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<SEC-DOCUMENT>0000950123-06-002375.txt : 20060228
<SEC-HEADER>0000950123-06-002375.hdr.sgml : 20060228
<ACCEPTANCE-DATETIME>20060228171622
ACCESSION NUMBER: 0000950123-06-002375
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 11
CONFORMED PERIOD OF REPORT: 20051231
FILED AS OF DATE: 20060228
DATE AS OF CHANGE: 20060228

FILER:

COMPANY DATA:
COMPANY CONFORMED NAME: METLIFE INC
CENTRAL INDEX KEY: 0001099219
STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411]
IRS NUMBER: 134075851
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231

FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-15787
FILM NUMBER: 06652112

BUSINESS ADDRESS:
STREET 1: 200 PARK AVENUE
CITY: NEW YORK
STATE: NY
ZIP: 10166
BUSINESS PHONE: 2125782211

MAIL ADDRESS:
STREET 1: 200 PARK AVENUE
CITY: NEW YORK
STATE: NY
ZIP: 10166
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>y16723e10vk.txt
<DESCRIPTION>FORM 10-K
<TEXT>
<PAGE>

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

FORM 10-K

<Table>
<C> <S>
(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, 2005

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

FOR THE TRANSITION PERIOD FROM TO
</Table>

COMMISSION FILE NUMBER 001-15787

METLIFE, INC.
(Exact name of registrant as specified in its charter)

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

200 PARK AVENUE
NEW YORK, NEW YORK 10166-0188
(212) 578-2211
(Address and telephone number of registrant's principal executive offices)

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

<Table>
<Caption>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
<S> <C>
Common Stock, par value $0.01 New York Stock Exchange
Floating Rate Non-Cumulative Preferred Stock, Series A, par New York Stock Exchange
value $0.01
6.50% Non-Cumulative Preferred Stock, Series B, par value New York Stock Exchange
$0.01
6.375% Common Equity Units New York Stock Exchange
5.875% Senior Notes New York Stock Exchange
5.375% Senior Notes Irish Stock Exchange
5.25% Senior Notes Irish Stock Exchange
</Table>

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [X] No [ ]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act. Yes [ ] No [X]

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. [X]

Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.

<Table>
<S> <C> <C>
Large accelerated filer [X] Accelerated filer [ ] Non-accelerated filer [ ]
</Table>

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

The aggregate market value of the voting and non-voting common equity held
by non-affiliates of the registrant as of June 30, 2005 was approximately $33
billion. As of February 24, 2006, 757,959,631 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, ITEM
11, PART OF ITEM 12, AND ITEMS 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 25, 2006, 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, 2005.

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<PAGE>

TABLE OF CONTENTS

<Table>
<Caption>
PAGE
NUMBER
------
<S> <C> <C>
PART I
Item 1. Business.................................................... 3
Item 1A. Risk Factors................................................ 27
Item 1B. Unresolved Staff Comments................................... 42
Item 2. Properties.................................................. 42
Item 3. Legal Proceedings........................................... 42
Item 4. Submission of Matters to a Vote of Security Holders......... 51

PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities........... 52
Item 6. Selected Financial Data..................................... 54
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 58
Item 7A. Quantitative and Qualitative Disclosures About Market
Risk........................................................ 138
Item 8. Financial Statements and Supplementary Data................. 144
Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure.................................... 145
Item 9A. Controls and Procedures..................................... 145
Item 9B. Other Information........................................... 147

PART III
Item 10. Directors and Executive Officers of the Registrant.......... 149
Item 11. Executive Compensation...................................... 149
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.................. 149
Item 13. Certain Relationships and Related Transactions.............. 151
Item 14. Principal Accountant Fees and Services...................... 151

PART IV
Item 15. Exhibits and Financial Statement Schedules.................. 152

SIGNATURES............................................................ 153

EXHIBIT INDEX......................................................... E-1
</Table>
<PAGE>

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 MetLife, Inc. and its subsidiaries, as well as other statements including
words such as "anticipate," "believe," "plan," "estimate," "expect," "intend"
and other similar expressions. Forward-looking statements are made based upon
management's current expectations and beliefs concerning future developments and
their potential effects on MetLife, Inc. and its subsidiaries. Such
forward-looking statements are not guarantees of future performance. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

2
<PAGE>

PART I

ITEM 1. BUSINESS

As used in this Form 10-K, "MetLife," the "Company," "we," "our" and "us"
refer to MetLife, Inc., a Delaware corporation incorporated in 1999 (the
"Holding Company"), and its subsidiaries, including Metropolitan Life Insurance
Company ("Metropolitan Life").

MetLife, Inc. is a leading provider of insurance and other financial
services to millions of individual and institutional customers throughout the
United States. Through its subsidiaries and affiliates, MetLife, Inc. offers
life insurance, annuities, automobile and homeowners insurance and retail
banking services to individuals, as well as group insurance, reinsurance and
retirement & savings products and services to corporations and other
institutions. Outside the United States, the MetLife companies have direct
insurance operations in Asia Pacific, Latin America and Europe.

MetLife is one of the largest insurance and financial services companies in
the United States. The Company's franchises and brand names uniquely position it
to be the preeminent provider of protection and savings and investment products
in the United States. In addition, MetLife's international operations are
focused on 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 a large customer base

- Enhance capital efficiency

- Expand distribution channels

- Continue to introduce innovative and competitive products

- Focus on international operations

- Maintain balanced focus on asset accumulation and protection products

- Manage operating expenses commensurate with revenue growth

- Further commitment to a diverse workplace

MetLife is organized into five operating segments: Institutional,
Individual, Auto & Home, International and Reinsurance, as well as Corporate &
Other. Revenues derived from any customer within each of these segments did not
exceed 10% of consolidated revenues. Financial information, including revenues,
expenses, income and loss, and total assets by segment, is provided in Note 18
of Notes to Consolidated Financial Statements.

3
<PAGE>

$10.9 billion in cash and 22,436,617 shares of the Holding Company's common
stock with a market value of approximately $1.0 billion to Citigroup and
approximately $100 million in other transaction costs. Consideration paid to
Citigroup will be finalized subject to review of the June 30, 2005 financial
statements of Travelers by both the Company and Citigroup and interpretation of
the provisions of the acquisition agreement by both parties. In addition to cash
on-hand, the purchase price was financed through the issuance of common stock as
described above, debt securities, common equity units and preferred shares.

INSTITUTIONAL

The Company's Institutional segment offers a broad range of group insurance
and retirement & savings products and services to corporations and other
institutions and their respective employees. The Company 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 United States.

Group insurance products and services include group life insurance,
non-medical health insurance products and related administrative services, as
well as other benefits, such as employer-sponsored auto and homeowners insurance
provided through the Auto & Home segment, critical illness insurance and prepaid
legal services plans. Non-medical health insurance is comprised of products such
as accidental death and dismemberment, long-term care, short- and long-term
disability and dental insurance. The Company offers group insurance products as
employer-paid benefits or as voluntary benefits where all or a portion of the
premiums are paid by the employee. Revenues applicable to these group insurance
products and services were $13 billion in 2005, representing 29% of the
Company's total revenues in 2005.

The Company's retirement & 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 the Company's retirement & savings products were $6 billion in
2005, representing 13% of the Company's total revenues in 2005.

MARKETING AND DISTRIBUTION

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

The Company 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. Employers have been emphasizing such
voluntary products and, as a result, the Company has increased its focus on
communicating and marketing to such employees in order to further foster sales
of those products. As of December 31, 2005, the group insurance sales channels
had approximately 379 marketing representatives.

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

The Company distributes retirement & savings products and services through
dedicated sales teams and relationship managers located in 21 offices around the
country. In addition, the retirement & savings organization works with the
distribution channels in the Individual segment and in the group insurance area
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

4
<PAGE>

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., a wholly-owned subsidiary of Manu life Financial, 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 the
number of enrollees.

GROUP INSURANCE PRODUCTS AND SERVICES

The Company's group insurance products and services include:

Group life. Group life insurance products and services include group
term life (both employer paid basic life and employee paid supplemental
life), group universal life, group variable universal life, dependent life
and survivor income benefits. These products and services are offered as
standard products or may be 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, disability income, critical illness, long-term
care, dental and accidental death and dismemberment coverages. The Company
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 & SAVINGS PRODUCTS AND SERVICES

The Company's retirement & savings products and services include:

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

Accumulation and income products. The Company 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. The Company provides full service
defined contribution programs to small- and mid-sized companies.

Other retirement & savings products and services. Other retirement &
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.

INDIVIDUAL

The Company'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 Agency
Distribution Group and the Independent Distribution Group. Individual also
distributes products through several additional affiliated distribution
channels, including Walnut Street Securities, MetLife Resources, Tower Square
Securities and Texas Life. In total, Individual had approximately 11,500 active
sales representatives at December 31, 2005.

The Company's broadly recognized brand names and strong distribution
channels have allowed it to become the second largest provider of individual
life insurance and annuities in the United States, with

5
<PAGE>

$17 billion of total statutory individual life and annuity premiums and deposits
through September 30, 2005, 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 December 31, 2005, the
Company was the second largest issuer of individual variable life insurance in
the United States and the largest issuer of all individual life insurance
products in the United States. In addition, according to research done by LIMRA
and based on new annuity deposits through December 31, 2005, the Company was the
second largest annuity writer in the United States.

During the period from 2001 to 2005, the Company's first year statutory
deposits for life products increased at a compound annual growth rate of
approximately 9%. Life deposits represented approximately 31% of total statutory
premiums and deposits for Individual in 2005. During the same period from 2001
to 2005, the statutory deposits for annuity products increased at a compound
annual growth rate of approximately 21%. Annuity deposits represented
approximately 69% of total statutory premiums and deposits for Individual in
2005. Individual had $14 billion of total revenues, or 31% of the Company's
total revenues in 2005.

MARKETING AND DISTRIBUTION

The Company's Individual segment 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 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 Agency Distribution Group and the Independent Distribution Group.

Agency Distribution Group. The Agency Distribution Group is comprised of
two channels, the MetLife Distribution Channel, a career agency system, and the
New England Financial Distribution Channel, a general agency system.

MetLife Distribution Channel. The MetLife Distribution Channel had
5,804 agents under contract in 109 agencies at December 31, 2005. 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 33% of the MetLife Distribution Channel's individual
life sales in 2005. The average face amount of a life insurance policy sold
through the MetLife Distribution Channel in 2005 was approximately
$290,000.

Agents in the career agency system are full-time MetLife common law
and/or statutory employees who are compensated primarily based upon sales
which is in compliance with the limitations imposed by New York State
Insurance Law Section 4228. These career agents are also eligible to
receive certain benefits. Agents in the career agency system are not
authorized to sell other insurers' products without the Company's approval.
At December 31, 2005, 92% of the agents in the career agency sales force
were licensed to sell one or more of the following products: variable life
insurance, variable annuities and mutual funds.

From 2004 through 2005, the number of agents under contract in the
MetLife Distribution Channel's career agency sales force increased from
5,597 to 5,804. The increase in the number of agents is due to improving
retention, which in-turn drives increased productivity. From 2001 through
2005, 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 5%.

New England Financial Distribution Channel. The New England Financial
Distribution Channel 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 Distribution Channel in 2005 was approximately $520,000.

At December 31, 2005, the New England Financial Distribution Channel
included 49 general agencies providing support to 2,006 agents and a
network of independent brokers throughout the United
6
<PAGE>

States. 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, 2005, 93% 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.

Independent Distribution Group. During 2005, the Independent Distribution
Group was expanded to include Travelers distribution, as well as General
American Financial and the MetLife Investors Group. Within the Independent
Distribution Group there are three distribution channels, including the Coverage
and Point of Sale models for risk-based products, and the Annuity model for
accumulation-based products. Both the Coverage and Point of Sale models sell
universal life, variable universal life, traditional life, long-term care and
disability income products. The Annuity model sells both fixed and variable
annuities, as well as income annuities. Management of the Company intends to
continue to grow existing distribution relationships and acquire new
relationships in the Coverage, Point of Sale and Annuity Models by capitalizing
on an experienced management team, leveraging the MetLife brand and resources,
and developing high service, low cost operations while continuing the
distribution of other MetLife products.

Coverage Model. The Coverage wholesalers sell universal life,
variable universal life, traditional life, long-term care and disability
insurance products and related financial services to high net worth
individuals and small- to medium-sized businesses through independent
general agencies, financial advisors, consultants, brokerage general
agencies and other independent marketing organizations under contractual
arrangements. These agencies and individuals 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. The wholesalers direct sales and recruiting efforts from a
nationwide network of regional offices. As of December 31, 2005, there were
34 regional Coverage wholesalers.

Point of Sale Model. The Point of Sale wholesalers sell universal
life, variable universal life, traditional life, long-term care and
disability income products through financial intermediaries, including
regional broker/dealers, brokerage firms, financial planners and banks. As
of December 31, 2005, there were 57 regional Point of Sale wholesalers.

Annuity Model. The Annuity wholesalers sell individual fixed and
variable annuities, as well as income annuity products through financial
intermediaries, including regional broker/dealers, New York Stock Exchange
brokerage firms, financial planners and banks. As of December 31, 2005,
there were 138 regional Annuity wholesalers.

Additional distribution channels. The Individual segment also distributes
the Company's individual insurance and investment products through several
additional affiliated distribution channels, including Walnut Street Securities,
MetLife Resources, Tower Square Securities and Texas Life.

Walnut Street Securities. Walnut Street Securities, Inc., a
subsidiary of MetLife, Inc., is an affiliated broker/dealer that markets
variable life insurance and variable annuity products, as well as mutual
funds and other securities, through 1,047 independent registered
representatives.

MetLife Resources. MetLife Resources, a division of MetLife, markets
retirement, annuity and other financial products on a national basis
through 794 agents and independent brokers. MetLife Resources targets the
nonprofit, educational and healthcare markets.

Tower Square Securities. Tower Square Securities, Inc., a subsidiary
of MetLife, Inc., is an affiliated broker/dealer that markets variable life
insurance and variable annuity products, as well as mutual funds and other
securities, through 629 independent registered representatives.

Texas Life. Texas Life Insurance Company, a subsidiary of MetLife,
Inc., markets whole life and universal life insurance products under the
Texas Life name through approximately 1,330 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

7
<PAGE>

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 and updated
variable universal 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. The Company
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 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

8
<PAGE>

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.

The Company'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 certain activities of daily living.

In addition to these products, the Company'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, and 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 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 deferred
annuity contracts are allocated to the general account and are credited with
interest at rates the Company determines, subject to certain minimums. Credited
interest rates are guaranteed not to change for certain limited periods of time,
ranging from one to ten years. Fixed income annuities provide a guaranteed
monthly income for a specified period of years and/or for the life of the
annuitant.

Mutual funds and securities. The Company, through its broker-dealer
affiliates, offers a full range of mutual funds and other securities products.

AUTO & HOME

Auto & Home, operating through Metropolitan Property and Casualty Insurance
Company ("MPC") and its subsidiaries, offers personal lines property and
casualty insurance directly to employees at their employer's worksite, as well
as through a variety of retail distribution channels, including the Agency
Distribution Group, independent agents, property and casualty specialists and
direct response marketing. Auto & Home primarily sells auto insurance, which
represented 72.9% of Auto & Home's total net premiums earned in 2005, and
homeowners insurance, which represented 27.1% of Auto & Home's total net
premiums earned in 2005.

PRODUCTS

Auto & Home's insurance products include:

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

- homeowners, renters, condominium and dwelling; and

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- other personal lines, including personal excess liability (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 $63 million in
net premiums earned in 2005 and represented approximately 3.0% of total auto net
premiums earned in 2005.

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 that have been displaced from their
homes.

MARKETING AND DISTRIBUTION

Personal lines auto and homeowners insurance products are directly marketed
to employees at their employer's worksite. Auto & Home products are also
marketed and sold by the Agency Distribution Group, independent agents, property
and casualty specialists and through a direct response channel.

EMPLOYER WORKSITE PROGRAMS

Auto & Home is a leading provider of auto and homeowners products offered
to employees at their employer's worksite. Net premiums earned through this
distribution channel grew at a compound annual rate of 7.7%, from $734 million
in 2001 to $986 million in 2005. At December 31, 2005, approximately 1,900
employers offered MetLife Auto & Home products to their employees.

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

RETAIL DISTRIBUTION CHANNELS

The Company markets and sells Auto & Home products through the Agency
Distribution Group, independent agents, property and casualty specialists and
through a direct response channel. In recent years, the Company has increased
its use of independent agents and property and casualty specialists to sell
these products.

Agency Distribution Group career agency system. The Agency Distribution
Group career agency system has approximately 1,500 agents that sell Auto & Home
insurance products.

Independent agencies. At December 31, 2005, Auto & Home maintained
contracts with more than 3,900 agencies and brokers.

Property and casualty specialists. Auto & Home has 682 specialists located
in 35 states. Auto & Home's strategy is to utilize property and casualty
specialists, who are Auto & Home employees, in geographic markets that are
underserved by MetLife career agents.

Other distribution channels. Auto & Home 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.

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In 2005, Auto & Home's business was mostly concentrated in the following
states, as measured by net premiums earned: New York $385 million, or 13.2%;
Massachusetts $367 million, or 12.6%; Illinois $200 million, or 6.9%; Florida
$187 million, or 6.4%; Connecticut $131 million, or 4.5%; and Minnesota $121
million, or 4.2%.

CLAIMS

Auto & Home's claims department includes approximately 2,200 employees
located in Auto & Home's Warwick, Rhode Island home office, 12 field claim
offices, six in-house counsel offices, drive-in inspection sites 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 700,000 claims annually, principally by telephone.

INTERNATIONAL

International provides life insurance, accident and health insurance,
credit insurance, annuities and retirement & savings products to both
individuals and groups. The Company focuses on emerging markets primarily within
the Latin America region, the Asia Pacific region and Europe. The Company
operates in international markets through subsidiaries and joint ventures. The
acquisition of Travelers added operations in the following new markets:
Australia, Belgium, Japan, Poland and the United Kingdom, as well as operations
in Argentina, Brazil, Hong Kong, Japan and China. See "Quantitative and
Qualitative Disclosures About Market Risk."

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 represented approximately 85% of the total premiums and fees in
this region for the year ended December 31, 2005. The Mexican operation is the
leading life insurance company in both the individual and group businesses in
Mexico. The Chilean operation is the third largest annuity company in Chile,
based on market share. The Chilean operation also offers individual life
insurance and group insurance products.

ASIA PACIFIC

The Company operates in the Asia Pacific region in the following countries:
South Korea, Taiwan, Australia, Japan, Hong Kong and China. The operations in
South Korea and Taiwan represented approximately 91% of the total premiums and
fees in this region for the year ended December 31, 2005. The South Korean
operation offers individual life insurance, annuities, retirement & savings 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, annuities, as well as group life and group accident
and health insurance products.

EUROPE

The Company operates in Europe in the following countries: United Kingdom,
Belgium and Poland. The results of the Company's operations in India are also
included in this region. The operations in United Kingdom and Belgium
represented approximately 75% of the total premiums and fees in this region for
the year ended December 31, 2005. The United Kingdom operation underwrites risk
in its home market and 12 other countries across Europe, offering credit
insurance and personal accident coverage. The Belgian operation offers credit
insurance, endowment insurance and group insurance.

REINSURANCE

The Company's Reinsurance segment is comprised of the life reinsurance
business of Reinsurance Group of America, Incorporated ("RGA"), a publicly
traded company (NYSE: RGA). On December 12, 2005,
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RGA repurchased 1.6 million shares of its outstanding common stock at an
aggregate price of approximately $76 million under an accelerated share
repurchase agreement with a major bank. The bank borrowed the stock sold to RGA
from third parties and is purchasing the shares in the open market over the
subsequent few months to return to the lenders. RGA will either pay or receive
an amount based on the actual amount paid by the bank to purchase the shares.
These repurchases resulted in an increase in the Company's ownership percentage
of RGA to approximately to 53% at December 31, 2005 from approximately 52% at
December 31, 2004. In February 2006, the final purchase price was determined
resulting in a cash settlement substantially equal to the aggregate cost. RGA
recorded the initial repurchase of shares as treasury stock and recorded the
amount received as an adjustment to the cost of the treasury stock.

RGA's operations in North America are its largest and include operations of
its Canadian and U.S. subsidiaries. In addition to these operations, RGA has
subsidiary companies, branch offices, or representative offices in Australia,
Barbados, China, 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, critical illness 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, 2005, RGA had approximately $16.2
billion and $1.7 trillion in consolidated assets and worldwide life reinsurance
in-force, respectively.

RGA'S PRODUCTS AND SERVICES

RGA's operational segments are segregated primarily by geographic region:
United States, Canada, Asia Pacific and Europe & South Africa, as well as
Corporate & Other. The U.S. operations, which represented 63% of RGA's 2005 net
premiums, provide traditional life, asset-intensive products 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 9% of RGA's 2005 net
premiums, primarily provide insurers with traditional life reinsurance. The Asia
Pacific and Europe & South Africa operations, which represented, collectively,
28% of RGA's 2005 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.

CORPORATE & OTHER

Corporate & Other contains the excess capital not allocated to the business
segments, various start-up entities, including MetLife Bank, National
Association ("MetLife Bank" or "MetLife Bank, N.A."), a national bank, and
run-off entities, as well as interest expense related to the majority of the
Company's outstanding debt and expenses associated with certain legal
proceedings and income tax audit issues. Corporate & Other also includes the
elimination of all intersegment amounts, which generally relate to intersegment
loans, which bear interest rates commensurate with related borrowings, as well
as intersegment transactions.

POLICYHOLDER LIABILITIES

The Company 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, an insured dies or becomes
disabled or upon the occurrence of other covered events. The Company 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").

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,

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<PAGE>

as applicable. The Company amortizes deferred policy acquisition costs ("DAC")
in relation to the product's estimated gross margins.

In establishing actuarial liabilities for certain other insurance
contracts, the Company distinguishes between short duration and long duration
contracts. Short duration contracts generally arise from the property and
casualty business. 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 (i) guaranteed renewable term life; (ii) non-
participating whole life; (iii) individual disability; (iv) group life, dental
and disability; and (v) long-term care contracts. The Company determines
actuarial liabilities for long duration contracts using assumptions based on
experience, plus a margin for adverse deviation for these policies. Where they
exist, the Company amortizes DAC, including value of business acquired ("VOBA"),
in relation to the associated gross margins or premium.

Liabilities for investment-type and universal life-type products primarily
consist of policyholders' account balances. Investment-type products include
individual annuity contracts in the accumulation phase and certain group pension
contracts that have limited or no mortality risk. Universal life-type products
consist of universal and variable life contracts and contain group pension
contracts. For universal life-type contracts with front-end loads, the Company
defers the charge and amortizes the unearned revenue using the product's
estimated gross profits. The Company amortizes DAC on investment-type and
universal life-type contracts in relation to estimated gross profits.

Limited pay contracts primarily consist of single premium immediate
individual annuities, structured settlement annuities and certain group pension
annuities. Actuarial liabilities for limited pay contracts are equal to the
present value of future benefit payments and related expenses less the present
value of future net premiums plus premium deficiency reserves, if any. For
limited pay contracts, the Company also defers the excess of the gross premium
over the net premium and recognizes such excess into income in a constant
relationship with insurance in force for life insurance contracts and in
relation to anticipated future benefit payments for annuity contracts. The
Company amortizes DAC for limited pay contracts over the premium payment period.

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 liabilities (associated
with unearned revenues and claims payable) and for unearned revenue (the
unamortized portion of front-end loads charged). The Company also establishes
liabilities for minimum death and income benefit guarantees relating to certain
annuity contracts and secondary and paid up guarantees relating to certain life
policies.

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, the Company 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 the Company determines all estimates using expected amounts to
be paid. The Company 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, the Company derives estimates of unpaid loss adjustment expenses
principally from actuarial analyses of historical development patterns of the
relationship of loss adjustment expenses to losses
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<PAGE>

for each line of business. The Company anticipates ultimate recoveries from
salvage and subrogation principally on the basis of historical recovery
patterns. The Company calculates and records a single best estimate liability,
in conformance with GAAP, for reported losses and for incurred but not reported
losses. The Company aggregates these estimates to form the liability recorded in
the consolidated balance sheets.

Pursuant to state insurance laws, the Holding Company'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 (the "Superintendent") 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, the
Company 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.

However, the Company believes its actuarial liabilities for future benefits
are adequate to cover the ultimate benefits required to be paid to
policyholders. The Company periodically reviews its estimates of actuarial
liabilities for future benefits and compares them with its actual experience.
The Company revises estimates, to the extent permitted or required under GAAP,
if it determines that future expected experience differs from assumptions used
in the development of actuarial liabilities.

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, severity or amount of catastrophes
and acts of terrorism, but the Company makes broad use of catastrophic and
non-catastrophic reinsurance to manage risk from these perils.

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, critical
illness, retirement & 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.

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<PAGE>

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. The
Company 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.

The Company 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 the Company's underwriting and
pricing guidelines are appropriate.

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;

- underwriting potential insureds, on a case by case basis, 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 the Company'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

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<PAGE>

policyholders and administering policy benefits and other administrative and
overhead costs), competitive factors and profit considerations.

The major pricing variables for personal lines insurance include
characteristics of the insured property, such as age, make and model or
construction type, characteristics of insureds, such as driving record and loss
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 the Company'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

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
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.

REINSURANCE ACTIVITY

In addition to the activity of the Reinsurance segment, the Company 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
the Company depends on its evaluation of the specific risk, subject, in certain
circumstances, to maximum limits based on the characteristics of coverages. The
Company also cedes first dollar mortality risk under certain contracts. The
Company obtains reinsurance when capital requirements and the economic terms of
the reinsurance make it appropriate to do so.

Under the terms of the reinsurance agreements, the reinsurer agrees to
reimburse the Company for the ceded amount in the event the claim is paid.
However, the Company 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, the Company cedes
reinsurance to well-capitalized, highly rated reinsurers.

INDIVIDUAL

The Company's life insurance operations participate in reinsurance
activities in order to limit losses, minimize exposure to large risks, and
provide additional capacity for future growth. The Company has historically
reinsured the mortality risk on new life insurance policies primarily on an
excess of retention basis or a quota share basis. Until 2005, the Company
reinsured up to 90% of the mortality risk for all new individual life insurance
policies that it wrote through its various franchises. This practice was
initiated by the different franchises for different products starting at various
points in time between 1992 and 2000. During 2005, the Company changed its
retention practices for individual life insurance. Amounts reinsured in prior
years remain reinsured under the original reinsurance; however, under the new
retention guidelines, the Company reinsures up to 90% of the mortality risk in
excess of $1 million for most new life insurance policies that it writes through
its various franchises and for certain individual life policies the retention
limits remained unchanged. On a case by case basis, the Company may retain up to
$25 million per life on single life policies

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<PAGE>

and $30 million per life on survivorship policies and reinsure 100% of amounts
in excess of the Company's retention limits. The Company evaluates its
reinsurance programs routinely and may increase or decrease its retention at any
time. In addition, the Company reinsures a significant portion of the mortality
risk on its universal life policies issued since 1983. Placement of reinsurance
is done primarily on an automatic basis and also on a facultative basis for
risks with specific characteristics.

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 had also protected itself through the purchase of combination
risk coverage. This reinsurance coverage pooled risks from several lines of
business and included individual and group life claims in excess of $2 million
per policy, as well as excess property and casualty losses, among others. This
combination risk coverage was commuted during 2005.

The Company reinsures its business through a diversified group of
reinsurers. No single unaffiliated reinsurer has a material obligation to the
Company nor is the Company's business substantially dependent upon any
reinsurance contracts. The Company is contingently liable with respect to ceded
reinsurance should any reinsurer be unable to meet its obligations under these
agreements.

AUTO & HOME

Auto & Home purchases reinsurance to control the Company's exposure to
large losses (primarily catastrophe losses) and to protect statutory surplus.
Auto & Home cedes to reinsurers a portion of risks and pays premiums based upon
the risk and exposure of the policy 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 of 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 certain other
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 both the amounts
of agent compensation throughout the U.S., as well as 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

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<PAGE>

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 they are
licensed, in addition to any examinations conducted by their domiciliary states.
The New York State Department of Insurance (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 the absence of this accreditation 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 the Holding Company and its 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. See "Legal
Proceedings."

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
certain contractual insurance 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. 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. For the three-year period ended December 31, 2005, 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 had 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 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.

18
<PAGE>

Policy and contract reserve sufficiency analysis. Annually, the Holding
Company's U.S. insurance subsidiaries are required to conduct an analysis of the
sufficiency of all life and health insurance and annuity statutory reserves. 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, the Holding Company's insurance
subsidiaries which are required by their states of domicile to provide these
opinions have provided such opinions without qualifications.

Surplus and capital. The Holding Company'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"). Each of the Holding Company's U.S. insurance
subsidiaries is subject to certain RBC requirements. At December 31, 2005, the
total adjusted capital of each of these insurance subsidiaries was in excess of
each of the required levels. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources -- The Company -- Capital."

The NAIC adopted the Codification of Statutory Accounting Principles
("Codification") in 2001. Codification was intended to standardize regulatory
accounting and reporting to state insurance departments. However, statutory
accounting principles continue to be established by individual state laws and
permitted practices. The Department has adopted Codification with certain
modifications for the preparation of statutory financial statements of insurance
companies domiciled in New York. Modifications by the various state insurance
departments may impact the effect of Codification on the statutory capital and
surplus of the Holding Company's insurance subsidiaries.

Regulation of investments. Each of the Holding Company's U.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, 2005.

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 2006. 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 operations
or financial condition.

Legislative Developments. On October 22, 2004, President Bush signed into
law the American Jobs Creation Act of 2004, which includes changes to
requirements for non-qualified deferred compensation. The Company believes that
the changes to such requirements will not have a material impact on its
non-qualified deferred compensation arrangements.

See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Application of Recent Accounting Pronouncements" for a
discussion of the Medicare Prescription Drug Improvement and Modernization Act
of 2003.

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<PAGE>

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 the Holding Company's subsidiaries and their activities in offering
and selling variable insurance products are subject to extensive regulation
under the federal securities laws administered by the U.S. Securities and
Exchange Commission (the "SEC"). These subsidiaries issue variable annuity
contracts and variable life insurance policies through separate accounts that
are registered with the SEC as investment companies under the Investment Company
Act of 1940, as amended. Each registered separate account is generally divided
into sub-accounts, each of which invests in an underlying mutual fund which is
itself a registered investment company under the Investment Company Act of 1940,
as amended. In addition, the variable annuity contracts and variable life
insurance policies issued by the separate accounts are registered with the SEC
under the Securities Act of 1933, as amended. Other subsidiaries are registered
with the SEC as broker-dealers under the Securities Exchange Act of 1934, as
amended, and are members of, and subject to, regulation by the NASD. Further,
some of the Company's subsidiaries are registered as investment advisers with
the SEC under the Investment Advisers Act of 1940, as amended, and are also
registered as investment advisers in various states, as applicable.

Other Holding Company subsidiaries are pooled investment vehicles that are
exempt from registration under the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, but may be subject to certain other
provisions of the federal securities laws. In addition, certain variable
contract separate accounts sponsored by the Holding Company's subsidiaries are
exempt from registration, but may be subject to other provisions of the federal
securities laws.

Federal and state securities regulatory authorities and the NASD from time
to time make inquiries and conduct examinations regarding compliance by the
Holding Company and its subsidiaries with securities and other laws and
regulations. The Company cooperates with such inquiries and examinations and
takes corrective action when warranted.

Federal and state securities laws and regulations are primarily intended to
protect investors in the securities markets and generally grant regulatory
agencies broad rulemaking and enforcement 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 similar laws and regulations in
the foreign countries in which it provides investment advisory services, offers
products similar to those described above, or conducts other 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

20
<PAGE>

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.

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
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, 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

21
<PAGE>

corrective actions with respect to institutions that do not meet minimum capital
standards. At December 31, 2005, 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's management believes that competition faced by its business
segments is based on a number of factors, including service, product features,
scale, price, 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.

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." The Company continues to
undertake several initiatives to grow its 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.

The U.S. 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

22
<PAGE>

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 has entered the fixed benefit critical illness insurance marketplace.
Changes to the health care system may make this market more or less attractive
in the future.

COMPANY RATINGS

Insurer financial strength ratings represent the opinions of rating
agencies regarding the ability of an insurance company to meet its policyholder
financial obligations. Credit ratings represent the opinions of rating agencies
regarding an issuer'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 tables below:

INSURER FINANCIAL STRENGTH RATINGS

<Table>
<Caption>
MOODY'S
A.M. BEST FITCH INVESTORS STANDARD &
COMPANY(1) RATINGS(2) SERVICE(3) POOR'S(4)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
First MetLife Investors Insurance
Company................................ A+ (5) N/R -- N/R -- AA (6)
General American Life Insurance
Company................................ A+ (5) AA (5) Aa2 (6) AA (6)
MetLife Investors Insurance Company...... A+ (5) AA (5) Aa2 (6) AA (6)
MetLife Investors Insurance Company of
California............................. A+ (5) N/R -- N/R -- AA (6)
MetLife Investors USA Insurance
Company................................ A+ (5) AA (5) Aa3 (6) AA (6)
Metropolitan Casualty Insurance
Company................................ A (5) N/R -- N/R -- N/R --
Metropolitan Direct Property and Casualty
Insurance Company...................... A (5) N/R -- N/R -- N/R --
Metropolitan General Insurance Company... A (5) N/R -- N/R -- N/R --
Metropolitan Group Property & Casualty
Insurance Company...................... A (5) N/R -- N/R -- N/R --
Metropolitan Life Insurance Company...... A+ (5) AA (5) Aa2 (6) AA (6)
Metropolitan Life Insurance Company
(Short Term Rating).................... N/R -- N/R -- P-1 (5) A-1+ (5)
Metropolitan Lloyds Insurance Company of
Texas.................................. A (5) N/R -- N/R -- N/R --
Metropolitan Property and Casualty
Insurance Company...................... A (5) N/R -- Aa3 (6) N/R --
Metropolitan Tower Life Insurance
Company................................ A+ (5) N/R -- Aa3 (6) N/R --
New England Life Insurance Company....... A+ (5) AA (5) Aa2 (6) AA (6)
Paragon Life Insurance Company........... A+ (5) AA (5) N/R -- AA (6)
RGA Reinsurance Company.................. A+ (6) AA- (5) A1 (5) AA- (6)
RGA Life Reinsurance Company of Canada... N/R -- N/R -- N/R -- AA- (6)
Texas Life Insurance Company............. A (5) N/R -- N/R -- N/R --
The Travelers Insurance Company.......... A+ (5) AA (5) Aa2 (6) AA (6)
The Travelers Insurance Company (Short
Term Rating)........................... NR -- NR -- P-1 (5) NR --
The Travelers Life and Annuity Company... A+ (5) AA (5) Aa2 (6) AA (6)
</Table>

23
<PAGE>

CREDIT RATINGS

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

(1) A.M. Best Company ("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.

Best's 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.

Best's 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 ratings from "AA" to "CCC" 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 ratings from "AA" to "CCC"
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 ratings from "Aa" to "Caa" 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 (exceptional)" to "C
(typically in default)." A numeric modifier may be appended to ratings from
"Aa" to "Caa" 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)."

24
<PAGE>

(4) Standard & Poor's ("S&P") long term insurer financial strength ratings range
from "AAA (extremely strong)" to "R (regulatory action)." 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 action)."

S&P long-term credit ratings range from "AAA (extremely strong)" to "D
(payment 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. A rating of "BBB" has adequate protection parameters
and is considered investment grade.

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

(5) Outlook is "stable"

(6) Outlook is "negative"

N/R indicates not rated.

RATING STABILITY INDICATORS

Rating agencies use an "outlook statement" of "positive," "stable" or
"negative" to indicate a medium-or long-term trend in credit fundamentals which,
if continued, may lead to a rating change. These factors may be internal to the
issuer, such as a changing profitability profile, or may be brought about by
changes in the industry's landscape through new competition, regulation or
technological transformation. A rating may have a "stable" outlook to indicate
that the rating is not expected to change. A "stable" rating does not preclude a
rating agency from changing a rating at any time, without notice.

The foregoing insurer financial strength ratings reflect each rating
agency's opinion of Metropolitan Life and the Holding Company's other insurance
subsidiaries' financial characteristics with respect to their ability to pay
obligations under insurance policies and contracts in accordance with their
terms, and are not evaluations directed toward the protection of the Holding
Company's securityholders. Credit ratings are opinions of each agency with
respect to specific securities and contractual financial obligations and the
issuer's ability and willingness to meet those obligations when due. Neither
insurer financial strength nor credit ratings are statements of fact nor are
they recommendations to purchase, hold or sell any security, contract or policy.
Each rating should be evaluated independently of any other rating.

A ratings downgrade (or the potential for such a downgrade) of Metropolitan
Life or any of the Holding Company's other insurance subsidiaries could
potentially, 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 the Company's ability to compete and thereby have a
material adverse effect on its business, results of operations and financial
condition.

EMPLOYEES

At December 31, 2005, the Company employed approximately 65,500 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 61, has been Chairman of the Board and Chief
Executive Officer of MetLife, Inc. since September 1999. He also served as
President of MetLife, Inc. from September 1999 to June 2004. He has been
Chairman of the Board and Chief Executive Officer of Metropolitan Life since
July 1998, President of Metropolitan Life from November 1997 to June 2004, Chief
Operating Officer from November 1997 to June 1998, and Executive Vice President
from September 1995 to October 1997. Previously, he was

25
<PAGE>

Executive Vice President of PaineWebber Group Incorporated, a full service
securities and commodities firm, from 1989 to 1995.(1)

C. ROBERT HENRIKSON, age 58, has been President and Chief Operating Officer
of MetLife, Inc. and Metropolitan Life since June 2004. Previously, he was
President of the U.S. Insurance and Financial Services businesses of MetLife,
Inc. and Metropolitan Life from July 2002 to June 2004. He served as President
of Institutional Business of MetLife, Inc. from September 1999 to July 2002 and
President of Institutional Business of Metropolitan Life from May 1999 through
June 2002. 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
MetLife Inc., Metropolitan Life, MetLife Bank, N.A., The Travelers Insurance
Company and The Travelers Life and Annuity Company.(2)

STEVEN A. KANDARIAN, age 53, has been Executive Vice President and Chief
Investment Officer of MetLife, Inc. and Metropolitan Life since April 2005.
Previously, he was the executive director of the Pension Benefit Guaranty
Corporation ("PBGC") from 2001 to 2004. Before joining PBGC, Mr. Kandarian was
founder and managing partner of Orion Partners, LP, where he managed a private
equity fund specializing in venture capital and corporate acquisitions for eight
years.

LELAND C. LAUNER, JR., age 50, has been President, Institutional Business,
of MetLife, Inc. and Metropolitan Life since March 2005. Previously he was
Executive Vice President and Chief Investment Officer of MetLife, Inc. and
Metropolitan Life from July 2003 to March 2005, and a Senior Vice President of
Metropolitan Life for more than five years. Mr. Launer is a director and
Chairman of the Board of Reinsurance Group of America, Incorporated. He is also
a director of MetLife Bank, N.A., The Travelers Insurance Company and The
Travelers Life and Annuity Company.

JAMES L. LIPSCOMB, age 59, has been Executive Vice President and General
Counsel of MetLife, Inc. and Metropolitan Life since July 2003. He 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.

CATHERINE A. REIN, age 63, has been Senior Executive Vice President and
Chief Administrative Officer of MetLife, Inc. since January 2005. Previously,
she was Senior Executive Vice President of MetLife, Inc. from September 1999 and
President and Chief Executive Officer of Metropolitan Property and Casualty
Insurance Company from March 1999 to January 2005. 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 57, has been President, International, of MetLife,
Inc. and Metropolitan Life since June 2001. He was President of Client Services
and Chief Administrative Officer of MetLife, Inc. from September 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 President and
Chief Executive Officer of its Canadian Operations from July 1993 to October
1995.

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

(1) On December 1, 2005, the Holding Company announced that Mr. Benmosche will
retire as Chief Executive Officer on March 1, 2006 and as Chairman of the
Board on April 25, 2006, following the Holding Company's Annual Shareholders
Meeting. Mr. Benmosche will relinquish his corresponding roles with
Metropolitan Life at such times.

(2) The board of directors of the Holding Company has named Mr. Henrikson to
succeed Mr. Benmosche upon his retirement.

26
<PAGE>

LISA M. WEBER, age 43, has been President, Individual Business, of MetLife,
Inc. and Metropolitan Life since June 2004. Previously, she was Senior Executive
Vice President and Chief Administrative Officer of MetLife, Inc. and
Metropolitan Life from June 2001 to June 2004. 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 MetLife Bank, N.A., The Travelers Insurance Company and The
Travelers Life and Annuity Company.

WILLIAM J. WHEELER, age 44, 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." MetLife also has the exclusive license to use the
Peanuts(R) characters in the area of financial services and health care benefit
services in the United States and some foreign countries under an advertising
and premium agreement with United Feature Syndicate until December 31, 2012.
Furthermore, MetLife also has a non-exclusive license to use certain
Citigroup-owned trademarks in connection with the marketing, distribution or
sale of life insurance and annuity products under a licensing agreement with
Citigroup until June 30, 2015. The Company believes that its rights in its
trademarks and under its Peanuts(R) characters license and its Citigroup license
are well protected.

AVAILABLE INFORMATION

MetLife, Inc. files periodic reports, proxy statements and other
information with the SEC. Such reports, proxy statements and other information
may be obtained by visiting the Public Reference Room of the SEC at its
Headquarters Office, 100 F Street, N.E., Room 1580, Washington D.C. 20549 or by
calling the SEC at 1-202-551-8090 (Public Reference Room) or 1-800-SEC-0330
(Office of Investor Education and Assistance). 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, Inc. 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 the website is
not part of this or any other report filed with or furnished to the SEC.

ITEM 1A. RISK FACTORS

CHANGES IN MARKET INTEREST RATES MAY SIGNIFICANTLY AFFECT OUR PROFITABILITY

Some of our products, principally traditional whole life insurance, fixed
annuities and guaranteed interest contracts, expose us to the risk that changes
in interest rates will reduce our "spread," or the difference between the
amounts that we are required to pay under the contracts in our general account
and the rate of return we are able to earn on general account investments
intended to support obligations under the contracts. Our spread is a key
component of our net income.

As interest rates decrease or remain at low levels, we may be forced to
reinvest proceeds from investments that have matured or have been prepaid or
sold at lower yields, reducing our investment margin. Moreover, borrowers may
prepay or redeem the fixed-income securities, commercial mortgages and
mortgage-backed securities in our investment portfolio with greater frequency in
order to borrow at lower market rates, which

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exacerbates this risk. Lowering interest crediting rates can help offset
decreases in investment margins on some products. However, our ability to lower
these rates could be limited by competition or contractually guaranteed minimum
rates and may not match the timing or magnitude of changes in asset yields. As a
result, our spread could decrease or potentially become negative. Our
expectation for future spreads is an important component in the amortization of
DAC and significantly lower spreads may cause us to accelerate amortization,
thereby reducing net income in the affected reporting period. In addition,
during periods of declining interest rates, life insurance and annuity products
may be relatively more attractive investments to consumers, resulting in
increased premium payments on products with flexible premium features, repayment
of policy loans and increased persistency, or a higher percentage of insurance
policies remaining in force from year to year, during a period when our new
investments carry lower returns. A decline in market interest rates could also
reduce our return on investments that do not support particular policy
obligations. Accordingly, declining interest rates may materially adversely
affect our results of operations, financial position and cash flows and
significantly reduce our profitability.

Increases in market interest rates could also negatively affect our
profitability. In periods of rapidly increasing interest rates, we may not be
able to replace, in a timely manner, the assets in our general account with
higher yielding assets needed to fund the higher crediting rates necessary to
keep interest sensitive products competitive. We therefore may have to accept a
lower spread and, thus, lower profitability or face a decline in sales and
greater loss of existing contracts and related assets. In addition, policy
loans, surrenders and withdrawals may tend to increase as policyholders seek
investments with higher perceived returns as interest rates rise. This process
may result in cash outflows requiring that we sell invested assets at a time
when the prices of those assets are adversely affected by the increase in market
interest rates, which may result in realized investment losses. Unanticipated
withdrawals and terminations may cause us to accelerate the amortization of DAC,
which would increase our current expenses and reduce net income. An increase in
market interest rates could also have a material adverse effect on the value of
our investment portfolio, for example, by decreasing the fair values of the
fixed income securities that comprise a substantial majority of our investment
portfolio.

INDUSTRY TRENDS COULD ADVERSELY AFFECT THE PROFITABILITY OF OUR BUSINESSES

Our business segments continue to be influenced by a variety of trends that
affect the insurance industry. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Results of
Operations -- Industry Trends."

Financial Environment. The current financial environment presents a
challenge for the life insurance industry. A low general level of short-term and
long-term interest rates can have a negative impact on the demand for and the
profitability of spread-based products such as fixed annuities, guaranteed
interest contracts and universal life insurance. In addition, continued low
interest rates could put pressure on interest spreads on existing blocks of
business as declining investment portfolio yields draw closer to minimum
crediting rate guarantees on certain products. The compression of the yields
between spread-based products and interest rates will be a concern until new
money rates on corporate bonds are higher than overall life insurer investment
portfolio yields. Recent volatile equity market performance has also presented
challenges for life insurers, as fee revenue from variable annuities and pension
products is tied to separate account balances, which reflect equity market
performance. Also, variable annuity product demand often mirrors consumer demand
for equity market investments. See "-- Changes in Market Interest Rates May
Significantly Affect Our Profitability."

Competitive Pressures. The life insurance industry is becoming
increasingly competitive. The product development and product life-cycles have
shortened in many product segments, leading to more intense competition with
respect to product features. Larger companies have the ability to invest in
brand equity, product development and risk management, which are among the
fundamentals for sustained profitable growth in the life insurance industry. In
addition, several of the industry's products can be quite homogeneous and
subject to intense price competition, and sufficient scale, financial strength
and flexibility are becoming prerequisites for sustainable growth in the life
insurance industry. Larger market participants tend to have the capacity to
invest in additional distribution capability and the information technology
needed to offer the
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superior customer service demanded by an increasingly sophisticated industry
client base. See "-- Competitive Factors May Adversely Affect Our Market Share
and Profitability" and "Business -- Competition."

Regulatory Changes. The life insurance industry is regulated at the state
level, with some products also subject to federal regulation. As life insurers
introduce new and often more complex products, regulators refine capital
requirements and introduce new reserving standards for the life insurance
industry. Regulation recently adopted or currently under review can potentially
impact the reserve and capital requirements for several of the industry's
products. In addition, regulators have undertaken market and sales practices
reviews of several markets or products, including equity-indexed annuities,
variable annuities and group products. See "-- Our Insurance Businesses Are
Heavily Regulated, and Changes in Regulation May Reduce Profitability and Limit
Growth" and "Business -- Regulation -- Insurance Regulation."

Pension Plans. Recently, a number of corporations have announced that they
have already frozen or intend to freeze their traditional pension plans and,
instead, offer their employees a 401(k) program. This transition from a defined
benefit to a defined contribution program may adversely affect our annuities
business, as these traditional pension plans historically have been large
customers of such products.

A DECLINE IN EQUITY MARKETS OR AN INCREASE IN VOLATILITY IN EQUITY MARKETS MAY
ADVERSELY AFFECT SALES OF OUR INVESTMENT PRODUCTS AND OUR PROFITABILITY

Significant downturns and volatility in equity markets could have a
material adverse effect on our financial condition and results of operations in
three principal ways.

First, market downturns and volatility may discourage purchases of separate
account products, such as variable annuities, variable life insurance and mutual
funds that have returns linked to the performance of the equity markets and may
cause some of our existing customers to withdraw cash values or reduce
investments in those products.

Second, downturns and volatility in equity markets can have a material
adverse effect on the revenues and returns from our savings and investment
products and services. Because these products and services depend on fees
related primarily to the value of assets under management, a decline in the
equity markets could reduce our revenues by reducing the value of the investment
assets we manage. The retail annuity business in particular is highly sensitive
to equity markets, and a sustained weakness in the markets will decrease
revenues and earnings in variable annuity products.

Third, we provide certain guarantees within some of our products that
protect policyholders against significant downturns in the equity markets. For
example, we offer variable annuity products with guaranteed features, such as
minimum death and withdrawal benefits. These guarantees may be more costly than
expected in volatile or declining equity market conditions, causing us to
increase liabilities for future policy benefits, negatively affecting net
income.

THE PERFORMANCE OF OUR INVESTMENTS DEPENDS ON CONDITIONS THAT ARE OUTSIDE OUR
CONTROL, AND OUR NET INVESTMENT INCOME CAN VARY FROM PERIOD TO PERIOD

The performance of our investment portfolio depends in part upon the level
of and changes in interest rates, equity prices, real estate values, the
performance of the economy in general, the performance of the specific obligors
included in our portfolio and other factors that are beyond our control. Changes
in these factors can affect our net investment income in any period, and such
changes can be substantial.

We invest a portion of our invested assets in pooled investment funds that
make private equity investments. The amount and timing of income from such
investment funds tend to be uneven as a result of the performance of the
underlying private equity investments, which can be difficult to predict, as
well as the timing of distributions from the funds, which depends on particular
events relating to the underlying investments, as well as the funds' schedules
for making distributions and their needs for cash. As a result, the amount of
income that we record from these investments can vary substantially from quarter
to quarter.

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COMPETITIVE FACTORS MAY ADVERSELY AFFECT OUR MARKET SHARE AND PROFITABILITY

Our business segments are subject to intense competition. We believe that
this competition is based on a number of factors, including service, product
features, scale, price, financial strength, claims-paying ratings, credit
ratings, ebusiness capabilities and name recognition. We compete 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,
employers 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.

Many of our insurance products, particularly those offered by our
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 us. The effect of competition
may, as a result, adversely affect the persistency of these and other products,
as well as our ability to sell products in the future.

In addition, the investment management and securities brokerage businesses
have relatively few barriers to entry and continually attract new entrants. Many
of our competitors in these businesses offer a broader array of investment
products and services and are better known than us as sellers of annuities and
other investment products. See "Business-Competition."

WE MAY BE UNABLE TO ATTRACT AND RETAIN SALES REPRESENTATIVES FOR OUR PRODUCTS

We must attract and retain productive sales representatives to sell our
insurance, annuities and investment products. Strong competition exists among
insurers for sales representatives with demonstrated ability. We compete with
other insurers for sales representatives primarily on the basis of our financial
position, support services and compensation and product features. We continue to
undertake several initiatives to grow our career agency force while continuing
to enhance the efficiency and production of our existing sales force. We cannot
provide assurance that these initiatives will succeed in attracting and
retaining new agents. Sales of individual insurance, annuities and investment
products and our results of operations and financial condition could be
materially adversely affected if we are unsuccessful in attracting and retaining
agents. See "Business -- Competition."

DIFFERENCES BETWEEN ACTUAL CLAIMS EXPERIENCE AND UNDERWRITING AND RESERVING
ASSUMPTIONS MAY ADVERSELY AFFECT OUR FINANCIAL RESULTS

Our earnings significantly depend upon the extent to which our actual
claims experience is consistent with the assumptions we use in setting prices
for our products and establishing liabilities for future policy benefits and
claims. Our liabilities for future policy benefits and claims are established
based on estimates by actuaries of how much we will need to pay for future
benefits and claims. For life insurance and annuity products, we calculate these
liabilities based on many assumptions and estimates, including estimated
premiums to be received over the assumed life of the policy, the timing of the
event covered by the insurance policy, the amount of benefits or claims to be
paid and the investment returns on the assets we purchase with the premiums we
receive. We establish liabilities for property and casualty claims and benefits
based on assumptions and estimates of damages and liabilities incurred. To the
extent that actual claims experience is less favorable than the underlying
assumptions we used in establishing such liabilities, we could be required to
increase our liabilities.

Due to the nature of the underlying risks and the high degree of
uncertainty associated with the determination of liabilities for future policy
benefits and claims, we cannot determine precisely the amounts which we will
ultimately pay to settle our liabilities. Such amounts may vary from the
estimated amounts, particularly when those payments may not occur until well
into the future. We evaluate our liabilities periodically based on changes in
the assumptions used to establish the liabilities, as well as our actual
experience. We charge or credit changes in our liabilities to expenses in the
period the liabilities are established or re-estimated. If the liabilities
originally established for future benefit payments prove

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inadequate, we must increase them. Such increases could affect earnings
negatively and have a material adverse effect on our business, results of
operations and financial condition.

OUR RISK MANAGEMENT POLICIES AND PROCEDURES MAY LEAVE US EXPOSED TO UNIDENTIFIED
OR UNANTICIPATED RISK, WHICH COULD NEGATIVELY AFFECT OUR BUSINESS

Management of operational, legal and regulatory risks requires, among other
things, policies and procedures to record properly and verify a large number of
transactions and events. We have devoted significant resources to develop our
risk management policies and procedures and expect to continue to do so in the
future. Nonetheless, our policies and procedures may not be fully effective.
Many of our methods for managing risk and exposures are based upon the use of
observed historical market behavior or statistics based on historical models. As
a result, these methods may not predict future exposures, which could be
significantly greater than our historical measures indicate. Other risk
management methods depend upon the evaluation of information regarding markets,
clients, catastrophe occurrence or other matters that is publicly available or
otherwise accessible to us. This information may not always be accurate,
complete, up-to-date or properly evaluated. See "Quantitative and Qualitative
Disclosures About Market Risk."

CATASTROPHES MAY ADVERSELY IMPACT LIABILITIES FOR POLICYHOLDER CLAIMS AND
REINSURANCE AVAILABILITY

Our life insurance operations are exposed to the risk of catastrophic
mortality, such as a pandemic or other event that causes a large number of
deaths. Significant influenza pandemics have occurred three times in the last
century, but neither the likelihood, timing, nor the severity of a future
pandemic can be predicted. The effectiveness of external parties, including
governmental and non-governmental organizations, in combating the spread and
severity of such a pandemic could have a material impact on the losses
experienced by us. In our group insurance operations, a localized event that
affects the workplace of one or more of our group insurance customers could
cause a significant loss due to mortality or morbidity claims. These events
could cause a material adverse effect on our results of operations in any period
and, depending on their severity, could also materially and adversely affect our
financial condition. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Impact of Hurricanes" and Note 12 of
Notes to Consolidated Financial Statements.

Our Auto & Home business has experienced, and will likely in the future
experience, catastrophe losses that may have a material adverse impact on the
business, results of operations and financial condition of the Auto & Home
segment. Although Auto & Home makes every effort to minimize our exposure to
catastrophic risks through volatility management and reinsurance programs, these
efforts may not succeed. 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), fires, and
man-made events such as terrorist attacks. Historically, substantially all of
our catastrophe-related claims have related to homeowners coverages. However,
catastrophes may also affect other Auto & Home coverages. Due to their nature,
we cannot predict the incidence, timing and severity of catastrophes.

Hurricanes and earthquakes are of particular note for our homeowners
coverages. Areas of major hurricane exposure include coastal sections of the
northeastern United States (including Long Island and the Connecticut, Rhode
Island and Massachusetts shorelines), the Gulf Coast (including Mississippi and
Louisiana) and Florida. We also have some earthquake exposure, primarily along
the New Madrid fault line in the central United States and in the Pacific
Northwest. Losses incurred by Auto & Home from all catastrophes, net of
reinsurance but before taxes, were $286 million, $189 million and $77 million in
2005, 2004, and 2003, respectively. The 2005 number includes loss and loss
adjustment expenses and reinstatement and additional reinsurance-related
premiums which were caused by the magnitude of reinsurance recoverables.

The extent of losses from a catastrophe is a function of both the total
amount of insured exposure in the area affected by the event and the severity of
the event. Most catastrophes are restricted to small geographic areas; however,
pandemics, hurricanes, earthquakes and man-made catastrophes may produce
significant damage in larger areas, especially those that are heavily populated.
Claims resulting from natural or man-

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made catastrophic events could cause substantial volatility in our financial
results for any fiscal quarter or year and could materially reduce our
profitability or harm our financial condition. Also, catastrophic events could
harm the financial condition of our reinsurers and thereby increase the
probability of default on reinsurance recoveries. Our ability to write new
business could also be affected. It is possible that increases in the value and
geographic concentration of insured property and the effects of inflation could
increase the severity of claims from catastrophic events in the future.

Consistent with industry practice and accounting standards, we establish
liabilities for claims arising from a catastrophe only after assessing the
probable losses arising from the event. We cannot be certain that the
liabilities we have established will be adequate to cover actual claim
liabilities. From time to time, states have passed legislation that has the
effect of limiting the ability of insurers to manage risk, such as legislation
restricting an insurer's ability to withdraw from catastrophe-prone areas. While
we attempt to limit our exposure to acceptable levels, subject to restrictions
imposed by insurance regulatory authorities, a catastrophic event or multiple
catastrophic events could have a material adverse effect on our business,
results of operations and financial condition.

Our ability to manage this risk and the profitability of our property and
casualty and life insurance businesses depends in part on our ability to obtain
catastrophe reinsurance, which may not be available at commercially acceptable
rates in the future. See "-- Reinsurance May Not Be Available, Affordable or
Adequate to Protect Us Against Losses."

A DOWNGRADE OR A POTENTIAL DOWNGRADE IN OUR FINANCIAL STRENGTH OR CREDIT RATINGS
COULD RESULT IN A LOSS OF BUSINESS AND ADVERSELY AFFECT OUR FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Financial strength ratings, which various Nationally Recognized Statistical
Rating Organizations ("NRSROs") publish as indicators of an insurance company's
ability to meet contractholder and policyholder obligations, are important to
maintaining public confidence in our products, our ability to market our
products and our competitive position. See "Business -- Company
Ratings -- Insurer Financial Strength Ratings."

Following the announcement of the acquisition of Travelers, the financial
strength rating of each of TIC and its subsidiary, The Travelers Life and
Annuity Company ("TLAC"), was lowered one notch by certain rating agencies. We
believe the negative impact of these downgrades on Travelers' financial results
was immaterial. However, further downgrades in these or our other insurance
subsidiaries' financial strength ratings, or an announced potential for a
downgrade, could have a material adverse effect on our financial condition and
results of operations in many ways, including:

- reducing new sales of insurance products, annuities and other investment
products;

- adversely affecting our relationships with our sales force and
independent sales intermediaries;

- materially increasing the number or amount of policy surrenders and
withdrawals by contractholders and policyholders;

- requiring us to reduce prices for many of our products and services to
remain competitive;

- adversely affecting our ability to obtain reinsurance at reasonable
prices or at all; and

- adversely affecting our relationships with credit counterparties.

In addition to the financial strength ratings of our insurance
subsidiaries, NRSROs also publish credit ratings for MetLife and several of our
subsidiaries. Credit ratings are indicators of a debt issuer's ability to meet
the terms of the debt obligations in a timely manner. See "Business -- Company
Ratings -- Credit Ratings." A downgrade in our credit ratings could increase the
cost of borrowing, which could have a material adverse effect on our financial
condition and results of operations.

Following the announcement of the acquisition of Travelers, several NRSROs
took a number of rating actions, the net result of which is that various credit
and financial strength ratings have a "negative" outlook, rather than the former
"stable" outlook. We do not expect that all ratings will return to "stable"
until such time as we have established, to the sole satisfaction of each agency,
clear evidence of the successful integration
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of the Travelers businesses and that we are reducing our financial leverage to
levels closer to that which existed prior to the acquisition.

As a result of the additional securities that we issued to finance a
portion of the purchase price for the acquisition, our leverage ratio increased
moderately. See Note 2 of Notes to Consolidated Financial Statements. While we
expect our leverage ratio to decrease over time as a result of the accumulation
of retained earnings, there is no assurance that it will decrease as we expect.
The increased leverage will reduce our flexibility in managing our capital.

Rating agencies assign ratings based upon several factors, some of which
relate to general economic conditions and circumstances outside of our control.
In addition, rating agencies may employ different models and formulas to assess
our financial strength and creditworthiness, and may alter these models from
time to time at their discretion. We cannot predict what actions rating agencies
may take, or what actions we may be required to take in response to the actions
of rating agencies, which could adversely affect our business.

IF THE TRAVELERS BUSINESS DOES NOT PERFORM WELL, WE MAY INCUR SIGNIFICANT
CHARGES TO WRITE DOWN THE GOODWILL ESTABLISHED IN THE ACQUISITION

As a result of the acquisition of Travelers, we established goodwill of
$4,177 million. Under Statement of Financial Accounting Standards ("SFAS") No.
142, Goodwill and Other Intangible Assets, we must test goodwill annually for
impairment and, if we determine that the goodwill has been impaired, we must
write down the goodwill by the amount of the impairment, with a corresponding
charge to income. If the Travelers business does not perform well, it may impact
the goodwill impairment test which could result in a goodwill write down. Such
write downs could have a material adverse effect on our results of operations or
financial position.

DEFAULTS, DOWNGRADES OR OTHER EVENTS IMPAIRING THE VALUE OF OUR FIXED MATURITY
SECURITIES PORTFOLIO MAY REDUCE OUR EARNINGS

We are subject to the risk that the issuers of the fixed maturity
securities we own may default on principal and interest payments they owe us. At
December 31, 2005, the fixed maturity securities of $230 billion in our
investment portfolio represented 75.2% of our total cash and invested assets.
The occurrence of a major economic downturn, acts of corporate malfeasance or
other events that adversely affect the issuers of these securities could cause
the value of our fixed maturities portfolio and our net earnings to decline and
the default rate of the fixed maturity securities in our investment portfolio to
increase. A ratings downgrade affecting particular issuers or securities could
also have a similar effect. With recent downgrades in the automotive sector, as
well as economic uncertainty and increasing interest rates, credit quality of
issuers could be adversely affected. Any event reducing the value of these
securities other than on a temporary basis could have a material adverse effect
on our business, results of operations and financial condition.

DEFAULTS ON OUR MORTGAGE AND CONSUMER LOANS MAY ADVERSELY AFFECT OUR
PROFITABILITY

Our mortgage and consumer loan investments face default risk. Our mortgage
and consumer loans are principally collateralized by commercial, agricultural
and residential properties, as well as automobiles. At December 31, 2005, our
mortgage and consumer loan investments of $37 billion represented 12.2% of our
total cash and invested assets. At December 31, 2005, loans that were either
delinquent or in the process of foreclosure totaled less than 1% of our mortgage
and consumer loan investments. The performance of our mortgage and consumer loan
investments, however, may fluctuate in the future. In addition, substantially
all of our mortgage loan investments have balloon payment maturities. An
increase in the default rate of our mortgage and consumer loan investments could
have a material adverse effect on our business, results of operations and
financial condition.

SOME OF OUR INVESTMENTS ARE RELATIVELY ILLIQUID

Our investments in privately placed fixed maturity securities, mortgage and
consumer loans, equity real estate, including real estate joint ventures and
other limited partnership interests, are relatively illiquid. These
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asset classes represented 24.9% of the carrying value of our total cash and
invested assets as of December 31, 2005. If we require significant amounts of
cash on short notice in excess of normal cash requirements, we may have
difficulty selling these investments in a timely manner, be forced to sell them
for less than we otherwise would have been able to realize, or both.

FLUCTUATIONS IN FOREIGN CURRENCY EXCHANGE RATES AND FOREIGN SECURITIES MARKETS
COULD NEGATIVELY AFFECT OUR PROFITABILITY

We are exposed to risks associated with fluctuations in foreign currency
exchange rates against the U.S. dollar resulting from our holdings of non-U.S.
dollar denominated securities and investments in foreign subsidiaries. If the
currencies of the non-U.S. dollar denominated securities we hold in our
investment portfolios decline against the U.S. dollar, our investment returns,
and thus our profitability, may be adversely affected. Although we use foreign
currency swaps and forward contracts to mitigate foreign currency exchange rate
risk, we can not provide assurance that these methods will be effective or that
our counterparties will perform their obligations. See "Quantitative and
Qualitative Disclosures About Market Risk."

From time to time, various emerging market countries have experienced
severe economic and financial disruptions, including significant devaluations of
their currencies. Our exposure to foreign exchange rate risk is exacerbated by
our investments in emerging markets.

We have matched substantially all of our foreign currency liabilities in
our foreign subsidiaries with assets denominated in their respective foreign
currency, which limits the effect of currency exchange rate fluctuation on local
operating results; however, fluctuations in such rates affect the translation of
these results into our consolidated financial statements. Although we take
certain actions to address this risk, foreign currency exchange rate fluctuation
could materially adversely affect our reported results due to unhedged positions
or the failure of hedges to effectively offset the impact of the foreign
currency exchange rate fluctuation. See "Quantitative and Qualitative
Disclosures About Market Risk."

OUR INTERNATIONAL OPERATIONS FACE POLITICAL, LEGAL, OPERATIONAL AND OTHER RISKS
THAT COULD NEGATIVELY AFFECT THOSE OPERATIONS OR OUR PROFITABILITY

Our international operations face political, legal, operational and other
risks that we do not face in our domestic operations. We face the risk of
discriminatory regulation, nationalization or expropriation of assets, price
controls and exchange controls or other restrictions that prevent us from
transferring funds from these operations out of the countries in which they
operate or converting local currencies we hold into U.S. dollars or other
currencies. Some of our foreign insurance operations are, and are likely to
continue to be, in emerging markets where these risks are heightened. See
"Quantitative and Qualitative Disclosures About Market Risk." In addition, we
rely on local sales forces in these countries and may encounter labor problems
resulting from workers' associations and trade unions in some countries. If our
business model is not successful in a particular country, we may lose all or
most of our investment in building and training the sales force in that country.

We are currently planning to expand our international operations in markets
where we operate and in selected new markets. This may require considerable
management time, as well as start-up expenses for market development before any
significant revenues and earnings are generated. Operations in new foreign
markets may achieve low margins or may be unprofitable, and expansion in
existing markets may be affected by local economic and market conditions.
Therefore, as we expand internationally, we may not achieve expected operating
margins and our results of operations may be negatively impacted.

The business we acquired from Travelers includes operations in several
foreign countries, including Australia, Brazil, Argentina, the United Kingdom,
Belgium, Poland, Japan and Hong Kong. See "Business -- International." Those
operations, and operations in other new markets, are subject to the risks
described above, as well as our unfamiliarity with the business, legal and
regulatory environment in any of those countries.

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In recent years, the operating environment in Argentina has been
challenging. In Argentina, we are principally engaged in the pension business.
This business has incurred significant losses in recent years as a result of
actions taken by the Argentinean government in response to a sovereign debt
crisis in December 2001. Further governmental or legal actions related to
pension reform could impact our obligations to our customers and could result in
future losses in our Argentinean operations.

REINSURANCE MAY NOT BE AVAILABLE, AFFORDABLE OR ADEQUATE TO PROTECT US AGAINST
LOSSES

As part of our overall risk management strategy, we purchase reinsurance
for certain risks underwritten by our various business segments. See
"Business -- Reinsurance Activity." For example, we currently reinsure up to 90%
of the mortality risk in excess of $1 million for most new individual life
insurance policies that we write through our various franchises and for certain
individual life policies the retention limits remained unchanged. While life
reinsurance generally binds the reinsurer for the life of the business reinsured
at generally fixed pricing, market conditions beyond our control determine the
availability and cost of the reinsurance protection for new business. In certain
circumstances, the price of reinsurance for business already reinsured may also
increase. Any decrease in the amount of reinsurance will increase our risk of
loss and any increase in the cost of reinsurance will, absent a decrease in the
amount of reinsurance, reduce our earnings. Accordingly, we may be forced to
incur additional expenses for reinsurance or may not be able to obtain
sufficient reinsurance on acceptable terms, which could adversely affect our
ability to write future business or result in the assumption of more risk with
respect to those policies we issue.

As a result of consolidation of the life reinsurance market and other
market factors, capacity in the life reinsurance market has decreased. Further,
life reinsurance is currently available at higher prices and on less favorable
terms than those prevailing between 1997 and 2003. Further consolidation,
regulatory developments, catastrophic events or other significant developments
affecting the pricing and availability of reinsurance could materially harm the
reinsurance market and our ability to enter into reinsurance contracts.

IF THE COUNTERPARTIES TO OUR REINSURANCE ARRANGEMENTS OR TO THE DERIVATIVE
INSTRUMENTS WE USE TO HEDGE OUR BUSINESS RISKS DEFAULT OR FAIL TO PERFORM, WE
MAY BE EXPOSED TO RISKS WE HAD SOUGHT TO MITIGATE, WHICH COULD MATERIALLY
ADVERSELY AFFECT OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We use reinsurance and derivative instruments to mitigate our risks in
various circumstances. In general, reinsurance does not relieve us of our direct
liability to our policyholders, even when the reinsurer is liable to us.
Accordingly, we bear credit risk with respect to our reinsurers. We cannot
provide assurance that our reinsurers will pay the reinsurance recoverables owed
to us now or in the future or that they will pay these recoverables on a timely
basis. A reinsurer's insolvency, inability or unwillingness to make payments
under the terms of its reinsurance agreement with us could have a material
adverse effect on our financial condition and results of operations.

In addition, we use derivative instruments to hedge various business risks.
We enter into a variety of derivative instruments, including options, forwards,
interest rate and currency swaps with a number of counterparties. See
"Business -- Investments." If our counterparties fail or refuse to honor their
obligations under these derivative instruments, our hedges of the related risk
will be ineffective. Such failure could have a material adverse effect on our
financial condition and results of operations.

OUR INSURANCE BUSINESSES ARE HEAVILY REGULATED, AND CHANGES IN REGULATION MAY
REDUCE OUR PROFITABILITY AND LIMIT OUR GROWTH

Our insurance operations are subject to a wide variety of insurance and
other laws and regulations. State insurance laws regulate most aspects of our
U.S. insurance businesses, and our insurance subsidiaries are regulated by the
insurance departments of the states in which they are domiciled and the states
in which they are licensed. Our non-U.S. insurance operations are principally
regulated by insurance regulatory authorities in the jurisdictions in which they
are domiciled and operate. See "Business -- Regulation -- Insurance Regulation."

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State laws in the United States grant insurance regulatory authorities
broad administrative powers with respect to, among other things:

- licensing companies and agents to transact business;

- calculating the value of assets to determine compliance with statutory
requirements;

- mandating certain insurance benefits;

- regulating certain premium rates;

- reviewing and approving policy forms;

- regulating unfair trade and claims practices, including through the
imposition of restrictions on marketing and sales practices, distribution
arrangements and payment of inducements;

- regulating advertising;

- protecting privacy;

- establishing statutory capital and reserve requirements and solvency
standards;

- fixing maximum interest rates on insurance policy loans and minimum rates
for guaranteed crediting rates on life insurance policies and annuity
contracts;

- approving changes in control of insurance companies;

- restricting the payment of dividends and other transactions between
affiliates; and

- regulating the types, amounts and valuation of investments.

State insurance guaranty associations have the right to assess insurance
companies doing business in their state for funds to help pay the obligations of
insolvent insurance companies to policyholders and claimants. Because the amount
and timing of an assessment is beyond our control, the liabilities that we have
currently established for these potential liabilities may not be adequate. See
"Business -- Regulation -- Insurance Regulation -- Guaranty associations and
similar arrangements."

State insurance regulators and the National Association of Insurance
Commissioners ("NAIC") regularly re-examine existing laws and regulations
applicable to insurance companies and their products. Changes in these laws and
regulations, or in interpretations thereof, are often made for the benefit of
the consumer at the expense of the insurer and, thus, could have a material
adverse effect on our financial condition and results of operations.

The NAIC and several states' legislatures have recently considered the need
for regulations and/or laws to address agent or broker practices that have been
the focus of recent investigations of broker compensation in the State of New
York and in other jurisdictions. The NAIC has adopted a Compensation Disclosure
Amendment to its Producers Licensing Model Act which, if adopted by the states,
would require disclosure by agents or brokers to customers that insurers will
compensate such agents or brokers for the placement of insurance and documented
acknowledgement of this arrangement in cases where the customer also compensates
the agent or broker. Several states have recently enacted laws similar to the
NAIC amendment. Some other states, including California and New York, are
considering additional provisions that would require the disclosure of the
amount of compensation and/or require (where an agent or broker represents more
than one insurer) placement of the "best coverage." We cannot predict how many
states may promulgate the NAIC amendment or similar regulations or the extent to
which these regulations may have a material adverse impact on our business.

Currently, the U.S. federal government does not directly regulate the
business of insurance. However, federal legislation and administrative policies
in several areas can significantly and adversely affect insurance companies.
These areas include financial services regulation, securities regulation,
pension regulation, privacy, tort reform legislation and taxation. In addition,
various forms of direct federal regulation of insurance have been proposed.
These proposals include "The State Modernization and Regulatory Transparency
Act," which

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would maintain state-based regulation of insurance, but would affect state
regulation of certain aspects of the business of insurance, including rates,
agent and company licensing and market conduct examinations. We cannot predict
whether this or other proposals will be adopted, or what impact, if any, such
proposals or, if enacted, such laws, could have on our business, financial
condition or results of operations.

Our international operations are subject to regulation in the jurisdictions
in which they operate, which in many ways is similar to that of the state
regulation outlined above. Many of our customers and independent sales
intermediaries also operate in regulated environments. Changes in the
regulations that affect their operations also may affect our business
relationships with them and their ability to purchase or distribute our
products. Accordingly, these changes could have a material adverse effect on our
financial condition and results of operations.

Compliance with applicable laws and regulations is time consuming and
personnel-intensive, and changes in these laws and regulations may materially
increase our direct and indirect compliance and other expenses of doing
business, thus having a material adverse effect on our financial condition and
results of operations.

From time to time, regulators raise issues during examinations or audits of
our subsidiaries that could, if determined adversely, have a material impact on
us. We cannot predict whether or when regulatory actions may be taken that could
adversely affect our operations. In addition, the interpretations of regulations
by regulators may change and statutes may be enacted with retroactive impact,
particularly in areas such as accounting or statutory reserve requirements.

LEGAL AND REGULATORY INVESTIGATIONS AND ACTIONS ARE INCREASINGLY COMMON IN THE
INSURANCE BUSINESS AND MAY RESULT IN FINANCIAL LOSSES AND HARM TO OUR REPUTATION

We face a significant risk of litigation and regulatory investigations and
actions in the ordinary course of operating our businesses, including the risk
of class action lawsuits. Our pending legal and regulatory actions include
proceedings specific to us and others generally applicable to business practices
in the industries in which we operate. In connection with our insurance
operations, plaintiffs' lawyers may bring or are bringing class actions and
individual suits alleging, among other things, issues relating to sales or
underwriting practices, claims payments and procedures, product design,
disclosure, administration, additional premium charges for premiums paid on a
periodic basis, denial or delay of benefits and breaches of fiduciary or other
duties to customers. Plaintiffs in class action and other lawsuits against us
may seek very large or indeterminate amounts, including punitive and treble
damages, and the damages claimed and the amount of any probable and estimable
liability, if any, may remain unknown for substantial periods of time. See
"Legal Proceedings" and Note 12 of Notes to Consolidated Financial Statements.

Due to the vagaries of litigation, the outcome of a litigation matter and
the amount or range of potential loss at particular points in time may be
inherently impossible to ascertain with any degree of certainty. Inherent
uncertainties can include how fact finders will view individually and in their
totality documentary evidence, the credibility and effectiveness of witnesses'
testimony, and how trial and appellate courts will apply the law in the context
of the pleadings or evidence presented, whether by motion practice, or at trial
or on appeal. Disposition valuations are also subject to the uncertainty of how
opposing parties and their counsel will themselves view the relevant evidence
and applicable law.

On a quarterly and yearly basis, we review relevant information with
respect to liabilities for litigation and contingencies to be reflected in our
consolidated financial statements. The review includes senior legal and
financial personnel. Unless stated elsewhere herein, estimates of possible
additional losses or ranges of loss for particular matters cannot in the
ordinary course be made with a reasonable degree of certainty. See "Legal
Proceedings" and Note 12 of Notes to Consolidated Financial Statements.
Liabilities are established when it is probable that a loss has been incurred
and the amount of the loss can be reasonably estimated. Liabilities have been
established for a number of the matters noted in "Legal Proceedings" and Note 12
of Notes to Consolidated Financial Statements. It is possible that some of the
matters could require us to pay damages or make other expenditures or establish
accruals in amounts that could not be estimated as of December 31, 2005.

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Metropolitan Life and its affiliates are currently defendants in hundreds
of lawsuits raising allegations of improper marketing and sales of individual
life insurance policies or annuities. These lawsuits are generally referred to
as "sales practices 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. These
lawsuits principally have 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. Additional litigation relating to these
matters may be commenced in the future. 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. 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 our total exposure to
asbestos claims may be greater than the liability recorded by us in our
consolidated financial statements and that future charges to income may be
necessary. The potential future charges could be material in particular
quarterly or annual periods in which they are recorded. In addition,
Metropolitan Life and MetLife, Inc. have been named as defendants in several
lawsuits brought in connection with Metropolitan Life's demutualization in 2000.

We are also subject to various regulatory inquiries, such as information
requests, subpoenas and books and record examinations, from state and federal
regulators and other authorities. A substantial legal liability or a significant
regulatory action against us could have a material adverse effect on our
business, financial condition and results of operations. Moreover, even if we
ultimately prevail in the litigation, regulatory action or investigation, we
could suffer significant reputational harm, which could have a material adverse
effect on our business, financial condition and results of operations, including
our ability to attract new customers, retain our current customers and recruit
and retain employees. Regulatory inquiries and litigation may cause volatility
in the price of stocks of companies in our industry.

Recently, the insurance industry has become the focus of increased scrutiny
by regulatory and law enforcement authorities. This scrutiny includes the
commencement of investigations and other proceedings by the New York State
Attorney General and other governmental authorities relating to allegations of
improper conduct in connection with the payment of, and disclosure with respect
to, contingent commissions paid by insurance companies to intermediaries, the
solicitation and provision of fictitious or inflated quotes, the use of
inducements in the sale of insurance products and the accounting treatment for
finite insurance and reinsurance or other non-traditional or loss mitigation
insurance and reinsurance products.

One possible result of these investigations and attendant lawsuits is that
many insurance industry practices and customs may change, including, but not
limited to, the manner in which insurance is marketed and distributed through
independent brokers and agents. Our business strategy contemplates that we will
rely heavily on both intermediaries and our internal sales force to market and
distribute insurance products. We cannot predict how industry regulation with
respect to the use of intermediaries may change. Such changes, however, could
adversely affect our ability to implement our business strategy, which could
materially affect our growth and profitability.

Recent industry-wide inquiries also include those regarding market timing
and late trading in mutual funds and variable insurance products and, generally,
the marketing of products. 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 our subsidiary, General
American Life Insurance Company ("General American"). As previously reported, in
May 2004, General American received a Wells Notice stating that the SEC staff is
considering recommending that the SEC bring a civil action alleging violations
of the U.S. securities laws against General American. Under SEC procedures,
General American can avail itself of the opportunity to respond to the SEC staff
before it makes a formal recommendation regarding whether

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any action alleging violations of the U.S. securities laws should be considered.
General American has responded to the Wells Notice. We are fully cooperating
with regard to this investigation.

Other recent industry-wide inquiries include those relating to finite
insurance and reinsurance. We have received a subpoena from the Connecticut
Attorney General requesting information regarding our participation in any
finite reinsurance transactions. We have also received information requests
relating to finite insurance or reinsurance from other regulatory and
governmental entities. We believe we have appropriately accounted for
transactions of this type and intend to cooperate fully with these information
requests. We believe that a number of other industry participants have received
similar requests from various regulatory and governmental authorities. It is
reasonably possible that we may receive additional requests. We will fully
cooperate with all such requests.

We cannot give assurance that current claims, litigation, unasserted claims
probable of assertion, investigations and other proceedings against us will not
have a material adverse effect on our business, financial condition or results
of operations. It is also possible that related or unrelated claims, litigation,
unasserted claims probable of assertion, investigations and proceedings may be
commenced in the future, and we could become subject to further investigations
and have lawsuits filed or enforcement actions initiated against us. In
addition, increased regulatory scrutiny and any resulting investigations or
proceedings could result in new legal actions and precedents and industry-wide
regulations that could adversely affect our business, financial condition and
results of operations.

CHANGES IN U.S. FEDERAL AND STATE SECURITIES LAWS AND REGULATIONS MAY AFFECT OUR
OPERATIONS AND OUR PROFITABILITY

Federal and state securities laws and regulations apply to insurance
products that are also "securities," including variable annuity contracts and
variable life insurance policies. As a result, some of our subsidiaries and
their activities in offering and selling variable insurance contracts and
policies are subject to extensive regulation under these securities laws. These
subsidiaries issue variable annuity contracts and variable life insurance
policies through separate accounts that are registered with the SEC as
investment companies under the Investment Company Act of 1940, as amended. Each
registered separate account is generally divided into sub-accounts, each of
which invests in an underlying mutual fund which is itself a registered
investment company under the Investment Company Act of 1940, as amended. In
addition, the variable annuity contracts and variable life insurance policies
issued by the separate accounts are registered with the SEC under the Securities
Act of 1933, as amended. Other subsidiaries are registered with the SEC as
broker-dealers under the Securities Exchange Act of 1934, as amended, and are
members of, and subject to, regulation by the NASD. Further, some of our
subsidiaries are registered as investment advisers with the SEC under the
Investment Advisers Act of 1940, as amended, and are also registered as
investment advisers in various states, as applicable.

Federal and state securities laws and regulations are primarily intended to
ensure the integrity of the financial markets and to protect investors in the
securities markets, as well as protect investment advisory or brokerage clients.
These laws and regulations generally grant regulatory agencies broad rulemaking
and enforcement powers, including the power to limit or restrict the conduct of
business for failure to comply with the securities laws and regulations. Changes
to these laws or regulations that restrict the conduct of our business could
have a material adverse effect on our financial condition and results of
operations. In particular, changes in the regulations governing the registration
and distribution of variable insurance products, such as changes in the
regulatory standards under which the sale of a variable annuity contract or
variable life insurance policy is considered suitable for a particular customer,
could have such a material adverse effect.

CHANGES IN TAX LAWS COULD MAKE SOME OF OUR PRODUCTS LESS ATTRACTIVE TO CONSUMERS

Changes in tax laws could make some of our products less attractive to
consumers. For example, reductions in the federal income tax that investors are
required to pay on long-term capital gains and on some dividends paid on stock
may provide an incentive for some of our customers and potential customers to
shift assets into mutual funds and away from products, including life insurance
and annuities, designed to defer

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taxes payable on investment returns. Because the income taxes payable on
long-term capital gains and some dividends paid on stock have been reduced,
investors may decide that the tax-deferral benefits of annuity contracts are
less advantageous than the potential after-tax income benefits of mutual funds
or other investment products that provide dividends and long-term capital gains.
A shift away from life insurance and annuity contracts and other tax-deferred
products would reduce our income from sales of these products, as well as the
assets upon which we earn investment income.

We cannot predict whether any other legislation will be enacted, what the
specific terms of any such legislation will be or how, if at all, this
legislation or any other legislation could have a material adverse effect on our
financial condition and results of operations.

AS A HOLDING COMPANY, METLIFE, INC. DEPENDS ON THE ABILITY OF ITS SUBSIDIARIES
TO TRANSFER FUNDS TO IT TO PAY DIVIDENDS AND MEET ITS OBLIGATIONS

MetLife, Inc. is a holding company for its insurance and financial
subsidiaries and does not have any significant operations of its own. Dividends
from its subsidiaries and permitted payments to it under its tax sharing
arrangements with its subsidiaries are its principal sources of cash to meet its
obligations and to pay preferred and common dividends. If the cash the Holding
Company receives from its subsidiaries is insufficient for it to fund its debt
service and other holding company obligations, the Holding Company may be
required to raise cash through the incurrence of debt, the issuance of
additional equity or the sale of assets.

The payment of dividends and other distributions to the Holding Company by
its insurance subsidiaries is regulated by insurance laws and regulations. In
general, dividends in excess of prescribed limits are deemed "special" and
require insurance regulatory approval. In addition, insurance regulators may
prohibit the payment of ordinary dividends or other payments by its insurance
subsidiaries to the Holding Company if they determine that the payment could be
adverse to our policyholders or contractholders. See "Business --
Regulation -- Insurance Regulation," "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources -- The Holding Company" and Note 14 of Notes to Consolidated Financial
Statements.

The maximum amount of dividends which could be paid to the Holding Company
by Metropolitan Life, TIC, MPC and Metropolitan Tower Life Insurance Company
("MTL"), in 2005, without prior regulatory approval, was $880 million, $0
million, $187 million and $119 million, respectively. During the year ended
December 31, 2005, Metropolitan Life paid $880 million in ordinary dividends for
which prior insurance regulatory approval was not required and $2,320 million in
special dividends as approved by the Superintendent. TIC has not paid any
dividends since its acquisition by the Holding Company and may not make dividend
payments for a two-year period following the date of acquisition without
regulatory approval. MPC paid $400 million in special dividends, as approved by
the Rhode Island Superintendent of Insurance, during the year ended December 31,
2005. MTL paid $54 million in ordinary dividends for which prior insurance
regulatory approval was not required and $873 million in special dividends as
approved by the Delaware Superintendent of Insurance during the year ended
December 31, 2005. MetLife Mexico, S.A. paid dividends to the Holding Company of
$276 million during the year ended December 31, 2005. In addition, various
subsidiaries paid $19 million in total to the Holding Company for the year ended
December 31, 2005. The maximum amount of dividends which Metropolitan Life, TIC,
MPC and MTL may pay to us in 2006 without prior regulatory approval is $863
million, $0 million, $178 million, and $85 million, respectively. If paid before
a specified date in 2006, some or all of an otherwise ordinary dividend may be
deemed special by the relevant regulatory authority and require approval.

Any payment of interest, dividends, distributions, loans or advances by our
foreign subsidiaries to the Holding Company could be subject to taxation or
other restrictions on dividends or repatriation of earnings under applicable
law, monetary transfer restrictions and foreign currency exchange regulations in
the jurisdiction in which such foreign subsidiaries operate.

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WE MAY NEED TO FUND DEFICIENCIES IN OUR CLOSED BLOCK; ASSETS ALLOCATED TO THE
CLOSED BLOCK BENEFIT ONLY THE HOLDERS OF CLOSED BLOCK POLICIES

The plan of reorganization entered into in connection with Metropolitan
Life's 2000 demutualization required that we establish and operate an accounting
mechanism, known as a closed block, to ensure that the reasonable dividend
expectations of policyholders who own certain individual insurance policies of
Metropolitan Life are met. See Note 7 of Notes to Consolidated Financial
Statements. We allocated assets to the closed block in an amount that will
produce cash flows which, together with anticipated revenue 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 the policyholder dividend scales
in effect for 1999, if the experience underlying such scales continues, and for
appropriate adjustments in such scales if the experience changes. We cannot
provide assurance that the closed block assets, the cash flows generated by the
closed block assets and the anticipated revenue from the policies included in
the closed block will be sufficient to provide for the benefits guaranteed under
these policies. If they are not sufficient, we must fund the shortfall. Even if
they are sufficient, we may choose, for competitive reasons, to support
policyholder dividend payments with our general account funds.

The closed block assets, the cash flows generated by the closed block
assets and the anticipated revenue from the policies in the closed block will
benefit only the holders of those policies. In addition, to the extent that
these amounts are greater than the amounts estimated at the time the closed
block was funded, dividends payable in respect of the policies included in the
closed block may be greater than they would be in the absence of a closed block.
Any excess earnings will be available for distribution over time only to closed
block policyholders.

THE CONTINUED THREAT OF TERRORISM AND ONGOING MILITARY ACTIONS MAY ADVERSELY
AFFECT THE LEVEL OF CLAIM LOSSES WE INCUR AND THE VALUE OF OUR INVESTMENT
PORTFOLIO

The continued threat of terrorism, both within the United States and
abroad, ongoing military and other actions and heightened security measures in
response to these types of threats may cause significant volatility in global
financial markets and result in loss of life, property damage, additional
disruptions to commerce and reduced economic activity. Some of the assets in our
investment portfolio may be adversely affected by declines in the equity markets
and reduced economic activity caused by the continued threat of terrorism. We
cannot predict whether, and the extent to which, companies in which we maintain
investments may suffer losses as a result of financial, commercial or economic
disruptions, or how any such disruptions might affect the ability of those
companies to pay interest or principal on their securities. The continued threat
of terrorism also could result in increased reinsurance prices and reduced
insurance coverage and potentially cause us to retain more risk than we
otherwise would retain if we were able to obtain reinsurance at lower prices.
Terrorist actions also could disrupt our operations centers in the United States
or abroad. In addition, the occurrence of terrorist actions could result in
higher claims under our insurance policies than anticipated.

THE OCCURRENCE OF EVENTS UNANTICIPATED IN OUR DISASTER RECOVERY SYSTEMS AND
MANAGEMENT CONTINUITY PLANNING COULD IMPAIR OUR ABILITY TO CONDUCT BUSINESS
EFFECTIVELY

In the event of a disaster such as a natural catastrophe, an industrial
accident, a blackout, a computer virus, a terrorist attack or war, unanticipated
problems with our disaster recovery systems could have a material adverse impact
on our ability to conduct business and on our results of operations and
financial position, particularly if those problems affect our computer-based
data processing, transmission, storage and retrieval systems and destroy
valuable data. We depend heavily upon computer systems to provide reliable
service. Despite our implementation of a variety of security measures, our
servers could be subject to physical and electronic break-ins, and similar
disruptions from unauthorized tampering with our computer systems. In addition,
in the event that a significant number of our managers were unavailable in the
event of a disaster, our ability to effectively conduct business could be
severely compromised. These interruptions also may interfere with our suppliers'
ability to provide goods and services and our employees ability to perform their
job responsibilities.
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WE FACE UNFORESEEN LIABILITIES ARISING FROM OTHER POSSIBLE ACQUISITIONS AND
DISPOSITIONS OF BUSINESSES

We have engaged in numerous dispositions and acquisitions of businesses in
the past, and expect to continue to do so in the future. There could be
unforeseen liabilities that arise in connection with the businesses that we may
sell or the businesses that we may acquire in the future. In addition, there may
be liabilities that we fail, or we are unable, to discover in the course of
performing due diligence investigations on each business that we have acquired
or may acquire.

ITEM 1B. UNRESOLVED STAFF COMMENTS

The Company has no unresolved comments from the SEC staff regarding its
periodic or currents reports under the Securities Exchange Act of 1934, as
amended.

ITEM 2. PROPERTIES

In the second quarter of 2005, the Company sold its 200 Park Avenue
property in Manhattan, New York for $1.72 billion. The gain is included in
income from discontinued operations in the accompanying consolidated statements
of income. In connection with the sale of the 200 Park Avenue property, the
Company has retained rights to existing signage and is leasing space for
associates in the property for 20 years with optional renewal periods through
2205. Associates located in the 200 Park Avenue office, its headquarters,
include those working in the Institutional and Individual segments.

In 2005, the Company leased approximately 685,000 rentable square feet in
Long Island City, New York under a long-term lease arrangement and approximately
1,500 associates are located there. Associates located in Long Island City
include those working in the Institutional, Individual and International
segments, as well as Corporate & Other.

The Company continues to own 17 other buildings in the United States that
it uses in the operation of its business. These buildings contain approximately
4.1 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 639 other
locations throughout the United States, and these leased facilities consist of
approximately 8.6 million rentable square feet. Approximately 59% 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 eight buildings
outside the United States, comprising more than 800,000 rentable square feet.
The Company leases approximately 1.8 million rentable square feet in various
locations outside the United States. 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 $930 million of annual
terrorist coverage on its real estate portfolio through March 15, 2006, its
annual renewal date.

ITEM 3. LEGAL PROCEEDINGS

The Company is a defendant in a large number of litigation matters. In some
of the matters, very large and/or indeterminate amounts, including punitive and
treble damages, are sought. Modern pleading practice in the United States
permits considerable variation in the assertion of monetary damages or other
relief. Jurisdictions may permit claimants not to specify the monetary damages
sought or may permit claimants to state only that the amount sought is
sufficient to invoke the jurisdiction of the trial court. In addition,
jurisdictions may permit plaintiffs to allege monetary damages in amounts well
exceeding reasonably possible verdicts in the jurisdiction for similar matters.
This variability in pleadings, together with the actual experience of the
Company in litigating or resolving through settlement numerous claims over an
extended period of time, demonstrate to management that the monetary relief
which may be specified in a lawsuit or claim bears little

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relevance to its merits or disposition value. Thus, unless stated below, the
specific monetary relief sought is not noted.

Due to the vagaries of litigation, the outcome of a litigation matter and
the amount or range of potential loss at particular points in time may normally
be inherently impossible to ascertain with any degree of certainty. Inherent
uncertainties can include how fact finders will view individually and in their
totality documentary evidence, the credibility and effectiveness of witnesses'
testimony, and how trial and appellate courts will apply the law in the context
of the pleadings or evidence presented, whether by motion practice, or at trial
or on appeal. Disposition valuations are also subject to the uncertainty of how
opposing parties and their counsel will themselves view the relevant evidence
and applicable law.

On a quarterly and yearly basis, the Company reviews relevant information
with respect to liabilities for litigation and contingencies to be reflected in
the Company's consolidated financial statements. The review includes senior
legal and financial personnel. Unless stated below, estimates of possible
additional losses or ranges of loss for particular matters cannot in the
ordinary course be made with a reasonable degree of certainty. Liabilities are
established when it is probable that a loss has been incurred and the amount of
the loss can be reasonably estimated. Liabilities have been established for a
number of the matters noted below. It is possible that some of the matters could
require the Company to pay damages or make other expenditures or establish
accruals in amounts that could not be estimated as of December 31, 2005.

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 generally are 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.

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. 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.

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, including lawsuits or other
proceedings relating to the sale of mutual funds and other products, have been
brought. As of December 31, 2005, there are approximately 338 sales practices
litigation matters pending against Metropolitan Life; approximately 45 sales
practices litigation matters pending against New England Mutual, New England
Life Insurance Company, and New England Securities Corporation (collectively,
"New England"); approximately 34 sales practices litigation matters pending
against General American; and approximately 35 sales practices litigation
matters pending against Walnut Street Securities, Inc. ("Walnut Street"). In
addition, similar litigation matters are pending against MetLife Securities,
Inc. ("MSI"). Metropolitan Life, New England, General American, MSI and Walnut
Street continue to defend themselves vigorously against these litigation
matters. 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,
mutual funds and other products may be commenced in the future.

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<PAGE>

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.

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, General American, MSI
and Walnut Street.

Regulatory authorities in a small number of states have had investigations
or inquiries relating to Metropolitan Life's, New England's, General American's,
MSI's or Walnut Street's sales of individual life insurance policies or
annuities or other products. 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 principally have 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. Since 2002, trial courts in
California, Utah, Georgia, New York, Texas, and Ohio 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.

Metropolitan Life continues 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.

Bankruptcies of other companies involved in asbestos litigation, as well as
advertising by plaintiffs' asbestos lawyers, may be resulting in an increase in
the cost of resolving claims and could result in an increase in 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 bankruptcies by certain other

44
<PAGE>

defendants. In addition, publicity regarding legislative reform efforts may
result in an increase or decrease in the number of claims.

Metropolitan Life previously reported that it had received approximately
23,500 asbestos-related claims in 2004. In the context of reviewing in the third
quarter of 2005 certain pleadings received in 2004, it was determined that there
was a small undercount of Metropolitan Life's asbestos-related claims in 2004.
Accordingly, Metropolitan Life now reports that it received approximately 23,900
asbestos-related claims in 2004. 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 are
set forth in the following table:

<Table>
<Caption>
AT OR FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------
2005 2004 2003
----------- ----------- -----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Asbestos personal injury claims at year end
(approximate)...................................... 100,250 108,000 111,700
Number of new claims during the year (approximate)... 18,500 23,900 58,750
Settlement payments during the year(1)............... $ 74.3 $ 85.5 $ 84.2
</Table>

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

(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.

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, management does not believe any such charges are
likely to have a material adverse effect on the Company's consolidated financial
position.

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) was within the coverage of the excess insurance policies
discussed below. Metropolitan Life regularly reevaluates its exposure from
asbestos litigation and has updated its liability analysis for asbestos-related
claims through December 31, 2005.

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

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<PAGE>

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 with respect to the
prior year was made under the excess insurance policies in 2003, 2004 and 2005
for the amounts paid with respect to asbestos litigation in excess of the
retention. As the performance of the indices impacts the return in the reference
fund, it is possible that loss reimbursements to the Company and the recoverable
with respect to later periods may be 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. If at some point in the
future, the Company believes the liability for probable and reasonably 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. The foregone loss reimbursements were approximately $8.3 million with
respect to 2002 claims, $15.5 million with respect to 2003 claims and $15.1
million with respect to 2004 claims and estimated as of December 31, 2005, to be
approximately $45.4 million in the aggregate, including future years.

PROPERTY AND CASUALTY ACTIONS

A purported class action has been filed against Metropolitan Property and
Casualty Insurance Company's ("MPC") 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 MPC 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. The court recently granted MPC's motion to dismiss the fraud claim in
the second suit.

A purported class action has been filed against MPC 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. A recent decision by the Montana Supreme
Court in a suit involving another insurer determined that aggregation is
required. The parties have reached an agreement to settle this suit. MPC has
recorded a liability in an amount the Company believes is adequate to resolve
the claims underlying this matter. The amount to be paid will not be material to
MPC. Certain plaintiffs' lawyers in another action have alleged that the use of
certain automated databases to provide total loss vehicle valuation methods was
improper. MPC, along with a number of other insurers, agreed in July 2005 to
resolve this issue in a class action format. Management believes that the amount
to be paid in resolution of this matter will not be material to MPC.

In December 2005, a purported class action was filed against MPC in
Louisiana federal court on behalf of insureds who incurred total property losses
as a result of Hurricane Katrina. Plaintiffs claim they are entitled to coverage
for all of their claims. A lawsuit was filed against MPC in November 2005 in
Mississippi federal court by two policyholders challenging the denial of a claim
under their homeowners policy for damage caused to their property during
Hurricane Katrina. In 2006, MPC was sued in two additional Hurricane Katrina-
related actions, one in Louisiana and one in Mississippi and it is reasonably
possible other actions will be filed. The Company intends to vigorously defend
these matters.

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 named 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
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<PAGE>

Suisse First Boston. In 2003, a trial court within the commercial part of the
New York State court granted the defendants' motions to dismiss two purported
class actions. In 2004, the appellate court modified the trial court's order by
reinstating certain claims against Metropolitan Life, the Holding Company and
the individual directors. Plaintiffs in these actions have filed a consolidated
amended complaint. Plaintiffs' motion to certify a litigation class is pending.
Another purported class action filed in New York State court in Kings County has
been consolidated with this action. The plaintiffs in the state court class
actions seek compensatory relief and punitive damages. Five persons 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 sought to vacate the Superintendent's
Opinion and Decision and enjoin him from granting final approval of the plan. On
November 10, 2005, the trial court granted respondents' motions to dismiss this
proceeding. Petitioners have filed a notice of appeal. In a class action against
Metropolitan Life and the Holding Company pending in the United States District
Court for the Eastern District of New York, plaintiffs served a second
consolidated amended complaint in 2004. In this action, plaintiffs assert
violations of the Securities Act of 1933 and the Securities Exchange Act of 1934
in connection with the plan, claiming that the Policyholder Information Booklets
failed to disclose certain material facts and contained certain material
misstatements. They seek rescission and compensatory damages. On June 22, 2004,
the court denied the defendants' motion to dismiss the claim of violation of the
Securities Exchange Act of 1934. The court had previously denied defendants'
motion to dismiss the claim for violation of the Securities Act of 1933. In
2004, the court reaffirmed its earlier decision denying defendants' motion for
summary judgment as premature. On July 19, 2005, this federal trial court
certified a class action against Metropolitan Life and the Holding Company.
Metropolitan Life and the Holding Company have filed a petition seeking
permission for an interlocutory appeal from this order. 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.

On April 30, 2004, a lawsuit was filed in New York state court in New York
County against the Holding Company and Metropolitan Life 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. In their amended complaint,
plaintiffs challenged the treatment of the cost of the sales practices
settlement in the demutualization of Metropolitan Life and asserted claims of
breach of fiduciary duty, common law fraud, and unjust enrichment. In an order
dated July 13, 2005, the court granted the defendants' motion to dismiss the
action and the plaintiffs have filed a notice of appeal.

OTHER

A putative class action lawsuit which commenced in October 2000 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. In September
2005, Metropolitan Life's motion for summary judgment was granted. Plaintiffs
have moved for reconsideration.

On February 21, 2006, the SEC and New England Securities Corporation
("NES"), a subsidiary of NELICO, resolved a formal investigation of NES that
arose in response to NES informing the SEC that
47
<PAGE>

certain systems and controls relating to one NES advisory program were not
operating effectively. NES previously provided restitution to the affected
clients and the settlement includes additional client payments to be made by NES
in the total amount of approximately $2,615,000. No penalties were imposed.

In May 2003, the American Dental Association and three individual providers
sued MetLife 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 matter. The district
court has granted in part and denied in part MetLife's motion to dismiss.
MetLife has filed another motion to dismiss. The court has issued a tag-along
order, related to a medical managed care trial, which will stay the lawsuit
indefinitely.

In a lawsuit commenced in June 1998, a New York state court granted in 2004
plaintiffs' motion to certify a litigation class of owners of certain
participating life insurance policies and a sub-class of New York owners of such
policies in an action asserting that Metropolitan Life breached their policies
and violated New York's General Business Law in the manner in which it allocated
investment income across lines of business during a period ending with the 2000
demutualization. Plaintiffs sought compensatory damages. In January 2006, the
appellate court reversed the class certification order. On November 23, 2005,
the trial court issued a Memorandum Decision granting Metropolitan Life's motion
for summary judgment. The plaintiffs' time to appeal the trial court's decision
has not yet expired.

Regulatory bodies have contacted the Company and have requested information
relating to market timing and late trading of mutual funds and variable
insurance products and, generally, the marketing of products. The Company
believes that many of these inquiries are similar to those made to many
financial services companies as part of industry-wide investigations by various
regulatory agencies. 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. As previously
reported, in May 2004, General American received a Wells Notice stating that the
SEC staff is considering recommending that the SEC bring a civil action alleging
violations of the U.S. securities laws against General American. Under the SEC
procedures, General American can avail itself of the opportunity to respond to
the SEC staff before it makes a formal recommendation regarding whether any
action alleging violations of the U.S. securities laws should be considered.
General American has responded to the Wells Notice. The Company 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.

As anticipated, the SEC issued a formal order of investigation related to
certain sales by a former MetLife sales representative to the Sheriff's
Department of Fulton County, Georgia. The Company is fully cooperating with
respect to inquiries from the SEC.

The Company has received a number of subpoenas and other requests from the
Office of the Attorney General of the State of New York seeking, among other
things, information regarding and relating to compensation agreements between
insurance brokers and the Company, whether MetLife has provided or is aware of
the provision of "fictitious" or "inflated" quotes, and information regarding
tying arrangements with respect to reinsurance. Based upon an internal review,
the Company advised the Attorney General for the State of New York that MetLife
was not aware of any instance in which MetLife had provided a "fictitious" or
"inflated" quote. MetLife also has received subpoenas, including sets of
interrogatories, from the Office of the Attorney General of the State of
Connecticut seeking information and documents including contingent commission
payments to brokers and MetLife's awareness of any "sham" bids for business.
MetLife also has received a Civil Investigative Demand from the Office of the
Attorney General for the State of Massachusetts seeking information and
documents concerning bids and quotes that the Company submitted to potential
customers in Massachusetts, the identity of agents, brokers, and producers to
whom the Company submitted such bids or quotes, and communications with a
certain broker. The Company has received two subpoenas from the District
Attorney of the County of San Diego, California. The subpoenas seek numerous
documents

48
<PAGE>

including incentive agreements entered into with brokers. The Florida Department
of Financial Services and the Florida Office of Insurance Regulation also have
served subpoenas on the Company asking for answers to interrogatories and
document requests concerning topics that include compensation paid to
intermediaries. The Office of the Attorney General for the State of Florida has
also served a subpoena on the Company seeking, among other things, copies of
materials produced in response to the subpoenas discussed above. The Company has
received a subpoena from the Office of the U.S. Attorney for the Southern
District of California asking for documents regarding the insurance broker,
Universal Life Resources. The Insurance Commissioner of Oklahoma has served a
subpoena, including a set of interrogatories, on the Company seeking, among
other things, documents and information concerning the compensation of insurance
producers for insurance covering Oklahoma entities and persons. The Ohio
Department of Insurance has requested documents regarding a broker and certain
Ohio public entity groups. The Company continues to cooperate fully with these
inquiries and is responding to the subpoenas and other requests. MetLife is
continuing to conduct an internal review of its commission payment practices.

Approximately sixteen broker-related lawsuits in which the Company was
named as a defendant were filed. Voluntary dismissals and consolidations have
reduced the number of pending actions to four. In one of these, the California
Insurance Commissioner is suing in California state court Metropolitan Life,
Paragon Life Insurance Company and other companies alleging that the defendants
violated certain provisions of the California Insurance Code. Another of these
actions is pending in a multi-district proceeding established in the federal
district court in the District of New Jersey. In this proceeding, plaintiffs
have filed an amended class action complaint consolidating the claims from
separate actions that had been filed in or transferred to the District of New
Jersey. The consolidated amended complaint alleges that the Holding Company,
Metropolitan Life, several other insurance companies and several insurance
brokers violated RICO, ERISA, and antitrust laws and committed other misconduct
in the context of providing insurance to employee benefit plans and to persons
who participate in such employee benefit plans. Plaintiffs seek to represent
classes of employers that established employee benefit plans and persons who
participated in such employee benefit plans. A motion for class certification
has been filed. Plaintiffs in several other actions have voluntarily dismissed
their claims. The Company intends to vigorously defend these cases.

In addition to those discussed above, regulators and others have made a
number of inquiries of the insurance industry regarding industry brokerage
practices and related matters and other inquiries may begin. It is reasonably
possible that MetLife will receive additional subpoenas, interrogatories,
requests and lawsuits. MetLife will fully cooperate with all regulatory
inquiries and intends to vigorously defend all lawsuits.

The Company has received a subpoena from the Connecticut Attorney General
requesting information regarding its participation in any finite reinsurance
transactions. MetLife has also received information requests relating to finite
insurance or reinsurance from other regulatory and governmental authorities.
MetLife believes it has appropriately accounted for its transactions of this
type and intends to cooperate fully with these information requests. The Company
believes that a number of other industry participants have received similar
requests from various regulatory and governmental authorities. It is reasonably
possible that MetLife or its subsidiaries may receive additional requests.
MetLife and any such subsidiaries will fully cooperate with all such requests.

As previously disclosed, the NASD staff notified MSI, NES and Walnut
Street, all direct or indirect subsidiaries of MetLife, Inc., that it has made a
preliminary determination to file charges of violations of the NASD's and the
SEC's rules against the firms. The pending investigation was initiated after the
firms reported to the NASD that a limited number of mutual fund transactions
processed by firm representatives and at the firms' consolidated trading desk,
during the period April through December 2003, had been received from customers
after 4:00 p.m., Eastern time, and received the same day's net asset value. The
potential charges of violations of the NASD's and the SEC's rules relate to the
processing of transactions received after 4:00 p.m., the firms' maintenance of
books and records, supervisory procedures and responses to the NASD's
information requests. Under the NASD's procedures, the firms have submitted a
response to the NASD staff. The NASD staff has not made a formal recommendation
regarding whether any action alleging violations of the rules should be filed.
MetLife continues to cooperate fully with the NASD.

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<PAGE>

Following an inquiry commencing in March 2004, the staff of the NASD has
notified MSI that it has made a preliminary determination to recommend charging
MSI with the failure to adopt, maintain and enforce written supervisory
procedures reasonably designed to achieve compliance with suitability
requirements regarding the sale of college savings plans, also known as 529
plans. This notification follows an industry-wide inquiry by the NASD examining
sales of 529 plans. Under the NASD's procedures, MSI submitted its written
explanation of why it believes charges should not be filed. The NASD staff has
not made a formal recommendation regarding whether any action alleging
violations of applicable rules should be filed. MSI continues to cooperate fully
with the NASD.

In February 2006, the Company learned that the SEC has commenced a formal
investigation of NES in connection with the suitability of its sales of various
universal life insurance policies. The Company believes that others in the
insurance industry are the subject of similar investigations by the SEC. NES is
cooperating fully with the SEC.

MSI received in 2005 a notice from the Illinois Department of Securities
asserting possible violations of the Illinois Securities Act in connection with
sales of a former affiliate's mutual funds. A response has been submitted and
MSI intends to cooperate fully with the Illinois Department of Securities.

In August 1999, an amended putative class action complaint was filed in
Connecticut state court against The Travelers Life and Annuity Company ("TLAC"),
Travelers Equity Sales, Inc. and certain former affiliates. The amended
complaint alleges Travelers Property Casualty Corporation, a former TLAC
affiliate, purchased structured settlement annuities from TLAC and spent less on
the purchase of those structured settlement annuities than agreed with
claimants, and that commissions paid to brokers for the structured settlement
annuities, including an affiliate of TLAC, were paid in part to Travelers
Property Casualty Corporation. On May 26, 2004, the Connecticut Superior Court
certified a nationwide class action involving the following claims against TLAC:
violation of the Connecticut Unfair Trade Practice Statute, unjust enrichment,
and civil conspiracy. On June 15, 2004, the defendants appealed the class
certification order and the appeal is now pending before the Connecticut Supreme
Court.

A former registered representative of Tower Square Securities, Inc. ("Tower
Square"), a broker-dealer subsidiary of The Travelers Insurance Company ("TIC"),
is alleged to have defrauded individuals by diverting funds for his personal
use. In June 2005, the SEC issued a formal order of investigation with respect
to Tower Square and served Tower Square with a subpoena. The Securities and
Business Investments Division of the Connecticut Department of Banking and the
NASD are also reviewing this matter. Tower Square intends to fully cooperate
with the SEC, the NASD and the Connecticut Department of Banking. In the context
of the above, two arbitration matters were commenced in 2005 against Tower
Square. In one of the matters, defendants include other unaffiliated
broker-dealers with whom the registered representative was formerly registered.
It is reasonably possible that other actions will be brought regarding this
matter. Tower Square intends to defend itself vigorously in all such cases.

Metropolitan Life also has been named as a defendant in a number of
silicosis, welding and mixed dust cases in various states. The Company intends
to defend itself vigorously against these cases.

Various litigation, including purported or certified class actions, and
various 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

50
<PAGE>

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 2005.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

ISSUER COMMON EQUITY

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:

<Table>
<Caption>
2005
-----------------------------------------------------------------
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
COMMON STOCK PRICE
HIGH.................................. $41.37 $45.45 $50.20 $52.15
LOW................................... $38.31 $37.85 $45.47 $46.80
</Table>

<Table>
<Caption>
2004
-----------------------------------------------------------------
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
COMMON STOCK PRICE
HIGH.................................. $35.87 $36.66 $38.73 $41.18
LOW................................... $32.63 $33.21 $33.97 $33.98
</Table>

As of February 24, 2006, there were 71,078 shareholders of record of Common
Stock.

The table below presents declaration, record and payment dates, as well as
per share and aggregate dividend amounts, for the Common Stock:

<Table>
<Caption>
DIVIDEND
---------------------------
DECLARATION DATE RECORD DATE PAYMENT DATE PER SHARE AGGREGATE
- ---------------- ------------------- -------------------- --------- ---------------
<S> <C> <C> <C> <C>
October 25, 2005 November 7, 2005 December 15, 2005 $0.52 $ 394 million
September 28, 2004 November 5, 2004 December 13, 2004 $0.46 $ 343 million
</Table>

Future Common Stock dividend decisions will be determined by the Holding
Company's board of directors after taking into consideration factors such as the
Company's current earnings, expected medium-and long-term earnings, financial
condition, regulatory capital position, and applicable governmental regulations
and policies. Furthermore, the payment of dividends and other distributions to
the Holding Company by its insurance subsidiaries is regulated by insurance laws
and regulations. See "Business -- Regulation -- Insurance Regulation,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources -- The Holding
Company -- Liquidity Sources -- Dividends" and Note 14 of Notes to Consolidated
Financial Statements.

52
<PAGE>

ISSUER PURCHASES OF EQUITY SECURITIES

Purchases of Common Stock made by or on behalf of the Holding Company or
its affiliates during the three months ended December 31, 2005 are set forth
below:

<Table>
<Caption>
(C) TOTAL NUMBER (D) MAXIMUM NUMBER
OF SHARES (OR APPROXIMATE
PURCHASED AS PART DOLLAR VALUE) OF
(A) TOTAL NUMBER OF PUBLICLY SHARES THAT MAY YET
OF SHARES (B) AVERAGE PRICE ANNOUNCED PLANS BE PURCHASED UNDER
PERIOD PURCHASED(1) PAID PER SHARE OR PROGRAMS(2) THE PLANS OR PROGRAMS
- ------ ---------------- ----------------- ----------------- ---------------------
<S> <C> <C> <C> <C>
October 1-October 31, 2005.... 0 $ 0.00 -- $716,206,611
November 1-November 30,
2005........................ 755 $50.45 -- $716,206,611
December 1-December 31,
2005........................ 3,941 $49.93 -- $716,206,611
----- --------
Total......................... 4,696 $50.01 -- $716,206,611
===== ========
</Table>

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

(1) During the periods October 1-October 31, 2005, November 1-November 30, 2005
and December 1-December 31, 2005, separate account affiliates of the Holding
Company purchased 0 shares, 755 shares and 3,941 shares, respectively, of
Common Stock on the open market in nondiscretionary transactions to
rebalance index funds. Except as disclosed above, there were no shares of
Common Stock which were repurchased by the Holding Company other than
through a publicly announced plan or program.

(2) On October 26, 2004, the Holding Company's board of directors authorized a
$1 billion Common Stock repurchase program. Under this authorization, the
Holding Company may purchase its Common Stock from the MetLife Policyholder
Trust, in the open market and in privately negotiated transactions. As a
result of the acquisition of Travelers, the Holding Company has suspended
its Common Stock repurchase activity. Future Common Stock repurchases will
be dependent upon several factors, including the Company's capital position,
its financial strength and credit ratings, general market conditions and the
price of the Holding Company's Common Stock.

On December 16, 2004, the Holding Company repurchased 7,281,553 shares of
its outstanding common stock at an aggregate cost of $300 million under an
accelerated common stock repurchase agreement with a major bank. The bank
borrowed the stock sold to the Holding Company from third parties and
purchased the common stock in the open market to return to such third
parties. In April 2005, the Holding Company received a cash adjustment of
approximately $7 million based on the actual amount paid by the bank to
purchase the common stock, for a final purchase price of approximately $293
million. The Holding Company recorded the shares initially repurchased as
treasury stock and recorded the amount received as an adjustment to the cost
of the treasury stock.

53
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

The following tables set forth selected consolidated financial information
for the Company. The selected consolidated financial information for the years
ended December 31, 2005, 2004 and 2003, and at December 31, 2005 and 2004 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, 2002 and 2001 and at December 31, 2003, 2002 and
2001 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, 2005.

<Table>
<Caption>
YEARS ENDED DECEMBER 31,
-----------------------------------------------
2005 2004 2003 2002 2001
------- ------- ------- ------- -------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
STATEMENTS OF INCOME DATA(1)
Revenues:
Premiums..................................... $24,860 $22,200 $20,575 $19,020 $16,962
Universal life and investment-type product
policy fees................................ 3,828 2,867 2,495 2,145 1,888
Net investment income(2)..................... 14,910 12,364 11,472 11,123 11,106
Other revenues............................... 1,271 1,198 1,199 1,166 1,340
Net investment gains (losses)(2)(3)(4)....... (93) 175 (551) (895) (713)
------- ------- ------- ------- -------
Total revenues(5)(6)(7)(8)................. 44,776 38,804 35,190 32,559 30,583
------- ------- ------- ------- -------
Expenses:
Policyholder benefits and claims............. 25,506 22,662 20,811 19,455 18,329
Interest credited to policyholder account
balances................................... 3,925 2,997 3,035 2,950 3,084
Policyholder dividends....................... 1,679 1,666 1,731 1,803 1,802
Other expenses(2)............................ 9,267 7,813 7,168 6,862 6,894
------- ------- ------- ------- -------
Total expenses(5)(6)(7)(8)................. 40,377 35,138 32,745 31,070 30,109
------- ------- ------- ------- -------
Income from continuing operations before
provision for income taxes................... 4,399 3,666 2,445 1,489 474
Provision for income taxes(2)(5)(6)............ 1,260 1,029 616 448 170
------- ------- ------- ------- -------
Income from continuing operations.............. 3,139 2,637 1,829 1,041 304
Income from discontinued operations, net of
income taxes(2)(5)(6)........................ 1,575 207 414 564 169
------- ------- ------- ------- -------
Income before cumulative effect of a change in
accounting, net of income taxes.............. 4,714 2,844 2,243 1,605 473
Cumulative effect of a change in accounting,
net of income taxes.......................... -- (86) (26) -- --
------- ------- ------- ------- -------
Net income..................................... 4,714 2,758 2,217 1,605 473
Preferred stock dividends...................... 63 -- -- -- --
Charge for conversion of company-obligated
mandatorily redeemable securities of a
subsidiary trust............................. -- -- 21 -- --
------- ------- ------- ------- -------
Net income available to common shareholders.... $ 4,651 $ 2,758 $ 2,196 $ 1,605 $ 473
======= ======= ======= ======= =======
</Table>

54
<PAGE>

<Table>
<Caption>
AT DECEMBER 31,
----------------------------------------------------
2005 2004 2003 2002 2001
-------- -------- -------- -------- --------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA(1)
Assets:
General account assets.................. $353,776 $270,039 $251,085 $217,733 $194,256
Separate account assets................. 127,869 86,769 75,756 59,693 62,714
-------- -------- -------- -------- --------
Total assets(5)(6).................... $481,645 $356,808 $326,841 $277,426 $256,970
======== ======== ======== ======== ========
Liabilities:
Life and health policyholder
liabilities(9)........................ $258,881 $193,612 $177,947 $162,986 $148,598
Property and casualty policyholder
liabilities........................... 3,490 3,180 2,943 2,673 2,610
Short-term debt......................... 1,414 1,445 3,642 1,161 355
Long-term debt.......................... 12,022 7,412 5,703 4,411 3,614
Other liabilities....................... 48,868 41,566 39,701 27,852 21,761
Separate account liabilities............ 127,869 86,769 75,756 59,693 62,714
-------- -------- -------- -------- --------
Total liabilities(5)(6)............... 452,544 333,984 305,692 258,776 239,652
-------- -------- -------- -------- --------
Company-obligated mandatorily redeemable
securities of subsidiary trusts....... -- -- -- 1,265 1,256
-------- -------- -------- -------- --------
Stockholders' Equity:
Preferred stock, at par value(10)....... 1 -- -- -- --
Common stock, at par value(10).......... 8 8 8 8 8
Additional paid-in capital(10).......... 17,274 15,037 14,991 14,968 14,966
Retained earnings(10)................... 10,865 6,608 4,193 2,807 1,349
Treasury stock, at cost(10)............. (959) (1,785) (835) (2,405) (1,934)
Accumulated other comprehensive
income(10)............................ 1,912 2,956 2,792 2,007 1,673
-------- -------- -------- -------- --------
Total stockholders' equity............ 29,101 22,824 21,149 17,385 16,062
-------- -------- -------- -------- --------
Total liabilities and stockholders'
equity.............................. $481,645 $356,808 $326,841 $277,426 $256,970
======== ======== ======== ======== ========
</Table>

<Table>
<Caption>
AT OR FOR THE YEARS ENDED DECEMBER 31,
----------------------------------------------------
2005 2004 2003 2002 2001
-------- -------- -------- -------- --------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
OTHER DATA(1)
Net income available to common
shareholders.......................... $ 4,651 $ 2,758 $ 2,196 $ 1,605 $ 473
Return on common equity(11)............. 18.5% 12.5% 11.4% 9.6% 2.9%
Return on common equity, excluding
accumulated other comprehensive
income................................ 20.4% 14.4% 13.0% 10.8% 3.2%
INCOME FROM CONTINUING OPERATIONS PER
COMMON SHARE(1)
Basic................................... $ 4.19 $ 3.51 $ 2.45 $ 1.48 $ 0.41
Diluted................................. $ 4.16 $ 3.49 $ 2.42 $ 1.43 $ 0.40
INCOME FROM DISCONTINUED OPERATIONS PER
COMMON SHARE(1)
Basic................................... $ 2.10 $ 0.28 $ 0.56 $ 0.80 $ 0.23
Diluted................................. $ 2.09 $ 0.27 $ 0.55 $ 0.77 $ 0.22
CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PER COMMON SHARE(1)
Basic................................... $ -- $ (0.11) $ (0.04) $ -- $ --
Diluted................................. $ -- $ (0.11) $ (0.03) $ -- $ --
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS PER COMMON SHARE(1)
Basic................................... $ 6.21 $ 3.67 $ 2.97 $ 2.28 $ 0.64
Diluted................................. $ 6.16 $ 3.65 $ 2.94 $ 2.20 $ 0.62
DIVIDENDS DECLARED PER COMMON SHARE(1).... $ 0.52 $ 0.46 $ 0.23 $ 0.21 $ 0.20
</Table>

55
<PAGE>

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

(1) On July 1, 2005, the Company acquired Travelers. The results of this
acquisition are reflected in the 2005 selected financial data. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Acquisitions and Dispositions."

(2) In accordance with SFAS No. 144, Accounting for the Impairment or Disposal
of Long-Lived Assets ("SFAS 144"), 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 real estate operations
(see footnotes 5 and 6):

<Table>
<Caption>
YEARS ENDED DECEMBER 31,
--------------------------------------
2005 2004 2003 2002 2001
------ ----- ----- ----- -----
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Investment income........................... $ 140 $ 409 $ 491 $ 644 $ 583
Investment expense.......................... (82) (240) (279) (351) (338)
Net investment gains (losses)............... 2,125 146 420 585 --
------ ----- ----- ----- -----
Total revenues............................ 2,183 315 632 878 245
Interest expense............................ -- 13 4 -- 1
Provision for income taxes.................. 776 105 230 319 89
------ ----- ----- ----- -----
Income from discontinued operations, net
of income taxes........................ $1,407 $ 197 $ 398 $ 559 $ 155
====== ===== ===== ===== =====
</Table>

(3) Net investment gains (losses) exclude amounts related to real estate
operations reported as discontinued operations in accordance with SFAS 144.

(4) Net investment gains (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 $99 million, $51 million, $84 million,
$32 million and $24 million for the years ended December 31, 2005, 2004,
2003, 2002 and 2001, respectively. Additionally, excluded from net
investment gains (losses) for the year ended December 31, 2005 is ($13)
million related to revaluation losses on derivatives used to hedge interest
rate and currency risk on policyholder account balances that do not qualify
for hedge accounting.

(5) On September 29, 2005, the Company completed the sale of P.T. Sejahtera
("MetLife Indonesia") to a third party. In accordance with SFAS 144, the
assets, liabilities and operations of MetLife Indonesia have been
reclassified into discontinued operations for all years presented. The
following tables present the operations of MetLife Indonesia:

<Table>
<Caption>
YEARS ENDED DECEMBER 31,
--------------------------------
2005 2004 2003 2002 2001
---- ---- ---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Revenues from discontinued operations................. $ 5 $ 5 $ 4 $ 5 $ 3
Expenses from discontinued operations................. 10 14 9 8 6
--- --- --- --- ---
Income from discontinued operations, before provision
for income taxes.................................... (5) (9) (5) (3) (3)
Provision for income taxes............................ -- -- -- -- --
--- --- --- --- ---
Income (loss) from discontinued operations, net of
income taxes..................................... (5) (9) (5) (3) (3)
Net investment gains, net of income taxes............. 10 -- -- -- --
--- --- --- --- ---
Income (loss) from discontinued operations, net of
income taxes..................................... $ 5 $(9) $(5) $(3) $(3)
=== === === === ===
</Table>

56
<PAGE>

<Table>
<Caption>
AT DECEMBER 31,
-------------------------
2004 2003 2002 2001
---- ---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C> <C>
General account assets...................................... $31 $27 $23 $21
--- --- --- ---
Total assets.............................................. $31 $27 $23 $21
=== === === ===
Life and health policyholder liabilities.................... $24 $17 $11 $ 8
Other liabilities........................................... 4 3 5 5
--- --- --- ---
Total liabilities......................................... $28 $20 $16 $13
=== === === ===
</Table>

(6) On January 31, 2005, the Company sold its wholly-owned subsidiary, SSRM
Holdings, Inc. ("SSRM"), to a third party. In accordance with SFAS 144, the
assets, liabilities and operations of SSRM have been reclassified into
discontinued operations for all years presented. The following tables
present the operations of SSRM:

<Table>
<Caption>
YEARS ENDED DECEMBER 31,
--------------------------------
2005 2004 2003 2002 2001
---- ---- ---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Revenues from discontinued operations............. $ 19 $328 $231 $239 $254
Expenses from discontinued operations............. 38 296 197 225 230
---- ---- ---- ---- ----
Income (loss) from discontinued operations, before
provision (benefit) for income taxes............ (19) 32 34 14 24
Provision (benefit) for income taxes.............. (5) 13 13 6 7
---- ---- ---- ---- ----
Income (loss) from discontinued operations, net
of income taxes.............................. (14) 19 21 8 17
Net investment gains, net of income taxes......... 177 -- -- -- --
---- ---- ---- ---- ----
Income from discontinued operations, net of
income taxes................................. $163 $ 19 $ 21 $ 8 $ 17
==== ==== ==== ==== ====
</Table>

<Table>
<Caption>
AT DECEMBER 31,
-------------------------
2004 2003 2002 2001
---- ---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C> <C>
General account assets................................... $379 $183 $198 $203
---- ---- ---- ----
Total assets........................................... $379 $183 $198 $203
==== ==== ==== ====
Short-term debt.......................................... $ 19 $ -- $ -- $ --
Long-term debt........................................... -- -- 14 14
Other liabilities........................................ 221 70 78 80
---- ---- ---- ----
Total liabilities...................................... $240 $ 70 $ 92 $ 94
==== ==== ==== ====
</Table>

(7) Includes the following combined financial statement data of Conning
Corporation, which was sold in 2001:

<Table>
<Caption>
YEAR ENDED
DECEMBER 31,
2001
-------------
(IN MILLIONS)
<S> <C>
Total revenues.............................................. $32
===
Total expenses.............................................. $33
===
</Table>

As a result of this sale, an investment gain of $25 million was recorded
for the year ended December 31, 2001.

(8) 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.

57
<PAGE>

(9) 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.

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

(11) Return on common equity is defined as net income available to common
shareholders divided by average common stockholders' equity.

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" refer
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.

This 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 MetLife, Inc. and its subsidiaries,
as well as other statements including words such as "anticipate," "believe,"
"plan," "estimate," "expect," "intend" and other similar expressions.
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 United States Securities and Exchange Commission
("SEC"), 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.

ECONOMIC CAPITAL

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.

58
<PAGE>

As part of the economic capital process a portion of net investment income
is credited to the segments based on the level of allocated equity.

ACQUISITIONS AND DISPOSITIONS

On September 29, 2005, the Company completed the sale of P.T. Sejahtera
("MetLife Indonesia") to a third party resulting in a gain upon disposal of $10
million, net of income taxes. As a result of this sale, the Company recognized
income from discontinued operations of $5 million, net of income taxes, for the
year ended December 31, 2005. The Company reclassified the assets, liabilities
and operations of MetLife Indonesia into discontinued operations for all periods
presented.

On September 1, 2005, the Company completed the acquisition of CitiStreet
Associates, a division of CitiStreet LLC, that is primarily involved in the
distribution of annuity products and retirement plans to the education,
healthcare, and not-for-profit markets, for approximately $56 million, of which
$2 million was allocated to goodwill and $54 million to other identifiable
intangibles, specifically the value of customer relationships acquired, which
has a weighted average amortization period of 16 years. CitiStreet Associates
will be integrated with MetLife Resources, a division of MetLife dedicated to
providing retirement plans and financial services to the same markets.

On July 1, 2005, the Holding Company completed the acquisition of The
Travelers Insurance Company ("TIC"), excluding certain assets, most
significantly, Primerica, from Citigroup Inc. ("Citigroup"), and substantially
all of Citigroup's international insurance businesses (collectively,
"Travelers"), for $12.0 billion. The results of Travelers' operations were
included in the Company's consolidated financial statements beginning July 1,
2005. As a result of the acquisition, management of the Company increased
significantly the size and scale of the Company's core insurance and annuity
products and expanded the Company's presence in both the retirement & savings
domestic and international markets. The distribution agreements executed with
Citigroup as part of the acquisition will provide the Company with one of the
broadest distribution networks in the industry. Consideration paid by the
Holding Company for the purchase consisted of approximately $10.9 billion in
cash and 22,436,617 shares of the Holding Company's common stock with a market
value of approximately $1.0 billion to Citigroup and approximately $100 million
in other transaction costs. Consideration paid to Citigroup will be finalized
subject to review of the June 30, 2005 financial statements of Travelers by both
the Company and Citigroup and interpretation of the provisions of the
acquisition agreement by both parties. In addition to cash on-hand, the purchase
price was financed through the issuance of common stock as described above, debt
securities, common equity units and preferred shares. See "-- Liquidity and
Capital Resources -- The Holding Company -- Liquidity Sources."

On January 31, 2005, the Company completed the sale of SSRM Holdings, Inc.
("SSRM") to a third party for $328 million in cash and stock. As a result of the
sale of SSRM, the Company recognized income from discontinued operations of
approximately $157 million, net of income taxes, comprised of a realized gain of
$165 million, net of income taxes, and an operating expense related to a lease
abandonment of $8 million, net of income taxes. Under the terms of the sale
agreement, MetLife will have an opportunity to receive, prior to the end of
2006, payments aggregating up to approximately 25% of the base purchase price,
based on, among other things, certain revenue retention and growth measures. The
purchase price is also subject to reduction over five years, depending on
retention of certain MetLife-related business. Also under the terms of such
agreement, MetLife had the opportunity to receive additional consideration for
the retention of certain customers for a specific period in 2005. In the fourth
quarter of 2005, upon finalization of the computation, the Company received a
payment of $12 million, net of income taxes, due to the retention of these
specific customer accounts. The Company reclassified the assets, liabilities and
operations of SSRM into discontinued operations for all periods presented.
Additionally, the sale of SSRM resulted in the elimination of the Company's
Asset Management segment. The remaining asset management business, which is
insignificant, has been reclassified into Corporate & Other. The Company's
discontinued operations for the year ended December 31, 2005 also includes
expenses of approximately $6 million, net of income taxes, related to the sale
of SSRM.

In 2003, a subsidiary of MetLife, Inc., Reinsurance Group of America,
Incorporated ("RGA"), entered into a coinsurance agreement under which it
assumed the traditional U.S. life reinsurance business of Allianz

59
<PAGE>

Life Insurance Company of North America ("Allianz Life"). The transaction added
approximately $278 billion of life reinsurance in-force, $246 million of
premiums and $11 million of income before income tax expense, excluding minority
interest expense, in 2003. The effects of such transaction are included within
the Reinsurance segment.

In 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 (June 20, 2002). During the second quarter of 2003,
as a part of its acquisition and integration strategy, the International segment
completed the legal merger of Hidalgo into its original Mexican subsidiary,
Seguro Genesis, S.A., forming MetLife Mexico, S.A. As a result of the merger of
these companies, the Company recorded $62 million of earnings, net of income
taxes, from the merger and a reduction in policyholder liabilities resulting
from a change in methodology in determining the liability for future policy
benefits. Such benefit was recorded in the second quarter of 2003 in the
International segment.

IMPACT OF HURRICANES

On August 29, 2005, Hurricane Katrina made landfall in the states of
Louisiana, Mississippi and Alabama causing catastrophic damage to these coastal
regions. As of December 31, 2005, the Company recognized total net losses
related to the catastrophe of $134 million, net of income taxes and reinsurance
recoverables and including reinstatement premiums and other reinsurance-related
premium adjustments, which impacted the Auto & Home and Institutional segments.
The Auto & Home and Institutional segments recorded net losses related to the
catastrophe of $120 million and $14 million, each net of income taxes and
reinsurance recoverables and including reinstatement premiums and other
reinsurance-related premium adjustments, respectively. MetLife's gross losses
from Katrina were approximately $335 million, primarily arising from the
Company's homeowners business.

On October 24, 2005, Hurricane Wilma made landfall across the state of
Florida. As of December 31, 2005, the Company's Auto & Home segment recognized
total losses related to the catastrophe of $32 million, net of income taxes and
reinsurance recoverables. MetLife's gross losses from Hurricane Wilma were
approximately $57 million arising from the Company's homeowners and automobile
businesses.

Additional hurricane-related losses may be recorded in future periods as
claims are received from insureds and claims to reinsurers are processed.
Reinsurance recoveries are dependent on the continued creditworthiness of the
reinsurers, which may be affected by their other reinsured losses in connection
with Hurricanes Katrina and Wilma and otherwise. In addition, lawsuits,
including purported class actions, have been filed in Mississippi and Louisiana
challenging denial of claims for damages caused to their property during
Hurricane Katrina. Metropolitan Property and Casualty Insurance Company ("MPC")
is a named party in some of these lawsuits. In addition, rulings in cases in
which MPC is not a party may affect interpretation of its policies. MPC intends
to vigorously defend these matters. However, any adverse rulings could result in
an increase in the Company's hurricane-related claim exposure and losses. Based
on information currently known by management, it does not believe that
additional claim losses resulting from Hurricane Katrina will have a material
adverse impact on the Company's consolidated financial statements.

SUMMARY OF CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America ("GAAP") requires
management to adopt accounting policies and make estimates and assumptions that
affect amounts reported in the consolidated financial statements. The most
critical estimates include those used in determining: (i) investment
impairments; (ii) the fair value of investments in the absence of quoted market
values; (iii) application of the consolidation rules to certain investments;
(iv) the fair value of and accounting for derivatives; (v) the capitalization
and amortization of deferred policy acquisition costs ("DAC"), including value
of business acquired ("VOBA"); (vi) the measurement of goodwill and related
impairment, if any; (vii) the liability for future policyholder benefits; (viii)
accounting for reinsurance transactions;(ix) the liability for litigation and
regulatory matters; and (x) accounting for employee benefit plans. The
application of purchase accounting requires the use of estimation techniques in
determining the fair value of the assets acquired and liabilities assumed -- the
most significant of which relate to the aforementioned critical estimates. In
applying these policies, management

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<PAGE>

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. Actual results
could differ from these estimates.

INVESTMENTS

The Company's principal investments are in fixed maturities, mortgage and
consumer loans, other limited partnerships, and real estate and real estate
joint ventures, 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 or
amortized cost; (ii) the potential for impairments of securities when the issuer
is experiencing significant financial difficulties; (iii) the potential for
impairments in an entire industry sector or sub-sector; (iv) the potential for
impairments in certain economically depressed geographic locations; (v) the
potential for impairments of securities where the issuer, series of issuers or
industry has suffered a catastrophic type of loss or has exhausted natural
resources; (vi) the Company's ability and intent to hold the security for a
period of time sufficient to allow for the recovery of its value to an amount
equal to or greater than cost or amortized cost; (vii) unfavorable changes in
forecasted cash flows on asset-backed securities; and (viii) 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. 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 have embedded 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 under
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.
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DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED

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 DAC 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. VOBA, included in DAC, reflects the estimated
fair value of in-force contracts in a life insurance company acquisition and
represents the portion of the purchase price that is allocated to the value of
the right to receive future cash flows from the insurance and annuity contracts
in force at the acquisition date. VOBA is based on actuarially determined
projections, by each block of business, of future policy and contract charges,
premiums, mortality and morbidity, separate account performance, surrenders,
operating expenses, investment returns and other factors. Actual experience on
the purchased business may vary from these projections. 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 common industry practice, in its determination of the amortization
of DAC. 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.

GOODWILL

Goodwill is the excess of cost over the fair value of net assets acquired.
The Company tests goodwill for impairment at least annually or more frequently
if events or circumstances, such as adverse changes in the business climate,
indicate that there may be justification for conducting an interim test.
Impairment testing is performed using the fair value approach, which requires
the use of estimates and judgment, at the "reporting unit" level. A reporting
unit is the operating segment, or a business that is one level below the
operating segment if discrete financial information is prepared and regularly
reviewed by management at that level. For purposes of goodwill impairment
testing, goodwill within Corporate & Other is allocated to reporting units
within the Company's business segments. If the carrying value of a reporting
unit's goodwill exceeds its fair value, the excess is recognized as an
impairment and recorded as a charge against net income. The fair values of the
reporting units are determined using a market multiple or discounted cash flow
model. The critical estimates necessary in determining fair value are projected
earnings, comparative market multiples and the discount rate.

LIABILITY FOR FUTURE POLICY BENEFITS AND UNPAID CLAIMS AND CLAIM EXPENSES

The Company establishes liabilities for amounts payable under insurance
policies, including traditional life insurance, traditional annuities and
non-medical health 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. Utilizing these assumptions, liabilities are established on a block
of business basis.

The Company also establishes liabilities for unpaid claims and claim
expenses for property and casualty claim insurance which represent 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.

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<PAGE>

Differences between actual experience and the assumptions used in pricing
these policies and in the establishment of liabilities result in variances in
profit and could result in losses. The effects of changes in such estimated
liabilities are included in the results of operations in the period in which the
changes occur.

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 and regulatory
investigations. Given the inherent unpredictability of these matters, it is
difficult to estimate the impact 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 assumptions 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. On a quarterly and annual basis the Company reviews
relevant information with respect to liabilities for litigation, regulatory
investigations and litigation-related contingencies to be reflected in the
Company's consolidated financial statements. The review includes senior legal
and financial personnel. It is possible that an adverse outcome in certain of
the Company's litigation and regulatory investigations, 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

Certain subsidiaries of the Holding Company sponsor pension and other
retirement plans in various forms covering employees who meet specified
eligibility requirements. The reported expense and liability associated with
these plans require 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.
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.

FINANCIAL CONDITION

As a result of the Travelers acquisition, management of the Company
increased significantly the size and scale of the Company's core insurance and
annuity products and expanded the Company's presence in both

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<PAGE>

the retirement & savings domestic and international markets. The distribution
agreements executed with Citigroup as part of the acquisition will provide the
Company with one of the broadest distribution networks in the industry.

The Travelers assets and liabilities acquired of $102 billion and $90
billion, respectively, have been included in the consolidated balance sheet of
the Company at their estimated fair market values as of the date of acquisition,
July 1, 2005, and significantly increased the Company's assets and liabilities
in its consolidated financial statements as of December 31, 2005, as included
elsewhere herein. The purchase price of $12 billion was financed through the
issuance of common stock of $1 billion to Citigroup, issuances to the public of
preferred stock of $2 billion, common equity units of $2 billion and debt
securities of $3 billion and the use of cash on hand of $4 billion.

RESULTS OF OPERATIONS

EXECUTIVE SUMMARY

The management's discussion and analysis which follows isolates, in order
to be meaningful, the results of the Travelers acquisition in the period over
period comparison as the Travelers acquisition was not included in the results
of the Company until July 1, 2005. The Travelers' amounts which have been
isolated represent the results of the Travelers legal entities which have been
acquired. These amounts represent the impact of the Travelers acquisition;
however, as business currently transacted through the acquired Travelers legal
entities is transitioned to legal entities already owned by the Company, some of
which has already occurred, the identification of the Travelers legal entity
business will not necessarily be indicative of the impact of the Travelers
acquisition on the results of the Company.

As a part of the Travelers acquisition, management realigned certain
products and services within several of the Company's segments to better conform
to the way it manages and assesses its business. Accordingly, all prior period
segment results have been adjusted to reflect such product reclassifications.
Also in connection with the Travelers acquisition, management has utilized its
economic capital model to evaluate the deployment of capital based upon the
unique and specific nature of the risks inherent in the Company's existing and
newly acquired businesses and has adjusted such allocations based upon this
model.

YEAR ENDED DECEMBER 31, 2005 COMPARED WITH THE YEAR ENDED DECEMBER 31, 2004

The Company reported $4,651 million in net income available to common
shareholders and diluted earnings per common share of $6.16 for the year ended
December 31, 2005 compared to $2,758 million in net income available to common
shareholders and diluted earnings per common share of $3.65 for the year ended
December 31, 2004. The acquisition of Travelers contributed $233 million to net
income available to common shareholders for the year ended December 31, 2005.
Excluding the impact of Travelers, net income available to common shareholders
increased by $1,660 million in the 2005 period. The years ended December 31,
2005 and 2004 include the impact of certain transactions or events, the timing,
nature and amount of which are generally unpredictable. These transactions are
described in each applicable segment's discussion below. These items contributed
a benefit of $71 million, net of income taxes, to the year ended December 31,
2005 and a benefit of $113 million, net of income taxes, to the comparable 2004
period. Excluding the impact of these items, net income available to common
shareholders increased by $1,702 million for the year ended December 31, 2005
compared to the prior 2004 period.

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In 2005, the Company sold its One Madison Avenue and 200 Park Avenue
properties in Manhattan, New York, which, combined, resulted in a gain of $1,193
million, net of income taxes. In addition, during 2005, the Company completed
the sales of SSRM and MetLife Indonesia and recognized gains of $177 million and
$10 million, respectively, both net of income taxes. In 2004, the Company
completed the sale of the Sears Tower property resulting in a gain of $85
million, net of income taxes. Accordingly, income from discontinued operations
and, correspondingly, net income, increased by $1,368 million for the year ended
December 31, 2005 compared to the 2004 period primarily as a result of the
aforementioned sales.

These increases were partially offset by an increase in net investment
losses of $170 million, net of income taxes, for the year ended December 31,
2005 as compared to the corresponding period in 2004. The acquisition of
Travelers contributed a loss of $132 million, net of income taxes, to this
decrease. Excluding the impact of Travelers, net investment gains (losses)
decreased by $38 million, net of income taxes, in the 2005 period. This decrease
is primarily due to losses on fixed maturity security sales resulting from
continued portfolio repositioning in the 2005 period. Significantly offsetting
these reductions is an increase in gains from the mark-to-market on derivatives
in 2005. The derivative gains resulted from changes in the value of the dollar
versus major foreign currencies, including the euro and pound sterling, and
changes in U.S. interest rates during the year ended December 31, 2005.

The increase in net income available to common shareholders during the year
ended December 31, 2005 as compared to the prior year is partially due to the
decrease in net income available to common shareholders in the prior year of $86
million, net of income taxes, as a result of a cumulative effect of a change in
accounting principle in 2004 recorded in accordance with Statement of Position
("SOP") 03-1, Accounting and Reporting by Insurance Enterprises for Certain
Nontraditional Long-Duration Contracts and for Separate Accounts ("SOP 03-1").

In addition, during the second half of the year ended December 31, 2005,
the Company paid $63 million in dividends on its Series A and Series B preferred
shares issued in connection with financing the acquisition of Travelers.

The remaining increase in net income available to common shareholders of
$349 million is primarily due to an increase in premiums, fees and other
revenues primarily from continued sales growth across most of the Company's
business segments, as well as the positive impact of the U.S. financial markets
on policy fees. Policy fees from variable life and annuity and investment-type
products are typically calculated as a percentage of the average assets in
policyholder accounts. The value of these assets can fluctuate depending on
equity performance. In addition, continued strong investment spreads are largely
due to higher than expected net investment income from corporate joint venture
income and bond and commercial mortgage prepayment fees. Partially offsetting
these increases is a rise in expenses primarily due to higher interest expense,
integration costs, corporate incentive expenses, non deferrable volume-related
expenses, corporate support expenses and DAC amortization.

YEAR ENDED DECEMBER 31, 2004 COMPARED WITH THE YEAR ENDED DECEMBER 31, 2003

The Company reported $2,758 million in net income available to common
shareholders and diluted earnings per common share of $3.65 for the year ended
December 31, 2004 compared to $2,196 million in net income available to common
shareholders and diluted earnings per common share of $2.94 for the year ended
December 31, 2003. Continued top-line revenue growth across all of the Company's
business segments, strong interest rate spreads and an improvement in net
investment gains (losses) are the leading contributors to the 26% increase in
net income available to common shareholders for the year ended December 31, 2004
over the comparable 2003 period.

Total premiums, fees and other revenues increased to $26.3 billion, up 8%,
from the year ended December 31, 2003, primarily from continued sales growth
across most of the Company's business segments, as well as the positive impact
of the U.S. financial markets on policy fees. Policy fees from variable life and
annuity and investment-type products are typically calculated as a percentage of
the average assets in policyholder accounts. The value of these assets can
fluctuate depending on equity performance. Continued strong investment spreads
are largely due to higher than expected net investment income from corporate
joint
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<PAGE>

venture income and bond and commercial mortgage prepayment fees. In addition, an
improvement in net investment gains (losses), net of income taxes, of $461
million is primarily due to the more favorable economic environment in 2004.

These increases are partially offset by an $86 million, net of income
taxes, cumulative effect of a change in accounting principle in 2004 recorded in
accordance with SOP 03-1. In comparison, in the 2003 period the Company recorded
a $26 million charge for a cumulative effect of a change in accounting in
accordance with Financial Accounting Standards Board ("FASB") 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").

INDUSTRY TRENDS

The Company's segments continue to be influenced by a variety of trends
that affect the industry.

Improving Economy. A recovery in the employment market combined with
higher corporate confidence should improve demand for group insurance and
retirement & savings-type products. Group insurance premium growth, for example,
with respect to life and disability products, are closely tied to employers'
total payroll growth. Additionally, the potential market for these products is
expanded by new business creation. Bond portfolio credit losses have also
benefited from an increasingly healthy economy.

Demographics. In the coming decade, a key driver shaping the actions of
the life insurance industry will be the rising income protection, wealth
accumulation, protection and transfer needs of the retiring Baby Boomers -- the
first of whom have entered their pre-retirement, peak savings years. As a result
of increasing longevity, retirees will need to accumulate sufficient savings to
finance retirements that may span 30 or more years. Helping the Baby Boomers
accumulate assets for retirement and subsequently converting these assets into
retirement income represents a transformative opportunity for the life insurance
industry.

Life insurers are well positioned to address the Baby Boomers' rapidly
increasing need for savings tools and for income protection. In light of recent
Social Security reform and pension solvency concerns, "protection" is what sets
the U.S. life insurance industry apart from other financial services providers
pursuing the retiring Baby Boomer segment. The Company believes that, among life
insurers, those with strong brands, high financial strength ratings, and broad
distribution, are best positioned to capitalize on the opportunity to offer
income protection products to Baby Boomers.

Moreover, the life insurance industry's products and the needs they are
designed to address are complex. The Company believes that individuals
approaching retirement age will need to seek advice to plan for and manage their
retirements and that, in the workplace, as employees take greater responsibility
for their benefit options and retirement planning, they will need individually
tailored advice. The challenge for the life insurance industry remains
delivering tailored advice in a cost effective manner.

product development and risk management, which are among the fundamentals for
sustained profitable growth in the life insurance industry. In addition, several
of the industry's products can be quite homogeneous and subject to intense price
competition, and sufficient scale, financial strength and flexibility are
becoming prerequisites for sustainable growth in the life insurance industry.
Larger market participants tend to have the capacity to invest in additional
distribution capability and the information technology needed to offer the
superior customer service demanded by an increasingly sophisticated industry
client base.

Regulatory Changes. The life insurance industry is regulated at the state
level, with some products also subject to federal regulation. As life insurers
introduce new and often more complex products, regulators refine capital
requirements and introduce new reserving standards for the life insurance
industry. Regulation recently adopted or currently under review can potentially
impact the reserve and capital requirements for several of the industry's
products. In addition, regulators have undertaken market and sales practices
reviews of several markets or products including equity-indexed annuities,
variable annuities and group products.

DISCUSSION OF RESULTS

<Table>
<Caption>
YEAR ENDED DECEMBER 31,
---------------------------
2005 2004 2003
------- ------- -------
(IN MILLIONS)
<S> <C> <C> <C>
REVENUES
Premiums................................................ $24,860 $22,200 $20,575
Universal life and investment-type product policy
fees.................................................. 3,828 2,867 2,495
Net investment income................................... 14,910 12,364 11,472
Other revenues.......................................... 1,271 1,198 1,199
Net investment gains (losses)........................... (93) 175 (551)
------- ------- -------
Total revenues........................................ 44,776 38,804 35,190
------- ------- -------
EXPENSES
Policyholder benefits and claims........................ 25,506 22,662 20,811
Interest credited to policyholder account balances...... 3,925 2,997 3,035
Policyholder dividends.................................. 1,679 1,666 1,731
Other expenses.......................................... 9,267 7,813 7,168
------- ------- -------
Total expenses........................................ 40,377 35,138 32,745
------- ------- -------
Income from continuing operations before provision for
income taxes.......................................... 4,399 3,666 2,445
Provision for income taxes.............................. 1,260 1,029 616
------- ------- -------
Income from continuing operations....................... 3,139 2,637 1,829
Income from discontinued operations, net of income
taxes................................................. 1,575 207 414
------- ------- -------
Income before cumulative effect of a change in
accounting, net of income taxes....................... 4,714 2,844 2,243
Cumulative effect of a change in accounting, net of
income taxes.......................................... -- (86) (26)
------- ------- -------
Net income.............................................. 4,714 2,758 2,217
Preferred stock dividends............................... 63 -- --
Charge for conversion of company-obligated mandatorily
redeemable securities of a subsidiary trust........... -- -- 21
------- ------- -------
Net income available to common shareholders............. $ 4,651 $ 2,758 $ 2,196
======= ======= =======
</Table>

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YEAR ENDED DECEMBER 31, 2005 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2004 -- THE COMPANY

Income from continuing operations increased by $502 million, or 19%, to
$3,139 million for the year ended December 31, 2005 from $2,637 million in the
comparable 2004 period. The current period includes $233 million of income from
continuing operations related to the acquisition of Travelers. Included in the
Travelers results is a charge for the establishment of an excess mortality
reserve related to group of specific policies. In connection with MetLife's
acquisition of Travelers, the Company has performed reviews of Travelers
underwriting criteria in its effort to refine its estimated fair values for the
purchase price allocation. As a result of these reviews and actuarial analyses,
and to be consistent with MetLife's existing reserving methodologies, the
Company has established an excess mortality reserve on a specific group of
policies. This resulted in a charge of $20 million, net of income taxes, to
fourth quarter results. The Company expects to complete its reviews and refine
its estimate of the excess mortality reserve by June 30, 2006. Excluding the
acquisition of Travelers, income from continuing operations increased by $269
million, or 10%. Income from continuing operations for the year ended December
31, 2005 and 2004 includes the impact of certain transactions or events, the
timing, nature and amount of which are generally unpredictable. These
transactions are described in each applicable segment's discussion below. These
items contributed a benefit of $71 million, net of income taxes, to the year
ended December 31, 2005 and a benefit of $113 million, net of income taxes, to
the comparable 2004 period. Excluding the impact of these items, income from
continuing operations increased by $311 million for the year ended December 31,
2005 compared to the prior 2004 period. The Individual segment contributed $248
million, net of income taxes, to the increase, as a result of interest rate
spreads, increased fee income related to the growth in separate account
products, favorable underwriting, a decrease in the closed block-related
policyholder dividend obligation, lower annuity net guaranteed benefit costs and
lower DAC amortization. These increases were partially offset by lower net
investment income, net investment losses and higher operating costs offset by
revisions to certain expense, premium tax and policyholder liability estimates
in the current year and write-offs of certain assets in the prior year. The
Institutional segment contributed $50 million, net of income taxes, to this
increase primarily due to favorable interest spreads, partially offset by a
decrease in net investment gains, an adjustment recorded on DAC associated with
certain long-term care products in 2005, unfavorable underwriting and an
increase in other expenses. The Auto & Home segment contributed $16 million, net
of income taxes, to the 2005 increase primarily due to improvements in the
development of prior year claims, the non-catastrophe combined ratio, and losses
from the involuntary Massachusetts automobile plan, as well as an increase in
net investment income and earned premium. These increases in the Auto & Home
segment were partially offset by an increase in catastrophes as a result of the
impact of Hurricanes Katrina and Wilma and an increase in other expenses. The
Reinsurance segment contributed $9 million, net of income taxes, to this
increase primarily due to premium growth and higher net investment income,
partially offset by unfavorable mortality as a result of higher claim levels in
the U.S. and U.K. and a reduction in net investment gains. The International
segment contributed $9 million, net of income taxes, primarily due to business
growth in South Korea, Chile and Mexico. These increases in the International
segment were partially offset by an increase in certain policyholder liabilities
caused by unrealized investment gains (losses) on the invested assets supporting
those liabilities, an increase in expenses for start up costs and contingency
liabilities in Mexico, as well as a decrease in Canada primarily due to a
realignment of economic capital offset by the strengthening of the liability on
its pension business related to changes in mortality assumptions in the prior
year and higher oversight and infrastructure expenditures in support of the
segment growth. These increases in income from continuing operations were
partially offset by a decrease of $21 million, net of income taxes, in Corporate
& Other. The decrease in Corporate & Other is primarily due to higher interest
expense on debt, integration costs associated with the acquisition of Travelers,
higher interest credited on bank holder deposits and legal-related liabilities,
partially offset by an increase in net investment income, higher net investment
gains and a decrease in corporate support expenses.

Premiums, fees and other revenues increased by $3,694 million, or 14%, to
$29,959 million for the year ended December 31, 2005 from $26,265 million for
the comparable 2004 period. The current period includes $1,009 million of
premium, fees and other revenues related to the acquisition of Travelers.
Excluding the acquisition of Travelers, premium, fees and other revenues
increased by $2,685 million, or 10%. The Institutional segment contributed
$1,266 million, or 47%, to the year over year increase. The Institutional
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segment increase is primarily due to sales growth and the acquisition of new
business in the non-medical health & other business, as well as improved sales
and favorable persistency in group life and higher structured settlement sales
and pension close-outs in retirement & savings. The Reinsurance segment
contributed $523 million, or 19%, to the Company's year over year increase in
premiums, fees and other revenues. This growth is primarily attributable to new
premiums from facultative and automatic treaties and renewal premiums on
existing blocks of business, as well as favorable exchange rate movements. The
International segment contributed $452 million, or 17%, to the year over year
increase primarily due to business growth through increased sales and renewal
business in Mexico, South Korea, Brazil, and Taiwan, as well as changes in
foreign currency rates. In addition, Chile's premiums, fees and other revenues
increased due to the new bank distribution channel established in 2005. The
Individual segment contributed $445 million, or 17%, to the year over year
increase primarily due to higher fee income from variable annuity and universal
life products, active marketing of income annuity products and growth in the
business in traditional life products. The growth in traditional products more
than offset the decline in premiums in the Company's closed block business as
this business continues to run-off. Corporate & Other contributed $38 million,
or 1%, to the year over year increase, primarily due to intersegment
eliminations. The increase in premiums, fees and other revenues were partially
offset by a decrease in the Auto & Home segment of $39 million, or 1%. This
decrease is primarily attributable to reinstatement and additional
reinsurance-related premiums due to Hurricane Katrina.

Interest rate margins, which generally represent the margin between net
investment income and interest credited to policyholder account balances,
increased in the Institutional and Individual segments for the year ended
December 31, 2005 compared to the prior year period. Earnings from interest rate
spreads are influenced by several factors, including business growth, movement
in interest rates, and certain investment and investment-related transactions,
such as corporate joint venture income and bond and commercial mortgage
prepayment fees, the timing and amount of which are generally unpredictable and,
as a result, can fluctuate from period to period. If interest rates remain low,
it could result in compression of the Company's interest rate spreads on several
of its products, which provide guaranteed minimum rates of return to
policyholders. This compression could adversely impact the Company's future
financial results.

Underwriting results were favorable within the life products in the
Individual and Institutional segments, while underwriting results were
unfavorable in the Reinsurance segment and in the retirement & savings and non
medical health & other products within the Institutional segment. Underwriting
results are generally the difference between the portion of premium and fee
income intended to cover mortality, morbidity or other insurance costs, less
claims incurred, and the change in insurance-related liabilities. Underwriting
results are significantly influenced by mortality, morbidity or other
insurance-related experience trends and the reinsurance activity related to
certain blocks of business and, as a result, can fluctuate from period to
period. Underwriting results, excluding catastrophes, in the Auto & Home segment
were favorable for the year ended December 31, 2005, as the combined ratio,
excluding catastrophes and before the reinstatement premiums and other
reinsurance related premium adjustments due to Hurricane Katrina, decreased to
86.7% from 90.4% in the prior year period. Offsetting the improved
non-catastrophe ratios in the Auto & Home segment was an increase in
catastrophes primarily due to Hurricanes Katrina and Wilma. Underwriting results
in the International segment increased commensurate with the growth in the
business as discussed above.

Other expenses increased by $1,454 million, or 19%, to $9,267 million for
the year ended December 31, 2005 from $7,813 million for the comparable 2004
period. The current period includes $618 million of other expenses related to
the acquisition of Travelers. Excluding the acquisition of Travelers, other
expenses increased by $836 million, or 11%. The year ended December 31, 2005
includes a $28 million benefit associated with the reduction of a previously
established real estate transfer tax liability related to the Company's
demutualization in 2000. The year ended December 31, 2004 reflects a $49 million
reduction of a premium tax liability and a $22 million reduction of a liability
for interest associated with the resolution of all issues relating to the
Internal Revenue Service's audit of Metropolitan Life's and its subsidiaries'
tax returns for the years 1997-1999. These decreases were partially offset by a
$50 million contribution of appreciated stock to the MetLife Foundation.
Excluding the impact of these transactions, other expenses increased by $843
million, or 11%, from the comparable 2004 period. Corporate & Other contributed
$413 million, or 49%,

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<PAGE>

to the year over year variance primarily due to higher interest expense,
integration costs associated with the Travelers acquisition, growth in interest
credited to bank holder deposits at MetLife Bank, National Association ("MetLife
Bank" or "MetLife Bank, N.A.") and legal-related liabilities, partially offset
by a reduction in corporate support expenses. The Institutional segment
contributed $178 million, or 21%, to the year over year variance primarily due
to higher non-deferrable volume-related expenses associated with general
business growth, corporate support expenses, higher expenses related to
additional Travelers incentive accruals, as well as an adjustment recorded on
DAC associated with certain long-term care products in 2005. In addition, $174
million, or 21%, of this increase is primarily attributable to higher
amortization of DAC, changes in foreign currency rates, business growth
commensurate with the increase in revenues discussed above, a decrease in the
payroll tax liability and an accrual for an early retirement program in the
International segment. Other expenses in the International segment also
increased due to higher consultant fees for growth initiative projects, an
increase in compensation and incentive expenses, as well as higher costs for
legal, marketing and other corporate allocated expenses. The Reinsurance segment
also contributed $34 million, or 4%, to the increase in other expenses primarily
due to an increase in the amortization of DAC. The Auto & Home segment
contributed $33 million, or 4%, to this increase primarily due to increased
information technology, advertising and incentive and other compensation costs.
In addition, the Individual segment contributed $11 million, or 1%, to the year
over year increase primarily due to higher corporate incentive expenses and
general spending, partially offset by the revision of prior period estimates for
certain expense, premium tax and policyholder liabilities, as well as certain
asset write-offs in the prior year and lower DAC amortization.

Net investment gains (losses) decreased by $268 million, or 153%, to a loss
of $93 million for the year ended December 31, 2005 from a net investment gain
of $175 million for the comparable 2004 period. The current year includes $208
million of net investment losses related to the acquisition of Travelers.
Excluding the acquisition of Travelers, net investment gains (losses) decreased
by $60 million, or 34%. This decrease is primarily due to losses on fixed
maturity security sales resulting from continued portfolio repositioning in the
2005 period. Significantly offsetting these reductions is an increase in gains
from the mark-to-market on derivatives in 2005. The derivative gains resulted
from changes in the value of the dollar versus major foreign currencies,
including the euro and pound sterling, and changes in U.S. interest rates during
the year ended December 31, 2005.

Income tax expense for the year ended December 31, 2005 is $1,260 million,
or 29% of income from continuing operations before provision for income taxes,
compared with $1,029 million, or 28%, for the comparable 2004 period. The
current period includes $80 million of income tax expense related to the
acquisition of Travelers. Excluding the acquisition of Travelers, income tax
expense for the year ended December 31, 2005 is $1,180 million, or 29% of income
from continuing operations before provision for income taxes, compared with
$1,029 million, or 28%, for the comparable 2004 period. The 2005 effective tax
rate differs from the corporate tax rate of 35% primarily due to the impact of
non-taxable investment income and tax credits for investments in low income
housing. In addition, the 2005 effective tax rate reflects a tax benefit of $27
million related to the repatriation of foreign earnings pursuant to Internal
Revenue Code Section 965 for which a U.S. deferred tax provision had previously
been recorded and an adjustment of a benefit of $31 million consisting primarily
of a revision in the estimate of income taxes for 2004 had been made. The 2004
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 decrease in the deferred tax valuation allowance to recognize
the effect of certain foreign net operating loss carryforwards in South Korea,
and the contribution of appreciated stock to the MetLife Foundation. In
addition, the 2004 effective tax rate reflects an adjustment for the resolution
of all issues relating to the Internal Revenue Service's audit of Metropolitan
Life's and its subsidiaries' tax returns for the years 1997-1999 and an
adjustment of a benefit of $9 million consisting primarily of a revision in the
estimate of income taxes for 2003.

Income from discontinued operations is comprised of the operations and the
gain upon disposal from the sale of MetLife Indonesia on September 29, 2005 and
SSRM on January 31, 2005, as well as net investment income and net investment
gains related to real estate properties that the Company has classified as
available-for-sale or has sold. Income from discontinued operations, net of
income taxes, increased by $1,368 million, or

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<PAGE>

661%, to $1,575 million for the year ended December 31, 2005 from $207 million
for the comparable 2004 period. This increase is primarily due to a gain of
$1,193 million, net of income taxes, on the sales of the One Madison Avenue and
200 Park Avenue properties in Manhattan, New York, and the gains on the sales of
SSRM and MetLife Indonesia of $177 million and $10 million, respectively, both
net of income taxes, in the year ended December 31, 2005. Partially offsetting
this increase is the gain on the sale of the Sears Tower property of $85
million, net of income taxes, in the year ended December 31, 2004.

During the year ended December 31, 2004, the Company recorded an $86
million charge, net of income taxes, for a cumulative effect of a change in
accounting principle in accordance with SOP 03-1, which 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. This charge is primarily related to those long-duration contract
liabilities where the amount of the liability is indexed to the performance of a
target portfolio of investment securities.

YEAR ENDED DECEMBER 31, 2004 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2003 -- THE COMPANY

Income from continuing operations increased by $808 million, or 44%, to
$2,637 million for the year ended December 31, 2004 from $1,829 million in the
comparable 2003 period. Income from continuing operations for the years ended
December 31, 2004 and 2003 includes the impact of certain transactions or
events, the timing, nature and amount of which are generally unpredictable.
These transactions are described in each applicable segment's discussion below.
These items contributed a benefit of $113 million, net of income taxes, to the
year ended December 31, 2004 and a benefit of $159 million, net of income taxes,
to the comparable 2003 period. Excluding the impact of these items, income from
continuing operations increased by $854 million for the year ended December 31,
2004 compared to the prior 2003 period. This increase is primarily the result of
an improvement in net investment gains (losses), net of income taxes, of $461
million. Also contributing to the increase is higher earnings from interest rate
spreads of approximately $306 million, net of income taxes, in the Institutional
and Individual segments. Additionally, the Individual segment contributed $186
million, net of income taxes, as a result of increased income from policy fees
on investment-type products partially offset by higher amortization associated
with DAC of $72 million, net of income taxes, and a reduction in earnings of
$101 million, net of income taxes, resulting from an increase in the closed
block policyholder dividend obligation. In addition, the Auto & Home segment's
earnings increased primarily due to an improved non-catastrophe combined ratio
and favorable claim development related to prior accident years of $113 million,
net of income taxes. This increase was partially offset by higher catastrophe
losses of $73 million, net of income taxes, in 2004.

Premiums, fees and other revenues increased by $1,996 million, or 8%, to
$26,265 million for the year ended December 31, 2004 from $24,269 million for
the comparable 2003 period. The Institutional segment contributed 53% to the
year over year increase. This increase stems largely from sales growth and the
acquisitions of new businesses in the group life and the non-medical health &
other businesses, as well as an increase in structured settlements sales and
pension close outs. The Reinsurance segment contributed approximately 36% to the
Company's year over year increase in premiums, fees and other revenues. This
growth is primarily attributable to this segment's coinsurance agreement with
Allianz Life and continued growth in its traditional life reinsurance
operations. The Individual segment contributed 6% to the year over year increase
primarily due to higher fee income, partially offset by a reduction in the
Company's closed block premiums as the business continues to run-off.

Interest rate spreads, which generally represent the margin between net
investment income and interest credited to policyholder account balances,
increased across the Institutional and Individual segments during the year ended
December 31, 2004 compared to the prior year period. Earnings from interest rate
spreads are influenced by several factors, including business growth, movement
in interest rates, and certain investment and investment-related transactions,
such as corporate joint venture income and bond and commercial

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<PAGE>

mortgage prepayment fees for which the timing and amount are generally
unpredictable and, as a result, can fluctuate from period to period.

Underwriting results in the Institutional and Individual segments in the
year ended December 31, 2004 were less favorable compared to the 2003 period.
Underwriting results are significantly influenced by mortality and morbidity
trends, claim experience and the reinsurance activity related to certain blocks
of business, and, as a result, can fluctuate from period to period. Underwriting
results in the Auto & Home segment were favorable in 2004 as the combined ratio
declined to 90.4%, excluding catastrophes, from 97.1% in the prior year period.
This result is largely due to continued improvement in both auto and homeowner
claim frequencies, lower auto severities and an increase in average earned
premiums.

Other expenses increased by $645 million, or 9%, to $7,813 million for the
year ended December 31, 2004 from $7,168 million for the comparable 2003 period.
The 2004 period reflects a $49 million reduction of a premium tax liability and
a $22 million reduction of a liability for interest associated with the
resolution of all issues relating to the Internal Revenue Service's audit of
Metropolitan Life's and its subsidiaries' tax returns for the years 1997-1999.
These decreases were partially offset by a $50 million contribution of
appreciated stock to the MetLife Foundation. The 2003 period includes the impact
of a $144 million reduction of a previously established liability related to the
Company's race-conscious underwriting settlement. In addition, the 2003 period
includes a $48 million charge related to certain improperly deferred expenses at
New England Financial and a $45 million charge related to VOBA associated with a
change in methodology in determining the liability for future policy benefits in
the Company's International segment. Excluding the impact of these transactions,
other expenses increased by $615 million, or 9%, from the comparable 2003
period. The Reinsurance segment contributed 31% to this year over year variance
primarily due to the growth in expenses associated with the Allianz Life
acquisition and continued revenue growth, as mentioned above. In addition, 27%
of this variance is primarily attributable to increases in direct business
support expenses and non-deferrable commission expenses associated with general
business growth, as well as infrastructure improvements, partially offset by
costs in 2003 associated with office consolidations and an impairment of assets
in the Institutional segment. The Individual segment contributed 23% to this
increase primarily due to accelerated DAC amortization, as well as an increase
in expenses associated with general business growth. The remainder of the
increase is the result of general business growth across the remaining segments
and Corporate & Other.

Net investment gains (losses) increased by $726 million, or 132%, to a net
investment gain of $175 million for the year ended December 31, 2004 from a net
investment loss of ($551) million for the comparable 2003 period. This increase
is primarily due to the more favorable economic environment in 2004.

Income tax expense for the year ended December 31, 2004 was $1,029 million,
or 28% of income from continuing operations before provision for income taxes,
compared with $616 million, or 25%, for the comparable 2003 period. The 2004
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 decrease in the deferred tax valuation allowance to recognize
the effect of certain foreign net operating loss carryforward in South Korea,
and the contribution of appreciated stock to the MetLife Foundation. In
addition, the 2004 effective tax rate reflects an adjustment of $91 million for
the resolution of all issues relating to the Internal Revenue Service's audit of
Metropolitan Life's and its subsidiaries' tax returns for the years 1997-1999.
Also, the 2004 effective tax rate reflects an adjustment of $9 million
consisting primarily of a revision in the estimate of income taxes for 2003. 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, and tax benefits related to the sale of foreign
subsidiaries. In addition, the 2003 effective tax rate reflects an adjustment of
a benefit of $36 million consisting primarily of a revision in the estimate of
income taxes for 2002.

The income from discontinued operations is comprised of the operations of
SSRM and net investment income and net investment gains related to real estate
properties that the Company has classified as available-for-sale. The Company
entered into an agreement to sell SSRM during the third quarter of 2004. As
previously discussed, SSRM was sold effective January 31, 2005.

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<PAGE>

Income from discontinued operations, net of income taxes, decreased $207
million, or 50%, to $207 million for the year ended December 31, 2004 from $414
million for the comparable 2003 period. The decrease is primarily due to lower
recognized net investment gains from real estate properties sold in 2004 as
compared to the prior year. For the years ended December 31, 2004 and 2003, the
Company recognized $146 million and $420 million of net investment gains,
respectively, from discontinued operations related to real estate properties
sold or held-for-sale.

INSTITUTIONAL

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

<Table>
<Caption>
YEAR ENDED DECEMBER 31,
---------------------------
2005 2004 2003
------- ------- -------
(IN MILLIONS)
<S> <C> <C> <C>
REVENUES
Premiums................................................ $11,387 $10,037 $ 9,063
Universal life and investment-type product policy
fees.................................................. 772 711 660
Net investment income................................... 5,962 4,582 4,146
Other revenues.......................................... 653 654 618
Net investment gains (losses)........................... (10) 163 (289)
------- ------- -------
Total revenues........................................ 18,764 16,147 14,198
------- ------- -------
EXPENSES
Policyholder benefits and claims........................ 12,776 11,173 10,023
Interest credited to policyholder account balances...... 1,652 1,016 974
Policyholder dividends.................................. 1 -- (1)
Other expenses.......................................... 2,229 1,972 1,854
------- ------- -------
Total expenses........................................ 16,658 14,161 12,850
------- ------- -------
Income from continuing operations before provision for
income taxes.......................................... 2,106 1,986 1,348
Provision for income taxes.............................. 706 678 485
------- ------- -------
Income from continuing operations....................... 1,400 1,308 863
Income (loss) from discontinued operations, net of
income taxes.......................................... 162 19 49
------- ------- -------
Income before cumulative effect of a change in
accounting, net of income taxes....................... 1,562 1,327 912
Cumulative effect of a change in accounting, net of
income taxes.......................................... -- (60) (26)
------- ------- -------
Net income.............................................. $ 1,562 $ 1,267 $ 886
======= ======= =======
</Table>

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<PAGE>

YEAR ENDED DECEMBER 31, 2005 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2004 -- INSTITUTIONAL

Income from continuing operations increased by $92 million, or 7%, to
$1,400 million for the year ended December 31, 2005 from $1,308 million for the
comparable 2004 period. The acquisition of Travelers accounted for $73 million
of this increase, which includes $57 million, net of income taxes, of net
investment losses. Excluding the impact of the Travelers acquisition, income
from continuing operations increased by $19 million, or 1%, from the comparable
2004 period. An increase in interest margins of $124 million, net of income
taxes, compared to the prior year period contributed to the increase in income
from continuing operations. Management attributes this increase primarily to
improvements in interest spreads for the retirement & savings and non-medical
health products of $81 million and $44 million, both net of income taxes,
respectively. Higher earnings from growth in the asset base, interest on
economic capital, corporate and real estate joint venture income and income from
securities lending activities are the primary drivers of the year over year
increase. Interest margins in group life were relatively flat with a decrease of
$1 million. The interest margins in the retirement & savings and the group life
businesses include the impact of a reduction in interest spreads compared to the
prior year period. Interest spreads are generally the percentage point
difference between the yield earned on invested assets and the interest rate the
Company uses to credit on certain liabilities. Therefore, given a constant value
of assets and liabilities, an increase in interest rate spreads would result in
higher income to the Company. Interest rate spreads for the year ended December
31, 2005 increased to 3.38% from 3.06% in the prior year period for the
non-medical health & other business. Interest rate spreads for the year ended
December 31, 2005 decreased to 1.81% and 2.04% from 1.83% and 2.19%, in the
prior year period for the retirement and savings and group life businesses,
respectively. Management generally expects these spreads to be in the range of
1.30% to 1.60%, 1.20% to 1.35%, and 1.60% to 1.80% for the non-medical health &
other, retirement & savings, and the group life businesses, respectively.
Earnings from interest rate spreads are influenced by several factors, including
business growth, movement in interest rates, and certain investment and
investment-related transactions, such as corporate joint venture income and bond
and commercial mortgage prepayment fees for which the timing and amount are
generally unpredictable. As a result, income from these investment transactions
may fluctuate from period to period. The increase in interest margins is
partially offset by a decrease of $57 million, net of income taxes, in net
investment gains (losses), which is partially offset by a decrease of $10
million, net of income taxes, in policyholder benefits and claims related to net
investment gains (losses). Also contributing to the decline in income from
continuing operations is a $14 million charge, net of income taxes, related to
an adjustment recorded on DAC associated with certain long-term care products in
2005 and a reduction of a premium tax liability of $31 million, net of income
taxes, recorded in 2004. Underwriting results decreased by $7 million, net of
income taxes, compared to the prior year. This decline is primarily due to less
favorable results of $27 million, net of income taxes, in retirement & savings
and a $24 million, net of income taxes, decrease in non-medical health & other.
These unfavorable results were partially offset by an improvement of $44
million, net of income taxes, in group life's underwriting results, primarily
due to favorable claim experience. Underwriting results are generally the
difference between the portion of premium and fee income intended to cover
mortality, morbidity or other insurance costs less claims incurred and the
change in insurance-related liabilities. Underwriting results are significantly
influenced by mortality, morbidity, or other insurance-related experience trends
and the reinsurance activity related to certain blocks of business and, as a
result, can fluctuate from period to period. In addition, increases in operating
expenses, which include higher expenses related to the Travelers integration,
have more than offset the remaining growth in premiums, fees and other revenues.

Total revenues, excluding net investment gains (losses), increased by
$2,790 million, or 17%, to $18,774 million for the year ended December 31, 2005
from $15,984 million for the comparable 2004 period. The acquisition of
Travelers accounted for $855 million of this increase. Excluding the impact of
the Travelers acquisition, total revenues, excluding net investment gains
(losses), increased by $1,935 million, or 12%, from the comparable 2004 period.
This increase is comprised of growth in premiums, fees and other revenues of
$1,266 million and higher net investment income of $669 million. The increase of
$1,266 million in premiums, fees, and other revenues is largely due to an
increase in non-medical health & other of $520 million, primarily due to growth
in the disability, dental and accidental death and dismemberment ("AD&D")
products of $360 million. In addition, continued growth in the long-term care
business contributed $138 million, of which $25 million is related to the 2004
acquisition of TIAA/CREF's long-term care business. Group life insurance
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<PAGE>

premiums, fees and other revenues increased by $481 million, which management
primarily attributes to improved sales and favorable persistency, as well as a
significant increase in premiums from two large customers. Retirement & savings'
premiums, fees and other revenues increased by $265 million, which is largely
due to growth in premiums, resulting primarily from an increase of $166 million
in structured settlement sales and $107 million in pension close-outs. Premiums,
fees and other revenues from retirement & savings products are significantly
influenced by large transactions, and as a result, can fluctuate from period to
period. In addition, net investment income increased by $669 million primarily
due to higher income from growth in the asset base driven by sales, particularly
in guaranteed interest contracts and the structured settlement business. In
addition, increases in corporate and real estate joint venture income, interest
on economic capital, and income from securities lending activities across the
majority of the businesses, and higher short-term interest rates contributed to
the growth compared to the prior year.

Total expenses increased by $2,497 million, or 18%, to $16,658 million for
the year ended December 31, 2005 from $14,161 million for the comparable 2004
period. The acquisition of Travelers accounted for $658 million of this
increase. Excluding the impact of the acquisition of Travelers, total expenses
increased by $1,839 million, or 13%, from the comparable 2004 period. This
increase is comprised of higher policyholder benefits and claims of $1,278
million, an increase in interest credited to policyholder account balances of
$334 million and an increase in other expenses of $227 million. The increase in
policyholder benefits and claims of $1,278 million is attributable to a $482
million, a $452 million, and a $344 million increase in the non-medical health &
other, group life, and retirement & savings businesses, respectively. These
increases are predominantly attributable to the business growth referenced in
the revenue discussion above. The increase in policyholder benefits and claims
in the non-medical health & other business include the impact of the acquisition
of TIAA/CREF of $43 million. These increases include $2 million and $18 million
of policyholder benefits and claims related to Hurricane Katrina in the group
life and non-medical health & other business, respectively. The increase in
interest credited to policyholder account balances of $334 million is primarily
the result of the impact of growth in guaranteed interest contracts within the
retirement & savings business. In addition, the impact of higher short-term
interest rates in the current year, also contributed to the increase. The rise
in other expenses of $227 million is primarily due to higher non-deferrable
volume-related expenses of $61 million, which are largely associated with
business growth, an increase of $39 million in corporate support expenses, and
$43 million of Travelers-related integration costs, principally incentive
accruals. In addition, expenses increased as a result of the impact of a $49
million benefit recorded in the second quarter of 2004, which is related to a
reduction in a premium tax liability. Expenses also increased by $22 million
related to an adjustment of DAC for certain long-term care products in 2005.

YEAR ENDED DECEMBER 31, 2004 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2003 -- INSTITUTIONAL

Income from continuing operations increased by $445 million, or 52%, to
$1,308 million for the year ended December 31, 2004 from $863 million for the
comparable 2003 period. An improvement of $287 million, net of income taxes, in
net investment gains (losses), which is partially offset by an increase of $63
million, net of income taxes, in policyholder benefits and claims related to net
investment gains (losses), is a significant component of the increase. In
addition, favorable interest rate spreads contributed $219 million, net of
income taxes, to the increase compared to the prior year period, with the
retirement & savings products generating $182 million, net of income taxes, of
this increase. Higher investment yields, growth in the asset base and lower
average crediting rates are the primary drivers of the year over year increase
in interest rate spreads. These spreads are generally the percentage point
difference between the yield earned on invested assets and the interest rate the
Company uses to credit on certain liabilities. Therefore, given a constant value
of assets and liabilities, an increase in interest rate spreads would result in
higher income to the Company. Interest rate spreads for the year ended December
31, 2004 increased to 2.06%, 1.66% and 1.88% for group life, retirement &
savings and the non-medical health & other businesses, respectively, from 2.04%,
1.40% and 1.51% for the group life, retirement & savings, and the non-medical
health & other businesses, respectively, in the comparable prior year period.
Management generally expects these spreads to be in the range of 1.60% to 1.80%,
1.30% to 1.45%, and 1.30% to 1.50% for the group life, retirement & savings and
the non-medical health & other businesses, respectively. Earnings from interest
rate spreads are influenced by several factors, including business growth,
movement in interest rates, and certain investment and investment-related
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<PAGE>

transactions, such as corporate joint venture income and bond and commercial
mortgage prepayment fees for which the timing and amount are generally
unpredictable. As a result, income from these investment transactions may
fluctuate from period to period. Also contributing to the increase in income
from continuing operations is a reduction in a premium tax liability of $31
million in the second quarter of 2004, net of income taxes. These increases in
income from continuing operations are partially offset by less favorable
underwriting results, which are estimated to have declined $40 million, net of
income taxes, compared to the prior year period. Management attributes this
decrease to mixed claim experience in the non-medical health & other and group
life business. Underwriting results are significantly influenced by mortality
and morbidity trends, as well as claim experience and, as a result, can
fluctuate from period to period.

Total revenues, excluding net investment gains (losses), increased by
$1,497 million, or 10%, to $15,984 million for the year ended December 31, 2004
from $14,487 million for the comparable 2003 period. Growth of $1,061 million in
premiums, fees, and other revenues contributed to the revenue increase. Group
life insurance premiums, fees and other revenues increased by $452 million,
which management primarily attributes to improved sales and favorable
persistency, as well as the acquisition of the John Hancock group life insurance
business in late 2003, which contributed $20 million to the increase.
Non-medical health & other business premiums, fees and other revenues increased
by $421 million partly due to the continued growth in long-term care of $149
million, of which $41 million is related to the 2004 acquisition of TIAA/ CREF's
long-term care business. Growth in the disability business, dental business and
AD&D products contributed $260 million to the year over year increase.
Retirement & savings' premiums, fees and other revenues increased by $188
million, which is largely due to a growth in premiums of $172 million, resulting
primarily from an increase in structured settlement sales and pension
close-outs. Premiums, fees and other revenues from retirement & savings products
are significantly influenced by large transactions, and as a result, can
fluctuate from year to year. In addition, an increase of $436 million in net
investment income, which is primarily due to higher income from growth in the
asset base, earnings on corporate joint venture income and bond and commercial
mortgage prepayment fees contributed to the overall increase in revenues. This
increase is a component of the favorable interest rate spreads discussed above.

Total expenses increased by $1,311 million, or 10%, to $14,161 million for
the year ended December 31, 2004 from $12,850 million for the comparable 2003
period. This increase is comprised of higher policyholder benefits and claims of
$1,150 million, an increase to interest credited to policyholder account
balances of $42 million and an increase in other expenses of $118 million. The
increase in policyholder benefits and claims of $1,150 million is primarily
attributable to a $453 million, $412 million, and $285 million increase in the
group life, non-medical health & other and retirement & savings businesses,
respectively. These increases are predominantly attributable to the business
growth discussed in the revenue discussion above. The increases in group life
and the non-medical health & other businesses include the impact of the
acquisition of certain businesses from John Hancock and TIAA/CREF of $11 million
and $39 million, respectively. Also included in the increase is the impact of
less favorable claim experience, primarily in the non-medical health & other
business. Interest credited to policyholder account balances increased by $42
million over the prior year period primarily as a result of the impact of growth
in guaranteed interest contracts within the retirement & savings business. Other
operating expenses increased $118 million. The largest component of this expense
growth is an increase of $92 million related to increases in direct business
support expenses. In addition, non-deferrable commissions and premium taxes
increased by $25 million. This item is net of a $49 million reduction in a
premium tax liability in the second quarter of 2004. Excluding this item,
non-deferrable commissions and premium taxes increased by $74 million, which is
commensurate with the aforementioned revenue growth. In addition, the Company
incurred infrastructure improvement costs of $34 million and expenses of $12
million related to the closing of one of the Company's disability claims centers
which were partially offset by a decline of $45 million primarily relating to
expenses incurred in the prior year for office closures and consolidations and
an impairment of related assets.

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<PAGE>

INDIVIDUAL

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

<Table>
<Caption>
YEAR ENDED DECEMBER 31,
---------------------------
2005 2004 2003
------- ------- -------
(IN MILLIONS)
<S> <C> <C> <C>
REVENUES
Premiums................................................ $ 4,502 $ 4,204 $ 4,363
Universal life and investment-type product policy
fees.................................................. 2,476 1,805 1,564
Net investment income................................... 6,535 6,031 6,069
Other revenues.......................................... 477 422 380
Net investment gains (losses)........................... (50) 91 (311)
------- ------- -------
Total revenues........................................ 13,940 12,553 12,065
------- ------- -------
EXPENSES
Policyholder benefits and claims........................ 5,420 5,107 5,048
Interest credited to policyholder account balances...... 1,775 1,618 1,734
Policyholder dividends.................................. 1,670 1,657 1,721
Other expenses.......................................... 3,272 2,879 2,783
------- ------- -------
Total expenses........................................ 12,137 11,261 11,286
------- ------- -------
Income from continuing operations before provision for
income taxes.......................................... 1,803 1,292 779
Provision for income taxes.............................. 595 428 260
------- ------- -------
Income from continuing operations....................... 1,208 864 519
Income from discontinued operations, net of income
taxes................................................. 295 21 51
------- ------- -------
Net income.............................................. $ 1,503 $ 885 $ 570
======= ======= =======
</Table>

YEAR ENDED DECEMBER 31, 2005 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2004 -- INDIVIDUAL

Income from continuing operations increased by $344 million, or 40%, to
$1,208 million for the year ended December 31, 2005 from $863 million for the
comparable 2004 period. The acquisition of Travelers accounted for $96 million
of the increase which includes $66 million, net of income taxes, of net
investment losses. Included in the Travelers results is a charge for the
establishment of an excess mortality reserve related to group of specific
policies. In connection with MetLife's acquisition of Travelers, the Company has
performed reviews of Travelers underwriting criteria in its effort to refine its
estimated fair values for the purchase allocation. As a result of these reviews
and actuarial analyses, and to be consistent with MetLife's existing reserving
methodologies, the Company has established an excess mortality reserve on a
specific group of policies. This resulted in a charge of $20 million, net of
income taxes, to fourth quarter results. The Company expects to complete its
reviews and refine its estimate of the excess mortality reserve by June 30,
2006. Excluding the impact of the acquisition of Travelers, income from
continuing operations increased by $248 million, or 29%, for the comparable 2004
period. Included in this increase are net investment losses of $26 million, net
of income taxes. Improvements in interest rate spreads contributed $117 million,
net of income taxes, to the year over year increase. These spreads are generally
the percentage point difference between the yield earned on invested assets and
the interest rate the Company uses to credit on certain liabilities. Therefore,
given a constant value of assets and liabilities, an increase in interest rate
spreads would result in higher income to the Company. Interest rate spreads are
influenced by several factors, including business growth, movement in interest
rates, and certain investment and investment-related transactions, such as
corporate joint venture income and prepayment fees on bonds and commercial
mortgages, the timing and amount of which are generally unpredictable. As a
result, income from these investment transactions may

77
<PAGE>

fluctuate from period to period. Fee income from separate account products
increased by $126 million, net of income taxes, primarily related to growth in
the business and favorable market conditions. Favorable underwriting results in
life products contributed $37 million, net of income taxes, to the increase in
income from continuing operations. Underwriting results are generally the
difference between the portion of premium and fee income intended to cover
mortality, morbidity or other insurance costs less claims incurred and the
change in insurance-related liabilities. Underwriting results are significantly
influenced by mortality, morbidity, or other insurance-related experience trends
and the reinsurance activity related to certain blocks of business and, as a
result, can fluctuate from period to period. The decrease in the closed-block
related policyholder dividend obligation of $27 million, net of income taxes,
lower annuity net guaranteed benefit costs of $12 million, net of income taxes,
and lower DAC amortization of $6 million, net of income taxes, all contributed
to the increase. These increases in income from continuing operations are
partially offset by lower net investment income on blocks of business that are
not driven by interest rate spreads of $19 million, net of income taxes. The
increase in income from continuing operations is partially offset by higher
expenses of $10 million, net of income taxes, primarily due to higher operating
costs offset by the impact of revisions to certain expense, premium tax and
policyholder liability estimates in the current year and certain asset write-
offs in the prior year. Additionally, offsetting the increase in income from
continuing operations, is a revision to the estimate for policyholder dividends
of $9 million, net of income taxes, which occurred in the prior year. The
changes in tax rates between years accounted for a decrease in income from
continuing operations of $15 million.

Total revenues, excluding net investment gains (losses), increased by
$1,528 million, or 12%, to $13,990 million for the year ended December 31, 2005
from $12,462 million for the comparable 2004 period. The acquisition of
Travelers accounted for $975 million of the increase. Excluding the impact of
the acquisition of Travelers, total revenues, excluding net investment gains
(losses) increased by $553 million, or 4%, to $13,015 million for the year ended
December 31, 2005 from $12,462 million for the comparable 2004 period. This
increase includes higher fee income primarily from variable annuity and
universal life products of $239 million resulting from a combination of growth
in the business and improved overall market performance. Policy fees from
variable life and annuity and investment-type products are typically calculated
as a percentage of the average assets in policyholder accounts. The value of
these assets can fluctuate depending on equity performance. In addition,
management attributes higher premiums of $170 million in 2005 to the active
marketing of income annuity products. Although premiums associated with the
Company's closed block of business continue to decline, as expected, by $94
million, an increase in premiums of $130 million from other life products more
than offset the decline of the closed block. Included in the premium increase of
the other life products is the impact of growth in the business and a new
reinsurance strategy where more business is retained. Net investment income
increased by $108 million resulting from higher joint venture income and bond
and commercial mortgage prepayment fees partially offset by a decline in bond
yields.

Total expenses increased by $876 million, or 8%, to $12,137 million for the
year ended December 31, 2005 from $11,261 million for the comparable 2004
period. The acquisition of Travelers accounted for $761 million of the increase.
Excluding the impact from the acquisition of Travelers, total expenses increased
by $115 million, or 1%, to $11,376 million for the year ended December 31, 2005
from $11,261 million for the comparable 2004 period. Higher expenses are
primarily the result of higher policyholder benefits primarily due to the
increase in future policy benefits of $207 million, commensurate with the net
increase in premium on annuity and life products discussed above, partially
offset by $5 million due to better mortality in life products. Also partially
offsetting the increase in policyholder benefits was a reduction in the closed
block-related policyholder dividend obligation of $41 million and a benefit of
$18 million associated with the hedging of guaranteed annuity benefit riders.
The reduction in the closed block-related policyholder dividend obligation was
driven by lower net investment income, offset by higher realized gains in the
closed block. Interest credited to policyholder account balances decreased by
$45 million due to lower crediting rates, partially offset by the growth in
policyholder account balances. In addition, total expenses increased by $13
million due to a revision in the estimate of policyholder dividends in the prior
period. Other expenses increased primarily due to higher corporate incentive
expenses of $60 million and higher general spending of $28 million. The current
year includes revisions to prior period estimates for certain expense, premium
tax and policyholder liabilities which reduce the current year expenses while
the prior period includes certain asset write-offs which increased
78
<PAGE>

the prior year expenses. The impact of these two items resulted in a decrease in
other expenses of $73 million. Also offsetting the increase in other expenses is
lower DAC amortization of $9 million resulting from net investment losses and
adjustments for management's update of assumptions used to determine estimated
gross margins partially offset by growth in the business.

YEAR ENDED DECEMBER 31, 2004 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2003 -- INDIVIDUAL

Income from continuing operations increased by $345 million, or 66%, to
$864 million for the year ended December 31, 2004 from $519 million for the
comparable 2003 period. Included in this increase is an improvement in net
investment gains (losses) of $269 million, net of income taxes. This increase
includes additional fee income of $186 million, net of income taxes, primarily
related to separate account products. In addition, improvement in interest rate
spreads contributed $81 million, net of income taxes, to the year over year
increase. These spreads are generally the percentage point difference between
the yield earned on invested assets and the interest rate the Company uses to
credit on certain liabilities. Therefore, given a constant value of assets and
liabilities, an increase in interest rate spreads would result in higher income
to the Company. Interest rate spreads include income from certain investment
transactions, including corporate joint venture income and bond and commercial
mortgage prepayment fees, the timing and amount of which are generally
unpredictable. As a result, income from these investment transactions may
fluctuate from year to year. Additionally, the charge of $32 million, net of
income taxes, in 2003 related to certain improperly deferred expenses at New
England Financial, and a reduction in policyholder dividends of $43 million, net
of income taxes, in 2004 contributed to the increase in income from continuing
operations. These increases in income from continuing operations are partially
offset by a reduction in earnings of $101 million, net of income taxes,
resulting from an increase in the closed block-related policyholder dividend
obligation, associated primarily with an improvement in net investment gains
(losses). Higher DAC amortization of $72 million, net of income taxes, also
increased expenses for the year ended December 31, 2004. Additionally,
offsetting these increases are lower net investment income on traditional life
and income annuity products of $32 million, net of income taxes. The application
of SOP 03-1 and the corresponding cost of hedging guaranteed annuity benefit
riders reduced earnings by $30 million, net of income taxes. In addition, less
favorable underwriting results in the traditional and universal life products of
$22 million, net of income taxes, and higher general spending of $17 million,
net of income taxes, added to this offset. These underwriting results are
significantly influenced by mortality experience and the reinsurance activity
related to certain blocks of business and, as a result, can fluctuate from
period to period.

Total revenues, excluding net investment gains (losses), increased by $86
million, or 1%, to $12,462 million for the year ended December 31, 2004 from
$12,376 million for the comparable 2003 period. This increase includes higher
fee income primarily from separate account products of $256 million resulting
from a combination of growth in the business and improved overall market
performance. Policy fees from variable life and annuity and investment-type
products are typically calculated as a percentage of the average assets in
policyholder accounts. The value of these assets can fluctuate depending on
equity performance. In addition, management attributes higher premiums of $37
million in 2004 to the active marketing of income annuity products. The
increased volume of sales in 2004 also resulted in higher broker/dealer and
other subsidiaries revenues of $27 million. Partially offsetting the increases
in total revenues for the year ended December 31, 2004 are lower premiums of
$196 million which are primarily related to the Company's closed block of
business which decreased by $209 million and continues to run off at
management's expected range of 3% to 6% per year. In addition, lower net
investment income of $38 million resulting from lower investment yields offset
increases in total revenues.

Total expenses decreased by $25 million, or less than 1%, to $11,261
million for the year ended December 31, 2004 from $11,286 million for the
comparable 2003 period. Lower expenses are primarily the result of a $193
million decrease in the closed block policyholder benefits, commensurate with
the net decrease in premiums and a $116 million decline in interest credited to
policyholder account balances due to lower crediting rates. Also included in the
decrease in expenses are lower policyholder dividends of $64 million primarily
resulting from reductions in the dividend scale in late 2003 and a charge in
2003 related to certain improperly deferred expenses at New England Financial of
$48 million. Partially offsetting these decreases in

79
<PAGE>

expenses is a $151 million increase in the closed block-related policyholder
dividend obligation based on positive performance of the closed block and higher
DAC amortization of $108 million. The increase in DAC amortization is a result
of accelerated amortization resulting from improvement in net investment gains
(losses) and the update of management's assumptions used to determine estimated
gross margins. Additionally, offsetting the decrease to expenses is a $46
million increase from the application of SOP 03-1 and the corresponding cost of
hedging guaranteed annuity benefit riders, a $35 million increase in future
policy benefits commensurate with the increase in income annuity premiums, and a
$10 million increase in policyholder benefits primarily due to higher
amortization of deferred sales inducements due to growth in expenses. Further,
the decrease in expenses was offset by higher general spending of $26 million
and a $10 million increase in broker/dealer and other subsidiary-related
expenses. Additionally, unfavorable underwriting results in the traditional and
universal life products of $9 million contributed to the increase.

AUTO & HOME

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

<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------
2005 2004 2003
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
REVENUES
Premiums................................................... $2,911 $2,948 $2,908
Net investment income...................................... 181 171 158
Other revenues............................................. 33 35 33
Net investment gains (losses).............................. (12) (9) (15)
------ ------ ------
Total revenues........................................... 3,113 3,145 3,084
------ ------ ------
EXPENSES
Policyholder benefits and claims........................... 1,994 2,079 2,139
Policyholder dividends..................................... 3 2 2
Other expenses............................................. 828 795 756
------ ------ ------
Total expenses........................................... 2,825 2,876 2,897
------ ------ ------
Income before provision for income taxes................... 288 269 187
Provision for income taxes................................. 64 61 30
------ ------ ------
Net income................................................. $ 224 $ 208 $ 157
====== ====== ======
</Table>

YEAR ENDED DECEMBER 31, 2005 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2004 -- AUTO & HOME

Net income increased by $16 million, or 8%, to $224 million for the year
ended December 31, 2005 from $208 million for the comparable 2004 period. The
increase is primarily the result of improvements in the development of prior
years claims of $40 million, net of income taxes, and an improvement in the non-
catastrophe combined ratio resulting in $16 million, net of income taxes,
primarily due to lower automobile and homeowner claim frequencies. Also
contributing to this increase in net income is an improvement in losses from the
involuntary Massachusetts automobile plan of $12 million, net of income taxes,
an increase in net investment income of $6 million, net of income taxes, and an
increase in earned premium of $4 million, net of income taxes, as discussed
below. Offsetting these improved results, is an increase in catastrophes,
including Hurricanes Katrina and Wilma of $63 million, net of income taxes.

Total revenues, excluding net investment gains (losses), decreased by $29
million, or 1%, to $3,125 million for the year ended December 31, 2005 from
$3,154 million for the comparable 2004 period. This decrease is primarily
attributable to reinstatement and additional reinsurance-related premiums due to
Hurricane Katrina of $43 million. This decrease was partially offset by higher
net investment income of $10 million,

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<PAGE>

primarily due to a change in the allocation of economic capital, offset by a
lower yield on a slightly higher invested asset base and an increase in earned
premium of $6 million primarily due to rate increases, higher inflation guard
endorsements and higher insurance-to-value programs, all in the homeowners
business.

Total expenses decreased by $51 million, or 2%, to $2,825 million for the
year ended December 31, 2005 from $2,876 million for the comparable 2004 period.
This decrease is predominantly due to improved non-catastrophe losses of $32
million. This is primarily due to lower non-catastrophe automobile and homeowner
claim frequencies of $18 million and a smaller exposure base of $15 million for
the year ended December 31, 2005 versus the comparable 2004 period. Improvement
in the development of losses reported in prior years contributed $61 million.
Unallocated claim expenses, excluding the expenses associated with Hurricane
Katrina, decreased by $28 million mainly due to a smaller increase in the year
over year change in unallocated claim expense liability due to a smaller
increase in the related loss reserve and related unallocated claim expense
reserve rate. Assumed losses from the involuntary Massachusetts automobile plan
decreased by $18 million primarily due to improved claim frequency and severity
trends. These improvements were partially offset by an increase in catastrophe
losses, including Hurricanes Katrina and Wilma, of $54 million and an increase
in other expenses of $33 million primarily as a result of higher information
technology, advertising and compensation costs. The combined ratio, excluding
catastrophes and before the reinstatement premiums and other reinsurance-related
premium adjustments due to Hurricane Katrina, is 86.7% for the year ended
December 31, 2005 versus 90.4% for the comparable 2004 period.

YEAR ENDED DECEMBER 31, 2004 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2003 -- AUTO & HOME

Net income increased by $51 million, or 32%, to $208 million for the year
ended December 31, 2004 from $157 million for the comparable 2003 period. This
increase is primarily attributable to an improved non-catastrophe combined
ratio, which resulted in a benefit of $52 million, net of income taxes, improved
claim development related to prior accident years of $61 million, net of income
taxes, and an increase in net investment income of $13 million, net of income
taxes. Partially offsetting these favorable variances are increased catastrophe
losses of $73 million, net of income taxes. This increase resulted from the four
hurricanes that struck the Southeastern United States in August and September of
2004.

Total revenues, excluding net investment gains (losses), increased by $55
million, or 2%, to $3,154 million for the year ended December 31, 2004 from
$3,099 million for the comparable 2003 period. This increase is primarily
attributable to a $40 million increase in premiums, which is largely the result
of an increase in the average earned premium resulting from continued rate
increases. In addition, a $13 million increase in net investment income is
largely attributable to growth in the underlying asset base, an increase in the
investment yield and higher income related to tax advantaged municipal bonds.

Total expenses decreased by $21 million, or 1%, to $2,876 for the year
ended December 31, 2004 from $2,897 million for the comparable 2003 period. This
decrease is the result of an improvement in policyholder benefits and claims due
to a favorable change of $94 million in prior year claim development, as well as
a decrease in expenses of $80 million resulting from an improved non-catastrophe
combined ratio primarily attributable to lower automobile and homeowners claim
frequencies. These favorable changes in expenses are partially offset by an
increase in losses from catastrophes of $112 million and a $39 million increase
in expenses primarily due to inflation and employee and other related labor
costs. The combined ratio excluding catastrophes declined to 90.4% for the year
ended December 31, 2004 from 97.1% for the comparable 2003 period.

81
<PAGE>

INTERNATIONAL

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

<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------
2005 2004 2003
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
REVENUES
Premiums.................................................... $2,186 $1,690 $1,631
Universal life and investment-type product policy fees...... 579 349 271
Net investment income....................................... 844 585 500
Other revenues.............................................. 20 23 80
Net investment gains (losses)............................... 5 23 8
------ ------ ------
Total revenues............................................ 3,634 2,670 2,490
------ ------ ------
EXPENSES
Policyholder benefits and claims............................ 2,128 1,611 1,456
Interest credited to policyholder account balances.......... 278 151 143
Policyholder dividends...................................... 5 6 9
Other expenses.............................................. 1,000 614 652
------ ------ ------
Total expenses............................................ 3,411 2,382 2,260
------ ------ ------
Income from continuing operations before provision for
income taxes.............................................. 223 288 230
Provision (benefit) for income taxes........................ 36 86 17
------ ------ ------
Income from continuing operations........................... 187 202 213
Income (loss) from discontinued operations, net of income
taxes..................................................... 5 (9) (5)
------ ------ ------
Income before cumulative effect of a change in accounting,
net of income taxes....................................... 192 193 208
Cumulative effect of a change in accounting, net of income
taxes..................................................... -- (30) --
------ ------ ------
Net income.................................................. $ 192 $ 163 $ 208
====== ====== ======
</Table>

YEAR ENDED DECEMBER 31, 2005 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2004 -- INTERNATIONAL

Income from continuing operations decreased by $15 million, or 7%, to $187
million for the year ended December 31, 2005 from $202 million for the
comparable 2004 period. The acquisition of Travelers accounted for a loss from
continuing operations of $24 million including net investment losses of $14
million, net of income taxes. Excluding the impact of the Travelers acquisition,
income from continuing operations increased by $9 million, or 4%, over the prior
year. South Korea's income from continuing operations increased by $26 million,
net of income taxes, primarily due to growth in business, specifically higher
sales of its variable universal life product and a larger in-force business.
Chile's income from continuing operations increased by $8 million primarily due
to growth in business, specifically in the new bank distribution channel, as
well as an increase in net investment income primarily due to higher inflation
rates. Mexico's income from continuing operations increased by $8 million,
primarily due to tax benefits of $27 million under the American Jobs Creation
Act of 2004, higher net investment earnings, an adjustment to the amortization
of DAC for management's update of assumptions used to determine estimated gross
margins and several other one-time revenue items. These increases in Mexico were
substantially offset by an increase in certain policyholder liabilities caused
by unrealized investment losses on the invested assets supporting those
liabilities, as well as an increase in expenses for start up costs for the new
Mexican Pension Business ("AFORE") and contingency liabilities. Partially
offsetting these increases in income from continuing operations was a decrease
in Canada of $13 million, net of income taxes, primarily due to a realignment of
economic capital, offset by the

82
<PAGE>

strengthening of the liability on its pension business related to changes in
mortality assumptions in the prior year and higher home office and
infrastructure expenditures in support of the segment growth of $16 million, net
of income taxes. The remainder of the variance can be attributed to various
other countries. Additionally, $4 million of the increase in income from
continuing operations is due to changes in the foreign currency exchange rates.

Total revenues, excluding net investment gains (losses), increased by $982
million, or 37%, to $3,629 million for the year ended December 31, 2005 from
$2,647 million for the comparable 2004 period. The acquisition of Travelers
accounted for $377 million of this increase. Excluding the impact of the
Travelers acquisition, total revenues, excluding net investment gains, increased
by $605 million, or 23%, over the comparable 2004 period. Premiums, fees and
other revenues increased by $452 million, or 22%, to $2,514 million for the year
ended December 31, 2005 from $2,062 million for the comparable 2004 period. This
increase is primarily the result of continued business growth through increased
sales and renewal business within South Korea, Brazil and Taiwan of $216
million, $48 million and $31 million, respectively. Mexico's premiums, fees and
other revenues increased by $78 million primarily due to increases in the
institutional and agency business channels, as well as several one-time other
revenue items of $19 million. Chile's premiums, fees and other revenues
increased by $64 million mainly due to its new bank distribution channel. Net
investment income increased by $153 million, or 26%, to $738 million for the
year ended December 31, 2005 from $585 million for the comparable 2004 period.
Mexico's net investment income increased by $89 million due principally to
increases in interest rates and also as a result of an increase in invested
assets. Chile's net investment income increased by $58 million primarily due to
higher inflation rates and an increase in invested assets. Investment valuations
and returns on invested assets in Chile are linked to the inflation rates. South
Korea and Taiwan's net investment income increased by $20 million and $11
million, respectively, primarily due to an increase in their invested assets.
These increases in net investment income were partially offset by a decrease of
$21 million due to the realignment of economic capital. The remainder of the
increases in total revenues, excluding net investment gains can be attributed to
business growth and investment income in other countries. Additionally, $221
million of the increase in total revenues, excluding net investment gains
(losses), is due to changes in foreign currency exchange rates.

Total expenses increased by $1,029 million, or 43%, to $3,411 million for
the year ended December 31, 2005 from $2,382 million for the comparable 2004
period. The acquisition of Travelers accounted for $404 million of this
increase. Excluding the impact of the Travelers acquisition, total expenses
increased by $625 million, or 26%, over the comparable 2004 period. Policyholder
benefits and claims, policyholder dividends and interest credited to
policyholder account balances increased by $451 million, or 26%, to $2,219
million for the year ended December 31, 2005 from $1,768 million for the
comparable 2004 period. Policyholder benefits and claims and dividends in Mexico
increased by $177 million primarily due to an increase in certain policyholder
liabilities caused by unrealized investment gains (losses) on the invested
assets supporting those liabilities of $110 million, as well as an increase in
interest credited to policyholder accounts of $65 million in line with the net
investment income increase in Mexico. South Korea, Taiwan and Brazil's
policyholder benefits and claims, policyholder dividends and interest credited
to policyholder accounts increased by $122 million, $41 million and $27 million,
respectively, commensurate with the business growth discussed above. Chile's
policyholder benefits and claims, policyholder dividends and interest credited
to policyholder accounts increased by $86 million due to the business growth
primarily in the bank distribution channel business, as well as to an increase
in the liabilities for annuity benefits, which, like net investment income on
related assets, are linked to the inflation rate. Hong Kong's policyholder
benefits and claims and policyholder dividends increased by $3 million due to
higher claims and the associated increase in liabilities in 2005. These
increases were partially offset by a decrease of $10 million in Canada's
policyholder benefits and claims, policyholder dividends and interest credited
to policyholder account balances primarily due to the strengthening of the
liability on its pension business related to changes in mortality assumptions in
the prior year. Other expenses increased by $174 million, or 28%, to $788
million for the year ended December 31, 2005 from $614 million for the
comparable 2004 period. South Korea's other expenses increased by $73 million
primarily due to higher amortization of deferred acquisition costs driven by the
rapid growth in the business, a decrease in a payroll tax liability in the prior
year resulting from the resolution of the related tax matter, an accrual for an
early retirement program in 2005, as well as additional overhead expenses in
line with the
83
<PAGE>

growth in business. Mexico's other expenses increased by $17 million primarily
due to incurred start up costs during the current year associated with the AFORE
operations, an increase in liabilities related to potential employment matters
in 2005, an increase in consulting services and a decrease in the prior year of
severance accruals. Partially offsetting these increases in Mexico is a decrease
in the amortization of DAC due to an adjustment for management's update of
assumptions used to determine estimated gross margins. Brazil's other expenses
increased by $28 million, primarily due to growth in business discussed above
including an increase in non-deferrable sales expenses. Chile's other expenses
increased by $24 million due primarily to increases in non-deferrable expenses
for the bank distribution channel of business in 2005. Other expenses at home
office also increased by $26 million primarily due to increased consultant fees
for growth initiative projects, an increase in compensation resulting from
increased headcount, higher incentive compensation, as well as higher costs for
legal, marketing and other corporate support expenses. The remainder of the
increase in total expenses can be attributed to business growth in other
countries. Additionally, a component of the growth in total expenses is due to
changes in foreign currency exchange rates of $202 million.

YEAR ENDED DECEMBER 31, 2004 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2003 -- INTERNATIONAL

Income from continuing operations decreased by $11 million, or 5%, to $202
million for the year ended December 31, 2004 from $213 million for the
comparable 2003 period. The prior year includes a $62 million benefit, net of
income taxes, from the merger of the Mexican operations and a reduction in
policyholder liabilities resulting from a change in methodology in determining
the liability for future policy benefits, a $12 million tax benefit in Chile
related to the merger of two subsidiaries and an $8 million benefit, net of
income taxes, related to reinsurance treaties. These increases are partially
offset by a $19 million charge, net of income taxes, in Taiwan related to an
increased loss recognition liability due to low interest rates relative to
product guarantees. The prior year also includes a $4 million benefit, net of
income taxes, related to the Spanish operations, which were sold in 2003.
Excluding these items, income from continuing operations increased by $56
million, or 38%. A significant component of this increase is attributable to the
application of SOP 03-1 in 2004, which resulted in a $21 million decrease, net
of income taxes, in policyholder liabilities in Mexico. The primary driver of
the 2004 impact is a decline in the fair value of the underlying assets
associated with these contracts. Additionally, a $10 million, net of income
taxes, increase in net investment gains is primarily due to the gain from the
sale of the Spanish operations. In addition, 2004 includes $8 million of certain
tax-related benefits in South Korea. The remainder of the increase can be
attributed to business growth in other countries. Additionally, $8 million of
the decrease in income from continuing operations is due to changes in the
foreign currency exchange rates.

Total revenues, excluding net investment gains (losses), increased by $165
million, or 7%, to $2,647 million for the year ended December 31, 2004 from
$2,482 million for the comparable 2003 period. The prior year period includes
$230 million of revenues related to the Spanish operations, which were sold in
2003. Excluding the sale of these operations, revenues increased by $395
million, or 18%. The Company's Mexican and Chilean operations increased revenues
by $144 million and $58 million, respectively, primarily due to growth in the
business, as well as improved investment earnings. The Company's operations in
South Korea and Taiwan also have increased revenues by $121 million and $34
million, respectively, primarily due to increased new sales and renewal
business. The remainder of the increase can be attributed to business growth in
other countries. Changes in foreign currency exchange rates contributed $14
million to the year over year increase in total revenues.

Total expenses increased by $122 million, or 5%, to $2,382 million for the
year ended December 31, 2004 from $2,260 million for the comparable 2003 period.
The prior year includes expenses of $223 million related to the Spanish
operations, which were sold in 2003. The prior year also includes a $79 million
benefit related to a reduction in the Mexican operation's policyholder
liabilities resulting from a change in methodology in determining the liability
for future policy benefits, partially offset by a related increase of $45
million in amortization of VOBA. Additionally, Taiwan's 2003 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. Excluding these
items, expenses increased $341 million, or 17%, over the prior year. Expenses
grew by $71 million, $98 million, $58 million and $36 million for the operations
in Mexico, South Korea, Chile and Taiwan,

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respectively, which is commensurate with the revenue growth discussed above. In
addition, 2004 includes a $33 million decrease in Mexico's policyholder
liabilities resulting from the application of SOP 03-1. Canada's expenses
increased by $13 million due primarily to the strengthening of the liability on
its pension business related to changes in mortality assumptions in the fourth
quarter of 2004. The remainder of the increase in total expenses is primarily
related to the ongoing investment in infrastructure. Changes in foreign currency
exchange rates contributed $18 million to the year over year increase in total
expenses.

REINSURANCE

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

<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------
2005 2004 2003
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
REVENUES
Premiums.................................................... $3,869 $3,348 $2,648
Universal life and investment-type product policy fees...... -- -- --
Net investment income....................................... 606 538 431
Other revenues.............................................. 58 56 47
Net investment gains (losses)............................... 22 59 62
------ ------ ------
Total revenues............................................ 4,555 4,001 3,188
------ ------ ------
EXPENSES
Policyholder benefits and claims............................ 3,206 2,694 2,109
Interest credited to policyholder account balances.......... 220 212 184
Policyholder dividends...................................... -- 1 --
Other expenses.............................................. 991 957 764
------ ------ ------
Total expenses............................................ 4,417 3,864 3,057
------ ------ ------
Income before provision for income taxes.................... 138 137 131
Provision for income taxes.................................. 46 46 45
------ ------ ------
Net income.................................................. $ 92 $ 91 $ 86
====== ====== ======
</Table>

YEAR ENDED DECEMBER 31, 2005 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2004 -- REINSURANCE

Net income increased by $1 million, or 1%, to $92 million for the year
ended December 31, 2005 from $91 million for the comparable 2004 period. This
increase is attributable to a 14% increase in revenues, primarily due to new
premiums from facultative and automatic treaties and renewal premiums on
existing blocks of business in the U.S. and international operations, as well as
an increase in net investment income due to growth in RGA's operations and
invested asset base. The increase in net income is partially offset by a
reduction in net investment gains of $12 million, net of income taxes and
minority interest, and a higher loss ratio in the current year, primarily due to
unfavorable mortality experience as a result of high claim levels in the U.S.
and the U.K. during the first six months of the year. Reserve strengthening in
RGA's Argentine pension business in 2005 reduced net income by $11 million, net
of income taxes and minority interest. The comparable 2004 period included a
negotiated claim settlement in RGA's accident and health business, reducing net
income by $8 million, net of income taxes and minority interest. The Argentine
pension business and the accident and health business are currently in run-off.

Total revenues, excluding net investment gains (losses), increased by $591
million, or 15%, to $4,533 million for the year ended December 31, 2005 from
$3,942 million for the comparable 2004 period primarily due to a $521 million,
or 16%, increase in premiums and a $68 million, or 13%, increase in net
investment income. New premiums from facultative and automatic treaties and
renewal premiums on existing

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<PAGE>

blocks of business in the U.S. and international operations 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. The growth in net investment income is the
result of the growth in RGA's operations and invested asset base. Additionally,
a component of the total revenue increase is attributable to foreign currency
exchange rate movements contributing an estimated $49 million.

Total expenses increased by $553 million, or 14%, to $4,417 million for the
year ended December 31, 2005 from $3,864 million for the comparable 2004 period.
This increase is commensurate with growth in revenues and is primarily
attributable to an increase of $520 million in policyholder benefits and claims
and interest credited to policyholder account balances, primarily associated
with RGA's growth in insurance in force of approximately $270 billion, the
aforementioned unfavorable mortality experience in the U.S. and U.K. during the
first six months of the year, and strengthening of reserves of $33 million for
the Argentine pension business. The comparable 2004 period included a negotiated
claim settlement in RGA's accident and health business of $24 million and $18
million in policy benefits and claims as a result of the Indian Ocean tsunami on
December 26, 2004 and claims development associated with the reinsurance of the
Argentine pension business. Other expenses increased by $34 million, or 4%,
primarily due to an increase in the amortization of DAC. Changes in DAC,
included in other expenses, can vary from period to period primarily due to
changes in the mixture of the business being reinsured. Additionally, $46
million of the total expense increase is attributable to foreign currency
exchange rate movements.

YEAR ENDED DECEMBER 31, 2004 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2003 -- REINSURANCE

Net income increased by $5 million, or 6%, to $91 million for the year
ended December 31, 2004 from $86 million for the comparable 2003 period. This
increase is attributable to a 26% increase in revenues, primarily due to strong
premium growth across all of RGA's geographical segments, which includes the
effect of the Allianz Life transaction. The growth in income from continuing
operations is partially offset by higher minority interest expense as the
Company's ownership in RGA decreased from 59% to 52% in the comparable periods
and a negotiated claim settlement in RGA's accident and health business, which
is currently in run-off, of $8 million for the third quarter of 2004, net of
income taxes and minority interest.

Total revenues, excluding net investment gains (losses), increased by $816
million, or 26%, to $3,942 million for the year ended December 31, 2004 from
$3,126 million for the comparable 2003 period due primarily to a $700 million
increase in premiums. The premium increase during the year ended December 31,
2004 is partially the result of RGA's coinsurance agreement with Allianz Life
under which RGA assumed 100% of Allianz Life's United States traditional life
reinsurance business. This transaction closed during 2003, with six months of
reinsurance activity recorded in 2003, as compared to twelve months in 2004. New
premiums from facultative and automatic treaties and renewal premiums on
existing blocks of business in the United States and certain international
operations also contributed to the premium growth. Premium levels are
significantly influenced by large transactions, such as the Allianz Life
transaction, and reporting practices of ceding companies, and as a result, can
fluctuate from period to period. Net investment income also contributed to
revenue growth, increasing $107 million, or 25%, to $538 million in 2004 from
$431 million in 2003. The growth in net investment income is the result of the
growth in RGA's operations and invested asset base, as well as the conversion of
a large reinsurance treaty from a funds withheld to coinsurance basis which
resulted in an increase of $12 million in net investment income. Additionally, a
component of the total revenue increase is attributable to foreign currency
exchange rate movements contributing an estimated $99 million.

Total expenses increased by $807 million, or 26%, to $3,864 million for the
year ended December 31, 2004 from $3,057 million for the comparable 2003 period.
This increase is commensurate with the growth in revenues and is primarily
attributable to an increase of $613 million in policyholder benefits and claims
and interest credited to policyholder account balances, primarily associated
with RGA's growth in insurance in force of approximately $200 billion, a
negotiated claim settlement in RGA's accident and health business of $24
million, and the inclusion of only six months of results from the Allianz Life
transaction in the prior year. The growth in interest credited is associated
with an increase in the account balances of market value adjusted annuity
products and is generally offset by corresponding change in investment income.
Also, during the fourth quarter of 2004, RGA recorded approximately $18 million
in policy benefits and claims as a result of
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<PAGE>

the Indian Ocean tsunami on December 26, 2004 and claims development associated
with its reinsurance of Argentine pension business. Other expenses increased
primarily due to an increase of $106 million in allowances and related expenses
on assumed reinsurance associated with RGA's growth in premiums and insurance in
force and $15 million in additional amortization of DAC from the conversion of a
large reinsurance treaty from a funds withheld to coinsurance basis. The balance
of the growth in other expenses is primarily due to additional costs in the U.S.
associated with the Allianz Life transaction, start-up costs in various
international markets, and the aforementioned increase in minority interest
expense from $114 million in 2003 to $161 million in 2004. Additionally, $95
million of the total expense increase is attributable to foreign currency
exchange rate movements.

CORPORATE & OTHER

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

<Table>
<Caption>
YEAR ENDED DECEMBER 31,
-------------------------
2005 2004 2003
------- ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
REVENUES
Premiums.................................................... $ 5 $ (27) $ (38)
Universal life and investment-type product policy fees...... 1 2 --
Net investment income....................................... 782 457 168
Other revenues.............................................. 30 8 41
Net investment gains (losses)............................... (48) (152) (6)
------ ----- -----
Total revenues............................................ 770 288 165
------ ----- -----
EXPENSES
Policyholder benefits and claims............................ (18) (2) 36
Other expenses.............................................. 947 596 359
------ ----- -----
Total expenses............................................ 929 594 395
------ ----- -----
Income (loss) from continuing operations before income tax
benefit................................................... (159) (306) (230)
Income tax benefit.......................................... (187) (270) (221)
------ ----- -----
Income from continuing operations........................... 28 (36) (9)
Income from discontinued operations, net of income taxes.... 1,113 176 319
------ ----- -----
Income before cumulative effect of a change in accounting,
net of income taxes....................................... 1,141 140 310
Cumulative effect of a change in accounting, net of income
taxes..................................................... -- 4 --
------ ----- -----
Net income.................................................. 1,141 144 310
Preferred stock dividends................................... 63 -- --
Charge for conversion of company-obligated mandatorily
redeemable securities of a subsidiary trust............... -- -- 21
------ ----- -----
Net income available to common shareholders................. $1,078 $ 144 $ 289
====== ===== =====
</Table>

YEAR ENDED DECEMBER 31, 2005 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2004 -- CORPORATE & OTHER

Income from continuing operations increased by $64 million, or 178%, to $28
million for the year ended December 31, 2005 from a loss of $36 million for the
comparable 2004 period. The acquisition of Travelers, excluding Travelers
financing and integration costs incurred by the Company, accounted for $88
million of this increase. Excluding the impact of the Travelers acquisition,
income from continuing operations decreased by $24 million for the year ended
December 31, 2005 from the comparable 2004 period. The 2005 period includes

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<PAGE>

a $31 million benefit from a revision of the estimate of income taxes for 2004,
a $30 million benefit, net of income taxes, associated with the reduction of a
previously established liability for settlement death benefits related to the
Company's sales practices class action settlement recorded in 1999, and an $18
million benefit, net of income taxes, associated with the reduction of a
previously established real estate transfer tax liability related to the
Company's demutualization in 2000. The 2004 period includes a $105 million
benefit associated with the resolution of issues relating to the Internal
Revenue Service's audit of Metropolitan Life's and its subsidiaries' tax returns
for the years 1997-1999. Also included in the 2004 period is an expense related
to a $32 million, net of income taxes, contribution to the MetLife Foundation
and a $9 million benefit from a revision of the estimate of income taxes for
2003. Excluding the impact of these items, income from continuing operations
decreased by $21 million for the year ended December 31, 2005 from the
comparable 2004 period. The decrease is primarily attributable to higher
interest expense on debt (principally associated with the issuance of debt to
finance the Travelers acquisition), integration costs associated with the
acquisition of Travelers, interest credited to bank holder deposits and
legal-related liabilities of $119 million, $76 million, $44 million and $4
million, respectively, all of which are net of income taxes. This is partially
offset by an increase in net investment income of $107 million, net of income
taxes, higher net investment gains of $66 million, net of income taxes, and a
decrease in corporate support expenses of $10 million, net of income taxes. The
remainder of the difference is primarily driven by the difference between the
actual and the estimated tax rate allocated to the various segments.

Total revenues, excluding net investment gains (losses), increased by $378
million, or 86%, to $818 million for the year ended December 31, 2005 from $440
million for the comparable 2004 period. The acquisition of Travelers accounted
for $152 million of this increase. Excluding the impact of the acquisition of
Travelers, the increase of $226 million is primarily attributable to increases
in income on fixed maturities as a result of higher yields from lengthening the
duration and a higher asset base, as well as increased income from corporate
joint ventures and mortgage loans on real estate. Also included as a component
of total revenues are intersegment eliminations which are offset within total
expenses.

Total expenses increased by $335 million, or 56%, to $929 million for the
year ended December 31, 2005 from $594 million for the comparable 2004 period.
The acquisition of Travelers, excluding Travelers financing and integration
costs incurred by the Company, accounted for $15 million of this increase.
Excluding the impact of the acquisition of Travelers, total expenses increased
by $320 million for the year ended December 31, 2005 from the comparable 2004
period. The 2005 period includes a $47 million benefit associated with a
reduction of a previously established liability for settlement death benefits
related to the Company's sales practices class action settlement recorded in
1999, a $28 million benefit associated with the reduction of a previously
established real estate transfer tax liability related to the Company's
demutualization in 2000. The 2004 period includes a $50 million contribution to
the MetLife Foundation, partially offset by a $22 million reduction of a
liability associated with the resolution of all issues relating to the Internal
Revenue Service's audit of Metropolitan Life's and its subsidiaries' tax returns
for the years 1997-1999. Excluding the impact of these items, total expenses
increased by $423 million for the year ended December 31, 2005 from the
comparable 2004 period. This increase is attributable to higher interest expense
of $187 million as a result of the issuance of senior notes in 2004 and 2005,
which includes $129 million of expenses from the financing of the acquisition of
Travelers. Integration costs associated with the acquisition of Travelers were
$120 million. As a result of growth in the business, interest credited to bank
holder deposits increased by $70 million at MetLife Bank. In addition,
legal-related liabilities increased by $5 million. These increases were offset
by a reduction in corporate support expenses of $16 million. The remainder of
the increase is attributable to intersegment eliminations.

YEAR ENDED DECEMBER 31, 2004 COMPARED WITH THE YEAR ENDED DECEMBER 31,
2003 -- CORPORATE & OTHER

Income (loss) from continuing operations decreased by $27 million, or 300%,
to ($36) million for the year ended December 31, 2004 from ($9) million for the
comparable 2003 period. The 2004 period includes a $105 million benefit
associated with the resolution of issues relating to the Internal Revenue
Service's audit of Metropolitan Life's and its subsidiaries' tax returns for the
years 1997-1999. Also included in 2004 is an expense related to a $32 million
contribution, net of income taxes, to the MetLife Foundation and a $9 million

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<PAGE>

benefit from a revision of the estimate of income taxes for 2003. The year ended
December 31, 2003 includes a $92 million benefit, net of income taxes, from the
reduction of a previously established liability related to the Company's
race-conscious underwriting settlement, as well as a $36 million benefit from a
revision of the estimate of income taxes for 2002. Excluding the impact of these
items, income from continuing operations increased by $19 million in the year
ended December 31, 2004 from the comparable 2003 period. The increase in
earnings in 2004 over the prior year period is primarily attributable to an
increase in net investment income of $184 million and a decrease in policyholder
benefits and claims of $24 million, both of which are net of income taxes. This
increase is partially offset by an increase in net investment losses of $93
million and an increase in interest on bank holder deposits of $14 million, a
charge related to unoccupied space of $10 million, as well as expenses
associated with the piloting of a new product of $7 million, all net of income
taxes. In addition, the tax benefit increased by $41 million as a result of a
change in the Company's allocation of tax expense among segments.

Total revenues, excluding net investment gains (losses), increased by $269
million, or 157%, to $440 million for the year ended December 31, 2004 from $171
million for the comparable 2003 period. The increase in revenue is primarily
attributable to increases in income on fixed maturity securities, corporate
joint venture income, mortgage loans on real estate and equity securities due to
increased invested assets and higher yields. Also included as a component of
total revenues are intersegment eliminations which are offset within total
expenses.

Total expenses increased by $199 million, or 50%, to $594 million for the
year ended December 31, 2004 from $395 million for the comparable 2003 period.
The year ended December 31, 2004 includes a $50 million contribution to the
MetLife Foundation, partially offset by a $22 million reduction of interest
expense associated with the resolution of all issues relating to the Internal
Revenue Service's audit of Metropolitan Life's and its subsidiaries' tax returns
for the years 1997-1999. The year ended December 31, 2003 includes a $144
million benefit from a reduction of a previously established liability
associated with the Company's race-conscious underwriting settlement. Excluding
these items, total expenses increased by $27 million for the year ended December
31, 2004. This increase is attributable to higher interest expense of $61
million as a result of the issuance of senior notes at the end of 2003 and
during 2004, as well as higher interest credited to bank holder deposits of $22
million as a result of growth in MetLife Bank's business. This increase is
partially offset by a decrease of $54 million from lower interest expense on
surplus notes, as well as lower expenses from policyholder benefits and claims
of $38 million, a charge related to unoccupied space of $15 million, as well as
expenses associated with the piloting of a new product of $11 million. The
remainder of the increase is attributable to intersegment eliminations.

METLIFE CAPITAL TRUST I

In connection with MetLife, Inc.'s initial public offering in April 2000,
the Holding Company and MetLife Capital Trust I, a wholly-owned trust, (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. 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

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<PAGE>

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.

Due to the dissolution of the Trust in 2003, there was no interest expense
on capital securities for the years ended December 31, 2005 and 2004. Interest
expense on the capital securities is included in other expenses and was $10
million for the year ended December 31, 2003.

LIQUIDITY AND CAPITAL RESOURCES

THE COMPANY

CAPITAL

Risk based capital ("RBC") requirements are used as minimum capital
requirements by the National Association of Insurance Commissioners ("NAIC") and
the state insurance departments to identify companies that merit further
regulatory action. RBC is based on a formula calculated by applying factors to
various asset, premium and statutory reserve items and takes into account the
risk characteristics of the insurer, including asset risk, insurance risk,
interest rate risk and business risk. These rules apply to each of the Company's
domestic insurance subsidiaries. At December 31, 2005, each of the Holding
Company's domestic insurance subsidiaries' total adjusted capital was in excess
of the RBC levels required by their respective states of domicile.

The NAIC adopted the Codification of Statutory Accounting Principles
("Codification") in 2001 to standardize regulatory accounting and reporting to
state insurance departments. However, statutory accounting principles continue
to be established by individual state laws and permitted practices. The New York
State Department of Insurance (the "Department") has adopted Codification with
certain modifications for the preparation of statutory financial statements of
insurance companies domiciled in New York. Modifications by the various state
insurance departments may impact the effect of Codification on the statutory
capital and surplus of the Holding Company's insurance subsidiaries.

ASSET/LIABILITY MANAGEMENT

The Company actively manages its assets using an approach that balances
quality, diversification, asset/liability matching, liquidity and investment
return. The goals of the investment process are to optimize, net of income
taxes, risk-adjusted investment income and risk-adjusted total return while
ensuring that the assets and liabilities are managed on a cash flow and duration
basis. The asset/liability management process is the shared responsibility of
the Portfolio Management Unit, the Business Finance Asset/Liability Management
Unit, and the operating business segments under the supervision of the various
product line specific Asset/Liability Management Committees ("ALM Committees").
The ALM Committees' duties include reviewing and approving target portfolios on
a periodic basis, establishing investment guidelines and limits and providing
oversight of the asset/liability 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 ALM Committees.

The Company 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. In executing these
asset/liability matching strategies, management regularly reevaluates the
estimates used in determining the approximate amounts and timing of payments to
or on behalf of policyholders for insurance liabilities. Many of these estimates
are inherently subjective and could impact the Company's ability to achieve its
asset/liability management goals and objectives.

LIQUIDITY

Liquidity refers to a company's ability to generate adequate amounts of
cash to meet its needs. The Company's liquidity position (cash and cash
equivalents and short-term investments, excluding securities

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lending) was $6.7 billion and $5.4 billion at December 31, 2005 and 2004,
respectively. Liquidity needs are determined from a rolling 12-month forecast by
portfolio and are monitored daily. Asset mix and maturities are adjusted based
on forecast. Cash flow testing and stress testing provide additional
perspectives on liquidity. The Company believes that it has sufficient liquidity
to fund its cash needs under various scenarios that include the potential risk
of early contractholder and policyholder withdrawal. The Company includes
provisions limiting withdrawal rights on many of its products, including general
account institutional pension products (generally group annuities, including
guaranteed interest contracts ("GICs"), and certain deposit funds liabilities)
sold to employee benefit plan sponsors. Certain of these provisions prevent the
customer from making withdrawals prior to the maturity date of the product.

In the event of significant unanticipated cash requirements beyond normal
liquidity, the Company has multiple liquidity alternatives available based on
market conditions and the amount and timing of the liquidity need. These options
include cash flow from operations, the sale of liquid assets, global funding
sources and various credit facilities.

The Company's ability to sell investment assets could be limited by
accounting rules including rules relating to the intent and ability to hold
impaired securities until the market value of those securities recovers.

In extreme circumstances, all general account assets within a statutory
legal entity are available to fund any obligation of the general account within
that legal entity.

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'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, marketable fixed maturity and equity
securities. Liquid assets exclude assets relating to securities lending and
dollar roll activities. At December 31, 2005 and 2004, the Company had $179
billion and $136 billion in liquid assets, respectively.

Global Funding Sources. Liquidity is also provided by a variety of both
short-term 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, 2005 and 2004, the Company had $1.4 billion in short-term
debt outstanding, and $9.9 billion and $7.4 billion in long-term debt
outstanding, respectively.

Debt Issuances. On June 23, 2005, the Holding Company issued in the United
States public market $1,000 million aggregate principal amount of 5.00% senior
notes due June 15, 2015 at a discount of $2.7 million ($997.3 million), and
$1,000 million aggregate principal amount of 5.70% senior notes due June 15,
2035 at a discount of $2.4 million ($997.6 million).

On June 29, 2005, the Holding Company issued 400 million pounds sterling
($729.2 million at issuance) aggregate principal amount of 5.25% senior notes
due June 29, 2020 at a discount of 4.5 million pounds sterling ($8.1 million at
issuance), for aggregate proceeds of 395.5 million pounds sterling ($721.1
million at issuance). The senior notes were initially offered and sold outside
the United States in reliance upon Regulation S under the Securities Act of
1933, as amended.

On December 8, 2005, RGA issued junior subordinated debentures with a face
amount of $400 million. Interest is payable semi-annually at a fixed rate of
6.75% until December 15, 2015. Subsequent to

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December 15, 2015, interest on these debentures will accrue at an annual rate of
3-month LIBOR plus a margin equal to 266.5 basis points, payable quarterly until
maturity in 2065.

The Company repaid a $250 million, 7% surplus note which matured on
November 1, 2005 and repaid a $1,006 million, 3.911% senior note which matured
on May 15, 2005.

MetLife Bank has entered into several repurchase agreements with the
Federal Home Loan Bank of New York (the "FHLB of NY") whereby MetLife Bank has
issued such repurchase agreements in exchange for cash and for which the FHLB of
NY has been granted a blanket lien on MetLife Bank's residential mortgages and
mortgage-backed securities to collateralize MetLife Bank's obligations under the
repurchase agreements. The repurchase agreements and the related security
agreement represented by this blanket lien provide that upon any event of
default by MetLife Bank, the FHLB of NY's recovery is limited to the amount of
MetLife Bank's liability under the outstanding repurchase agreements. During
2005, the Company increased its liability for repurchase agreements with the
FHLB of NY by $750 million. As of December 31, 2005 and 2004, the Company's
total liability was $855 million and $105 million, respectively, which is
included in long-term debt.

MetLife Funding, Inc. ("MetLife Funding"), a subsidiary of Metropolitan
Life, serves as a centralized finance unit for the Company. 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, 2005 and 2004,
MetLife Funding had a tangible net worth of $11.2 million and $10.9 million,
respectively. MetLife Funding raises cash from various funding sources and uses
the proceeds to extend loans, through MetLife Credit Corp., another 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, 2005 and 2004, MetLife Funding had total outstanding
liabilities, including accrued interest payable, of $456 million and $1,448
million, respectively, consisting primarily of commercial paper.

Credit Facilities. The Company maintains committed and unsecured credit
facilities aggregating $3.85 billion as of December 31, 2005. When drawn upon,
these facilities bear interest at varying rates in accordance with the
respective agreements. The facilities can be used for general corporate purposes
and $3.0 billion of the facilities also serve as back-up lines of credit for the
Company's commercial paper programs. The following table provides details on
these facilities as of December 31, 2005:

<Table>
<Caption>
LETTER OF
CREDIT UNUSED
BORROWER(S) EXPIRATION CAPACITY ISSUANCES DRAWDOWNS COMMITMENTS
- ---------------------------------------------- -------------- -------- --------- --------- -----------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
MetLife, Inc., MetLife Funding, Inc. and
Metropolitan Life Insurance Company......... April 2009 $1,500 $374 $ -- $1,126
MetLife, Inc. and MetLife Funding, Inc. ...... April 2010 1,500 -- -- 1,500
MetLife Bank, N.A............................. July 2006 200 -- -- 200
Reinsurance Group of America, Incorporated.... January 2006 26 -- 26 --
Reinsurance Group of America, Incorporated.... May 2007 26 -- 26 --
Reinsurance Group of America, Incorporated.... September 2010 600 320 50 230
------ ---- ---- ------
Total......................................... $3,852 $694 $102 $3,056
====== ==== ==== ======
</Table>

Letters of Credit. On July 1, 2005, in connection with the closing of the
acquisition of Travelers, the $2.0 billion amended and restated five-year letter
of credit and reimbursement agreement (the "L/C Agreement") entered into by The
Travelers Life and Annuity Reinsurance Company ("TLARC") and various
institutional lenders on April 25, 2005 became effective. Under the L/C
Agreement, the Holding Company agreed to unconditionally guarantee reimbursement
obligations of TLARC with respect to reinsurance letters of credit issued
pursuant to the L/C Agreement and replaced Citigroup Insurance Holding Company
as guarantor upon closing of the Travelers acquisition. The L/C Agreement
expires five years after the closing of the acquisition. Also during 2005,
Exeter Reassurance Company Ltd. ("Exeter") entered into three ten-year letter of
credit and reimbursement agreements totaling $800 million with an institutional
lender,

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<PAGE>

and the Holding Company and Exeter entered into a $500 million ten-year letter
of credit and reimbursement agreement with another institutional lender. The
following table provides details on the capacity and outstanding balances of
such committed facilities as of December 31, 2005:

<Table>
<Caption>
LETTER OF
CREDIT UNUSED
ACCOUNT PARTY EXPIRATION CAPACITY ISSUANCES COMMITMENTS
- ------------------------------------------ -------------- -------- ------------- -----------
(IN MILLIONS)
<S> <C> <C> <C> <C>
The Travelers Life and Annuity Reinsurance
Company................................. July 2010 $2,000 $1,930 $ 70
Exeter Reassurance Company Ltd. .......... March 2015 225 225 --
Exeter Reassurance Company Ltd. .......... June 2015 250 250 --
Exeter Reassurance Company Ltd. .......... September 2015 325 -- 325
Exeter Reassurance Company Ltd. and
MetLife, Inc. .......................... December 2015 500 280 220
------ ------ ----
Total..................................... $3,300 $2,685 $615
====== ====== ====
</Table>

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

Note: The Holding Company is a guarantor under the first four agreements and a
party to the fifth agreement above.

At December 31, 2005 and 2004, the Company had outstanding $3.6 billion and
$961 million, respectively, in letters of credit from various banks, of which
$3.4 billion and $470 million, respectively, were part of committed facilities.
The letters of credit outstanding at December 31, 2005 and 2004 all
automatically renew for one year periods except for $755 million in the current
period which expires in ten years. Since commitments associated with letters of
credit and financing arrangements may expire unused, these amounts do not
necessarily reflect the Company's actual future cash funding requirements.

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.

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<PAGE>

The following table summarizes the Company's major contractual obligations
as of December 31, 2005:

<Table>
<Caption>
LESS THAN THREE TO MORE THAN
CONTRACTUAL OBLIGATIONS TOTAL THREE YEARS FIVE YEARS FIVE YEARS
- ----------------------- -------- ----------- ---------- -------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Other long-term liabilities(1)(2)................ $106,522 $19,089 $ 8,026 $79,407
Payables for collateral under securities loaned
and other transactions......................... 34,515 34,515 -- --
Long-term debt(3)................................ 19,506 2,836 1,376 15,294
Mortgage commitments............................. 2,974 2,030 296 648
Partnership investments(4)....................... 2,684 2,684 -- --
Junior subordinated debt securities underlying
common equity units(5)......................... 2,433 1,359 1,074 --
Operating leases................................. 1,338 579 235 524
Shares subject to mandatory redemption(3)........ 350 -- -- 350
Capital leases................................... 73 38 9 26
Contracts to purchase real estate................ 36 36 -- --
-------- ------- ------- -------
Total............................................ $170,431 $63,166 $11,016 $96,249
======== ======= ======= =======
</Table>

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

(1) Other long-term liabilities include various investment-type products with
contractually scheduled maturities, including guaranteed interest contracts,
structured settlements, pension closeouts, certain annuity policies and
certain indemnities.

(2) Other long-term liabilities include benefit and claim liabilities for which
the Company believes the amount and timing of the payment is essentially
fixed and determinable. Such amounts generally relate to (i) policies or
contracts where the Company is currently making payments and will continue
to do so until the occurrence of a specific event, such as death; and (ii)
life insurance and property and casualty incurred and reported claims.
Liabilities for future policy benefits of $82.4 billion and policyholder
account balances of $113.4 billion, both at December 31, 2005, have been
excluded from this table. Amounts excluded from the table are generally
comprised of policies or contracts where (i) the Company is not currently
making payments and will not make payments in the future until the
occurrence of an insurable event, such as death or disability, or (ii) the
occurrence of a payment triggering event, such as a surrender of a policy or
contract, is outside the control of the Company. The determination of these
liability amounts and the timing of payment are not reasonably fixed and
determinable since the insurable event or payment triggering event has not
yet occurred. Such excluded liabilities primarily represent future policy
benefits of approximately $63.4 billion relating to traditional life, health
and disability insurance products and policyholder account balances of
approximately $41.7 billion relating to deferred annuities, $27.3 billion
for group and universal life products and approximately $27.0 billion for
funding agreements without fixed maturity dates. Significant uncertainties
relating to these liabilities include mortality, morbidity, expenses,
persistency, investment returns, inflation and the timing of payments. See
"-- The Company -- Asset/Liability Management."

Amounts included in other long-term liabilities reflect estimated cash
payments to be made to policyholders. Such cash outflows reflect
adjustments for the estimated timing of mortality, retirement, and other
appropriate factors, but are undiscounted with respect to interest. The
amount shown in the More than Five Years column represents the sum of cash
flows, also adjusted for the estimated timing of mortality, retirement and
other appropriate factors and undiscounted with respect to interest,
extending for more than 100 years from the present date. As a result, the
sum of the cash outflows shown for all years in the table of $104.4 billion
exceeds the corresponding liability amounts of $51.4 billion included in
the consolidated financial statements at December 31, 2005. The liability
amount in the consolidated financial statements reflects the discounting
for interest, as well as adjustments for the timing of other factors as
described above.

(3) Amounts differ from the balances presented on the consolidated balance
sheets. The amounts above do not include any fair value adjustments, related
premiums and discounts or capital leases which are presented separately.
Amounts include interest to be paid on fixed-rate debt only.

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<PAGE>

(4) 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.

(5) Amounts include interest paid on junior subordinated debt.

As of December 31, 2005, and relative to its liquidity program, the Company
had no material (individually or in the aggregate) purchase obligations or
material (individually or in the aggregate) unfunded pension or other
postretirement benefit obligations due within one year.

Support Agreements. 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 (or not
less than 125% of the company action level RBC, if NELICO has a negative trend),
as defined by state insurance statutes, and liquidity necessary to enable it to
meet its current obligations on a timely basis. At December 31, 2005, 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 recently referenced RBC-based amount calculated at December 31, 2005.

In connection with the Company's acquisition of the parent of General
American Life Insurance Company ("General American"), Metropolitan Life entered
into a net worth maintenance agreement with General American. Under the
agreement, as subsequently amended, 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 250% 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, 2005, 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, 2005.

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 contractual obligations of its
subsidiary, Paragon Life Insurance Company, and certain contractual 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 180% 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, 2005, 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, 2005.

In connection with the acquisition of Travelers, MetLife International
Holdings, Inc. ("MIH"), a subsidiary of the Holding Company, committed to the
Australian Prudential Regulatory Authority that it will provide or procure the
provision of additional capital to MetLife General Insurance Limited ("MGIL"),
an Australian subsidiary of MIH, to the extent necessary to enable MGIL to meet
insurance capital adequacy and solvency requirements. In addition, MetLife
International Insurance, Ltd. ("MIIL"), a Bermuda insurance company, was
acquired as part of the Travelers transaction. In connection with the assumption
of a

95
<PAGE>

block of business by MIIL from a company in liquidation in 1995, Citicorp Life
Insurance Company ("CLIC"), an affiliate of MIIL and a subsidiary of the Holding
Company, agreed with MIIL and the liquidator to make capital contributions to
MIIL to ensure that, for so long as any policies in such block remain
outstanding, MIIL remains solvent and able to honor the liabilities under such
policies.

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

Litigation. Various litigation, including purported or certified class
actions, and various claims and assessments against the Company, in addition to
those discussed elsewhere herein 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.

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 elsewhere herein in connection with specific
matters. In some of the matters referred to herein, 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.

Other. 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 cash needs. The nature of the
Company's diverse product portfolio and customer base lessens the likelihood
that normal operations will result in any significant strain on liquidity.

Consolidated cash flows. Net cash provided by operating activities was
$8,005 million and $6,510 million for the years ended December 31, 2005 and
2004, respectively. The $1,495 million increase in operating cash flows in 2005
over the comparable 2004 period is primarily attributable to the acquisition of
Travelers, growth in disability, dental, long-term care business, group life and
retirement & savings, as well as continued growth in the annuity business.

Net cash provided by operating activities was $6,510 million and $6,127
million for the years ended December 31, 2004 and 2003, respectively. The $383
million increase in operating cash flows in 2004 over the comparable 2003 period
is primarily attributable to continued growth in the group life, long-term care,
dental and disability businesses, as well as an increase in retirement &
savings' structured settlements due to a large multi-contract sale in 2004.
Also, the late 2003 acquisition of John Hancock's group TIAA/CREF's long-term
care business contributed to growth in the 2004 period.

Net cash used in investing activities was $22,610 million and $14,417
million for the years ended December 31, 2005 and 2004, respectively. The $8,193
million increase in net cash used in investing activities in 2005 over the
comparable 2004 period is primarily due to the acquisition of Travelers and
CitiStreet Associates, the increase in net purchases of fixed maturities and an
increase in the origination of mortgage and consumer loans, primarily in
commercial loans, as compared to the 2004 period. This was partially offset by
an increase in repayments of mortgage and consumer loans, an increase in sales
of equity real estate and a

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<PAGE>

decrease in the cash used for short-term investments. In addition, the 2005
period includes proceeds associated with the sale of SSRM and MetLife Indonesia.

Net cash used in investing activities was $14,417 million and $26,878
million for the years ended December 31, 2004 and 2003, respectively. The
$12,461 million decrease in net cash used in investing activities in 2004 over
the comparable 2003 period is primarily due to less cash provided by financing
activities, partially offset by an increase in cash generated from operations.
This decrease in available cash resulted in reduced investments in fixed
maturities in 2004 as compared to 2003. These items are partially offset by an
increase in mortgage and other loan origination as the Company continues to take
advantage of favorable market conditions in this sector, as well as an increase
in cash used for equity securities and short-term investments for the comparable
periods.

Net cash provided by financing activities was $14,517 million and $8,280
million for the years ended December 31, 2005 and 2004, respectively. The $6,237
million increase in net cash provided by financing activities in 2005 over the
comparable 2004 period is primarily attributable to the Holding Company's
funding of the acquisition of Travelers through the issuance of long-term debt,
junior subordinated debt securities and preferred shares. In addition, there was
an increase in the amount of securities lending cash collateral invested in
connection with the program. This increase was partially offset by a decrease in
net cash provided by policyholder account balances, the repayment of previously
issued long-term debt, the payment of common stock dividends, the payment of
dividends on the preferred shares, the payment of debt and equity issuance
costs, and the repurchase of its common stock by RGA.

Net cash provided by financing activities was $8,280 million and $22,161
million for the years ended December 31, 2004 and 2003, respectively. The
$13,881 million decrease in net cash provided by financing activities in 2004
over the comparable 2003 period is primarily due to a decrease in securities
lending cash collateral invested in connection with the program. In addition,
there were repayments of short-term debt associated with dollar roll activity,
and an increase in cash used in the Company's stock repurchase program. Net cash
provided by policyholder account balances decreased from the comparable 2003
period mainly as a result of a decrease in GICs sold in 2004 as compared to
2003, partially offset by an increase in MetLife Bank's customer deposits,
particularly in the personal and business savings accounts. The 2003 period
included payments of $1,006 million received on the settlement of common stock
purchase contracts (see "-- Results of Operations -- MetLife Capital Trust I")
and $317 million net cash proceeds associated with RGA's issuance of common
stock. The Company also doubled its annual dividend per share in 2004. These
items were partially offset by additional proceeds from the issuance of senior
notes by the Holding Company and a decrease in repayments of long-term debt for
the comparable periods.

THE HOLDING COMPANY

CAPITAL

Restrictions and Limitations on Bank Holding Companies and Financial
Holding Companies -- Capital. The Holding Company and its insured depository
institution subsidiary, MetLife 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, 2005,
MetLife, Inc. and MetLife Bank met the minimum capital standards as per federal
banking regulatory agencies with all of MetLife Bank's risk-based and leverage
capital ratios meeting the federal banking regulatory agencies "well
capitalized" standards and all of MetLife, Inc.'s risk-based and leverage
capital ratios meeting the "adequately capitalized" standards. At December 31,
2004, MetLife, Inc. and MetLife Bank were in compliance with the aforementioned
minimum capital standards and each had risk-based and leverage capital ratios
that met the federal banking regulatory agencies "well capitalized" standards.

97
<PAGE>

The following table contains the RBC ratios as of December 31, 2005 and
2004 and the regulatory requirements for MetLife Inc., as a bank holding
company, and MetLife Bank:

METLIFE, INC.
RBC RATIOS -- BANK HOLDING COMPANY
AS OF DECEMBER 31,

<Table>
<Caption>
- -------------------------------------------------------------------------------------------
REGULATORY
REGULATORY REQUIREMENTS
REQUIREMENTS "WELL
2005 2004 MINIMUM CAPITALIZED"
---- ----- ------------ -------------
<S> <C> <C> <C> <C>
Total RBC Ratio............................... 9.57% 10.12% 8.00% 10.00%
Tier 1 RBC Ratio.............................. 9.21% 9.66% 4.00% 6.00%
Tier 1 Leverage Ratio......................... 5.39% 6.02% 4.00% N/A
</Table>

METLIFE BANK
RBC RATIOS -- BANK
AS OF DECEMBER 31,

<Table>
<Caption>
- -------------------------------------------------------------------------------------------
REGULATORY
REGULATORY REQUIREMENTS
REQUIREMENTS "WELL
2005 2004 MINIMUM CAPITALIZED"
----- ----- ------------ -------------
<S> <C> <C> <C> <C>
Total RBC Ratio.............................. 11.78% 17.09% 8.00% 10.00%
Tier 1 RBC Ratio............................. 11.22% 16.38% 4.00% 6.00%
Tier 1 Leverage Ratio........................ 5.96% 10.84% 4.00% 5.00%
</Table>

LIQUIDITY

Liquidity 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 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 high credit 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 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 its insurance subsidiaries. The Holding Company's
insurance subsidiaries are subject to regulatory restrictions on the payment of
dividends imposed by the regulators of their respective domiciles. The dividend
limitation for U.S. insurance subsidiaries is based on the surplus to
policyholders as of the immediately preceding calendar

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<PAGE>

year and statutory net gain from operations for the immediately preceding
calendar year. 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.

The maximum amount of dividends which could be paid to the Holding Company
by Metropolitan Life, TIC, MPC and Metropolitan Tower Life Insurance Company
("MTL"), in 2005, without prior regulatory approval, was $880 million, $0
million, $187 million and $119 million, respectively. During the year ended
December 31, 2005, Metropolitan Life paid $880 million in ordinary dividends for
which prior insurance regulatory approval was not required and $2,320 million in
special dividends as approved by the New York Superintendent of Insurance. TIC
has not paid any dividends since its acquisition by the Holding Company and may
not make dividend payments for a two-year period following the date of
acquisition without regulatory approval. MPC paid $400 million in special
dividends, as approved by the Rhode Island Superintendent of Insurance, during
the year ended December 31, 2005. MTL paid $54 million in ordinary dividends for
which prior insurance regulatory approval was not required and $873 million in
special dividends as approved by the Delaware Superintendent of Insurance during
the year ended December 31, 2005. MetLife Mexico, S.A. paid dividends to the
Holding Company of $276 million during the year ended December 31, 2005. In
addition, various subsidiaries paid $19 million in total to the Holding Company
for the year ended December 31, 2005. The maximum amount of dividends which
Metropolitan Life, TIC, MPC and MTL may pay to the Holding Company in 2006
without prior regulatory approval is $863 million, $0 million, $178 million, and
$85 million, respectively. If paid before a specified date in 2006, some or all
of an otherwise ordinary dividend may be deemed special by the relevant
regulatory authority and require approval.

Liquid Assets. An integral part of the Holding 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
securities. At December 31, 2005 and 2004, the Holding Company had $668 million
and $2.1 billion in liquid assets, respectively.

Global Funding Sources. Liquidity is also provided by a variety of both
short-term and long-term instruments, commercial paper, medium- and long-term
debt, capital securities and stockholders' equity. The diversity 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. Other sources of
the Holding Company's liquidity include programs for short- and long-term
borrowing, as needed.

At December 31, 2005 and 2004, the Holding Company had $961 million and $0
million in short-term debt outstanding, respectively. At December 31, 2005 and
2004, the Holding Company had $7.3 billion and $5.7 billion of unaffiliated
long-term debt outstanding, respectively. On December 30, 2005, the Holding
Company issued $286 million of affiliated long-term debt with an interest rate
of 5.24% maturing in 2015.

On April 27, 2005, the Holding Company filed a shelf registration statement
(the "2005 Registration Statement") with the U.S. Securities and Exchange
Commission ("SEC"), covering $11 billion of securities. On May 27, 2005, the
2005 Registration Statement became effective, permitting the offer and sale,
from time to time, of a wide range of debt and equity securities. In addition to
the $11 billion of securities registered on the 2005 Registration Statement,
approximately $3.9 billion of registered but unissued securities remained
available for issuance by the Holding Company as of such date, from the $5.0
billion shelf registration statement filed with the SEC during the first quarter
of 2004, permitting the Holding Company to issue an aggregate of $14.9 billion
of registered securities. The terms of any offering will be established at the
time of the offering.

During June 2005, in connection with the Company's acquisition of
Travelers, the Holding Company issued $2.0 billion of senior notes, $2.07
billion of common equity units and $2.1 billion of preferred stock under the
2005 Registration Statement. In addition, $0.7 billion of senior notes were sold
outside the United States in reliance upon Regulation S under the Securities Act
of 1933, as amended, a portion of which may be

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<PAGE>

resold in the United States under the 2005 Registration Statement. Remaining
capacity under the 2005 Registration Statement after such issuances is $6.6
billion.

Debt Issuances. On June 23, 2005, the Holding Company issued in the
United States public market $1,000 million aggregate principal amount of
5.00% senior notes due June 15, 2015 at a discount of $2.7 million ($997.3
million), and $1,000 million aggregate principal amount of 5.70% senior
notes due June 15, 2035 at a discount of $2.4 million ($997.6 million).

On June 29, 2005, the Holding Company issued 400 million pounds
sterling ($729.2 million at issuance) aggregate principal amount of 5.25%
senior notes due June 29, 2020 at a discount of 4.5 million pounds sterling
($8.1 million at issuance), for aggregate proceeds of 395.5 million pounds
sterling ($721.1 million at issuance). The senior notes were initially
offered and sold outside the United States in reliance upon Regulation S
under the Securities Act of 1933, as amended.

On December 30, 2005, the Holding Company issued $286 million of affiliated
long-term debt with an interest rate of 5.24% maturing in 2015.

The following table summarizes the Holding Company's outstanding
senior notes issuances:

<Table>
<Caption>
INTEREST
ISSUE DATE PRINCIPAL(3) RATE MATURITY
- ---------- ------------ -------- --------
(IN MILLIONS)
<S> <C> <C> <C>
June 2005............................................... $1,000 5.00% 2015
June 2005............................................... $1,000 5.70% 2035
June 2005(1)............................................ $ 688 5.25% 2020
December 2004(1)........................................ $ 602 5.38% 2024
June 2004(2)............................................ $ 350 5.50% 2014
June 2004(2)............................................ $ 750 6.38% 2034
November 2003........................................... $ 500 5.00% 2013
November 2003........................................... $ 200 5.88% 2033
December 2002........................................... $ 400 5.38% 2012
December 2002........................................... $ 600 6.50% 2032
November 2001........................................... $ 500 5.25% 2006
November 2001........................................... $ 750 6.13% 2011
</Table>

(1) This amount represents the translation of pounds sterling into
U.S. Dollars using the noon buying rate on December 30, 2005 of $1.7188 as
announced by the Federal Reserve Bank of New York.

(2) On July 23, 2004, the Holding Company reopened its June 3, 2004
senior notes offering and increased the principal outstanding on the 5.50%
notes due June 2014, from $200 million to $350 million and on the 6.38%
notes due June 2034, from $400 million to $750 million.

(3) This table excludes any premium or discount on the senior notes
issuances.

See also "-- Liquidity and Capital Resources -- The Holding
Company -- Liquidity Sources -- Common Equity Units" for junior
subordinated debt securities of $2,134 million issued in connection with
issuance of common equity units.

Debt Repayments. The Holding Company repaid a $1,006 million, 3.911%
senior note which matured on May 15, 2005.

Preferred Stock. On June 13, 2005, the Holding Company issued 24
million shares of Floating Rate Non-Cumulative Preferred Stock, Series A
(the "Series A preferred shares") with a $0.01 par value per share, and a
liquidation preference of $25 per share for aggregate proceeds of $600
million.

100
<PAGE>

On June 16, 2005, the Holding Company issued 60 million shares of
6.50% Non-Cumulative Preferred Stock, Series B (the "Series B preferred
shares"), with a $0.01 par value per share, and a liquidation preference of
$25 per share, for aggregate proceeds of $1.5 billion.

The Series A and Series B preferred shares (the "Preferred Shares")
rank senior to the common stock with respect to dividends and liquidation
rights. Dividends on the Preferred Shares are not cumulative. Holders of
the Preferred Shares will be entitled to receive dividend payments only
when, as and if declared by the Holding Company's board of directors or a
duly authorized committee of the board. If dividends are declared on the
Series A preferred shares, they will be payable quarterly, in arrears, at
an annual rate of the greater of (i) 1.00% above three-month LIBOR on the
related LIBOR determination date; or (ii) 4.00%. Any dividends declared on
the Series B preferred shares will be payable quarterly, in arrears, at an
annual fixed rate of 6.50%. Accordingly, in the event that dividends are
not declared on the Preferred Shares for payment on any dividend payment
date, then those dividends will cease to accrue and be payable. If a
dividend is not declared before the dividend payment date, the Holding
Company has no obligation to pay dividends accrued for that dividend period
whether or not dividends are declared and paid in future periods. No
dividends may, however, be paid or declared on the Holding Company's common
stock -- or any other securities ranking junior to the Preferred Shares --
unless the full dividends for the latest completed dividend period on all
Preferred Shares, and any parity stock, have been declared and paid or
provided for.

The Holding Company is prohibited from declaring dividends on the
Preferred Shares if it fails to meet specified capital adequacy, net income
and shareholders' equity levels. In addition, under Federal Reserve Board
policy, the Holding Company may not be able to pay dividends if it does not
earn sufficient operating income.

The Preferred Shares do not have voting rights except in certain
circumstances where the dividends have not been paid for an equivalent of
six or more dividend payment periods whether or not those periods are
consecutive. Under such circumstances, the holders of the Preferred Shares
have certain voting rights with respect to members of the board of
directors of the Holding Company.

The Preferred Shares are not subject to any mandatory redemption,
sinking fund, retirement fund, purchase fund or similar provisions. The
Preferred Shares are redeemable, but not prior to September 15, 2010. On
and after that date, subject to regulatory approval, the Preferred Shares
will be redeemable at the Holding Company's option in whole or in part, at
a redemption price of $25 per Preferred Share, plus declared and unpaid
dividends.

See "-- Liquidity and Capital Resources -- The Holding
Company -- Liquidity Uses -- Dividends."

Common Equity Units. In connection with financing the acquisition of
Travelers on July 1, 2005, the Company distributed and sold 82.8 million
6.375% common equity units for $2,070 million in proceeds in a registered
public offering on June 21, 2005. Each common equity unit has an initial
stated amount of $25 per unit and consists of (i) a 1/80, or 1.25%
($12.50), undivided beneficial ownership interest in a series A trust
preferred security of MetLife Capital Trust II ("Series A Trust"), with an
initial liquidation amount of $1,000; (ii) a 1/80, or 1.25% ($12.50),
undivided beneficial ownership interest in a series B trust preferred
security of MetLife Capital Trust III ("Series B Trust" and, together with
the Series A Trust, the "Trusts"), with an initial liquidation amount of
$1,000; and (iii) a stock purchase contract under which the holder of the
common equity unit will purchase and the Holding Company will sell, on each
of the initial stock purchase date and the subsequent stock purchase date,
a variable number of shares of the Holding Company's common stock, par
value $0.01 per share, for a purchase price of $12.50.

The Holding Company issued $1,067 million 4.82% Series A and $1,067
million 4.91% Series B junior subordinated debt securities due no later
than February 15, 2039 and February 15, 2040, respectively, for a total of
$2,134 million, in exchange for $2,070 million in aggregate proceeds from
the sale of the trust preferred securities by the Trusts and $64 million in
trust common securities issued

101
<PAGE>

equally by the Trusts. The common and preferred securities of the Trusts,
totaling $2,134 million, represent undivided beneficial ownership interests
in the assets of the Trusts, have no stated maturity and must be redeemed
upon maturity of the corresponding series of junior subordinated debt
securities -- the sole assets of the respective Trusts. The Series A and
Series B Trusts will make quarterly distributions on the common and
preferred securities at an annual rate of 4.82% and 4.91%, respectively.

The Holding Company has directly guaranteed the repayment of the trust
preferred securities to the holders thereof to the extent that there are
funds available in the Trusts. The guarantee will remain in place until the
full redemption of the trust preferred securities. The trust preferred
securities held by the common equity unit holders are pledged to the
Holding Company to collateralize the obligation of the common equity unit
holders under the related stock purchase contracts. The common equity unit
holder may substitute certain zero coupon treasury securities in place of
the trust preferred securities as collateral under the stock purchase
contract.

The trust preferred securities have remarketing dates which correspond
with the initial and subsequent stock purchase dates to provide the holders
of the common equity units with the proceeds to exercise the stock purchase
contracts. The initial stock purchase date is expected to be August 15,
2008, but could be deferred for quarterly periods until February 15, 2009,
and the subsequent stock purchase date is expected to be February 15, 2009,
but could be deferred for quarterly periods until February 15, 2010. At the
remarketing date, the remarketing agent will have the ability to reset the
interest rate on the trust preferred securities to generate sufficient
remarketing proceeds to satisfy the common equity unit holder's obligation
under the stock purchase contract, subject to a reset cap for each of the
first two attempted remarketings of each series. The interest rate on the
supporting junior subordinated debt securities issued by the Holding
Company will be reset at a commensurate rate. If the initial remarketing is
unsuccessful, the remarketing agent will attempt to remarket the trust
preferred securities, as necessary, in subsequent quarters through February
15, 2009 for the Series A trust preferred securities and through February
15, 2010 for the Series B trust preferred securities. The final attempt at
remarketing will not be subject to the reset cap. If all remarketing
attempts are unsuccessful, the Holding Company has the right, as a secured
party, to apply the liquidation amount on the trust preferred securities to
the common equity unit holders obligation under the stock purchase contract
and to deliver to the common equity unit holder a junior subordinated debt
security payable on August 15, 2010 at an annual rate of 4.82% and 4.91% on
the Series A and Series B trust preferred securities, respectively, in
payment of any accrued and unpaid distributions.

Each stock purchase contract requires (i) the Holding Company to pay
the holder of the common equity unit quarterly contract payments on the
stock purchase contracts at the annual rate of 1.510% on the stated amount
of $25 per stock purchase contract until the initial stock purchase date
and at the annual rate of 1.465% on the remaining stated amount of $12.50
per stock purchase contract thereafter; and (ii) the holder of the common
equity unit to purchase, and the Holding Company to sell, for $12.50, on
each of the initial stock purchase date and the subsequent stock purchase
date, a number of newly issued or treasury shares of the Holding Company's
common stock, par value $0.01 per share, equal to the applicable settlement
rate. The settlement rate at the respective stock purchase date will be
calculated based on the closing price of the common stock during a
specified 20-day period immediately preceding the applicable stock purchase
date. Accordingly, upon settlement in the aggregate, the Holding Company
will receive proceeds of $2,070 million and issue between 39.0 million and
47.8 million shares of common stock. The stock purchase contract may be
exercised at the option of the holder at any time prior to the settlement
date. However, upon early settlement, the holder will receive the minimum
settlement rate.

Credit Facilities. The Holding Company maintains committed and unsecured
credit facilities aggregating $3.0 billion ($1.5 billion expiring in 2009, which
it shares with Metropolitan Life and MetLife Funding, and $1.5 billion expiring
in 2010, which it shares with MetLife Funding) as of December 31, 2005.
Borrowings under these facilities bear interest at varying rates as 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, 2005, neither the Holding Company, Metropolitan Life
nor MetLife Funding had
102
<PAGE>

borrowed against these credit facilities. At December 31, 2005, $374 million of
the unsecured credit facilities were used in support of letters of credit issued
on behalf of the Company.

Letters of Credit. On July 1, 2005, in connection with the closing of the
acquisition of Travelers, the L/C Agreement entered into by TLARC and various
institutional lenders on April 25, 2005 became effective. Under the L/C
Agreement, the Holding Company agreed to unconditionally guarantee reimbursement
obligations of TLARC with respect to reinsurance letters of credit issued
pursuant to the L/C Agreement and replaced Citigroup Insurance Holding Company
as guarantor upon closing of the Travelers acquisition. The L/C Agreement
expires five years after the closing of the acquisition. Also during 2005,
Exeter entered into three ten-year letter of credit and reimbursement agreements
totaling $800 million with an institutional lender, and the Holding Company and
Exeter entered into a $500 million ten-year letter of credit and reimbursement
agreement with another institutional lender. The following table provides
details on the capacity and outstanding balances of such committed facilities as
of December 31, 2005:

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

Note: The Holding Company is a guarantor under the first four agreements and a
party to the fifth agreement above.

At December 31, 2005 and 2004, the Holding Company had $190 million and
$369 million, respectively, in outstanding letters of credit from various banks,
all of which automatically renew for one year periods. Since commitments
associated with letters of credit and financing arrangements may expire unused,
these amounts do not necessarily reflect the Holding Company's actual future
cash funding requirements.

LIQUIDITY USES

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

Dividends. On November 15, 2005, the Holding Company's board of directors
declared dividends of $0.3077569 per share, for a total of $8 million, on the
Series A preferred shares, and $0.4062500 per share, for a total of $24 million,
on the Series B preferred shares. Both dividends were paid on December 15, 2005
to shareholders of record as of November 30, 2005.

On October 25, 2005, the Holding Company's board of directors approved an
annual dividend for 2005 of $0.52 per share of common stock, for a total of $394
million, payable on December 15, 2005 to common shareholders of record on
November 7, 2005. The 2005 common stock dividend represents a 13% increase from
the 2004 annual common stock dividend of $0.46 per share. Future common stock
dividend decisions will be determined by the Holding Company's board of
directors after taking into consideration factors such as the Company's current
earnings, expected medium- and long-term earnings, financial condition,
regulatory capital position, and applicable governmental regulations and
policies. Furthermore, the payment of dividends and other distributions to the
Holding Company by its insurance subsidiaries is regulated by insurance laws and
regulations. See "-- Liquidity and Capital Resources -- The Holding Company
-- Liquidity Sources -- Dividends."

103
<PAGE>

On August 22, 2005, the Holding Company's board of directors declared
dividends of $0.286569 per share, for a total of $7 million, on the Series A
preferred shares, and $0.4017361 per share, for a total of $24 million, on the
Series B preferred shares. Both dividends were paid on September 15, 2005 to
shareholders of record as of August 31, 2005.

See "-- Subsequent Events."

Affiliated Transactions. During the years ended December 31, 2005 and
2004, the Holding Company invested an aggregate of $904 million and $761 million
in various subsidiaries, respectively.

On December 12, 2005, RGA repurchased 1.6 million shares of its outstanding
common stock at an aggregate price of approximately $76 million under an
accelerated share repurchase agreement with a major bank. The bank borrowed the
stock sold to RGA from third parties and is purchasing the shares in the open
market over the subsequent few months to return to the lenders. RGA will either
pay or receive an amount based on the actual amount paid by the bank to purchase
the shares. These repurchases resulted in an increase in the Company's ownership
percentage of RGA to approximately to 53% at December 31, 2005 from
approximately 52% at December 31, 2004. In February 2006, the final purchase
price was determined resulting in a cash settlement substantially equal to the
aggregate cost. RGA recorded the initial repurchase of shares as treasury stock
and recorded the amount received as an adjustment to the cost of the treasury
stock.

The Holding Company lends funds, as necessary, to its affiliates, some of
which are regulated, to meet their capital requirements. Such loans to
affiliates consisted of the following at December 31, 2005 and 2004:

<Table>
<Caption>
DECEMBER 31,
INTEREST -------------
AFFILIATE RATE MATURITY DATE 2005 2004
- --------- -------- -------------------- ------ ----
(IN MILLIONS)
<S> <C> <C> <C> <C>
Metropolitan Life........................ 7.13% December 15, 2032 $ 400 $400
Metropolitan Life........................ 7.13% January 15, 2033 100 100
Metropolitan Life........................ 5.00% December 31, 2007 800 --
MetLife Investors USA Insurance
Company................................ 7.35% April 1, 2035 400 --
------ ----
Total.................................... $1,700 $500
====== ====
</Table>

Share Repurchase. On October 26, 2004, the Holding Company's Board of
Directors authorized a $1 billion common stock repurchase program. Under this
authorization, the Holding Company may purchase its common stock from the
MetLife Policyholder Trust, in the open market and in privately negotiated
transactions.

On December 16, 2004, the Holding Company repurchased 7,281,553 shares of
its outstanding common stock at an aggregate cost of $300 million under an
accelerated common stock repurchase agreement with a major bank. The bank
borrowed the stock sold to the Holding Company from third parties and purchased
the common stock in the open market to return to such third parties. In April
2005, the Holding Company received a cash adjustment of approximately $7 million
based on the actual amount paid by the bank to purchase the common stock, for a
final purchase price of approximately $293 million. The Holding Company recorded
the shares initially repurchased as treasury stock and recorded the amount
received as an adjustment to the cost of the treasury stock.

At December 31, 2005, the Holding Company had approximately $716 million
remaining on its October 26, 2004 common stock repurchase program. As a result
of the acquisition of Travelers, the Holding Company has suspended its common
stock repurchase activity. Future common stock repurchases will be dependent
upon several factors, including the Company's capital position, its financial
strength and credit ratings, general market conditions and the price of the
Holding Company's common stock.

104
<PAGE>

The following table summarizes the 2004 and 2003 common stock repurchase
activity of the Holding Company, which includes the accelerated common stock
repurchase activity in the fourth quarter of 2004:

<Table>
<Caption>
DECEMBER 31,
------------------------
2004 2003
----------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Shares Repurchased......................................... 26,373,952 2,997,200
Cost....................................................... $ 1,000 $ 97
</Table>

Support Agreements. The Holding Company has net worth maintenance
agreements with three of its insurance subsidiaries, MetLife Investors, First
MetLife Investors Insurance Company and MetLife Investors Insurance Company of
California. Under these agreements, as subsequently amended, 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, 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, 2005, 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, 2005.

In connection with the acquisition of Travelers, support agreements
regarding certain subsidiaries of the Holding Company were provided to various
insurance regulators. The Holding Company committed to the Delaware Department
of Insurance, in the event that at December 31, 2005 the total adjusted capital
of MTL, a Delaware subsidiary of the Holding Company, is below 250% of the
company action level RBC, the Holding Company would make a capital contribution
to MTL in an amount that would make up for such shortfall. Pursuant to this
commitment, during 2005, the Holding Company made a capital contribution of $50
million to MTL. At December 31, 2005, MTL's company action level was in excess
of 250%. The Holding Company also committed to the South Carolina Department of
Insurance to take necessary action to maintain the minimum capital and surplus
of The Travelers Life and Annuity Reinsurance Company, a South Carolina
subsidiary of the Holding Company, at the greater of $250,000 or 10% of net loss
reserves (loss reserves less deferred acquisition costs).

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, its portfolio of liquid assets, anticipated securities
issuances 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 and preferred stock, contribute
capital to its subsidiaries, pay all operating expenses, and meet its cash
needs.

SUBSEQUENT EVENTS

On February 21, 2006, the Holding Company's board of directors declared
dividends of $0.3432031 per share, for a total of $9 million, on its Series A
preferred shares, and $0.4062500 per share, for a total of $24 million, on its
Series B preferred shares, subject to the final confirmation that it has met the
financial tests specified in the Series A and Series B preferred shares, which
the Holding Company anticipates will be made on or about March 5, 2006, the
earliest date permitted in accordance with the terms of the securities. Both
dividends will be payable March 15, 2006 to shareholders of record as of
February 28, 2006.

OFF-BALANCE SHEET ARRANGEMENTS

COMMITMENTS TO FUND PARTNERSHIP INVESTMENTS

The Company makes commitments to fund partnership investments in the normal
course of business for the purpose of enhancing the Company's total return on
its investment portfolio. The amounts of these unfunded commitments were $2,684
million and $1,324 million at December 31, 2005 and 2004, respectively. The
Company anticipates that these amounts will be invested in partnerships over the
next five years. There are no other obligations or liabilities arising from such
arrangements that are reasonably likely to become material.

105
<PAGE>

MORTGAGE LOAN COMMITMENTS

The Company commits to lend funds under mortgage loan commitments. The
amounts of these mortgage loan commitments were $2,974 million and $1,189
million at December 31, 2005 and 2004, respectively. The purpose of these loans
is to enhance the Company's total return on its investment portfolio. There are
no other obligations or liabilities arising from such arrangements that are
reasonably likely to become material.

LEASE COMMITMENTS

The Company, as lessee, has entered into various lease and sublease
agreements for office space, data processing and other equipment. The Company's
commitments under such lease agreements are included within the contractual
obligations table. See "-- Liquidity and Capital Resources -- The Company --
Liquidity Uses."

CREDIT FACILITIES AND LETTER OF CREDIT

The Company maintains committed and unsecured credit facilities and letters
of credit with various financial institutions. See "-- Liquidity and Capital
Resources -- The Company -- Liquidity Sources -- Credit Facilities
and -- Letters of Credit" for further description of such arrangements.

SHARE-BASED ARRANGEMENTS

In connection with the issuance of the common equity units, the Holding
Company has issued forward stock purchase contracts under which the Company will
issue, in 2008 and 2009, between 39.0 and 47.8 million shares, depending upon
whether the share price is greater than $43.45 and less than $53.10. See
"-- Liquidity and Capital Resources -- The Holding Company -- Liquidity
Sources -- Common Equity Units" for further description of such arrangements.

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 less than $1 million to $2 billion, with a cumulative
maximum of $5.2 billion, 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 Company has also guaranteed minimum investment returns on certain
international retirement funds in accordance with local laws. Since these
guarantees are 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 guarantees in the future.

106
<PAGE>

In the first quarter of 2005, the Company recorded a liability of $4
million with respect to indemnities provided in connection with a certain
disposition. The approximate term for this liability is 18 months. The maximum
potential amount of future payments the Company could be required to pay under
these indemnities is approximately $500 million. Due to the uncertainty in
assessing changes to the liability over the term, the liability on the Company's
consolidated balance sheet will remain until either expiration or settlement of
the guarantee unless evidence clearly indicates that the estimates should be
revised. In the third quarter of 2005, the Company released $6 million of a
liability due to the expiration of indemnities provided in a prior year
disposition. The Company's recorded liabilities at December 31, 2005 and 2004
for indemnities, guarantees and commitments were $9 million and $10 million,
respectively.

In connection with RSATs, 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 the value of the referenced
credits becomes worthless, is $593 million at December 31, 2005. The credit
default swaps expire at various times during the next six years.

OTHER COMMITMENTS

TIC is a member of the Federal Home Loan Bank of Boston (the "FHLB of
Boston") and has entered into several funding agreements with the FHLB of Boston
whereby TIC has issued such funding agreements in exchange for cash and for
which the FHLB of Boston has been granted a blanket lien on TIC's residential
mortgages and mortgage-backed securities to collateralize TIC's obligations
under the funding agreements. TIC maintains control over these pledged assets,
and may use, commingle, encumber or dispose of any portion of the collateral as
long as there is no event of default and the remaining qualified collateral is
sufficient to satisfy the collateral maintenance level. The funding agreements
and the related security agreement represented by this blanket lien, provide
that upon any event of default by TIC, the FHLB of Boston's recovery is limited
to the amount of TIC's liability under the outstanding funding agreements. The
amount of the Company's liability for funding agreements with the Bank as of
December 31, 2005 is $1.1 billion, which is included in policyholder account
balances.

COLLATERAL FOR SECURITIES LENDING

The Company has noncash collateral for securities lending on deposits from
customers, which cannot be sold or re-pledged, and which has not been recorded
on its consolidated balance sheets. The amount of this collateral was $207
million and $17 million at December 31, 2005 and 2004, respectively.

PENSIONS AND POSTRETIREMENT BENEFIT PLANS

DESCRIPTION OF PLANS

Plan Description Overview

Subsidiaries of the Company (the "Subsidiaries") sponsor and/or administer
various qualified and non-qualified defined benefit pension plans and
postretirement employee benefit plans covering employees and sales
representatives who meet specified eligibility requirements.

Virtually all of the Subsidiaries' obligations under the defined benefit
pension plans relate to traditional defined benefit obligations. Effective
January 1, 1994, the basic plan benefit under the traditional defined benefit
pension plan was amended to provide an annual benefit based upon a participant's
final five year average earnings and credited years of service integrated with
social security benefits.

Effective January 1, 2003 the pension plan was amended to incorporate a new
benefit formula for employees hired on or after January 1, 2002 and those
existing employees who elected to have new accruals after December 31, 2002
determined under the new formula. Under the new benefit formula, amounts are
credited to individual participants' "hypothetical" accounts. Such plan
accumulations are commonly referred to as cash balance plans. Eligible
participants accounts are credited monthly for benefits equal to five percent of
eligible monthly pay, and an additional five percent on the excess eligible
monthly pay over the current
107
<PAGE>

social security wage base. Participants are also credited interest each month
based on the average annual rate of interest on 30-year U.S. Treasury securities
as published by the IRS in November of the prior year.

Postretirement benefits consist primarily of healthcare and life insurance
benefits. Employees of the Subsidiaries who were hired prior to 2003 (or, in
certain cases, rehired during or after 2003) and meet age and service criteria
while working for a covered subsidiary, may become eligible for these
postretirement benefits, at various levels, in accordance with the applicable
plans. Employees hired after 2003 are not eligible for postretirement benefits.

Financial Summary

A summary of the plan obligations and plan assets for the pension and
postretirement benefit plans for the years ended December 31, 2005 and 2004 are
presented below. A December 31 measurement date is used for all the
Subsidiaries' defined benefit pension and other postretirement benefit plans. As
described more fully in the discussion of plan assets which follows, the
Subsidiaries have issued group annuity and life insurance contracts supporting
98% of all pension and postretirement benefit plan assets.

The benefit obligations and funded status of the Company's defined benefit
pension and postretirement benefit plans are as follows:

<Table>
<Caption>
DECEMBER 31,
------------------------------------
POSTRETIREMENT
PENSION BENEFITS BENEFITS
----------------- ----------------
2005 2004 2005 2004
------- ------- ------- ------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Projected benefit obligation at end of year....... $5,766 $5,523 $ 2,176 $1,975
Fair value of plan assets at end of year.......... 5,518 5,392 1,093 1,062
------ ------ ------- ------
Underfunded....................................... $ (248) $ (131) $(1,083) $ (913)
Unrecognized net asset at transition.............. -- 1 1 --
Unrecognized net actuarial losses................. 1,528 1,510 377 199
Unrecognized prior service cost................... 54 67 (122) (165)
------ ------ ------- ------
Prepaid (accrued) benefit cost.................... $1,334 $1,447 $ (827) $ (879)
====== ====== ======= ======
Qualified plan prepaid pension cost............... $1,691 $1,782 $ -- $ --
Non-qualified plan accrued pension cost........... (435) (478) (827) (879)
Intangible assets................................. 12 13 -- --
Accumulated other comprehensive loss.............. 66 130 -- --
------ ------ ------- ------
Prepaid (accrued) benefit cost.................... $1,334 $1,447 $ (827) $ (879)
====== ====== ======= ======
</Table>

The prepaid (accrued) benefit cost for pension benefits presented in the
above table consists of prepaid benefit costs of $1,696 million and $1,785
million as of December 31, 2005 and 2004, respectively, and accrued benefit
costs of $362 million and $338 million as of December 31, 2005 and 2004,
respectively.

The aggregate projected benefit obligation and aggregate fair value of plan
assets for the pension plans were as follows:

<Table>
<Caption>
NON-QUALIFIED
QUALIFIED PLAN PLAN TOTAL
--------------- ------------- ---------------
2005 2004 2005 2004 2005 2004
------ ------ ----- ----- ------ ------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Aggregate fair value of plan assets
(principally Company
contracts)....................... $5,518 $5,392 $ -- $ -- $5,518 $5,392
Aggregate projected benefit
obligation....................... 5,258 4,999 508 524 5,766 5,523
------ ------ ----- ----- ------ ------
Over (under) funded................ $ 260 $ 393 $(508) $(524) $ (248) $ (131)
====== ====== ===== ===== ====== ======
</Table>

108
<PAGE>

The accumulated benefit obligation for all defined benefit pension plans
was $5,349 million and $5,149 million at December 31, 2005 and 2004,
respectively.

Information for pension plans with an accumulated benefit obligation in
excess of plan assets:

<Table>
<Caption>
DECEMBER 31,
-------------
2005 2004
----- -----
(IN MILLIONS)
<S> <C> <C>
Projected benefit obligation................................ $538 $550
Accumulated benefit obligation.............................. $449 $482
Fair value of plan assets................................... $ 19 $ 17
</Table>

Information for pension and other postretirement plans with a projected
benefit obligation in excess of plan assets:

<Table>
<Caption>
DECEMBER 31,
-----------------------------
PENSION POSTRETIREMENT
BENEFITS BENEFITS
----------- ---------------
2005 2004 2005 2004
---- ---- ------ ------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Projected benefit obligation.......................... $538 $550 $2,176 $1,975
Fair value of plan assets............................. $ 19 $ 17 $1,093 $1,062
</Table>

PENSION AND POSTRETIREMENT BENEFIT PLAN OBLIGATIONS

Pension Plan Obligations

Statement of Financial Accounting Standards ("SFAS") No. 87, Employers'
Accounting for Pensions ("SFAS 87") establishes the accounting for pension plan
obligations. Under SFAS 87, the projected pension benefit obligation ("PBO") is
defined as the actuarially calculated present value of vested and non vested
pension benefits accrued based on future salary levels. The accumulated pension
benefit obligation ("ABO") is the actuarial present value of vested and
non-vested pension benefits accrued based on current salary levels. The PBO and
ABO of the pension plans are set forth in the preceding section.

Obligations, both PBO and ABO, of the defined benefit pension plans are
determined using a variety of actuarial assumptions, from which actual results
may vary. Some of the more significant of these assumptions include the discount
rate used to determine the present value of future benefit payments, the
expected rate of compensation increases and average expected retirement age.

Assumptions used in determining pension plan obligations were as follows:

<Table>
<Caption>
DECEMBER 31,
-----------------
2005 2004
------- -------
<S> <C> <C>
Weighted average discount rate.............................. 5.82% 5.87%
Rate of compensation increase............................... 3% - 8% 3% - 8%
Average expected retirement age............................. 61 61
</Table>

The discount rate is determined annually based on the yield, measured on a
yield to worst basis, of a hypothetical portfolio constructed of high-quality
debt instruments available on the valuation date, which would provide the
necessary future cash flows to pay the aggregate projected pension benefit
obligation when due. The yield of this hypothetical portfolio, constructed of
bonds rated AA or better by Moody's resulted in a discount rate of approximately
5.82% and 5.87% for the defined pension plans as of December 31, 2005 and 2004,
respectively.

A decrease (increase) in the discount rate increases (decreases) the
pension benefit obligation. This increase is amortized into earnings as an
actuarial loss (gain). Based on the December 31, 2005 PBO, a 25 basis point
decrease (increase) in the discount rate would result in an increase (decrease)
in the PBO of approximately $175 million.

109
<PAGE>

Changes in discount rates are amortized into earnings as actuarial gains
and losses. At the end of 2005, total unrecognized actuarial losses were $1,528
million, as compared to $1,510 million in 2004. The majority of the unrecognized
actuarial losses are due to declining discount rates in recent years. These
losses will be amortized on a straight-line basis over the average remaining
service period of active employees expected to receive benefits under the
benefit plans. At the end of 2005, the average remaining service period of
active employees was 8.3 years for the pension plans.

As the benefits provided under the defined pension plans are calculated as
a percentage of future earnings, an assumption of future compensation increases
is required to determine the projected benefit obligation. These rates are
derived through periodic analysis of historical demographic data conducted by an
independent actuarial firm. The last review of such data was conducted using
salary information through 2003 and the Subsidiaries believe that no
circumstances have since occurred that would result in a material change to
these rates.

SFAS 87 also requires the recognition of an additional minimum liability
and an intangible asset (limited to unrecognized prior service cost) if the
market value of pension plan assets is less than the ABO at the measurement
date. The Subsidiaries' additional minimum liability was $78 million, and the
intangible asset was $12 million, at December 31, 2005. The excess of the
additional minimum liability over the intangible asset, of $66 million is
recorded, net of income taxes, as a reduction of accumulated other comprehensive
income.

Postretirement Benefit Plan Obligations

SFAS No. 106, Employers Accounting for Postretirement Benefits Other than
Pensions ("SFAS 106"), establishes the accounting for expected postretirement
plan benefit obligations ("EPBO") which represents the actuarial present value
of all postretirement benefits expected to be paid after reti