 million in 2008.

Amortization of VOBA and DAC is allocated to (i) investment gains and
losses to provide consolidated statement of income information regarding the
impact of such gains and losses on the amount of the

F-36

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

amortization, (ii) unrealized investment gains and losses to provide information
regarding the amount that would have been amortized if such gains and losses had
been recognized, and (iii) other expenses to provide amounts related to the
gross margins or profits originating from transactions other than investment
gains and losses.

Investment gains and losses related to certain products have a direct
impact on the amortization of VOBA and DAC. Presenting investment gains and
losses net of related amortization of VOBA and DAC provides information useful
in evaluating the operating performance of the Company. This presentation may
not be comparable to presentations made by other insurers.

FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES

Future policy benefit liabilities for participating traditional life
insurance policies are equal to the aggregate of (i) net level premium reserves
for death and endowment policy benefits (calculated based upon the nonforfeiture
interest rate, ranging from 3% to 11%, and mortality rates guaranteed in
calculating the cash surrender values described in such contracts), (ii) the
liability for terminal dividends, and (iii) premium deficiency reserves, which
are established when the liabilities for future policy benefits plus the present
value of expected future gross premiums are insufficient to provide for expected
future policy benefits and expenses after DAC is written off.

Future policy benefit liabilities for traditional annuities are equal to
accumulated contractholder fund balances during the accumulation period and the
present value of expected future payments after annuitization. Interest rates
used in establishing such liabilities range from 2% to 11%. Future policy
benefit liabilities for non-medical health insurance are calculated using the
net level premium method and assumptions as to future morbidity, withdrawals and
interest, which provide a margin for adverse deviation. Interest rates used in
establishing such liabilities range from 3% to 11%. Future policy benefit
liabilities for disabled lives are estimated using the present value of benefits
method and experience assumptions as to claim terminations, expenses and
interest. Interest rates used in establishing such liabilities range from 3% to
11%.

Policyholder account balances for universal life and investment-type
contracts are equal to the policy account values, which consist of an
accumulation of gross premium payments plus credited interest, ranging from 1%
to 13%, less expenses, mortality charges, and withdrawals.

The liability for unpaid claims and claim expenses for property and
casualty insurance represents the amount estimated for claims that have been
reported but not settled and claims incurred but not reported. Liabilities for
unpaid claims are estimated based upon the Company's historical experience and
other actuarial assumptions that consider the effects of current developments,
anticipated trends and risk management programs, reduced for anticipated salvage
and subrogation. Revisions of these estimates are included in operations in the
year such refinements are made.

SEPARATE ACCOUNTS

Separate accounts include two categories of account types: non-guaranteed
separate accounts totaling $59,278 million and $44,470 million at December 31,
2003 and 2002, respectively, for which the policyholder assumes the investment
risk, and guaranteed separate accounts totaling $16,478 million and $15,223
million at December 31, 2003 and 2002, respectively, for which the Company
contractually guarantees either a minimum return or account value to the
policyholder.

Fees charged to the separate accounts by the Company (including mortality
charges, policy administration fees and surrender charges) are reflected in the
Company's revenues as universal life and investment-type product policy fees and
totaled $626 million, $542 million and $559 million for the years ended December
31, 2003, 2002 and 2001, respectively. Guaranteed separate accounts consisted
primarily of Met Managed Guaranteed Interest Contracts and participating
close-out contracts. The average interest rates credited on
F-37

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

these contracts were 4.5% and 4.8% at December 31, 2003 and 2002, respectively.
The assets that support these liabilities were comprised of $13,513 million and
$12,984 million in fixed maturities at December 31, 2003 and 2002, respectively.

5. REINSURANCE

The Company's life insurance operations participate in reinsurance
activities in order to limit losses, minimize exposure to large risks, and to
provide additional capacity for future growth. The Company currently reinsures
up to 90% of the mortality risk for all new individual life insurance policies
that it writes through its various franchises. This practice was initiated by
different franchises for different products starting at various points in time
between 1992 and 2000. Risks in excess of $25 million on single life policies
and $30 million on survivorship policies are 100% coinsured. In addition, in
1998, the Company reinsured substantially all of the mortality risk on its
universal life policies issued since 1983. RGA retains a maximum of $6 million
of coverage per individual life with respect to its assumed reinsurance
business. The Company reinsures its business through a diversified group of
reinsurers. Placement of reinsurance is done primarily on an automatic basis and
also on a facultative basis for risks of specific characteristics. The Company
is contingently liable with respect to ceded reinsurance should any reinsurer be
unable to meet its obligations under these agreements.

In addition to reinsuring mortality risk, the Company reinsures other risks
and specific coverages. The Company routinely reinsures certain classes of risks
in order to limit its exposure to particular travel, avocation and lifestyle
hazards. The Company has exposure to catastrophes, which are an inherent risk of
the property and casualty business and could contribute to significant
fluctuations in the Company's results of operations. The Company uses excess of
loss and quota share reinsurance arrangements to limit its maximum loss, provide
greater diversification of risk and minimize exposure to larger risks.

The Company has also protected itself through the purchase of combination
risk coverage. This reinsurance coverage pools risks from several lines of
business and includes individual and group life claims in excess of $2 million
per policy, as well as excess property and casualty losses, among others.

See Note 12 for information regarding certain excess of loss reinsurance
agreements providing coverage for risks associated primarily with sales
practices claims.

The amounts in the consolidated statements of income are presented net of
reinsurance ceded. The effects of reinsurance were as follows:

Reinsurance recoverables, included in premiums and other receivables, were
$4,014 million and $3,918 million at December 31, 2003 and 2002, respectively,
including $1,341 million and $1,348 million, respectively, relating to
reinsurance of long-term guaranteed interest contracts and structured settlement
lump sum contracts accounted for as a financing transaction. Reinsurance and
ceded commissions payables, included in other liabilities, were $106 million and
$79 million at December 31, 2003 and 2002, respectively.

F-38

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table provides an analysis of the activity in the liability
for benefits relating to property and casualty, group accident and non-medical
health policies and contracts:

6. CLOSED BLOCK

On the date of demutualization, Metropolitan Life established a closed
block for the benefit of holders of certain individual life insurance policies
of Metropolitan Life. Assets have been allocated to the closed block in an
amount that has been determined to produce cash flows which, together with
anticipated revenues from the policies included in the closed block, are
reasonably expected to be sufficient to support obligations and liabilities
relating to these policies, including, but not limited to, provisions for the
payment of claims and certain expenses and taxes, and to provide for the
continuation of policyholder dividend scales in effect for 1999, if the
experience underlying such dividend scales continues, and for appropriate
adjustments in such scales if the experience changes. At least annually, the
Company compares actual and projected experience against the experience assumed
in the then-current dividend scales. Dividend scales are adjusted periodically
to give effect to changes in experience.

The closed block assets, the cash flows generated by the closed block
assets and the anticipated revenues from the policies in the closed block will
benefit only the holders of the policies in the closed block. To the extent
that, over time, cash flows from the assets allocated to the closed block and
claims and other experience related to the closed block are, in the aggregate,
more or less favorable than what was assumed when the closed block was
established, total dividends paid to closed block policyholders in the future
may be greater than or less than the total dividends that would have been paid
to these policyholders if the policyholder dividend scales in effect for 1999
had been continued. Any cash flows in excess of amounts assumed will be
available for distribution over time to closed block policyholders and will not
be available to stockholders. If the closed block has insufficient funds to make
guaranteed policy benefit payments, such payments will be made from assets
outside of the closed block. The closed block will continue in effect as long as
any policy in the closed block remains in-force. The expected life of the closed
block is over 100 years.

F-39

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company uses the same accounting principles to account for the
participating policies included in the closed block as it used prior to the date
of demutualization. However, the Company establishes a policyholder dividend
obligation for earnings that will be paid to policyholders as additional
dividends as described below. The excess of closed block liabilities over closed
block assets at the effective date of the demutualization (adjusted to eliminate
the impact of related amounts in accumulated other comprehensive income)
represents the estimated maximum future earnings from the closed block expected
to result from operations attributed to the closed block after income taxes.
Earnings of the closed block are recognized in income over the period the
policies and contracts in the closed block remain in-force. Management believes
that over time the actual cumulative earnings of the closed block will
approximately equal the expected cumulative earnings due to the effect of
dividend changes. If, over the period the closed block remains in existence, the
actual cumulative earnings of the closed block is greater than the expected
cumulative earnings of the closed block, the Company will pay the excess of the
actual cumulative earnings of the closed block over the expected cumulative
earnings to closed block policyholders as additional policyholder dividends
unless offset by future unfavorable experience of the closed block and,
accordingly, will recognize only the expected cumulative earnings in income with
the excess recorded as a policyholder dividend obligation. If over such period,
the actual cumulative earnings of the closed block is less than the expected
cumulative earnings of the closed block, the Company will recognize only the
actual earnings in income. However, the Company may change policyholder dividend
scales in the future, which would be intended to increase future actual earnings
until the actual cumulative earnings equal the expected cumulative earnings.

F-40

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Closed block liabilities and assets designated to the closed block are as
follows:

F-41

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Information regarding the policyholder dividend obligation is as follows:

Closed block revenues and expenses were as follows:

The change in maximum future earnings of the closed block is as follows:

F-42

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

During the year ended December 31, 2002, the allocation of assets to the
closed block was revised to appropriately classify assets in accordance with the
plan of demutualization. The reallocation of assets had no impact on
consolidated assets or liabilities.

Metropolitan Life charges the closed block with federal income taxes, state
and local premium taxes, and other additive state or local taxes, as well as
investment management expenses relating to the closed block as provided in the
plan of demutualization. Metropolitan Life also charges the closed block for
expenses of maintaining the policies included in the closed block.

Many of the derivative instrument strategies used by the Company are also
used for the closed block. The table below provides a summary of the notional
amount and fair value of derivatives by hedge accounting classification at:

During the years ended December 31, 2003, 2002 and 2001, the closed block
recognized net investment expenses of $2 million and net investment income of $1
million and $1 million, respectively, from the periodic settlement of interest
rate caps and interest rate, foreign currency and credit default swaps that
qualify as accounting hedges under SFAS 133, as amended.

During the year ended December 31, 2003, the closed block recognized $1
million in net investment losses related to qualifying fair value hedges.
Accordingly, $1 million of unrealized gains on fair value hedged investments was
recognized in net investment losses during the year ended December 31, 2003.
There were no fair value hedges during the years ended December 31, 2002 and
2001. There were no discontinued fair value hedges during the years ended
December 31, 2003, 2002 and 2001.

For the years ended December 31, 2003 and 2002, the net amounts accumulated
in other comprehensive income relating to cash flow hedges were losses of $75
million and gains of $21 million, respectively. For the years ended December 31,
2003 and 2002, the market value of cash flow hedges decreased by $106 million
and increased by $4 million, respectively. During the years ended December 31,
2003 and 2002, the closed block recognized other comprehensive net losses of $93
million and other comprehensive net gains of $4 million, respectively, relating
to the effective portion of cash flow hedges. During the years ended December
31, 2003, 2002 and 2001, no cash flow hedges were discontinued. For the years
ended December 31, 2003 and 2002, $3 million and $4 million of other
comprehensive income was reclassified to net investment income, respectively,
related to the SFAS 133 transition adjustment. Amounts reclassified for the
transition adjustment for the year ended December 31, 2001 were insignificant.

Approximately $5 million of net losses reported in accumulated other
comprehensive income at December 31, 2003 are expected to be reclassified during
the year ending December 31, 2004 into net investment losses as the derivatives
and underlying investments mature or expire according to their original terms.

For the years ended December 31, 2003, 2002 and 2001, scheduled periodic
settlement payments on derivative instruments recognized as net investment gains
and losses were immaterial. Net investment losses

F-43

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

from changes in fair value of $18 million and $11 million and gains of $5
million related to derivatives not qualifying as accounting hedges were
recognized for the years ended December 31, 2003, 2002 and 2001, respectively.

7. DEBT

Debt consisted of the following:

The Company maintains committed and unsecured credit facilities aggregating
$2,478 million ($1,000 million expiring in 2004, $1,303 million expiring in 2005
and $175 million expiring in 2006). If these facilities were drawn upon, they
would bear interest at rates stated in the agreements. The facilities are
primarily used for general corporate purposes and as back-up lines of credit for
the borrowers' commercial paper program. At December 31, 2003, the Company had
drawn approximately $49 million under the facilities expiring in 2005 at
interest rates ranging from 4.08% to 5.48% and approximately another $50 million
under the facility expiring in 2006 at an interest rate of 1.69%. In April 2003,
the Company replaced an expiring $1 billion five-year credit facility with a $1
billion 364-day credit facility and the Holding Company was added as a borrower.
In May 2003, the Company replaced an expiring $140 million three-year credit
facility, with a $175 million three-year credit facility which expires in 2006.
At December 31, 2003, the Company had approximately $828 million in letters of
credit from various banks.

Payments of interest and principal on the surplus notes, subordinated to
all other indebtedness, may be made only with the prior approval of the
insurance department of the state of domicile. On November 1, 2003, the Company
redeemed the $300 million of 7.45% surplus notes outstanding scheduled to mature
on November 1, 2023 at a redemption price of $311 million.

The aggregate maturities of long-term debt for the Company are $134 million
in 2004, $1,436 million in 2005, $662 million in 2006, $39 million in 2007, $44
million in 2008 and $3,388 million thereafter.

Short-term debt of the Company consisted of commercial paper with a
weighted average interest rate of 1.1% and a weighted average maturity of 31
days at December 31, 2003. Short-term debt of the Company consisted of
commercial paper with a weighted average interest rate of 1.5% and a weighted
average maturity of 74 days at December 31, 2002. The Company also has other
collateralized borrowings with a weighted average coupon rate of 5.07% and a
weighted average maturity of 30 days at December 31, 2003. Such securities had a
weighted average coupon rate of 5.83% and a weighted average maturity of 34 days
at December 31, 2002.

F-44

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Interest expense related to the Company's indebtedness included in other
expenses was $420 million, $288 million and $252 million for the years ended
December 31, 2003, 2002 and 2001, respectively.

8. SHARES SUBJECT TO MANDATORY REDEMPTION AND COMPANY-OBLIGATED MANDATORILY
REDEEMABLE SECURITIES OF SUBSIDIARY TRUSTS

MetLife Capital Trust I. In connection with MetLife, Inc.'s, initial
public offering in April 2000, the Holding Company and MetLife Capital Trust I
(the "Trust") issued equity security units (the "units"). Each unit originally
consisted of (i) a contract to purchase, for $50, shares of the Holding
Company's common stock (the "purchase contracts") on May 15, 2003; and (ii) a
capital security of the Trust, with a stated liquidation amount of $50.

In accordance with the terms of the units, the Trust was dissolved on
February 5, 2003, and $1,006 million aggregate principal amount of 8.00%
debentures of the Holding Company (the "MetLife debentures"), the sole assets of
the Trust, were distributed to the owners of the Trust's capital securities in
exchange for their capital securities. The MetLife debentures were remarketed on
behalf of the debenture owners on February 12, 2003 and the interest rate on the
MetLife debentures was reset as of February 15, 2003 to 3.911% per annum for a
yield to maturity of 2.876%. As a result of the remarketing, the debenture
owners received $21 million ($0.03 per diluted common share) in excess of the
carrying value of the capital securities. This excess was recorded by the
Company as a charge to additional paid-in capital and, for the purpose of
calculating earnings per share, is subtracted from net income to arrive at net
income available to common shareholders.

On May 15, 2003, the purchase contracts associated with the units were
settled. In exchange for $1,006 million, the Company issued 2.97 shares of
MetLife, Inc. common stock per purchase contract, or approximately 59.8 million
shares of treasury stock. The excess of the Company's cost of the treasury stock
($1,662 million) over the contract price of the stock issued to the purchase
contract holders ($1,006 million) was $656 million, which was recorded as a
direct reduction to retained earnings.

Interest expense on the capital securities is included in other expenses
and was $10 million, $81 million and $81 million for the years ended December
31, 2003, 2002 and 2001, respectively.

GenAmerica Capital I. In June 1997, GenAmerica Corporation ("GenAmerica")
issued $125 million of 8.525% capital securities through a wholly-owned
subsidiary trust, GenAmerica Capital I. GenAmerica has fully and unconditionally
guaranteed, on a subordinated basis, the obligation of the trust under the
capital securities and is obligated to mandatorily redeem the securities on June
30, 2027. GenAmerica may prepay the securities any time after June 30, 2007.
Capital securities outstanding were $119 million, net of unamortized discounts
of $6 million, at both December 31, 2003 and 2002. Interest expense on these
instruments is included in other expenses and was $11 million for each of the
years ended December 31, 2003, 2002 and 2001.

RGA Capital Trust I. In December 2001, a majority-owned subsidiary of the
Company, Reinsurance Group of America Incorporated ("RGA"), through its
wholly-owned trust, RGA Capital Trust I (the "Trust"), issued 4,500,000
Preferred Income Equity Redeemable Securities ("PIERS") Units. Each PIERS unit
consists of (i) a preferred security issued by the Trust, having a stated
liquidation amount of $50 per unit, representing an undivided beneficial
ownership interest in the assets of the Trust, which consist solely of junior
subordinated debentures issued by RGA which have a principal amount at maturity
of $50 and a stated maturity of March 18, 2051, and (ii) a warrant to purchase,
at any time prior to December 15, 2050, 1.2508 shares of RGA stock at an
exercise price of $50. The fair market value of the warrant on the issuance date
was $14.87 and is detachable from the preferred security. RGA fully and
unconditionally guarantees, on a subordinated basis, the obligations of the
Trust under the preferred securities. The preferred securities and subordinated
debentures were issued at a discount (original issue discount) to the face or
liquidation value of

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$14.87 per security. The securities will accrete to their $50 face/liquidation
value over the life of the security on a level yield basis. The weighted average
effective interest rate on the preferred securities and the subordinated
debentures is 8.25% per annum. Capital securities outstanding were $158 million,
net of unamortized discount of $67 million, at both December 31, 2003 and 2002.

9. SEPTEMBER 11, 2001 TRAGEDIES

On September 11, 2001, terrorist attacks occurred in New York, Washington,
D.C. and Pennsylvania (the "tragedies") triggering a significant loss of life
and property, which had an adverse impact on certain of the Company's
businesses. The Company's original estimate of the total insurance losses
related to the tragedies, which was recorded in the third quarter of 2001, was
$208 million, net of income taxes of $117 million. As of December 31, 2003 and
2002, the Company's remaining liability for unpaid and future claims associated
with the tragedies was $9 million and $47 million, respectively, principally
related to disability coverages. This estimate has been and will continue to be
subject to revision in subsequent periods, as claims are received from insureds
and processed. Any revision to the estimate of losses in subsequent periods will
affect net income in such periods.

10. BUSINESS REALIGNMENT INITIATIVES

During the fourth quarter of 2001, the Company implemented several business
realignment initiatives, which resulted from a strategic review of operations
and an ongoing commitment to reduce expenses. The impact of these actions on a
segment basis were charges of $399 million in Institutional, $97 million in
Individual and $3 million in Auto & Home. The liability at December 31, 2003 and
2002 was $27 million and $40 million, in the Institutional segment and $9
million and $18 million, in the Individual segment, respectively. The remaining
liability is due to certain contractual obligations.

11. INCOME TAXES

The provision for income taxes for continuing operations was as follows:

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Reconciliations of the income tax provision at the U.S. statutory rate to
the provision for income taxes as reported for continuing operations were as
follows:

Deferred income taxes represent 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:

Domestic net operating loss carryforwards amount to $828 million at
December 31, 2003 and will expire beginning in 2013. Foreign net operating loss
carryforwards amount to $241 million at December 31, 2003 and were generated in
various foreign countries with expiration periods of five years to infinity.

The Company has recorded a valuation allowance related to tax benefits of
certain foreign net operating loss carryforwards. The valuation allowance
reflects management's assessment, based on available informa-

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

tion, that it is more likely than not that the deferred income tax asset for
certain foreign net operating loss carryforwards will not be realized. The tax
benefit will be recognized when management believes that it is more likely than
not that these deferred income tax assets are realizable. In 2003, the Company
recorded a tax benefit for the reduction of the deferred tax valuation allowance
related to certain foreign net operating loss carryforwards. The 2003 tax
provision also includes an adjustment revising the estimate of income taxes for
2002.

The Internal Revenue Service has audited the Company for the years through
and including 1996. The Company is being audited for the years 1997, 1998 and
1999. The Company believes that any adjustments that might be required for open
years will not have a material effect on its consolidated financial statements.

12. COMMITMENTS, CONTINGENCIES AND GUARANTEES

LITIGATION

Sales Practices Claims

Over the past several years, Metropolitan Life, New England Mutual Life
Insurance Company ("New England Mutual") and General American Life Insurance
Company ("General American") have faced numerous claims, including class action
lawsuits, alleging improper marketing and sales of individual life insurance
policies or annuities. These lawsuits are generally referred to as "sales
practices claims."

In December 1999, a federal court approved a settlement resolving sales
practices claims on behalf of a class of owners of permanent life insurance
policies and annuity contracts or certificates issued pursuant to individual
sales in the United States by Metropolitan Life, Metropolitan Insurance and
Annuity Company or Metropolitan Tower Life Insurance Company between January 1,
1982 and December 31, 1997. The class includes owners of approximately six
million in-force or terminated insurance policies and approximately one million
in-force or terminated annuity contracts or certificates.

Similar sales practices class actions against New England Mutual, with
which Metropolitan Life merged in 1996, and General American, which was acquired
in 2000, have been settled. In October 2000, a federal court approved a
settlement resolving sales practices claims on behalf of a class of owners of
permanent life insurance policies issued by New England Mutual between January
1, 1983 through August 31, 1996. The class includes owners of approximately
600,000 in-force or terminated policies. A federal court has approved a
settlement resolving sales practices claims on behalf of a class of owners of
permanent life insurance policies issued by General American between January 1,
1982 through December 31, 1996. An appellate court has affirmed the order
approving the settlement. The class includes owners of approximately 250,000
in-force or terminated policies.

Certain class members have opted out of the class action settlements noted
above and have brought or continued non-class action sales practices lawsuits.
In addition, other sales practices lawsuits have been brought. As of December
31, 2003, there are approximately 366 sales practices lawsuits pending against
Metropolitan Life, approximately 40 sales practices lawsuits pending against New
England Mutual and approximately 25 sales practices lawsuits pending against
General American. Metropolitan Life, New England Mutual and General American
continue to defend themselves vigorously against these lawsuits. Some individual
sales practices claims have been resolved through settlement, won by dispositive
motions, or, in a few instances, have gone to trial. Most of the current cases
seek substantial damages, including in some cases punitive and treble damages
and attorneys' fees. Additional litigation relating to the Company's marketing
and sales of individual life insurance may be commenced in the future.

The Metropolitan Life class action settlement did not resolve two putative
class actions involving sales practices claims filed against Metropolitan Life
in Canada, and these actions remain pending.

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company believes adequate provision has been made in its consolidated
financial statements for all probable and reasonably estimable losses for sales
practices claims against Metropolitan Life, New England Mutual and General
American.

Regulatory authorities in a small number of states have had investigations
or inquiries relating to Metropolitan Life's, New England Mutual's or General
American's sales of individual life insurance policies or annuities. Over the
past several years, these and a number of investigations by other regulatory
authorities were resolved for monetary payments and certain other relief. The
Company may continue to resolve investigations in a similar manner.

Asbestos-Related Claims

Metropolitan Life is also a defendant in thousands of lawsuits seeking
compensatory and punitive damages for personal injuries allegedly caused by
exposure to asbestos or asbestos-containing products. Metropolitan Life has
never engaged in the business of manufacturing, producing, distributing or
selling asbestos or asbestos-containing products nor has Metropolitan Life
issued liability or workers' compensation insurance to companies in the business
of manufacturing, producing, distributing or selling asbestos or
asbestos-containing products. Rather, these lawsuits have principally been based
upon allegations relating to certain research, publication and other activities
of one or more of Metropolitan Life's employees during the period from the
1920's through approximately the 1950's and have alleged that Metropolitan Life
learned or should have learned of certain health risks posed by asbestos and,
among other things, improperly publicized or failed to disclose those health
risks. Metropolitan Life believes that it should not have legal liability in
such cases.

Legal theories asserted against Metropolitan Life have included negligence,
intentional tort claims and conspiracy claims concerning the health risks
associated with asbestos. Although Metropolitan Life believes it has meritorious
defenses to these claims, and has not suffered any adverse monetary judgments in
respect of these claims, due to the risks and expenses of litigation, almost all
past cases have been resolved by settlements. Metropolitan Life's defenses
(beyond denial of certain factual allegations) to plaintiffs' claims include
that: (i) Metropolitan Life owed no duty to the plaintiffs -- it had no special
relationship with the plaintiffs and did not manufacture, produce, distribute or
sell the asbestos products that allegedly injured plaintiffs; (ii) plaintiffs
cannot demonstrate justifiable detrimental reliance; and (iii) plaintiffs cannot
demonstrate proximate causation. In defending asbestos cases, Metropolitan Life
selects various strategies depending upon the jurisdictions in which such cases
are brought and other factors which, in Metropolitan Life's judgment, best
protect Metropolitan Life's interests. Strategies include seeking to settle or
compromise claims, motions challenging the legal or factual basis for such
claims or defending on the merits at trial. In 2002 and 2003, trial courts in
California, Utah and Georgia granted motions dismissing claims against
Metropolitan Life on some or all of the above grounds. Other courts have denied
motions brought by Metropolitan Life to dismiss cases without the necessity of
trial. There can be no assurance that Metropolitan Life will receive favorable
decisions on motions in the future. Metropolitan Life intends to continue to
exercise its best judgment regarding settlement or defense of such cases,
including when trials of these cases are appropriate.

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table sets forth the total number of asbestos personal injury
claims pending against Metropolitan Life as of the dates indicated, the number
of new claims during the years ended on those dates and the total settlement
payments made to resolve asbestos personal injury claims during those years:

- ---------------

(1) Settlement payments represent payments made by Metropolitan Life during the
year in connection with settlements made in that year and in prior years.
Amounts do not include Metropolitan Life's attorneys' fees and expenses and
do not reflect amounts received from insurance carriers.

The Company believes adequate provision has been made in its consolidated
financial statements for all probable and reasonably estimable losses for
asbestos-related claims. The ability of Metropolitan Life to estimate its
ultimate asbestos exposure is subject to considerable uncertainty due to
numerous factors. The availability of data is limited and it is difficult to
predict with any certainty numerous variables that can affect liability
estimates, including the number of future claims, the cost to resolve claims,
the disease mix and severity of disease, the jurisdiction of claims filed, tort
reform efforts and the impact of any possible future adverse verdicts and their
amounts.

Recent bankruptcies of other companies involved in asbestos litigation, as
well as advertising by plaintiffs' asbestos lawyers, may result in an increase
in the number of claims and the cost of resolving claims, as well as the number
of trials and possible adverse verdicts Metropolitan Life may experience.
Plaintiffs are seeking additional funds from defendants, including Metropolitan
Life, in light of such recent bankruptcies by certain other defendants. In
addition, publicity regarding legislative reform efforts may result in an
increase in the number of claims.

Metropolitan Life will continue to study its claims experience, review
external literature regarding asbestos claims experience in the United States
and consider numerous variables that can affect its asbestos liability exposure,
including bankruptcies of other companies involved in asbestos litigation and
legislative and judicial developments, to identify trends and to assess their
impact on the recorded asbestos liability.

The number of asbestos cases that may be brought or the aggregate amount of
any liability that Metropolitan Life may ultimately incur is uncertain.
Accordingly, it is reasonably possible that the Company's total exposure to
asbestos claims may be greater than the liability recorded by the Company in its
consolidated financial statements and that future charges to income may be
necessary. While the potential future charges could be material in particular
quarterly or annual periods in which they are recorded, based on information
currently known by management, it does not believe any such charges are likely
to have a material adverse effect on the Company's consolidated financial
position.

During the fourth quarter of 2002, Metropolitan Life analyzed its claims
experience and reviewed external publications and numerous variables to identify
trends and assessed their impact on its recorded asbestos liability. Certain
publications suggested a trend towards more asbestos-related claims and a
greater awareness of asbestos litigation generally by potential plaintiffs and
plaintiffs' lawyers. Plaintiffs' lawyers continue to advertise heavily with
respect to asbestos litigation. Bankruptcies and reorganizations of other
defendants in asbestos litigation may increase the pressures on remaining
defendants, including Metropolitan Life. Through the first nine months of 2002,
the number of new claims received by Metropolitan Life was

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

lower than those received during the comparable 2001 period. However, the number
of new claims received by Metropolitan Life during the fourth quarter of 2002
was significantly higher than those received in the prior year quarter,
resulting in more new claims being received by Metropolitan Life in 2002 than in
2001. Factors considered also included expected trends in filing cases, the
dates of initial exposure of plaintiffs to asbestos, the likely percentage of
total asbestos claims which included Metropolitan Life as a defendant and
experience in claims settlement negotiations.

Metropolitan Life also considered views derived from actuarial calculations
it made in the fourth quarter of 2002. These calculations were made using, among
other things, then current information regarding Metropolitan Life's claims and
settlement experience, information available in public reports, as well as a
study regarding the possible future incidence of mesothelioma. Based on all of
the above information, including greater than expected claims experience in
2000, 2001 and 2002, Metropolitan Life expected to receive more claims in the
future than it had previously expected. Previously, Metropolitan Life's
liability reflected that the increase in asbestos-related claims was a result of
an acceleration in the reporting of such claims; the liability now reflects that
such an increase is also the result of an increase in the total number of
asbestos-related claims expected to be received by Metropolitan Life.
Accordingly, Metropolitan Life increased its recorded liability for
asbestos-related claims by $402 million from approximately $820 million to
$1,225 million at December 31, 2002. This total recorded asbestos-related
liability (after the self-insured retention) is within the coverage of the
excess insurance policies discussed below. The aforementioned analysis was
updated through December 31, 2003.

During 1998, Metropolitan Life paid $878 million in premiums for excess
insurance policies for asbestos-related claims. The excess insurance policies
for asbestos-related claims provide for recovery of losses up to $1,500 million,
which is in excess of a $400 million self-insured retention. The
asbestos-related policies are also subject to annual and per-claim sublimits.
Amounts are recoverable under the policies annually with respect to claims paid
during the prior calendar year. Although amounts paid by Metropolitan Life in
any given year that may be recoverable in the next calendar year under the
policies will be reflected as a reduction in the Company's operating cash flows
for the year in which they are paid, management believes that the payments will
not have a material adverse effect on the Company's liquidity.

Each asbestos-related policy contains an experience fund and a reference
fund that provides for payments to Metropolitan Life at the commutation date if
the reference fund is greater than zero at commutation or pro rata reductions
from time to time in the loss reimbursements to Metropolitan Life if the
cumulative return on the reference fund is less than the return specified in the
experience fund. The return in the reference fund is tied to performance of the
Standard & Poor's 500 Index and the Lehman Brothers Aggregate Bond Index. A
claim was made under the excess insurance policies in 2003 for the amounts paid
with respect to asbestos litigation in excess of the retention. Based on
performance of the reference fund, at December 31, 2002, the loss reimbursements
to Metropolitan Life in 2003 and the recoverable with respect to later periods
was $42 million less than the amount of the recorded losses. Such foregone loss
reimbursements may be recovered upon commutation depending upon future
performance of the reference fund. The foregone loss reimbursements were
estimated to be $9 million with respect to 2002 claims and estimated to be $42
million in the aggregate.

The $402 million increase in the recorded liability for asbestos claims
less the foregone loss reimbursement adjustment of $42 million ($27 million, net
of income tax) resulted in an increase in the recoverable of $360 million. At
December 31, 2002, a portion ($136 million) of the $360 million recoverable was
recognized in income while the remainder ($224 million) was recorded as a
deferred gain which is expected to be recognized in income in the future over
the estimated settlement period of the excess insurance policies. The $402
million increase in the recorded liability, less the portion of the recoverable
recognized in income, resulted in a net expense of $266 million ($169 million,
net of income tax). The $360 million recoverable may

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

change depending on the future performance of the Standard & Poor's 500 Index
and the Lehman Brothers Aggregate Bond Index.

As a result of the excess insurance policies, $1,237 million is recorded as
a recoverable at December 31, 2002 ($224 million of which is recorded as a
deferred gain as mentioned above); the amount includes recoveries for amounts
paid in 2002. If at some point in the future, the Company believes the liability
for probable and estimable losses for asbestos-related claims should be
increased, an expense would be recorded and the insurance recoverable would be
adjusted subject to the terms, conditions and limits of the excess insurance
policies. Portions of the change in the insurance recoverable would be recorded
as a deferred gain and amortized into income over the estimated remaining
settlement period of the insurance policies.

In 2003, Metropolitan Life also has been named as a defendant in a small
number of silicosis, welding and mixed dust cases. The cases are pending in
Mississippi, Texas, Ohio, Pennsylvania, West Virginia, Louisiana, Kentucky,
Georgia, Alabama, Illinois and Arkansas. The Company intends to defend itself
vigorously against these cases.

Property And Casualty Actions

A purported class action has been filed against Metropolitan Property and
Casualty Insurance Company's subsidiary, Metropolitan Casualty Insurance
Company, in Florida alleging breach of contract and unfair trade practices with
respect to allowing the use of parts not made by the original manufacturer to
repair damaged automobiles. Discovery is ongoing and a motion for class
certification is pending. Two purported nationwide class actions have been filed
against Metropolitan Property and Casualty Insurance Company in Illinois. One
suit claims breach of contract and fraud due to the alleged underpayment of
medical claims arising from the use of a purportedly biased provider fee pricing
system. A motion for class certification has been filed and discovery is
ongoing. The second suit claims breach of contract and fraud arising from the
alleged use of preferred provider organizations to reduce medical provider fees
covered by the medical claims portion of the insurance policy. A motion to
dismiss has been filed. A purported class action has been filed against
Metropolitan Property and Casualty Insurance Company in Montana. This suit
alleges breach of contract and bad faith for not aggregating medical payment and
uninsured coverages provided in connection with the several vehicles identified
in insureds' motor vehicle policies. Metropolitan Property and Casualty
Insurance Company is vigorously defending itself against this lawsuit. Certain
plaintiffs' lawyers have alleged that the use of certain automated databases to
provide total loss vehicle valuation methods was improper. Metropolitan Property
and Casualty Insurance Company, along with a number of other insurers, has
tentatively agreed in January 2004 to resolve this issue in a class action
format. The amount to be paid in resolution of this matter will not be material
to Metropolitan Property and Casualty Insurance Company.

Demutualization Actions

Several lawsuits were brought in 2000 challenging the fairness of
Metropolitan Life's plan of reorganization, as amended (the "plan") and the
adequacy and accuracy of Metropolitan Life's disclosure to policyholders
regarding the plan. These actions name as defendants some or all of Metropolitan
Life, the Holding Company, the individual directors, the New York Superintendent
of Insurance (the "Superintendent") and the underwriters for MetLife, Inc.'s
initial public offering, Goldman Sachs & Company and Credit Suisse First Boston.
Five purported class actions pending in the New York state court in New York
County were consolidated within the commercial part. In addition, there remained
a separate purported class action in New York state court in New York County. On
February 21, 2003, the defendants' motions to dismiss both the consolidated
action and separate action were granted; leave to replead as a proceeding under
Article 78 of New York's Civil Practice Law and Rules has been granted in the
separate action. Plaintiffs in the consolidated action and separate action have
filed notices of appeal. Another purported class action in New York state court
in Kings County has been voluntarily held in abeyance by plaintiffs. The
plaintiffs in the state

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

court class actions seek injunctive, declaratory and compensatory relief, as
well as an accounting and, in some instances, punitive damages. Some of the
plaintiffs in the above described actions also have brought a proceeding under
Article 78 of New York's Civil Practice Law and Rules challenging the Opinion
and Decision of the Superintendent who approved the plan. In this proceeding,
petitioners seek to vacate the Superintendent's Opinion and Decision and enjoin
him from granting final approval of the plan. This case also is being held in
abeyance by plaintiffs. Three purported class actions were filed in the United
States District Court for the Eastern District of New York claiming violation of
the Securities Act of 1933. The plaintiffs in these actions, which have been
consolidated, claim that the Policyholder Information Booklets relating to the
plan failed to disclose certain material facts and seek rescission and
compensatory damages. Metropolitan Life's motion to dismiss these three cases
was denied in 2001. On February 4, 2003, plaintiffs filed a consolidated amended
complaint adding a fraud claim under the Securities Exchange Act of 1934.
Metropolitan Life has served a motion to dismiss the consolidated amended
complaint and a motion for summary judgment in this action. Metropolitan Life,
the Holding Company and the individual defendants believe they have meritorious
defenses to the plaintiffs' claims and are contesting vigorously all of the
plaintiffs' claims in these actions.

In 2001, a lawsuit was filed in the Superior Court of Justice, Ontario,
Canada on behalf of a proposed class of certain former Canadian policyholders
against the Holding Company, Metropolitan Life, and Metropolitan Life Insurance
Company of Canada. Plaintiffs' allegations concern the way that their policies
were treated in connection with the demutualization of Metropolitan Life; they
seek damages, declarations, and other non-pecuniary relief. The defendants
believe they have meritorious defenses to the plaintiffs' claims and will
contest vigorously all of plaintiffs' claims in this matter.

In July 2002, a lawsuit was filed in the United States District Court for
the Eastern District of Texas on behalf of a proposed class comprised of the
settlement class in the Metropolitan Life sales practices class action
settlement approved in December 1999 by the United States District Court for the
Western District of Pennsylvania. After the defendants' motion to transfer the
lawsuit to the Western District of Pennsylvania was granted, plaintiffs filed an
amended complaint alleging that the treatment of the cost of the sales practices
settlement in connection with the demutualization of Metropolitan Life breached
the terms of the settlement. Plaintiffs sought compensatory and punitive
damages, as well as attorneys' fees and costs. In October 2003, the court
granted defendants' motion to dismiss the action. Plaintiffs filed a notice of
appeal to the United States Court of Appeals for the Third Circuit. In January
2004, the appeal was dismissed.

Race-Conscious Underwriting Claims

Insurance departments in a number of states initiated inquiries in 2000
about possible race-conscious underwriting of life insurance. These inquiries
generally have been directed to all life insurers licensed in their respective
states, including Metropolitan Life and certain of its affiliates. The New York
Insurance Department has concluded its examination of Metropolitan Life
concerning possible past race-conscious underwriting practices. Four purported
class action lawsuits filed against Metropolitan Life in 2000 and 2001 alleging
racial discrimination in the marketing, sale, and administration of life
insurance policies have been consolidated in the United States District Court
for the Southern District of New York. On April 28, 2003, the United States
District Court approved a class-action settlement of the consolidated actions.
Several persons filed notices of appeal from the order approving the settlement,
but subsequently the appeals were dismissed. Metropolitan Life also has entered
into settlement agreements to resolve the regulatory examination. Metropolitan
Life recorded a charge in the fourth quarter of 2001 in connection with the
anticipated resolution of these matters. The Company believes the remaining
portion of the previously recorded charge is adequate to cover the costs
associated with the resolution of these matters.

Sixteen lawsuits involving approximately 130 plaintiffs have been filed in
federal and state court in Alabama, Mississippi and Tennessee alleging federal
and/or state law claims of racial discrimination in

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

connection with the sale, formation, administration or servicing of life
insurance policies. Metropolitan Life is contesting vigorously plaintiffs'
claims in these actions.

Other

In 2001, a putative class action was filed against Metropolitan Life in the
United States District Court for the Southern District of New York alleging
gender discrimination and retaliation in the MetLife Financial Services unit of
the Individual segment. The plaintiffs were seeking unspecified compensatory
damages, punitive damages, a declaration that the alleged practices were
discriminatory and illegal, injunctive relief requiring Metropolitan Life to
discontinue the alleged discriminatory practices, an order restoring class
members to their rightful positions (or appropriate compensation in lieu
thereof), and other relief. Plaintiffs filed a motion for class certification.
Opposition papers were filed by Metropolitan Life. In August 2003, the court
granted preliminary approval to a settlement of the lawsuit. At the fairness
hearing held on November 6, 2003, the court approved the settlement of the
lawsuit. Implementation of the settlement has commenced in 2004.

A putative class action lawsuit is pending in the United States District
Court for the District of Columbia, in which plaintiffs allege that they were
denied certain ad hoc pension increases awarded to retirees under the
Metropolitan Life retirement plan. The ad hoc pension increases were awarded
only to retirees (i.e., individuals who were entitled to an immediate retirement
benefit upon their termination of employment) and not available to individuals
like these plaintiffs whose employment, or whose spouses' employment, had
terminated before they became eligible for an immediate retirement benefit. The
plaintiffs seek to represent a class consisting of former Metropolitan Life
employees, or their surviving spouses, who are receiving deferred vested annuity
payments under the retirement plan and who were allegedly eligible to receive
the ad hoc pension increases awarded in 1977, 1980, 1989, 1992, 1996 and 2001,
as well as increases awarded in earlier years. Metropolitan Life is vigorously
defending itself against these allegations.

A lawsuit was filed against Metropolitan Life in Ontario, Canada by Clarica
Life Insurance Company regarding the sale of the majority of Metropolitan Life's
Canadian operation to Clarica in 1998. Clarica alleged that Metropolitan Life
breached certain representations and warranties contained in the sale agreement,
that Metropolitan Life made misrepresentations upon which Clarica relied during
the negotiations and that Metropolitan Life was negligent in the performance of
certain of its obligations and duties under the sale agreement. The parties
settled the matter in January 2004. The settlement will have no material impact
on the Company's consolidated financial results in 2004.

A reinsurer of universal life policy liabilities of Metropolitan Life and
certain of its affiliates commenced an arbitration proceeding and sought
rescission, claiming that, during underwriting, material misrepresentations or
omissions were made to the reinsurer. The reinsurer also sent a notice
purporting to increase reinsurance premium rates. In December 2003, the
arbitration panel denied the reinsurer's attempt to rescind the contract and
granted the reinsurer's request to raise rates. As a result of the panel's
rulings, liabilities ceded to the reinsurer were recaptured effective May 5,
2003. The recapture had no material impact on the Company's consolidated
financial results in 2003.

As previously reported, the SEC is conducting a formal investigation of New
England Securities Corporation ("NES"), an indirect subsidiary of New England
Life Insurance Company ("NELICO"), in response to NES informing the SEC that
certain systems and controls relating to one NES advisory program were not
operating effectively. NES is cooperating fully with the SEC.

Prior to filing the Company's June 30, 2003 Form 10-Q, MetLife announced a
$31 million after-tax charge resulting from certain improperly deferred expenses
at an affiliate, New England Financial. MetLife notified the SEC about the
nature of this charge prior to its announcement. The SEC is pursuing a formal
investigation of the matter and MetLife is fully cooperating with the
investigation.

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The American Dental Association and two individual providers have sued
MetLife, Mutual of Omaha and Cigna in a purported class action lawsuit brought
in a Florida federal district court. The plaintiffs purport to represent a
nationwide class of in-network providers who allege that their claims are being
wrongfully reduced by downcoding, bundling, and the improper use and programming
of software. The complaint alleges federal racketeering and various state law
theories of liability. MetLife is vigorously defending the case and a motion to
dismiss has been filed.

A purported class action in which a policyholder seeks to represent a class
of owners of participating life insurance policies is pending in state court in
New York. Plaintiff asserts that Metropolitan Life breached her policy in the
manner in which it allocated investment income across lines of business during a
period ending with the 2000 demutualization. In August 2003, an appellate court
affirmed the dismissal of fraud claims in this action. MetLife is vigorously
defending the case.

Regulatory bodies have contacted the Company and have requested information
relating to market timing and late trading of mutual funds and variable
insurance products. The Company believes that these inquiries are similar to
those made to many financial services companies as part of an industry-wide
investigation by various regulatory agencies into the practices, policies and
procedures relating to trading in mutual fund shares. State Street Research
Investment Services, one of the Company's indirect broker/dealer subsidiaries,
has entered into a settlement with the National Association of Securities
Dealers ("NASD") resolving all outstanding issues relating to its investigation.
The SEC has commenced an investigation with respect to market timing and late
trading in a limited number of privately-placed variable insurance contracts
that were sold through General American. The Company is in the process of
responding and is fully cooperating with regard to these information requests
and investigations. The Company at the present time is not aware of any systemic
problems with respect to such matters that may have a material adverse effect on
the Company's consolidated financial position.

Various litigation, claims and assessments against the Company, in addition
to those discussed above and those otherwise provided for in 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, employer, investor, investment advisor 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.

Summary

It is not feasible to predict or determine the ultimate outcome of all
pending investigations and legal proceedings or provide reasonable ranges of
potential losses, except as noted above in connection with specific matters. In
some of the matters referred to above, very 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 adverse effect upon the Company's consolidated 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 adverse effect on the
Company's consolidated net income or cash flows in particular quarterly or
annual periods.

LEASES

In accordance with industry practice, certain of the Company's income from
lease agreements with retail tenants is contingent upon the level of the
tenants' sales revenues. Additionally, the Company, as lessee, has entered into
various lease and sublease agreements for office space, data processing and
other equipment.
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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Future minimum rental and sublease income, and minimum gross rental payments
relating to these lease agreements were as follows:

COMMITMENTS TO FUND PARTNERSHIP INVESTMENTS

The Company makes commitments to fund partnership investments in the normal
course of business. The amounts of these unfunded commitments were $1,380
million and $1,667 million at December 31, 2003 and 2002, respectively. The
Company anticipates that these amounts will be invested in the partnerships over
the next three to five years.

GUARANTEES

In the course of its business, the Company has provided certain
indemnities, guarantees and commitments to third parties pursuant to which 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 $1 million to $800 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 due under these guarantees
in the future.

In addition, the Company indemnifies its directors and officers as provided
in its charters and by-laws. Also, the Company indemnifies other of 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 due under these indemnities in the
future.

The fair value of such indemnities, guarantees and commitments entered into
was insignificant. The Company's recorded liability at December 31, 2003 and
2002 for indemnities, guarantees and commitments provided to third parties prior
to January 1, 2003 was insignificant.

The Company writes credit default swap obligations requiring payment of
principal due in exchange for the reference credit obligation, depending on the
nature or occurrence of specified credit events for the referenced entities. In
the event of a specified credit event, the Company's maximum amount at risk,
assuming

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the value of the referenced credits become worthless, is $489 million at
December 31, 2003. The credit default swaps expire at various times during the
next four years.

13. EMPLOYEE BENEFIT PLANS

PENSION BENEFIT AND OTHER BENEFIT PLANS

The Company is both the sponsor and administrator of defined benefit
pension plans covering eligible employees and sales representatives of the
Company. Retirement benefits are based upon years of credited service and final
average or career average earnings history.

The Company also provides certain postemployment benefits and certain
postretirement health care and life insurance benefits for retired employees
through insurance contracts. Substantially all of the Company's employees may,
in accordance with the plans applicable to the postretirement benefits, become
eligible for these benefits if they attain retirement age, with sufficient
service, while working for the Company.

The Company uses a December 31 measurement date for all of its pension and
postretirement benefit plans.

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

OBLIGATIONS, FUNDED STATUS AND NET PERIODIC BENEFIT COSTS

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The aggregate projected benefit obligation and aggregate contract value of
plan assets for the pension plans were as follows:

The accumulated benefit obligation for all defined benefit pension plans
was $4,902 million and $4,259 million at December 31, 2003 and 2002,
respectively.

Information for pension plans with an accumulated benefit obligation in
excess of plan assets:

Information for pension and postretirement plans with a projected benefit
obligation in excess of plan assets:

The components of net periodic benefit cost were as follows:

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Assumptions

Assumptions used in determining benefit obligations were as follows:

Assumptions used in determining net periodic benefit cost were as follows:

For the largest of the plans sponsored by the Company (the Metropolitan
Life Retirement Plan for United States Employees, with a projected benefit
obligation of $5.2 billion or 98% of all qualified plans at December 31, 2003),
the discount rate and the range of rates of future compensation increases used
in determining that plan's benefit obligation at December 31, 2003 were 6.1% and
4% to 8%, respectively. The discount rate, expected rate of return on plan
assets, and the range of rates of future compensation increases used in
determining that plan's net periodic benefit cost at December 31, 2003 were
6.75%, 8.5% and 4% to 8%, respectively. The discount rate is based on the yield
of a hypothetical portfolio of high-quality debt instruments available on the
valuation date, which would provide the necessary future cash flows to pay the
aggregate projected benefit obligation when due. The expected rate of return on
plan assets is based on anticipated performance of the various asset sectors in
which the plan invests, weighted by target allocation percentages. Anticipated
future performance is based on long-term historical returns of the plan assets
by sector, adjusted for the Company's long-term expectations on the performance
of the markets. While the precise expected return derived using this approach
will fluctuate from year to year, the Company's policy is to hold this long-term
assumption constant as long as it remains within a reasonable tolerance from the
derived rate. The expected rate of return on plan assets for use in that plan's
valuation in 2004 is currently anticipated to be 8.5%. The discount rates of
3.5% and 9.5% used in determining pension benefit obligations, the discount
rates of 4% and 9.5% used in determining net periodic pension costs, and the
expected rates of return on pension plan assets of 3.5% and 10% are attributable
to the Company's international subsidiaries in Taiwan and Mexico, respectively.
The rates of compensation increase of 3% and 2% in 2003 and 2002, respectively,
is attributable to the Company's subsidiary in Taiwan. These rates are
indicative of the economic environments in those countries. The expected rate of
return on postretirement benefit plan assets of 3.79% is attributable to the
Company's Canadian subsidiary and reflects the nature of the investments.

The assumed health care cost trend rates used in measuring the accumulated
nonpension postretirement benefit obligation were as follows:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Assumed health care cost trend rates may have a significant effect on the
amounts reported for health care plans. A one-percentage point change in assumed
health care cost trend rates would have the following effects:

PLAN ASSETS

The weighted average allocation of pension plan and other benefit plan
assets is as follows:

The weighted average target allocation of pension plan and other benefit
plan assets for 2004 is as follows:

Target allocations of assets are determined with the objective of
maximizing returns and minimizing volatility of net assets through adequate
asset diversification and partial liability immunization. Adjustments are made
to target allocations based on the Company's assessment of the impact of
economic factors and market conditions.

CASH FLOWS

In January 2004, the Company contributed $450 million to its pension plans
and $89 million to its other benefit plans during 2004.

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following benefit payments, which reflect expected future service as
appropriate, are expected to be paid:

SAVINGS AND INVESTMENT PLANS

The Company sponsors savings and investment plans for substantially all
employees under which the Company matches a portion of employee contributions.
The Company contributed $59 million, $58 million and $60 million for the years
ended December 31, 2003, 2002 and 2001, respectively.

14. EQUITY

PREFERRED STOCK

On September 29, 1999, the Holding Company adopted a stockholder rights
plan (the "rights plan") under which each outstanding share of common stock
issued between April 4, 2000 and the distribution date (as defined in the rights
plan) will be coupled with a stockholder right. Each right will entitle the
holder to purchase one one-hundredth of a share of Series A Junior Participating
Preferred Stock. Each one one-hundredth of a share of Series A Junior
Participating Preferred Stock will have economic and voting terms equivalent to
one share of common stock. Until it is exercised, the right itself will not
entitle the holder thereof to any rights as a stockholder, including the right
to receive dividends or to vote at stockholder meetings.

Stockholder rights are not exercisable until the distribution date, and
will expire at the close of business on April 4, 2010, unless earlier redeemed
or exchanged by the Holding Company. The rights plan is designed to protect
stockholders in the event of unsolicited offers to acquire the Holding Company
and other coercive takeover tactics.

COMMON STOCK

On February 19, 2002, the Holding Company's Board of Directors authorized a
$1 billion common stock repurchase program. This program began after the
completion of the March 28, 2001 and June 27, 2000 repurchase programs, each of
which authorized the repurchase of $1 billion of common stock. Under these
authorizations, the Holding Company may purchase common stock from the MetLife
Policyholder Trust, in the open market and in privately negotiated transactions.

On August 7, 2001, the Company purchased 10 million shares of its common
stock as part of the sale of 25 million shares of MetLife common stock by
Santusa Holdings, S.L., an affiliate of Banco Santander Central Hispano, S.A.
The sale by Santusa Holdings, S.L. was made pursuant to a shelf registration
statement, effective June 29, 2001.

The Company acquired 2,997,200, 15,244,492 and 45,242,966 shares of common
stock for $97 million, $471 million and $1,322 million during the years ended
December 31, 2003, 2002 and 2001, respectively. During the year ended December
31, 2003, 59,904,925 shares of common stock were issued from treasury stock for
$1,667 million, of which 59,771,221 shares were issued in connection with the
settlement of the

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

purchase contracts (see Note 8) with cash proceeds of approximately $1,006
million. During the years ended December 31, 2002 and 2001, 16,379 and 67,578
shares of common stock were issued from treasury stock for $438 thousand and $1
million, respectively. At December 31, 2003, the Company had approximately $709
million remaining on its existing share repurchase authorization.

DIVIDEND RESTRICTIONS

Under the New York Insurance Law, Metropolitan Life is permitted without
prior insurance regulatory clearance to pay a stockholder dividend to the
Holding Company as long as the aggregate amount of all such dividends in any
calendar year does not exceed the lesser of (i) 10% of its surplus to
policyholders as of the immediately preceding calendar year, and (ii) its
statutory net gain from operations for the immediately preceding calendar year
(excluding realized capital gains). Metropolitan Life will be permitted to pay a
cash dividend to the Holding Company in excess of the lesser of such two amounts
only if it files notice of its intention to declare such a dividend and the
amount thereof with the Superintendent and the Superintendent does not
disapprove the distribution. Under the New York Insurance Law, the
Superintendent 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. The Department has established informal
guidelines for such determinations. The guidelines, among other things, focus on
the insurer's overall financial condition and profitability under statutory
accounting practices. For the year ended December 31, 2003, Metropolitan Life
paid to MetLife, Inc. $698 million in dividends for which prior insurance
regulatory clearance was not required and $750 million in special dividends, as
approved by the Superintendent. For the year ended December 31, 2002,
Metropolitan Life paid to MetLife, Inc. $535 million in dividends for which
prior insurance regulatory clearance was not required and $369 million in
special dividends, as approved by the Superintendent. For the year ended
December 31, 2001, Metropolitan Life paid to MetLife, Inc. $721 million in
dividends for which prior insurance regulatory clearance was not required and
$3,033 million in special dividends, as approved by the Superintendent. At
December 31, 2003, the maximum amount of the dividend which may be paid to the
Holding Company from Metropolitan Life in 2004, without prior regulatory
approval is $798 million. Metropolitan Life could pay the Holding Company a
dividend of $798 million without prior approval of the Superintendent.

Under the Delaware Insurance Law, MIAC is permitted without prior insurance
regulatory clearance to pay a stockholder dividend to the Holding Company as
long as the aggregate amount of all such dividends in any calendar year does not
exceed the greater of (i) 10% of its surplus to policyholders as of the
immediately preceding calendar year, and (ii) its statutory net gain from
operations for the immediately preceding calendar year (excluding realized
capital gains). MIAC will be permitted to pay a cash dividend to the Holding
Company in excess of the greater of such two amounts only if it files notice of
its intention to declare such a dividend and the amount thereof with the
Superintendent and the Superintendent does not disapprove the distribution.
Under the Delaware Insurance Law, the Superintendent 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. The Department
has established informal guidelines for such determinations. The guidelines,
among other things, focus on the insurer's overall financial condition and
profitability under statutory accounting practices. MIAC paid to MetLife, Inc.
$104 million in dividends for which prior insurance regulatory clearance was not
required and $94 million in special dividends, as approved by the Superintendent
for the year ended December 31, 2003. For the years ended December 31, 2002 and
2001, respectively, MIAC paid to MetLife, Inc. $25 million and $31 million in
dividends for which prior insurance regulatory clearance was not required. As of
December 31, 2003, the maximum amount of the dividend which may be paid to the
Holding Company from MIAC in 2004, without prior regulatory approval, is $185
million.

Under the Rhode Island Insurance Law, Metropolitan Property and Casualty
Insurance Company is permitted without prior insurance regulatory clearance to
pay a stockholder dividend to the Holding Company as long as the aggregate
amount of all such dividends in any calendar year does not exceed the lesser of
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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(i) 10% of its surplus to policyholders as of the immediately preceding calendar
year, and (ii) next preceding three year earnings reduced by capital gains and
dividends paid to stockholders. Metropolitan Property and Casualty Insurance
Company will be permitted to pay a stockholder dividend to the Holding Company
in excess of the lesser of such two amounts only if it files notice of its
intention to declare such a dividend and the amount thereof with the
Superintendent and the Superintendent does not disapprove the distribution. For
the year ended December 31, 2003, Metropolitan Property and Casualty Insurance
Company paid to MetLife, Inc. $75 million in dividends for which prior insurance
regulatory clearance was not required. As of December 31, 2003, the maximum
amount of the dividend which may be paid to the Holding Company from
Metropolitan Property and Casualty Insurance Company in 2004, without prior
regulatory approval, is $200 million.

STOCK COMPENSATION PLANS

Under the MetLife, Inc. 2000 Stock Incentive Plan (the "Stock Incentive
Plan"), awards granted may be in the form of non-qualified or incentive stock
options qualifying under Section 422A of the Internal Revenue Code. Under the
MetLife, Inc. 2000 Directors Stock Plan, as amended (the "Directors Stock
Plan"), awards granted may be in the form of stock awards or non-qualified stock
options or a combination of the foregoing to outside Directors of the Company.
The aggregate number of shares of stock that may be awarded under the Stock
Incentive Plan is subject to a maximum limit of 37,823,333 shares for the
duration of the plan. The Directors Stock Plan has a maximum limit of 500,000
share awards.

All options granted have an exercise price equal to the fair market value
price of the Company's common stock on the date of grant, and an option's
maximum term is ten years. Certain options under the Stock Incentive Plan become
exercisable over a three-year period commencing with the date of grant, while
other options become exercisable three years after the date of grant. Options
issued under the Directors Stock Plan are exercisable immediately.

The fair value of each option grant is estimated on the date of the grant
using the Black-Scholes options-pricing model with the following weighted
average assumptions used for grants for the:

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

A summary of the status of options included in the Company's Stock
Incentive Plan and Directors Stock Plan is presented below:

The following table summarizes information about stock options outstanding
at December 31, 2003:

Effective January 1, 2003, the Company elected to apply the fair value
method of accounting for stock options granted by the Company subsequent to
December 31, 2002. As permitted under SFAS 148, options granted prior to January
1, 2003 will continue to be accounted for under APB 25. Had compensation expense
for grants awarded prior to January 1, 2003 been determined based on fair value
at the date of grant in

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

accordance with SFAS 123, Accounting for Stock-Based Compensation ("SFAS 123"),
the Company's earnings and earnings per share amounts would have been reduced to
the following pro-forma amounts:

- ---------------

(1) See Note 8 for a discussion of this charge included in the calculation of
net income available to common shareholders.

(2) The pro forma earnings disclosures are not necessarily representative of
the effects on net income and earnings per share in future years.

(3) Includes the Company's ownership share of stock compensation costs related
to the Reinsurance Group of America, Incorporated incentive stock plan and
the stock compensation costs related to the incentive stock plans at SSRM
Holdings, Inc. determined in accordance with SFAS 123.

For the years ended December 31, 2003, 2002 and 2001, stock-based
compensation expense related to the Company's Stock Incentive Plan and Directors
Stock Plan was $20 million, $2.1 million and $1.3 million, respectively,
including stock-based compensation for non-employees of $550 thousand, $2.1
million and $1.3 million, respectively.

STATUTORY EQUITY AND INCOME

Applicable insurance department regulations require that the insurance
subsidiaries prepare statutory financial statements in accordance with statutory
accounting practices prescribed or permitted by the insurance department of the
state of domicile. Statutory accounting practices primarily differ from GAAP 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 and valuing securities on a different
basis.

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

As of December 31, 2001, New York Statutory Accounting Practices did not
provide for deferred income taxes. The Department has adopted a modification to
its regulations, effective December 31, 2002, with respect to the admissibility
of deferred taxes by New York insurers, subject to certain limitations.

Statutory net income of Metropolitan Life, as filed with the Department,
was $2,169 million, $1,455 million and $2,782 million for the years ended
December 31, 2003 2002 and 2001, respectively; statutory capital and surplus, as
filed, was $7,978 million and $6,986 million at December 31, 2003 and 2002,
respectively.

Statutory net income of MIAC, which is domiciled in Delaware, as filed with
the Insurance Department of Delaware, was $341 million, $34 million and $26
million for the years ended December 31, 2003, 2002 and 2001, respectively;
statutory capital and surplus, as filed, was $1,051 million and $1,037 million
at December 31, 2003 and 2002, respectively.

Statutory net income of Metropolitan Property and Casualty, which is
domiciled in Rhode Island, as filed with the Insurance Department of Rhode
Island, was $214 million, $173 million and $61 million for the years ended
December 31, 2003, 2002 and 2001, respectively; statutory capital and surplus,
as filed, was $1,996 million and $1,964 million at December 31, 2003 and 2002,
respectively.

The National Association of Insurance Commissioners ("NAIC") adopted the
Codification of Statutory Accounting Principles (the "Codification"), which is
intended to standardize regulatory accounting and reporting to state insurance
departments, and became effective January 1, 2001. However, statutory accounting
principles continue to be established by individual state laws and permitted
practices. The Department required adoption of the Codification, with certain
modifications, for the preparation of statutory financial statements effective
January 1, 2001. Further modifications by state insurance departments may impact
the effect of the Codification on the statutory capital and surplus of
Metropolitan Life and the Holding Company's other insurance subsidiaries.

OTHER COMPREHENSIVE INCOME

The following table sets forth the reclassification adjustments required
for the years ended December 31, 2003, 2002 and 2001 in other comprehensive
income (loss) that are included as part of net income for the

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

current year that have been reported as a part of other comprehensive income
(loss) in the current or prior year:

15. OTHER EXPENSES

Other expenses were comprised of the following:

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

16. EARNINGS PER SHARE

The following presents a reconciliation of the weighted average shares used
in calculating basic earnings per share to those used in calculating diluted
earnings per share:

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

- ---------------

(1) See Note 8 for a discussion of this charge included in the calculation of
net income available to common shareholders.

17. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The unaudited quarterly results of operations for the years ended December
31, 2003 and 2002 are summarized in the table below:

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Unaudited net income for the three months ended June 30, 2003 includes a
$64 million after-tax benefit from a reduction of a previously established
liability related to the Company's race-conscious underwriting settlement, $62
million of after-tax earnings from the merger of the Company's Mexican
operations and a reduction in policyholder liabilities resulting from the change
in reserve methodology and a $31 million after-tax charge related to previously
deferred expenses. Unaudited net income for the three months ended September 30,
2003 includes a $28 million after-tax benefit from a reduction of a previously
established liability related to the Company's race-conscious underwriting
settlement and a $36 million benefit from a revision to the 2002 income tax
estimates.

Unaudited net income for the three months ended March 31, 2002 includes a
$48 million after-tax charge to cover costs associated with the resolution of a
federal government investigation of General American's former Medicare business.
Unaudited net income for the three months ended June 30, 2002 includes a $30
million after-tax reduction of a previously established liability related to the
Company's sales practice class action settlement in 1999. Unaudited net income
for the three months ended December 31, 2002 includes a $169 million after-tax
charge to cover costs associated with the asbestos-related claims, a $20 million
after-tax reduction of a previously established liability to the Company's 2001
business

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

realignment initiatives and a $17 million after-tax reduction of a previously
established disability insurance liability related to the September 11, 2001
tragedies.

18. BUSINESS SEGMENT INFORMATION

The Company provides insurance and financial services to customers in the
United States, Canada, Central America, Europe, South America, South Africa,
Asia and Australia. The Company's business is divided into six segments:
Institutional, Individual, Auto & Home, International, Reinsurance and Asset
Management. These segments are managed separately because they either provide
different products and services, require different strategies or have different
technology requirements.

Institutional offers a broad range of group insurance and retirement and
savings products and services, including group life insurance, non-medical
health insurance, such as short and long-term disability, long-term care, and
dental insurance, and other insurance products and services. Individual offers a
wide variety of individual insurance and investment products, including life
insurance, annuities and mutual funds. Auto & Home provides insurance coverages,
including private passenger automobile, homeowners and personal excess liability
insurance. International provides life insurance, accident and health insurance,
annuities and retirement and savings products to both individuals and groups,
and auto and homeowners coverage to individuals. Reinsurance provides primarily
reinsurance of life and annuity policies in North America and various
international markets. Additionally, reinsurance of critical illness policies is
provided in select international markets. Asset Management provides a broad
variety of asset management products and services to individuals and
institutions.

Set forth in the tables below is certain financial information with respect
to the Company's operating segments as of and for the years ended December 31,
2003, 2002 and 2001. The accounting policies of the segments are the same as
those of the Company, except for the method of capital allocation and the
accounting for gains and losses from intercompany sales, which are eliminated in
consolidation. The Company allocates capital to each segment based upon an
internal capital allocation system that allows the Company to more effectively
manage its capital. The Company evaluates the performance of each operating
segment based upon net income excluding certain net investment gains and losses,
net of income taxes, and the impact from the cumulative effect of changes in
accounting, net of income taxes. Scheduled periodic settlement payments on
derivative instruments not qualifying for hedge accounting are included in net
investment gains(losses). The Company allocates certain non-recurring items
(e.g., expenses associated with the resolution of proceedings alleging
race-conscious underwriting practices, sales practices claims and
asbestos-related claims) to Corporate & Other.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

- ---------------

(1) These balances reflect the allocation of capital using the Risk-Based
Capital methodology, which differs from the original presentation of GAAP
equity included in MetLife, Inc.'s 2002 Annual Report on Form 10-K.

The following table indicates amounts in the current and prior years that
have been classified as discontinued operations in accordance with SFAS 144:

Economic Capital. Beginning in 2003, the Company changed its methodology
of allocating capital to its business segments from Risk-Based Capital ("RBC")
to Economic Capital. Prior to 2003, the Company's business segments' allocated
equity was primarily based on RBC, an internally developed formula based on
applying a multiple to the National Association of Insurance Commissioners
Statutory Risk-Based Capital and included certain adjustments in accordance with
accounting principles generally accepted in the United

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

States of America ("GAAP"). Economic Capital is an internally developed risk
capital model, the purpose of which is to measure the risk in the business and
to provide a basis upon which capital is deployed. The Economic Capital model
accounts for the unique and specific nature of the risks inherent in MetLife's
businesses. This is in contrast to the standardized regulatory RBC formula,
which is not as refined in its risk calculations with respect to the nuances of
the Company's businesses.

The change in methodology is being applied prospectively. This change has
and will continue to impact the level of net investment income and net income of
each of the Company's business segments. A portion of net investment income is
credited to the segments based on the level of allocated equity. This change in
methodology of allocating equity does not impact the Company's consolidated net
investment income or net income.

The following table presents actual and pro forma net investment income
with respect to the Company's segments for the years ended December 31, 2002 and
2001. The amounts shown as pro forma reflect net investment income that would
have been reported in these years had the Company allocated capital based on
Economic Capital rather than on the basis of RBC.

NET INVESTMENT INCOME

The following table presents actual and pro forma assets for each of the
Company's operating segments at December 31, 2002. The amounts shown as pro
forma reflect assets that would have been reported in the prior year had the
Company allocated capital based on Economic Capital rather than on the basis of
RBC.

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METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

- ---------------

(1) These balances reflect the allocation of capital using the RBC methodology,
which differs from the original presentation of GAAP equity included in
MetLife, Inc.'s 2002 Annual Report on Form 10-K.

The Reinsurance segment's results of operations for the year ended December
31, 2003 include RGA's coinsurance agreement under which it assumed the
traditional U.S. life reinsurance business of Allianz Life Insurance Company of
North America. The transaction added approximately $246 million of premiums and
$11 million of pre-tax income, excluding minority interest expense.

The Individual segment's results of operations for the year ended December
31, 2003 includes a second quarter after-tax charge of $31 million resulting
from certain improperly deferred expenses at an affiliate, New England
Financial.

The International segment's results of operations include the results of
operations of Aseguradora Hidalgo S.A. ("Hidalgo"), a Mexican life insurer that
was acquired on June 20, 2002. During the second quarter of 2003, as part of its
acquisition and integration strategy, International completed the legal merger
of Hidalgo into its original Mexican subsidiary, Seguros Genesis, S.A., forming
MetLife Mexico, S.A. As a result of the merger of these companies, the Company
recorded $62 million of after-tax earnings from the merger and a reduction in
policyholder liabilities resulting from a change in reserve methodology.

The Institutional, Individual, Reinsurance and Auto & Home segments for the
year ended December 31, 2001 include $287 million, $24 million, $9 million and
$5 million, respectively, of pre-tax losses associated with the September 11,
2001 tragedies. See Note 9.

The Institutional, Individual and Auto & Home segments include $399
million, $97 million and $3 million, respectively, in pre-tax charges associated
with business realignment initiatives for the year ended December 31, 2001. See
Note 10.

The Individual segment for the year ended December 31, 2001 includes $118
million of pre-tax expenses associated with the establishment of a policyholder
liability for certain group annuity policies.

For the year ended December 31, 2001, pre-tax gross investment gains
(losses) of $1,027 million, $142 million and $(1,172) million (comprised of a
$354 million gain and an intercompany elimination of $(1,526) million),
resulting from the sale of certain real estate properties from Metropolitan Life
to Metropolitan Insurance and Annuity Company, a subsidiary of MetLife, Inc.,
are included in the Individual segment, Institutional segment and Corporate &
Other, respectively.

As part of the GenAmerica acquisition in 2000, the Company acquired Conning
Corporation ("Conning"), the results of which are included in the Asset
Management segment due to the types of products and strategies employed by the
entity from its acquisition date to July 2001, the date of its disposition. The
Company sold Conning, receiving $108 million in the transaction and reported a
gain of approximately $25 million, in the third quarter of 2001.

Corporate & Other includes various start-up and run-off entities, as well
as the elimination of all intersegment amounts. The elimination of intersegment
amounts relates to intersegment loans, which bear interest rates commensurate
with related borrowings, as well as intersegment reinsurance transactions.

Net investment income and net investment gains(losses) are based upon the
actual results of each segment's specifically identifiable asset portfolio
adjusted for allocated capital. Other costs and operating costs were 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 compensation costs incurred
by each segment; and (iii) cost estimates included in the Company's product
pricing.

Revenues derived from any customer did not exceed 10% of consolidated
revenues for the years ended December 31, 2003, 2002 and 2001. Revenues from
U.S. operations were $32,312 million, $30,263 million and

F-76

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$29,525 million for the years ended December 31, 2003, 2002 and 2001,
respectively, which represented 90%, 92% and 95%, respectively, of consolidated
revenues.

19. ACQUISITIONS AND DISPOSITIONS

In September 2003, a subsidiary of the Company, Reinsurance Group of
America, Incorporated ("RGA"), announced a coinsurance agreement under which it
assumed the traditional U.S. life reinsurance business of Allianz Life Insurance
Company of North America. The transaction closed during the fourth quarter of
2003 with an effective date retroactive to July 1, 2003. The transaction added
approximately $278 billion of life reinsurance in-force, $246 million of premium
and $11 million of income before income tax expense, excluding minority interest
expense, to the fourth quarter of 2003.

In June 2002, the Company acquired Aseguradora Hidalgo S.A. ("Hidalgo"), an
insurance company based in Mexico with approximately $2.5 billion in assets as
of the date of acquisition. The Company's existing Mexico subsidiary and Hidalgo
now operate as a combined entity under the name MetLife Mexico.

In November 2001, the Company acquired Compania de Seguros de Vida
Santander S.A. and Compania de Reaseguros de Vida Soince Re S.A., wholly-owned
subsidiaries of Santander Central Hispano in Chile. These acquisitions marked
MetLife's entrance into the Chilean insurance market.

In July 2001, the Company completed its sale of Conning Corporation
("Conning"), an affiliate acquired in the acquisition of GenAmerica Financial
Corporation ("GenAmerica") in 2000. Conning specialized in asset management for
insurance company investment portfolios and investment research.

20. DISCONTINUED OPERATIONS

The Company actively manages its real estate portfolio with the objective
to maximize earnings through selective acquisitions and dispositions. In
accordance with SFAS 144, income related to real estate classified as
held-for-sale on or after January 1, 2002 is presented as discontinued
operations. These assets are carried at the lower of cost or market.

The following table presents the components of income from discontinued
operations:

The carrying value of real estate related to discontinued operations was
$89 million and $799 million at December 31, 2003 and 2002, respectively. See
Note 18 for discontinued operations by business segment.

Subsequent to December 31, 2003, MetLife entered into a marketing agreement
to sell one of its real estate investments, the Sears Tower, and reclassified
the property from Real Estate -- Held-for Investments to Real Estate -- Held-for
Sale. The carrying value of the property as of December 31, 2003 is
approximately $700 million.

F-77

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

21. FAIR VALUE INFORMATION

The estimated fair values of financial instruments have been determined by
using available market information and the valuation methodologies described
below. Considerable judgment is often required in interpreting market data to
develop estimates of fair value. Accordingly, the estimates presented herein may
not necessarily be indicative of amounts that could be realized in a current
market exchange. The use of different assumptions or valuation methodologies may
have a material effect on the estimated fair value amounts.

Amounts related to the Company's financial instruments were as follows:

F-78

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The methods and assumptions used to estimate the fair values of financial
instruments are summarized as follows:

FIXED MATURITIES AND EQUITY SECURITIES

The fair value of fixed maturities and equity securities are based upon
quotations published by applicable stock exchanges or received from other
reliable sources. For securities for which the market values were not readily
available, fair values were estimated using quoted market prices of comparable
investments.

MORTGAGE LOANS ON REAL ESTATE, MORTGAGE LOAN COMMITMENTS AND COMMITMENTS TO
FUND PARTNERSHIP INVESTMENTS

Fair values for mortgage loans on real estate are estimated by discounting
expected future cash flows, using current interest rates for similar loans with
similar credit risk. For mortgage loan commitments, the estimated fair value is
the net premium or discount of the commitments. Commitments to fund partnership
investments have no stated interest rate and are assumed to have a fair value of
zero.

POLICY LOANS

The carrying values for policy loans approximate fair value.

CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

The carrying values for cash and cash equivalents and short-term
investments approximated fair values due to the short-term maturities of these
instruments.

F-79

METLIFE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

POLICYHOLDER ACCOUNT BALANCES

The fair value of policyholder account balances is estimated by discounting
expected future cash flows based upon interest rates currently being offered for
similar contracts with maturities consistent with those remaining for the
agreements being valued.

SHORT-TERM AND LONG-TERM DEBT, PAYABLES UNDER SECURITIES LOANED TRANSACTIONS,
SHARES SUBJECT TO MANDATORY REDEMPTION AND COMPANY-OBLIGATED MANDATORILY
REDEEMABLE SECURITIES OF SUBSIDIARY TRUSTS

The fair values of short-term and long-term debt, payables under securities
loaned transactions, shares subject to mandatory redemption and
Company-obligated mandatorily redeemable securities of subsidiary trusts are
determined by discounting expected future cash flows using risk rates currently
available for debt with similar terms and remaining maturities.

DERIVATIVE FINANCIAL INSTRUMENTS

The fair value of derivative instruments, including financial futures,
financial forwards, interest rate, credit default and foreign currency swaps,
foreign currency forwards, caps, floors, options and written covered calls are
based upon quotations obtained from dealers or other reliable sources. See Note
3 for derivative fair value disclosures.

F-80

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

The Holding Company's management, with the participation of the Holding
Company's Chief Executive Officer and Chief Financial Officer, has evaluated the
effectiveness of the design and operation of the Holding Company's disclosure
controls and procedures pursuant to Exchange Act Rule 13a-15(e) as of the end of
the period covered by this report. Based on that evaluation, the Chief Executive
Officer and Chief Financial Officer have concluded that these disclosure
controls and procedures are effective. There were no changes in the Holding
Company's internal control over financial reporting during the quarter ended
December 31, 2003 that have materially affected, or are reasonably likely to
materially affect, the Holding Company's internal control over financial
reporting.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information called for by this Item pertaining to Directors is
incorporated herein by reference to the sections entitled "Proposal
One -- Election of Directors," "Corporate Governance -- Information about
MetLife's Board of Directors, " and "Stock Ownership of Directors and Executive
Officers -- Section 16(a) Beneficial Ownership Reporting Compliance" in MetLife,
Inc.'s definitive proxy statement for the Annual Meeting of Shareholders to be
held on April 27, 2004, to be filed by MetLife, Inc. with the Securities and
Exchange Commission pursuant to Regulation 14A within 120 days after the year
ended December 31, 2003 (the "2004 Proxy Statement").

The information called for by this Item pertaining to Executive Officers
appears in "Part I -- Item 1. Business -- Executive Officers of the Registrant."

The Company has adopted the MetLife Financial Management Code of
Professional Conduct (the "Code"), a code of ethics as defined under Regulation
S-K, that applies to the Company's chief executive offer, chief financial
officer, chief accounting officer, corporate controller and all professionals in
finance and finance-related departments. This Code is available on the Company's
website at www.metlife.com on the corporate governance portion of the site. The
Company intends to satisfy its disclosure obligations under Item 10 of Form 8-K
by posting information about amendments to, or waivers from, a provision of the
Code that apply to the Company's chief executive officer, chief financial
officer, chief accounting officer, and corporate controller on the Company's
website at the address above.

Also available on the Company's website are the following other items:
Employee Code of Business Conduct and Ethics, Directors' Code of Business
Conduct and Ethics, Corporate Governance Guidelines, Audit Committee Charter,
Compensation Committee Charter and Governance Committee Charter (together with
the Code, collectively, the "Governance Documents"). The Company will provide
without charge upon written or oral request, a copy of any of such Governance
Documents. Requests should be directed to Investor Relations, MetLife, Inc., One
Madison Avenue, New York, New York 10010-3690, by electronic mail
([email protected]) or by telephone 1-800-753-4904.

ITEM 11. EXECUTIVE COMPENSATION

The information called for by this Item is incorporated herein by reference
to the section entitled "Executive Compensation" in the 2004 Proxy Statement.

113

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The information called for by this Item is incorporated herein by reference
to the sections entitled "Stock Ownership of Directors and Executive Officers",
"Ownership of MetLife Common Stock" and "Equity Compensation Plans Table" in the
2004 Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information called for by this Item is incorporated herein by reference
to the section entitled "Corporate Governance -- Certain Relationships and
Related Transactions" in the 2004 Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information called for by this item is incorporated herein by reference
to the section entitled "Proposal Five -- Ratification of Appointment of the
Independent Auditor" in the 2004 Proxy Statement.

114

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of this report:

1. Financial Statements

The financial statements are listed in the Index to Consolidated
Financial Statements and Schedules on page 112.

2. Financial Statement Schedules

The financial statement schedules are listed in the Index to
Consolidated Financial Statements and Schedules on page 112.

3. Exhibits

The exhibits are listed in the Exhibit Index which begins on page
E-1.

(b) Reports on Form 8-K

During the three months ended December 31, 2003, the following current
reports were filed on Form 8-K:

1. Form 8-K filed November 17, 2003 (dated November 17, 2003) regarding
purchase by subsidiary of shares of Reinsurance Group of America,
Incorporated and attaching press releases regarding (i) certain
personnel changes, and (ii) intent to resume common stock repurchase
activity.

2. Form 8-K filed November 21, 2003 (dated November 21, 2003) regarding
offering of 5.875% senior notes and attaching relevant
documentation.

3. Form 8-K filed November 24, 2003 (dated November 24, 2003) regarding
offering of 5.00% senior notes and attaching relevant documentation.

4. Form 8-K filed December 8, 2003 (dated December 4, 2003) regarding
decrease in percentage ownership of shares of Reinsurance Group of
America, Incorporated and attaching press release regarding a
contract to sell certain real estate.

5. Form 8-K filed December 15, 2003 (dated December 12, 2003)
announcing a new member of the board of directors.

115

METLIFE, INC.

SCHEDULE I

CONSOLIDATED SUMMARY OF INVESTMENTS -- OTHER THAN
INVESTMENTS IN AFFILIATES
DECEMBER 31, 2003
(DOLLARS IN MILLIONS)

- ---------------

(1) Cost for fixed maturities and mortgage loans on real estate represents
original cost reduced by repayments, net valuation allowances and writedowns
from other-than-temporary declines in value and adjusted for amortization of
premiums or accretion of discount; for equity securities, cost represents
original cost reduced by writedowns from other-than-temporary declines in
value; for real estate, cost represents original cost reduced by writedowns
and adjusted for valuation allowances and depreciation; cost for real estate
joint ventures and limited partnership interests represents original cost
reduced for other-than-temporary impairments or original cost adjusted for
equity in earnings and distributions.

116

METLIFE, INC.

SCHEDULE II

CONDENSED FINANCIAL INFORMATION OF METLIFE, INC. (REGISTRANT)
(DOLLARS IN MILLIONS)

117

METLIFE, INC.

SCHEDULE II -- (CONTINUED)

CONDENSED FINANCIAL INFORMATION OF METLIFE, INC. (REGISTRANT)
(DOLLARS IN MILLIONS)

118

METLIFE, INC.

SCHEDULE III

CONSOLIDATED SUPPLEMENTARY INSURANCE INFORMATION
AT AND FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
(DOLLARS IN MILLIONS)

- ---------------

(1) Amounts are included in Future Policy Benefits, Other Policyholder Funds and
Policyholder Dividend Obligation.

119

METLIFE, INC.

SCHEDULE III -- (CONTINUED)

CONSOLIDATED SUPPLEMENTARY INSURANCE INFORMATION
AT AND FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
(DOLLARS IN MILLIONS)

120

METLIFE, INC.

SCHEDULE IV

CONSOLIDATED REINSURANCE
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
(DOLLARS IN MILLIONS)

121

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

March 5, 2004

METLIFE, INC.

By:
/s/ ROBERT H. BENMOSCHE
------------------------------------
Name: Robert H. Benmosche
Title: Chairman of the Board,
President
and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

122

123

EXHIBIT INDEX

E-1

E-2

E-3

E-4

E-5

E-6

- ---------------

* Indicates management contracts or compensatory plans or arrangements.

** Indicates document to be filed as an exhibit to a Current Report on Form 8-K
or Quarterly Report on Form 10-Q pursuant to Item 601 of Regulation S-K and
incorporated herein by reference.

E-7