0000937834us-gaap:~~InterestRateContractMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-01-012022-06-30~~NonoperatingIncomeExpenseMemberus-gaap:NondesignatedMember2023-01-012023-03-31

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

Form 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~JUNE 30, 2022~~MARCH 31, 2023


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

FOR THE TRANSITION PERIOD FROM TO

Commission file number: 000-55029

________________________________________

Metropolitan Life Insurance Company

(Exact name of registrant as specified in its charter)

New York

13-5581829

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

200 Park Avenue,

New York,

10166-0188

(Address of principal executive offices)

(Zip Code)

(212) 578-9500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

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 ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

At ~~August~~May 9, ~~2022,~~2023, 494,466,664 shares of the registrant’s common stock were outstanding, all of which were owned directly by MetLife, Inc.

REDUCED DISCLOSURE FORMAT

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is, therefore, filing this Form 10-Q with the reduced disclosure format.

Table of Contents


		Page
Part I — Financial Information
Item 1.	Financial Statements (Unaudited) (at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 and for the Three Months Ended March 31, 2023 and ~~Six Months Ended June 30, 2022 and 2021)~~2022)
	Interim Condensed Consolidated Balance Sheets	4
	Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	5
	Interim Condensed Consolidated Statements of Equity	6
	Interim Condensed Consolidated Statements of Cash Flows	7
	Notes to the Interim Condensed Consolidated Financial Statements:
	Note 1 — Business, Basis of Presentation and Summary of Significant Accounting Policies	8
	Note 2 — Segment Information	1225
	Note 3 — ~~Insurance~~Future Policy Benefits	1628
	Note 4 — ~~Closed Block~~Policyholder Account Balances	1835
	Note 5 — ~~Investments~~Market Risk Benefits	2142
	Note 6 — ~~Derivatives~~Separate Accounts	3845
	Note 7 — ~~Fair~~Deferred Policy Acquisition Costs, Value of Business Acquired and Unearned Revenue	49
	Note 8 — ~~Equity~~Closed Block	6551
	Note 9 — Investments	55
	Note 10 — Derivatives	71
	Note 11 — Fair Value	80
	Note 12 — Long-term Debt	93
	Note 13 — Equity	93
	Note 1 4 — Other Revenues and Other Expenses	6896
	Note 101 5 — Income Tax	6997
	Note 111 6 — Contingencies, Commitments and Guarantees	6997
	Note 121 7 — Related Party Transactions	72100
	Note 18 — Subsequent Events	102
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	75103
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	116
Item 4.	Item 4. Controls and Procedures	83123

Part II — Other Information
Item 1.	Legal Proceedings	84123
Item 1A.	Risk Factors	84123
Item 6.	Exhibits	85124

Signatures		86125

Table of Contents

As used in this Form 10-Q, “MLIC,” the “Company,” “we,” “our” and “us” refer to Metropolitan Life Insurance Company, a New York corporation incorporated in 1868, and its subsidiaries. Metropolitan Life Insurance Company is a wholly-owned subsidiary of MetLife, Inc. (MetLife, Inc., together with its subsidiaries and affiliates, “MetLife”).

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10‑Q, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events and do not relate strictly to historical or current facts. They use words and terms such as “anticipate,” “are confident,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “if,” “intend,” “likely,” “may,” “plan,” “potential,” “project,” “should,” “will,” “would” and other words and terms of similar meaning or that are otherwise tied to future periods or future performance, in each case in all derivative forms. They include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, future sales efforts, future expenses, the outcome of contingencies such as legal proceedings, and future trends in operations and financial results.

Many factors determine Company results, and they involve unpredictable risks and uncertainties. Our forward-looking statements depend on our assumptions, our expectations, and our understanding of the economic environment, but they may be inaccurate and may change. We do not guarantee any future performance. Our results could differ materially from those we express or imply in forward-looking statements. The risks, uncertainties and other factors, including those relating to the COVID-19 pandemic, identified in Metropolitan Life Insurance Company’s filings with the U.S. Securities and Exchange Commission, and others, may cause such differences. These factors include:

(1) economic condition difficulties, including risks relating to public health, interest rates, credit spreads, equity, real estate, obligors and counterparties, government default, derivatives, and ~~derivatives;~~climate change;

(2) global capital and credit market adversity;

(3) credit facility inaccessibility;

(4) financial strength or credit ratings downgrades;

(5) unavailability, unaffordability, or inadequate reinsurance;

(6) statutory life insurance reserve financing costs or limited market capacity;

(7) legal, regulatory, and supervisory and enforcement policy changes;

(8) changes in tax rates, tax laws or interpretations;

(9) litigation and regulatory investigations;

(10) London Interbank Offered Rate discontinuation and transition to alternative reference rates;

(11) unsuccessful efforts to meet all environmental, social, and governance standards or to enhance our sustainability;

(12) investment defaults, downgrades, or volatility;

(13) investment sales or lending difficulties;

(14) collateral or derivative-related payments;

(15) investment valuations, allowances, or impairments changes;

(16) claims or other results that differ from our estimates, assumptions, or models;

(17) business competition;

(18) catastrophes;

(19) climate changes or responses to it;

(20) deficiencies in our closed block;

(21) ~~acceleration~~impairment of ~~amortization of deferred policy acquisition costs, deferred sales inducements,~~ value of business acquired, value of distribution agreements acquired or value of customer relationships acquired;

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(22) product guarantee volatility, costs, and counterparty risks;

(23) risk management failures;

(24) insufficient protection from operational risks;

(25) failure to protect confidentiality and integrity of data or other cybersecurity or disaster recovery failures;

(26) accounting standards changes;

(27) excessive risk-taking; and

(28) marketing and distribution difficulties.

Metropolitan Life Insurance Company does not undertake any obligation to publicly correct or update any forward-looking statement if Metropolitan Life Insurance Company later becomes aware that such statement is not likely to be achieved. Please consult any further disclosures Metropolitan Life Insurance Company makes on related subjects in subsequent reports to the U.S. Securities and Exchange Commission.

Note Regarding Reliance on Statements in Our Contracts

See “Exhibits — Note Regarding Reliance on Statements in Our Contracts” for information regarding agreements included as exhibits to this Quarterly Report on Form 10-Q.

Table of Contents

Part I — Financial Information

Item 1. Financial Statements

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Interim Condensed Consolidated Balance Sheets

~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 (Unaudited)

(In millions, except share and per share data)


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Assets	Assets					Assets
Investments:	Investments:					Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $153,812 and $158,354, respectively; allowance for credit loss of $124 and $53, respectively)		$	146,107	$	175,885

Mortgage loans (net of allowance for credit loss of $416 and $536, respectively; includes $150 and $224, respectively, relating to variable interest entities; includes $109 and $127, respectively, under the fair value option and $24 and $0, respectively, of mortgage loans held-for-sale)		61,392		60,219
Fixed maturity securities available-for-sale, at estimated fair value (net of allowance for credit loss of $135 and $114, respectively;) and amortized cost: $162,095 and $160,477, respectively						Fixed maturity securities available-for-sale, at estimated fair value (net of allowance for credit loss of $135 and $114, respectively;) and amortized cost: $162,095 and $160,477, respectively	$	150,960	$	145,576
Mortgage loans (net of allowance for credit loss of $587 and $448, respectively; includes $145 and $144, respectively, relating to variable interest entities)						Mortgage loans (net of allowance for credit loss of $587 and $448, respectively; includes $145 and $144, respectively, relating to variable interest entities)	64,053		62,570
Policy loans	Policy loans	5,746		5,816		Policy loans	5,701		5,729
Real estate and real estate joint ventures (includes $1,002 and $1,094, respectively, relating to variable interest entities, $309 and $240, respectively, under the fair value option and $0 and $175, respectively, of real estate held-for-sale)		8,050		7,873
Real estate and real estate joint ventures (includes $1,380 and $1,358, respectively, relating to variable interest entities, $294 and $299, respectively, under the fair value option)						Real estate and real estate joint ventures (includes $1,380 and $1,358, respectively, relating to variable interest entities, $294 and $299, respectively, under the fair value option)	8,492		8,416
Other limited partnership interests	Other limited partnership interests	8,285		8,754		Other limited partnership interests	7,817		7,887
Short-term investments, at estimated fair value	Short-term investments, at estimated fair value	1,550		4,866		Short-term investments, at estimated fair value	2,046		2,759
Other invested assets (includes $920 and $924, respectively, of leveraged and direct financing leases and $167 and $171, respectively, relating to variable interest entities and allowance for credit loss of $26 and $32, respectively)		20,162		19,860
Other invested assets (net of allowance for credit loss of $14 and $19, respectively; includes $848 and $858, respectively, of leveraged and direct financing leases; $161 and $161, respectively, relating to variable interest entities)						Other invested assets (net of allowance for credit loss of $14 and $19, respectively; includes $848 and $858, respectively, of leveraged and direct financing leases; $161 and $161, respectively, relating to variable interest entities)	18,737		19,148
Total investments	Total investments	251,292		283,273		Total investments	257,806		252,085
Cash and cash equivalents, principally at estimated fair value	Cash and cash equivalents, principally at estimated fair value	10,044		9,957		Cash and cash equivalents, principally at estimated fair value	5,225		9,405
Accrued investment income	Accrued investment income	1,759		1,767		Accrued investment income	2,080		1,949
Premiums, reinsurance and other receivables	Premiums, reinsurance and other receivables	21,187		20,505		Premiums, reinsurance and other receivables	21,508		20,791
Market risk benefits, at estimated fair value						Market risk benefits, at estimated fair value	124		174
Deferred policy acquisition costs and value of business acquired	Deferred policy acquisition costs and value of business acquired	4,349		2,598		Deferred policy acquisition costs and value of business acquired	3,757		3,757
Current income tax recoverable	Current income tax recoverable	168		80		Current income tax recoverable	123		165
Deferred income tax asset	Deferred income tax asset	1,247		—		Deferred income tax asset	2,675		2,920
Other assets	Other assets	4,570		4,526		Other assets	5,166		4,352
Separate account assets	Separate account assets	93,206		123,851		Separate account assets	88,357		89,241
Total assets	Total assets	$	387,822	$	446,557	Total assets	$	386,821	$	384,839
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Liabilities	Liabilities					Liabilities
Future policy benefits	Future policy benefits	$	126,505	$	132,274	Future policy benefits	$	128,198	$	126,914
Policyholder account balances	Policyholder account balances	96,029		94,459		Policyholder account balances	104,954		103,407
Market risk benefits, at estimated fair value						Market risk benefits, at estimated fair value	3,432		3,270
Other policy-related balances	Other policy-related balances	8,057		8,094		Other policy-related balances	8,214		7,931
Policyholder dividends payable	Policyholder dividends payable	309		312		Policyholder dividends payable	237		240
Policyholder dividend obligation		—		1,682
Payables for collateral under securities loaned and other transactions	Payables for collateral under securities loaned and other transactions	17,489		24,866		Payables for collateral under securities loaned and other transactions	13,443		14,171
Short-term debt	Short-term debt	100		100		Short-term debt	99		99
Long-term debt	Long-term debt	1,662		1,659		Long-term debt	1,887		1,676

Deferred income tax liability		—		2,036
Other liabilities	Other liabilities	24,330		23,796		Other liabilities	23,824		24,495
Separate account liabilities	Separate account liabilities	93,206		123,851		Separate account liabilities	88,357		89,241
Total liabilities	Total liabilities	367,687		413,129		Total liabilities	372,645		371,444
Contingencies, Commitments and Guarantees (Note 11)		0		0

Contingencies, Commitments and Guarantees (Note 16)						Contingencies, Commitments and Guarantees (Note 16)
Equity	Equity					Equity
Metropolitan Life Insurance Company stockholder’s equity:	Metropolitan Life Insurance Company stockholder’s equity:					Metropolitan Life Insurance Company stockholder’s equity:
Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 494,466,664 shares issued and outstanding	Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 494,466,664 shares issued and outstanding	5		5		Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 494,466,664 shares issued and outstanding	5		5
Additional paid-in capital	Additional paid-in capital	12,476		12,464		Additional paid-in capital	12,476		12,476
Retained earnings	Retained earnings	11,277		10,868		Retained earnings	8,315		9,022
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(3,777)		9,917		Accumulated other comprehensive income (loss)	(6,832)		(8,320)
Total Metropolitan Life Insurance Company stockholder’s equity	Total Metropolitan Life Insurance Company stockholder’s equity	19,981		33,254		Total Metropolitan Life Insurance Company stockholder’s equity	13,964		13,183
Noncontrolling interests	Noncontrolling interests	154		174		Noncontrolling interests	212		212
Total equity	Total equity	20,135		33,428		Total equity	14,176		13,395
Total liabilities and equity	Total liabilities and equity	$	387,822	$	446,557	Total liabilities and equity	$	386,821	$	384,839

See accompanying notes to the interim condensed consolidated financial statements.

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

~~For the~~ Three Months Ended March 31, 2023 and ~~Six Months Ended June 30,~~ 2022 ~~and 2021~~ (Unaudited)

(In millions)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
Revenues	Revenues									Revenues
Premiums	Premiums	$	5,668	$	6,451	$	11,578	$	12,256	Premiums		$	5,849	$	5,906
Universal life and investment-type product policy fees	Universal life and investment-type product policy fees	515		514		1,039		1,049		Universal life and investment-type product policy fees		430		479
Net investment income	Net investment income	2,442		3,034		5,268		6,221		Net investment income		2,685		2,826
Other revenues	Other revenues	373		432		785		857		Other revenues		415		411

Net investment gains (losses)	Net investment gains (losses)	(83)		342		(309)		502		Net investment gains (losses)		(102)		(226)
Net derivative gains (losses)	Net derivative gains (losses)	345		25		526		(990)		Net derivative gains (losses)		(560)		121
Total revenues	Total revenues	9,260		10,798		18,887		19,895		Total revenues		8,717		9,517
Expenses	Expenses									Expenses
Policyholder benefits and claims	Policyholder benefits and claims	5,936		7,129		12,497		13,708		Policyholder benefits and claims		6,223		6,651
Policyholder liability remeasurement (gains) losses										Policyholder liability remeasurement (gains) losses		(57)		(29)
Market risk benefits remeasurement (gains) losses										Market risk benefits remeasurement (gains) losses		244		(1,361)
Interest credited to policyholder account balances	Interest credited to policyholder account balances	530		512		1,021		1,023		Interest credited to policyholder account balances		831		502
Policyholder dividends	Policyholder dividends	154		200		313		405		Policyholder dividends		123		161
Other expenses	Other expenses	1,419		1,205		2,718		2,391		Other expenses		1,548		1,308
Total expenses	Total expenses	8,039		9,046		16,549		17,527		Total expenses		8,912		7,232
Income (loss) before provision for income tax	Income (loss) before provision for income tax	1,221		1,752		2,338		2,368		Income (loss) before provision for income tax		(195)		2,285
Provision for income tax expense (benefit)	Provision for income tax expense (benefit)	207		308		365		357		Provision for income tax expense (benefit)		(104)		403

Net income (loss)	Net income (loss)	1,014		1,444		1,973		2,011		Net income (loss)		(91)		1,882
Less: Net income (loss) attributable to noncontrolling interests	Less: Net income (loss) attributable to noncontrolling interests	2		1		2		4		Less: Net income (loss) attributable to noncontrolling interests		(2)		—
Net income (loss) attributable to Metropolitan Life Insurance Company	Net income (loss) attributable to Metropolitan Life Insurance Company	$	1,012	$	1,443	$	1,971	$	2,007	Net income (loss) attributable to Metropolitan Life Insurance Company		$	(89)	$	1,882
Comprehensive income (loss)	Comprehensive income (loss)	$	(7,443)	$	2,644	$	(11,721)	$	228	Comprehensive income (loss)		$	1,398	$	(167)
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax	Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax	2		1		2		4		Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax		(1)		—
Comprehensive income (loss) attributable to Metropolitan Life Insurance Company	Comprehensive income (loss) attributable to Metropolitan Life Insurance Company	$	(7,445)	$	2,643	$	(11,723)	$	224	Comprehensive income (loss) attributable to Metropolitan Life Insurance Company		$	1,399	$	(167)

See accompanying notes to the interim condensed consolidated financial statements.

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Metropolitan Life Insurance Company

(Exact name of registrant as specified in its charter)

New York

13-5581829

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

200 Park Avenue,

New York,

10166-0188

(Address of principal executive offices)

(Zip Code)

(212) 578-9500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☐
		Emerging growth company	☐

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

At May 9, 2023, 494,466,664 shares of the registrant’s common stock were outstanding, all of which were owned directly by MetLife, Inc.

REDUCED DISCLOSURE FORMAT

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is, therefore, filing this Form 10-Q with the reduced disclosure format.

Table of Contents


		Page
Part I — Financial Information
Item 1.	Financial Statements (Unaudited) (at March 31, 2023 and December 31, 2022 and for the Three Months Ended March 31, 2023 and 2022)
	Interim Condensed Consolidated Balance Sheets	4
	Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	5
	Interim Condensed Consolidated Statements of Equity	6
	Interim Condensed Consolidated Statements of Cash Flows	7
	Notes to the Interim Condensed Consolidated Financial Statements:
	Note 1 — Business, Basis of Presentation and Summary of Significant Accounting Policies	8
	Note 2 — Segment Information	25
	Note 3 — Future Policy Benefits	28
	Note 4 — Policyholder Account Balances	35
	Note 5 — Market Risk Benefits	42
	Note 6 — Separate Accounts	45
	Note 7 — Deferred Policy Acquisition Costs, Value of Business Acquired and Unearned Revenue	49
	Note 8 — Closed Block	51
	Note 9 — Investments	55
	Note 10 — Derivatives	71
	Note 11 — Fair Value	80
	Note 12 — Long-term Debt	93
	Note 13 — Equity	93
	Note 1 4 — Other Revenues and Other Expenses	96
	Note 1 5 — Income Tax	97
	Note 1 6 — Contingencies, Commitments and Guarantees	97
	Note 1 7 — Related Party Transactions	100
	Note 18 — Subsequent Events	102
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	103
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	116
Item 4.	Item 4. Controls and Procedures	123

Part II — Other Information
Item 1.	Legal Proceedings	123
Item 1A.	Risk Factors	123
Item 6.	Exhibits	124

Signatures		125

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Note Regarding Forward-Looking Statements

(2) global capital and credit market adversity;

(3) credit facility inaccessibility;

(4) financial strength or credit ratings downgrades;

(5) unavailability, unaffordability, or inadequate reinsurance;

(6) statutory life insurance reserve financing costs or limited market capacity;

(7) legal, regulatory, and supervisory and enforcement policy changes;

(8) changes in tax rates, tax laws or interpretations;

(9) litigation and regulatory investigations;

(10) London Interbank Offered Rate discontinuation and transition to alternative reference rates;

(11) unsuccessful efforts to meet all environmental, social, and governance standards or to enhance our sustainability;

(12) investment defaults, downgrades, or volatility;

(13) investment sales or lending difficulties;

(14) collateral or derivative-related payments;

(15) investment valuations, allowances, or impairments changes;

(16) claims or other results that differ from our estimates, assumptions, or models;

(17) business competition;

(18) catastrophes;

(19) climate changes or responses to it;

(20) deficiencies in our closed block;

(21) impairment of value of business acquired, value of distribution agreements acquired or value of customer relationships acquired;

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(22) product guarantee volatility, costs, and counterparty risks;

(23) risk management failures;

(24) insufficient protection from operational risks;

(25) failure to protect confidentiality and integrity of data or other cybersecurity or disaster recovery failures;

(26) accounting standards changes;

(27) excessive risk-taking; and

(28) marketing and distribution difficulties.

Note Regarding Reliance on Statements in Our Contracts

See “Exhibits — Note Regarding Reliance on Statements in Our Contracts” for information regarding agreements included as exhibits to this Quarterly Report on Form 10-Q.

Table of Contents

Part I — Financial Information

Item 1. Financial Statements

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Interim Condensed Consolidated Balance Sheets

March 31, 2023 and December 31, 2022 (Unaudited)

(In millions, except share and per share data)


	March 31, 2023		December 31, 2022
Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (net of allowance for credit loss of $135 and $114, respectively;) and amortized cost: $162,095 and $160,477, respectively	$	150,960	$	145,576
Mortgage loans (net of allowance for credit loss of $587 and $448, respectively; includes $145 and $144, respectively, relating to variable interest entities)	64,053		62,570
Policy loans	5,701		5,729
Real estate and real estate joint ventures (includes $1,380 and $1,358, respectively, relating to variable interest entities, $294 and $299, respectively, under the fair value option)	8,492		8,416
Other limited partnership interests	7,817		7,887
Short-term investments, at estimated fair value	2,046		2,759
Other invested assets (net of allowance for credit loss of $14 and $19, respectively; includes $848 and $858, respectively, of leveraged and direct financing leases; $161 and $161, respectively, relating to variable interest entities)	18,737		19,148
Total investments	257,806		252,085
Cash and cash equivalents, principally at estimated fair value	5,225		9,405
Accrued investment income	2,080		1,949
Premiums, reinsurance and other receivables	21,508		20,791
Market risk benefits, at estimated fair value	124		174
Deferred policy acquisition costs and value of business acquired	3,757		3,757
Current income tax recoverable	123		165
Deferred income tax asset	2,675		2,920
Other assets	5,166		4,352
Separate account assets	88,357		89,241
Total assets	$	386,821	$	384,839
Liabilities and Equity
Liabilities
Future policy benefits	$	128,198	$	126,914
Policyholder account balances	104,954		103,407
Market risk benefits, at estimated fair value	3,432		3,270
Other policy-related balances	8,214		7,931
Policyholder dividends payable	237		240
Payables for collateral under securities loaned and other transactions	13,443		14,171
Short-term debt	99		99
Long-term debt	1,887		1,676
Other liabilities	23,824		24,495
Separate account liabilities	88,357		89,241
Total liabilities	372,645		371,444
Contingencies, Commitments and Guarantees (Note 16)
Equity
Metropolitan Life Insurance Company stockholder’s equity:
Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 494,466,664 shares issued and outstanding	5		5
Additional paid-in capital	12,476		12,476
Retained earnings	8,315		9,022
Accumulated other comprehensive income (loss)	(6,832)		(8,320)
Total Metropolitan Life Insurance Company stockholder’s equity	13,964		13,183
Noncontrolling interests	212		212
Total equity	14,176		13,395
Total liabilities and equity	$	386,821	$	384,839

See accompanying notes to the interim condensed consolidated financial statements.

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Interim Condensed Consolidated Statements of ~~Equity~~Operations and Comprehensive Income (Loss)

~~For the Six~~Three Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ (Unaudited)

(In millions)

Common
Stock Additional
Paid-in
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Total
Metropolitan Life
Insurance Company
Stockholder’s Equity Noncontrolling
Interests Total
Equity
Balance at December 31, 2021 $ 5 $ 12,464 $ 10,868 $ 9,917 $ 33,254 $ 174 $ 33,428
Capital contributions from MetLife, Inc. 1 1 1
Dividends to MetLife, Inc. (881) (881) (881)
Change in equity of noncontrolling interests — (20) (20)
Net income (loss) 959 959 959
Other comprehensive income (loss), net of income tax (5,237) (5,237) (5,237)
Balance at March 31, 2022 5 12,465 10,946 4,680 28,096 154 28,250
Capital contributions from MetLife, Inc. 11 11 11
Dividends to MetLife, Inc. (681) (681) (681)
Change in equity of noncontrolling interests — (2) (2)
Net income (loss) 1,012 1,012 2 1,014
Other comprehensive income (loss), net of income tax (8,457) (8,457) (8,457)
Balance at June 30, 2022 $ 5 $ 12,476 $ 11,277 $ (3,777) $ 19,981 $ 154 $ 20,135

Common
Stock Additional
Paid-in
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Total
Metropolitan Life
Insurance Company
Stockholder’s Equity Noncontrolling
Interests Total
Equity
Balance at December 31, 2020 $ 5 $ 12,460 $ 10,548 $ 11,662 $ 34,675 $ 183 $ 34,858
Capital contributions from MetLife, Inc. 1 1 1
Dividends to MetLife, Inc. (1,030) (1,030) (1,030)
Net income (loss) 564 564 3 567
Other comprehensive income (loss), net of income tax (2,983) (2,983) (2,983)
Balance at March 31, 2021 5 12,461 10,082 8,679 31,227 186 31,413
Capital contributions from MetLife, Inc. 1 1 1
Dividends to MetLife, Inc. (400) (400) (400)
Change in equity of noncontrolling interests — 2 2
Net income (loss) 1,443 1,443 1 1,444
Other comprehensive income (loss), net of income tax 1,200 1,200 1,200
Balance at June 30, 2021 $ 5 $ 12,462 $ 11,125 $ 9,879 $ 33,471 $ 189 $ 33,660


	Three Months Ended March 31,
		2023		2022
Revenues
Premiums		$	5,849	$	5,906
Universal life and investment-type product policy fees		430		479
Net investment income		2,685		2,826
Other revenues		415		411





Net investment gains (losses)		(102)		(226)
Net derivative gains (losses)		(560)		121
Total revenues		8,717		9,517
Expenses
Policyholder benefits and claims		6,223		6,651
Policyholder liability remeasurement (gains) losses		(57)		(29)
Market risk benefits remeasurement (gains) losses		244		(1,361)
Interest credited to policyholder account balances		831		502
Policyholder dividends		123		161
Other expenses		1,548		1,308
Total expenses		8,912		7,232
Income (loss) before provision for income tax		(195)		2,285
Provision for income tax expense (benefit)		(104)		403


Net income (loss)		(91)		1,882
Less: Net income (loss) attributable to noncontrolling interests		(2)		—
Net income (loss) attributable to Metropolitan Life Insurance Company		$	(89)	$	1,882
Comprehensive income (loss)		$	1,398	$	(167)
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax		(1)		—
Comprehensive income (loss) attributable to Metropolitan Life Insurance Company		$	1,399	$	(167)

See accompanying notes to the interim condensed consolidated financial statements.

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Metropolitan Life Insurance Company

(Exact name of registrant as specified in its charter)

New York

13-5581829

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

200 Park Avenue,

New York,

10166-0188

(Address of principal executive offices)

(Zip Code)

(212) 578-9500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☐
		Emerging growth company	☐

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

At May 9, 2023, 494,466,664 shares of the registrant’s common stock were outstanding, all of which were owned directly by MetLife, Inc.

REDUCED DISCLOSURE FORMAT

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is, therefore, filing this Form 10-Q with the reduced disclosure format.

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		Page
Part I — Financial Information
Item 1.	Financial Statements (Unaudited) (at March 31, 2023 and December 31, 2022 and for the Three Months Ended March 31, 2023 and 2022)
	Interim Condensed Consolidated Balance Sheets	4
	Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	5
	Interim Condensed Consolidated Statements of Equity	6
	Interim Condensed Consolidated Statements of Cash Flows	7
	Notes to the Interim Condensed Consolidated Financial Statements:
	Note 1 — Business, Basis of Presentation and Summary of Significant Accounting Policies	8
	Note 2 — Segment Information	25
	Note 3 — Future Policy Benefits	28
	Note 4 — Policyholder Account Balances	35
	Note 5 — Market Risk Benefits	42
	Note 6 — Separate Accounts	45
	Note 7 — Deferred Policy Acquisition Costs, Value of Business Acquired and Unearned Revenue	49
	Note 8 — Closed Block	51
	Note 9 — Investments	55
	Note 10 — Derivatives	71
	Note 11 — Fair Value	80
	Note 12 — Long-term Debt	93
	Note 13 — Equity	93
	Note 1 4 — Other Revenues and Other Expenses	96
	Note 1 5 — Income Tax	97
	Note 1 6 — Contingencies, Commitments and Guarantees	97
	Note 1 7 — Related Party Transactions	100
	Note 18 — Subsequent Events	102
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	103
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	116
Item 4.	Item 4. Controls and Procedures	123

Part II — Other Information
Item 1.	Legal Proceedings	123
Item 1A.	Risk Factors	123
Item 6.	Exhibits	124

Signatures		125

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Note Regarding Forward-Looking Statements

(2) global capital and credit market adversity;

(3) credit facility inaccessibility;

(4) financial strength or credit ratings downgrades;

(5) unavailability, unaffordability, or inadequate reinsurance;

(6) statutory life insurance reserve financing costs or limited market capacity;

(7) legal, regulatory, and supervisory and enforcement policy changes;

(8) changes in tax rates, tax laws or interpretations;

(9) litigation and regulatory investigations;

(10) London Interbank Offered Rate discontinuation and transition to alternative reference rates;

(11) unsuccessful efforts to meet all environmental, social, and governance standards or to enhance our sustainability;

(12) investment defaults, downgrades, or volatility;

(13) investment sales or lending difficulties;

(14) collateral or derivative-related payments;

(15) investment valuations, allowances, or impairments changes;

(16) claims or other results that differ from our estimates, assumptions, or models;

(17) business competition;

(18) catastrophes;

(19) climate changes or responses to it;

(20) deficiencies in our closed block;

(21) impairment of value of business acquired, value of distribution agreements acquired or value of customer relationships acquired;

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(22) product guarantee volatility, costs, and counterparty risks;

(23) risk management failures;

(24) insufficient protection from operational risks;

(25) failure to protect confidentiality and integrity of data or other cybersecurity or disaster recovery failures;

(26) accounting standards changes;

(27) excessive risk-taking; and

(28) marketing and distribution difficulties.

Note Regarding Reliance on Statements in Our Contracts

See “Exhibits — Note Regarding Reliance on Statements in Our Contracts” for information regarding agreements included as exhibits to this Quarterly Report on Form 10-Q.

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Part I — Financial Information

Item 1. Financial Statements

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Interim Condensed Consolidated Balance Sheets

March 31, 2023 and December 31, 2022 (Unaudited)

(In millions, except share and per share data)


	March 31, 2023		December 31, 2022
Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (net of allowance for credit loss of $135 and $114, respectively;) and amortized cost: $162,095 and $160,477, respectively	$	150,960	$	145,576
Mortgage loans (net of allowance for credit loss of $587 and $448, respectively; includes $145 and $144, respectively, relating to variable interest entities)	64,053		62,570
Policy loans	5,701		5,729
Real estate and real estate joint ventures (includes $1,380 and $1,358, respectively, relating to variable interest entities, $294 and $299, respectively, under the fair value option)	8,492		8,416
Other limited partnership interests	7,817		7,887
Short-term investments, at estimated fair value	2,046		2,759
Other invested assets (net of allowance for credit loss of $14 and $19, respectively; includes $848 and $858, respectively, of leveraged and direct financing leases; $161 and $161, respectively, relating to variable interest entities)	18,737		19,148
Total investments	257,806		252,085
Cash and cash equivalents, principally at estimated fair value	5,225		9,405
Accrued investment income	2,080		1,949
Premiums, reinsurance and other receivables	21,508		20,791
Market risk benefits, at estimated fair value	124		174
Deferred policy acquisition costs and value of business acquired	3,757		3,757
Current income tax recoverable	123		165
Deferred income tax asset	2,675		2,920
Other assets	5,166		4,352
Separate account assets	88,357		89,241
Total assets	$	386,821	$	384,839
Liabilities and Equity
Liabilities
Future policy benefits	$	128,198	$	126,914
Policyholder account balances	104,954		103,407
Market risk benefits, at estimated fair value	3,432		3,270
Other policy-related balances	8,214		7,931
Policyholder dividends payable	237		240
Payables for collateral under securities loaned and other transactions	13,443		14,171
Short-term debt	99		99
Long-term debt	1,887		1,676
Other liabilities	23,824		24,495
Separate account liabilities	88,357		89,241
Total liabilities	372,645		371,444
Contingencies, Commitments and Guarantees (Note 16)
Equity
Metropolitan Life Insurance Company stockholder’s equity:
Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 494,466,664 shares issued and outstanding	5		5
Additional paid-in capital	12,476		12,476
Retained earnings	8,315		9,022
Accumulated other comprehensive income (loss)	(6,832)		(8,320)
Total Metropolitan Life Insurance Company stockholder’s equity	13,964		13,183
Noncontrolling interests	212		212
Total equity	14,176		13,395
Total liabilities and equity	$	386,821	$	384,839

See accompanying notes to the interim condensed consolidated financial statements.

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

Three Months Ended March 31, 2023 and 2022 (Unaudited)

(In millions)


	Three Months Ended March 31,
		2023		2022
Revenues
Premiums		$	5,849	$	5,906
Universal life and investment-type product policy fees		430		479
Net investment income		2,685		2,826
Other revenues		415		411





Net investment gains (losses)		(102)		(226)
Net derivative gains (losses)		(560)		121
Total revenues		8,717		9,517
Expenses
Policyholder benefits and claims		6,223		6,651
Policyholder liability remeasurement (gains) losses		(57)		(29)
Market risk benefits remeasurement (gains) losses		244		(1,361)
Interest credited to policyholder account balances		831		502
Policyholder dividends		123		161
Other expenses		1,548		1,308
Total expenses		8,912		7,232
Income (loss) before provision for income tax		(195)		2,285
Provision for income tax expense (benefit)		(104)		403


Net income (loss)		(91)		1,882
Less: Net income (loss) attributable to noncontrolling interests		(2)		—
Net income (loss) attributable to Metropolitan Life Insurance Company		$	(89)	$	1,882
Comprehensive income (loss)		$	1,398	$	(167)
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of income tax		(1)		—
Comprehensive income (loss) attributable to Metropolitan Life Insurance Company		$	1,399	$	(167)

See accompanying notes to the interim condensed consolidated financial statements.

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Interim Condensed Consolidated Statements of Equity

Three Months Ended March 31, 2023 and 2022 (Unaudited)

(In millions)


	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Metropolitan Life Insurance Company Stockholder’s Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2022	$	5	$	12,476	$	9,022	$	(8,320)	$	13,183	$	212	$	13,395
Dividends to MetLife, Inc.					(618)				(618)				(618)
Change in equity of noncontrolling interests									—		1		1
Net income (loss)					(89)				(89)		(2)		(91)
Other comprehensive income (loss), net of income tax							1,488		1,488		1		1,489
Balance at March 31, 2023	$	5	$	12,476	$	8,315	$	(6,832)	$	13,964	$	212	$	14,176


	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Metropolitan Life Insurance Company Stockholder’s Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2021	$	5	$	12,464	$	6,933	$	(1,055)	$	18,347	$	174	$	18,521
Capital contributions from MetLife, Inc.			1						1				1
Dividends to MetLife, Inc.					(881)				(881)				(881)
Change in equity of noncontrolling interests									—		(20)		(20)
Net income (loss)					1,882				1,882		—		1,882
Other comprehensive income (loss), net of income tax							(2,049)		(2,049)				(2,049)
Balance at March 31, 2022	$	5	$	12,465	$	7,934	$	(3,104)	$	17,300	$	154	$	17,454

See accompanying notes to the interim condensed consolidated financial statements.

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Interim Condensed Consolidated Statements of Cash Flows

~~For the~~ ~~Six~~Three Months Ended ~~June 30,~~ March 31, 2023 and 2022 ~~and 2021~~ (Unaudited)

(In millions)


		Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021			2023		2022
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	$	1,160	$	968	Net cash provided by (used in) operating activities	$	199	$	1,000
Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Sales, maturities and repayments of:	Sales, maturities and repayments of:					Sales, maturities and repayments of:
Fixed maturity securities available-for-sale	Fixed maturity securities available-for-sale	27,410		23,549		Fixed maturity securities available-for-sale	10,356		11,324
Equity securities	Equity securities	82		244		Equity securities	30		57
Mortgage loans	Mortgage loans	5,667		7,891		Mortgage loans	1,146		3,038
Real estate and real estate joint ventures	Real estate and real estate joint ventures	431		733		Real estate and real estate joint ventures	8		73
Other limited partnership interests	Other limited partnership interests	732		241		Other limited partnership interests	155		594
Short-term investments						Short-term investments	2,042		4,982
Purchases and originations of:	Purchases and originations of:					Purchases and originations of:
Fixed maturity securities available-for-sale	Fixed maturity securities available-for-sale	(23,277)		(23,399)		Fixed maturity securities available-for-sale	(11,590)		(12,780)
Equity securities	Equity securities	(40)		(18)		Equity securities	(4)		(2)
Mortgage loans	Mortgage loans	(7,175)		(4,269)		Mortgage loans	(2,700)		(2,571)
Real estate and real estate joint ventures	Real estate and real estate joint ventures	(263)		(393)		Real estate and real estate joint ventures	(193)		(112)
Other limited partnership interests	Other limited partnership interests	(491)		(1,001)		Other limited partnership interests	(174)		(232)
Short-term investments						Short-term investments	(1,321)		(2,027)
Cash received in connection with freestanding derivatives	Cash received in connection with freestanding derivatives	1,542		1,214		Cash received in connection with freestanding derivatives	259		784
Cash paid in connection with freestanding derivatives	Cash paid in connection with freestanding derivatives	(2,323)		(4,386)		Cash paid in connection with freestanding derivatives	(921)		(1,181)
Cash received from the redemption of an investment in affiliated preferred stock		—		315

Purchases of loans to affiliates	Purchases of loans to affiliates	(19)		—		Purchases of loans to affiliates	—		(18)
Net change in policy loans	Net change in policy loans	70		88		Net change in policy loans	28		50
Net change in short-term investments		3,215		435

Net change in other invested assets	Net change in other invested assets	20		184		Net change in other invested assets	(11)		(13)
Net change in property, equipment and leasehold improvements	Net change in property, equipment and leasehold improvements	6		9		Net change in property, equipment and leasehold improvements	1		2
Other, net	Other, net	6		5		Other, net	5		3
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	5,593		1,442		Net cash provided by (used in) investing activities	(2,884)		1,971
Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Policyholder account balances:	Policyholder account balances:					Policyholder account balances:
Deposits	Deposits	46,124		41,600		Deposits	22,131		22,773
Withdrawals	Withdrawals	(44,020)		(40,944)		Withdrawals	(22,491)		(20,482)
Net change in payables for collateral under securities loaned and other transactions	Net change in payables for collateral under securities loaned and other transactions	(7,377)		810		Net change in payables for collateral under securities loaned and other transactions	(728)		(983)

Long-term debt issued	Long-term debt issued	4		—		Long-term debt issued	211		—
Long-term debt repaid	Long-term debt repaid	(10)		(15)		Long-term debt repaid	—		(3)
Financing element on certain derivative instruments and other derivative related transactions, net	Financing element on certain derivative instruments and other derivative related transactions, net	200		165		Financing element on certain derivative instruments and other derivative related transactions, net	(2)		144

Dividends paid to MetLife, Inc.	Dividends paid to MetLife, Inc.	(1,562)		(1,430)		Dividends paid to MetLife, Inc.	(618)		(881)

Other, net	Other, net	(16)		(23)		Other, net	2		(13)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	(6,657)		163		Net cash provided by (used in) financing activities	(1,495)		555
Effect of change in foreign currency exchange rates on cash and cash equivalents balances	Effect of change in foreign currency exchange rates on cash and cash equivalents balances	(9)		1		Effect of change in foreign currency exchange rates on cash and cash equivalents balances	—		(2)
Change in cash and cash equivalents	Change in cash and cash equivalents	87		2,574		Change in cash and cash equivalents	(4,180)		3,524
Cash and cash equivalents, beginning of period	Cash and cash equivalents, beginning of period	9,957		11,337		Cash and cash equivalents, beginning of period	9,405		9,957
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	10,044	$	13,911	Cash and cash equivalents, end of period	$	5,225	$	13,481
Supplemental disclosures of cash flow information	Supplemental disclosures of cash flow information					Supplemental disclosures of cash flow information
Net cash paid (received) for:	Net cash paid (received) for:					Net cash paid (received) for:
Interest	Interest	$	49	$	48	Interest	$	14	$	9
Income tax	Income tax	$	170	$	386	Income tax	$	3	$	12
Non-cash transactions:	Non-cash transactions:					Non-cash transactions:
Capital contributions from MetLife, Inc.	Capital contributions from MetLife, Inc.	$	12	$	2	Capital contributions from MetLife, Inc.	$	—	$	1
Real estate and real estate joint ventures acquired in satisfaction of debt		$	129	$	171
Increase in equity securities due to in-kind distributions received from other limited partnership interest						Increase in equity securities due to in-kind distributions received from other limited partnership interest	$	18	$	42

Increase in equity securities due to in-kind distributions received from other limited partnership interests		$	56	$	128
Increase in policyholder account balances associated with funding agreement backed notes issued but not settled						Increase in policyholder account balances associated with funding agreement backed notes issued but not settled	$	795	$	—
Transfer of fixed maturity securities available-for-sale from an affiliate						Transfer of fixed maturity securities available-for-sale from an affiliate	$	502	$	—
Increase in policyholder account balances in connection with affiliated reinsurance transactions						Increase in policyholder account balances in connection with affiliated reinsurance transactions	$	502	$	—
Transfer of fixed maturity securities available-for-sale to an affiliate	Transfer of fixed maturity securities available-for-sale to an affiliate	$	189	$	—	Transfer of fixed maturity securities available-for-sale to an affiliate	$	—	$	189
Transfer of fair value option securities from an affiliate	Transfer of fair value option securities from an affiliate	$	186	$	—	Transfer of fair value option securities from an affiliate	$	—	$	186
Increase in policyholder account balances associated with funding agreement backed notes issued but not settled		$	184	$	—
Increase in other invested assets in connection with an affiliated reinsurance transaction		$	—	$	822

See accompanying notes to the interim condensed consolidated financial statements.

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies

Business

Metropolitan Life Insurance Company and its subsidiaries (collectively, “MLIC” or the “Company”) is a provider of insurance, annuities, employee benefits and asset management and is organized into 2two segments: U.S. and MetLife Holdings. Metropolitan Life Insurance Company is a wholly-owned subsidiary of MetLife, Inc. (MetLife, Inc., together with its subsidiaries and affiliates, “MetLife”).

Basis of Presentation

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the interim condensed consolidated financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently ~~uncertain, including uncertainties associated with the COVID-19 pandemic.~~uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s business and operations. Actual results could differ from these estimates.

The accompanying interim condensed consolidated financial statements are unaudited and reflect all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. Interim results are not necessarily indicative of full year performance. ~~The~~Except for balances affected by the adoption of Accounting Standards Update (“ASU”) 2018-12 noted below, the December 31, ~~2021~~2022 consolidated balance sheet data was derived from audited consolidated financial statements included in Metropolitan Life Insurance Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 (the ~~“2021~~“2022 Annual Report”), which include all disclosures required by GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the ~~2021~~2022 Annual Report.

Adoption of ASU 2018-12 - Targeted Improvements to the Accounting for Long-Duration Contracts

Effective January 1, 2023, the Company adopted ASU 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, as amended by ASU 2019-09, Financial Services—Insurance (Topic 944): Effective Date; ASU 2020-11, Financial Services—Insurance (Topic 944): Effective Date and Early Application; and ASU 2022-05, Financial Services—Insurance (Topic 944): Transition for Sold Contracts (“LDTI”), with a transition date of January 1, 2021 (the “Transition Date”). Adoption of LDTI impacted the Company’s accounting and presentation related to long-duration insurance contracts and certain related balances for the years ended December 31, 2022 and 2021. Amounts within these interim condensed consolidated financial statements which were previously presented, have been revised to conform with the current year accounting and presentation under LDTI. Disclosures as of the Transition Date are reflected in summary within “— Recent Accounting Pronouncements — Adoption of ASU 2018-12 - Targeted Improvements to the Accounting for Long-Duration Contracts,” and in further detail (at the disaggregated level) within Notes 3, 4, 5 and 7.

Consolidation

The accompanying interim condensed consolidated financial statements include the accounts of ~~MLIC,~~Metropolitan Life Insurance Company and its subsidiaries, as well as partnerships and joint ventures in which the Company has a controlling financial interest, and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. Intercompany accounts and transactions have been eliminated.

The Company uses the equity method of accounting or the fair value option (“FVO”) for real estate joint ventures and other limited partnership interests (“investee”) when it has more than a minor ownership interest or more than a minor influence over the investee’s operations. The Company generally recognizes its share of the investee’s earnings in net investment income on a three-month lag in instances where the investee’s financial information is not sufficiently timely or when the investee’s reporting period differs from the Company’s reporting period.

Since the Company is a member of a controlled group of affiliated companies, its results may not be indicative of those of a stand-alone entity.

~~Recent Accounting Pronouncements~~

Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. The following tables provide a description of ASUs recently issued by the FASB and the impact of their adoption on the Company’s interim condensed consolidated financial statements.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

Revisions

Cash flows from short term investments in the prior years’ Interim Condensed Consolidated Statement of Cash Flows, which were previously presented net, have been revised to gross presentation to conform with the current year presentation. The revision in presentation was not material to the previously presented financial statements.

Summary of Significant Accounting Policies

The following table presents the Company’s significant accounting policies which have changed as a result of the adoption of LDTI with cross-references to the notes which provide additional information on such policies.


Accounting Policy			Note
Future Policy Benefit Liabilities			3
Policyholder Account Balances			4
Market Risk Benefits			5
Deferred Policy Acquisition Costs, Value of Business Acquired and Unearned Revenue			7

Derivatives			10

Future Policy Benefit Liabilities

Traditional Non-participating and Limited-payment Long-duration products

The Company establishes future policy benefit liabilities (“FPBs”) for amounts payable under traditional non-participating and limited-payment long-duration insurance and reinsurance policies which include, but are not limited to, pension risk transfers, structured settlements, institutional income annuities and long-term care products. Generally, amounts are payable over an extended period of time and the related liabilities are calculated as the present value of future expected benefits and claim settlement expenses to be paid, reduced by the present value of future expected net premiums.

FPBs are measured as cohorts (e.g., groups of long-duration contracts), with the exception of pension risk transfers and longevity reinsurance solutions contracts, each of which are generally considered their own cohort. Contracts from different subsidiaries or branches, issue years, benefit currency and product types are not grouped together in the same cohort.

Such liabilities are established based on methods and underlying assumptions in accordance with GAAP and applicable actuarial standards. A net premium ratio (“NPR”) approach is utilized, where net premiums (i.e., the portion of gross premiums required to fund expected insurance benefits and claim settlement expenses) under the contract are accrued each period as an FPB. The NPR used to accrue the FPB in each period is determined by using the historical and present value of expected future benefits and claim settlement expenses for the cohort divided by the historical and present value of expected future gross premiumsfor the cohort.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

Cash flow assumptions are incorporated into the calculation of a cohort's NPR and FPB reserve. These assumptions are used to project the amount and timing of expected benefits and claim settlement expenses to be paid and the expected amount of premiums to be collected for a cohort. The principal inputs and assumptions used in the establishment of FPBs are actual premiums, actual benefits, in-force policies, and best estimate cash flow assumptions to project future premium and benefit amounts. The Company’s primary best estimate cash flow assumptions include expectations related to mortality, morbidity, termination, claim settlement expense, policy lapse, renewal, retirement, disability incidence, disability terminations, inflation and other contingent events as appropriate to the respective product type and geographical area. Upon transition to LDTI, generally, the NPR and FPB reserve are updated retrospectively on a quarterly basis for actual experience and at least once a year for any changes in future cash flow assumptions, except for claim settlement expenses, for which the Company has elected to lock in assumptions at the Transition Date or inception (for contracts sold after the Transition Date), as allowed by LDTI. The resulting remeasurement (gain) loss is recorded through net income and reflects the impact on the change in the NPR based on experience at end of the quarter applied to the cumulative premiums received from the inception of the cohort (or from the Transition Date for contracts issued prior to the Transition Date) to the beginning of the quarter. The total contractual profit pattern is recognized over the expected life of the cohort by retrospectively updating the NPR. If net premiums exceed gross premiums (i.e., expected benefits exceed expected gross premiums), the FPB is increased, and a corresponding adjustment is recognized immediately in net income.

The change in FPB reflected in the statement of operations is calculated using a locked-in discount rate. For products issued prior to the Transition Date, a cohort level locked-in discount rate was developed that reflects the interest accretion rates that were locked in at inception of the underlying contracts (unless there was a historical premium deficiency event that resulted in updating the interest accretion rate prior to the Transition Date), or the acquisition date for contracts acquired through an assumed in-force reinsurance transaction or a business combination. For contracts issued subsequent to the Transition Date, the upper-medium grade discount rate used for interest accretion is locked in for the cohort and represents the original upper-medium grade discount rate at the issue date of the underlying contracts. The FPB for all cohorts is remeasured to a current upper-medium grade discount rate at each reporting date through other comprehensive income (loss) (“OCI”).

The Company generally interprets the upper-medium grade discount rate to be a rate comparable to that of a U.S. corporate single A rate that reflects the duration characteristics of the liability. The upper-medium grade discount rate for the products that are included in the disaggregated rollforwards in Note 3 which are issued in the U.S. is determined by using observable market data, including published single A base curves. The last liquid point on the upper-medium grade discount curve grades to an ultimate forward rate, which is derived using assumptions of economic growth, inflation, and a long-term upper-medium grade spread.

For limited-payment long-duration contracts, the collection of premiums does not represent the completion of the earnings process, therefore, any gross premiums received in excess of net premiums is deferred and amortized as a deferred profit liability (“DPL”). The DPL is presented within FPBs and is amortized in proportion to either the present value of expected benefit payments or insurance in-force of each cohort to ensure that profits are recognized over the life of the underlying policies in that cohort, regardless of when premiums are received. This amortization of the DPL is recorded through net income within policyholder benefits and claims. Consistent with the Company’s measurement of traditional long-duration products, management also recognizes a FPB reserve for limited-payment contracts that is representative of the difference between the present value of expected future benefit payments and the present value of expected future net premiums, subject to retrospective remeasurement through net income and OCI, as described above. The DPL is also subject to retrospective remeasurement through net income, however, it is not remeasured for changes in discount rates.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

Traditional participating products

The Company establishes FPBs for traditional participating contracts in the U.S., which include whole and term life participating contracts in both the open and closed block using a net premium approach, similar to traditional non-participating contracts. However, for participating contracts, the discount rate and actuarial assumptions are locked in at inception, include a provision for adverse deviation, and all changes in the associated FPBs are reported within policyholder benefits and claims. See Note 8 for additional information on the closed block. For traditional participating contracts, the Company reviews its estimates of actuarial liabilities for future benefits and compares them with current best estimate assumptions. The Company revises estimates, to increase FPBs, if the Company determines that the liabilities previously established for future benefit payments less future expected net premiums in the aggregate for this line of business prove inadequate.

Additional Insurance Liabilities

Liabilities for universal, variable universal, and variable life policies with secondary guarantees (“ULSG”) and paid-up guarantees are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the life of the contract based on total expected assessments. The additional insurance liabilities are updated retrospectively on a quarterly basis for actual experience and at least once a year for any changes in future cash flow assumptions. The assumptions used in estimating the secondary and paid-up guarantee liabilities are investment income, mortality, lapse, and premium payment pattern and persistency. The assumptions of investment performance and volatility for variable products are consistent with historical experience of appropriate underlying equity indices, such as the S&P Global Ratings (“S&P”) 500 Index. The benefits used in calculating the liabilities are based on the average benefits payable over a range of scenarios.

The resulting remeasurement (gain) loss recorded through net income reflects the impact on the change in the ratio of benefits payable to total assessments over the life of the contract based on experience at end of the quarter applied to the cumulative assessments received as of the beginning of the quarter.

Premium Deficiency Reserves on Short-Duration Contracts

Premium deficiency reserves may be established for short-duration contracts to provide for expected future losses and certain expenses that exceed unearned premiums. These reserves are based on actuarial estimates of the amount of loss inherent in that period, including losses incurred for which claims have not been reported. The provisions for unreported claims are calculated using studies that measure the historical length of time between the incurred date of a claim and its eventual reporting to the Company. Anticipated investment income is considered in the calculation of premium deficiency losses for short-duration contracts.

Policyholder Account Balances

Policyholder account balances (“PABs”) represents the amount held by the Company on behalf of the policyholder at each reporting date. This amount includes deposits received from the policyholder, interest credited to the policyholder’s account balance, net of charges assessed against the account balance and any policyholder withdrawals. This balance also includes liabilities for structured settlement and institutional income annuities, and certain other contracts, that do not contain significant insurance risk, as well as the estimated fair value of embedded derivatives associated with indexed annuity products.

Market Risk Benefits

As defined by LDTI, market risk benefits (“MRBs”) are contracts or contract features that guarantee benefits, such as guaranteed minimum benefits, in addition to an account balance, which expose insurance companies to other than nominal capital market risk (equity price, interest rate, and/or foreign currency exchange risk) and subsequently protect the contractholder from the same risk. These contracts and contract features were generally recorded as embedded derivatives or additional insurance liabilities prior to the Transition Date. Certain contracts may have multiple contract features or guarantees. In these cases, each feature is separately evaluated to determine whether it meets the definition of an MRB at contract inception. If a contract includes multiple benefits that meet the definition of an MRB, those benefits are aggregated and measured as a single compound MRB.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

All identified MRBs are required to be measured at estimated fair value, whether the contract or contract feature represents a direct, assumed or ceded capital market risk. All MRBs in an asset position are aggregated and presented as an asset, and all MRBs in a liability position are aggregated and presented as a liability. Changes in the estimated fair value of MRBs are recognized in net income, except for the portion of the fair value change attributable to the change in nonperformance risk of the Company which is recorded as a separate component of OCI.

The Company generally uses an attributed fee approach to value MRBs, where the attributed fee is determined at contract inception by estimating the fair value of expected future benefits and the expected future fees. The attributed fee percentage is the portion of the expected future fees due from contractholders deemed necessary at contract inception to fund all future expected benefits. This typically results in a zero fair value for the MRB at inception. The estimated fair value of the expected future benefits is estimated using a stochastically-generated set of risk-neutral scenarios. Once calculated, the attributed fee percentage is fixed and does not change over the life of the contract. All fees due from contractholders in excess of the attributed fees are reported in universal life and investment-type product policy fees.

Other Policy-Related Balances

Other policy-related balances include policy and contract claims, premiums received in advance, unearned revenue (“UREV”) liabilities, obligations assumed under structured settlement assignments, policyholder dividends due and unpaid and policyholder dividends left on deposit.

The liability for policy and contract claims generally relates to incurred but not reported (“IBNR”) death and dental claims. In addition, generally included in other policy-related balances are claims which have been reported but not yet settled for death and dental. The liability for these claims is based on the Company’s estimated ultimate cost of settling all claims. The Company derives estimates for the development of IBNR claims principally from analyses of historical patterns of claims by business line. The methods used to determine these estimates are continually reviewed. Adjustments resulting from this continuous review process and differences between estimates and payments for claims are recognized in policyholder benefits and claims expense in the period in which the estimates are changed or payments are made.

The Company accounts for the prepayment of premiums on its individual life, group life and health contracts as premiums received in advance. These amounts are then recognized in premiums when due.

The UREV liability relates to universal life and investment-type products and represents policy charges for services to be provided in future periods. The charges are deferred as unearned revenue and amortized on a basis consistent with the methodologies and assumptions used for amortizing deferred policy acquisition costs (“DAC”) for the related contracts. Changes in the UREV liability for each period (representing deferrals less amortization) are reported in universal life and investment-type product policy fees.

Recognition of Insurance Revenues and Deposits

Premiums related to whole and term life products, individual disability, individual and group fixed annuities (including pension risk transfers, certain structured settlements and certain income annuities), long-term care and participating products are recognized as revenues when due from policyholders. Policyholder benefits and expenses are provided to recognize profits over the estimated lives of the insurance policies. When premiums are due over a significantly shorter period than the period over which benefits are provided, any excess profit is deferred as a DPL and recognized into earnings in a constant relationship to insurance in-force or, for annuities, the present value of expected future policy benefit payments.

Premiums related to short-duration non-medical health and disability contracts are recognized on a pro rata basis over the applicable contract term. Unearned premiums, representing the portion of premium written related to the unexpired coverage, are reflected as liabilities until earned.

Deposits related to universal life and investment-type products are credited to PABs. Revenues from such contracts consist of fees for mortality, policy administration and surrender charges and are recorded in universal life and investment-type product policy fees in the period in which services are provided. All fees due from contractholders in excess of the attributed fees on contracts with MRBs are reported in universal life and investment-type product policy fees. Amounts that are charged to earnings include interest credited and benefit claims incurred in excess of related PABs.

All revenues and expenses are presented net of reinsurance, as applicable.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles

The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that are related directly to the successful acquisition or renewal of insurance contracts are capitalized as DAC. Such costs include:

•incremental direct costs of contract acquisition, such as commissions;

•the portion of an employee’s total compensation and benefits related to time spent selling, underwriting or processing the issuance of new and renewal insurance business only with respect to actual policies acquired or renewed; and

•other essential direct costs that would not have been incurred had a policy not been acquired or renewed.

All other acquisition-related costs, including those related to general advertising and solicitation, market research, agent training, product development, unsuccessful sales and underwriting efforts, as well as all indirect costs, are expensed as incurred.

Value of business acquired (“VOBA”) is an intangible asset resulting from a business combination that represents the excess of book value over the estimated fair value of acquired insurance, annuity, and investment-type contracts in-force at the acquisition date. The estimated fair value of the acquired liabilities is based on projections, by each block of business, of future policy and contract charges, premiums, mortality and morbidity, separate account performance, surrenders, operating expenses, investment returns, nonperformance risk adjustment and other factors. Actual experience with the purchased business may vary from these projections. VOBA is subject to periodic recoverability testing for traditional life and limited-payment contracts, as well as universal life type contracts.

Beginning on the Transition Date, DAC and VOBA for most long-duration products are amortized on a constant-level basis that approximates straight-line amortization on an individual contract basis. The DAC and VOBA related to U.S. annuities are amortized over expected benefit payments, and for all other long-duration products are generally amortized in proportion to policy count. For short-duration products, DAC and VOBA are amortized in proportion to actual and expected future earned premiums.

DAC and VOBA are aggregated on the financial statements for reporting purposes. See Note 7 for additional information on DAC and VOBA amortization. Amortization of DAC and VOBA is included in other expenses.

The Company generally has two different types of sales inducements which are included in other assets: (i) the policyholder receives a bonus whereby the policyholder’s initial account balance is increased by an amount equal to a specified percentage of the customer’s deposit; and (ii) the policyholder receives a higher interest rate using a dollar cost averaging method than would have been received based on the normal general account interest rate credited. The Company defers sales inducements and amortizes them over the life of the policy using the same methodologies and assumptions used to amortize DAC for the related contracts. The amortization of sales inducements is included in policyholder benefits and claims. Each year, or more frequently if circumstances indicate a potential recoverability issue exists, the Company reviews deferred sales inducements (“DSI”) to determine the recoverability of the asset. DSI assets were $48 million and $49 million at March 31, 2023 and December 31, 2022, respectively.

Value of distribution agreements acquired (“VODA”) is reported in other assets and represents the present value of expected future profits associated with the expected future business derived from the distribution agreements acquired as part of a business combination. Value of customer relationships acquired (“VOCRA”) is also reported in other assets and represents the present value of the expected future profits associated with the expected future business acquired through existing customers of the acquired company or business. The VODA and VOCRA associated with past business combinations are amortized over the assets’ useful lives ranging from 10 to 30 years and such amortization is included in other expenses. Each year, or more frequently if circumstances indicate a possible impairment exists, the Company reviews VODA and VOCRA to determine whether the asset is impaired.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

Reinsurance

For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. Cessions under reinsurance agreements do not discharge the Company’s obligations as the primary insurer. The Company reviews all contractual features, including those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims.

The reinsurance recoverable for traditional non-participating and limited-payment contracts is generally measured using a net premium methodology to accrue the projected net gain or loss on reinsurance in proportion to the gross premiums of the underlying reinsured cohorts; and is updated retrospectively on a quarterly basis for actual experience and at least once a year for any changes in cash flow assumptions. The locked-in discount rate used to measure changes in the reinsurance recoverable recorded in net income was established at the Transition Date, or at the inception of the reinsurance coverage for new reinsurance agreements entered into subsequent to the Transition Date. The reinsurance recoverable is remeasured to an upper-medium grade discount rate through OCI at each reporting date, similar to the underlying reinsured contracts. The reinsurance recoverable for other long-duration contracts and associated contract features is measured using assumptions and methods generally consistent with the underlying direct policies.

For reinsurance of existing in-force blocks of long-duration contracts that transfer significant insurance risk, the difference, if any, between the amounts paid (received), and the liabilities ceded (assumed) related to the underlying reinsured contracts is considered the net cost of reinsurance at the inception of the reinsurance agreement. The net cost of reinsurance is amortized on a basis consistent with the methodologies and assumptions used for amortizing DAC related to the underlying reinsured contracts. Subsequent amounts paid (received) on the reinsurance of in-force blocks, as well as amounts paid (received) related to new business, are recorded as ceded (assumed) premiums; and ceded (assumed) premiums, reinsurance and other receivables (future policy benefits) are established.

For prospective reinsurance of short-duration contracts that meet the criteria for reinsurance accounting, amounts paid (received) are recorded as ceded (assumed) premiums and ceded (assumed) unearned premiums. Ceded (assumed) unearned premiums are reflected as a component of premiums, reinsurance and other receivables (future policy benefits). Such amounts are amortized through earned premiums over the remaining contract period in proportion to the amount of insurance protection provided. For retroactive reinsurance of short-duration contracts that meet the criteria for reinsurance accounting, amounts paid (received) in excess of the related insurance liabilities ceded (assumed) are recognized immediately as a loss and are reported in the appropriate line item within the statement of operations. Any gain on such retroactive agreement is deferred and is amortized as part of DAC, primarily using the recovery method.

Amounts currently recoverable under reinsurance agreements are included in premiums, reinsurance and other receivables and amounts currently payable are included in other liabilities. Assets and liabilities relating to reinsurance agreements with the same reinsurer may be recorded net on the balance sheet, if a right of offset exists within the reinsurance agreement. In the event that reinsurers do not meet their obligations to the Company under the terms of the reinsurance agreements, or when events or changes in circumstances indicate that its carrying amount may not be recoverable, reinsurance recoverable balances could become uncollectible. In such instances, reinsurance recoverable balances are stated net of allowances for uncollectible reinsurance, consistent with credit loss guidance which requires recording an allowance for credit loss (“ACL”).

The funds withheld liability represents amounts withheld by the Company in accordance with the terms of the reinsurance agreements. The Company withholds the funds rather than transferring the underlying investments and, as a result, records funds withheld liability within other liabilities. The Company recognizes interest on funds withheld, included in other expenses, at rates defined by the terms of the agreement which may be contractually specified or directly related to the investment portfolio. See Note 1 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report for information on funds withheld assets.

Premiums, fees and policyholder benefits and claims include amounts assumed under reinsurance agreements and are net of reinsurance ceded. Amounts received from reinsurers for policy administration are reported in other expenses.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Deposits received are included in other liabilities and deposits made are included within premiums, reinsurance and other receivables. As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabilities are adjusted. Interest on such deposits is recorded as other revenues or other expenses, as appropriate. Periodically, the Company evaluates the adequacy of the expected payments or recoveries and adjusts the deposit asset or liability through other revenues or other expenses, as appropriate.

Derivatives

Freestanding Derivatives

Freestanding derivatives are carried on the Company’s balance sheet either as assets within other invested assets or as liabilities within other liabilities at estimated fair value. The Company does not offset the estimated fair value amounts recognized for derivatives executed with the same counterparty under the same master netting agreement.

Accruals on derivatives are generally recorded in accrued investment income or within other liabilities. However, accruals that are not scheduled to settle within one year are included with the derivative’s carrying value in other invested assets or other liabilities.

If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are reported in net derivative gains (losses) except as follows:


Statement of Operations Presentation:	Derivative:
Net investment income	•	Economic hedges of equity method investments in joint ventures

	•	Economic hedges of fair value option securities (“FVO Securities”) which are linked to equity indices

Hedge Accounting

To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge. Hedge designation and financial statement presentation of changes in estimated fair value of the hedging derivatives are as follows:

•Fair value hedge - a hedge of the estimated fair value of a recognized asset or liability - in the same line item as the earnings effect of the hedged item. The carrying value of the hedged recognized asset or liability is adjusted for changes in its estimated fair value due to the hedged risk.

•Cash flow hedge - a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability - in OCI and reclassified into the statement of operations when the Company’s earnings are affected by the variability in cash flows of the hedged item.

The changes in estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported on the statement of operations within interest income or interest expense to match the location of the hedged item.

In its hedge documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the hedging instrument’s effectiveness. A derivative designated as a hedging instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and at least quarterly throughout the life of the designated hedging relationship. Assessments of hedge effectiveness are also subject to interpretation and estimation and different interpretations or estimates may have a material effect on the amount reported in net income.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item; (ii) the derivative expires, is sold, terminated, or exercised; (iii) it is no longer probable that the hedged forecasted transaction will occur; or (iv) the derivative is de-designated as a hedging instrument.

When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized in net derivative gains (losses). The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its estimated fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. The changes in estimated fair value of derivatives related to discontinued cash flow hedges remain in OCI unless it is probable that the hedged forecasted transaction will not occur.

When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur on the anticipated date or within two months of that date, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized currently in net derivative gains (losses). Deferred gains and losses of a derivative recorded in OCI pursuant to the discontinued cash flow hedge of a forecasted transaction that is no longer probable of occurring are recognized immediately in net investment gains (losses).

In all other situations in which hedge accounting is discontinued, the derivative is carried at its estimated fair value on the balance sheet, with changes in its estimated fair value recognized in the current period as net derivative gains (losses).

Embedded Derivatives

As discussed above, certain guarantees previously accounted for as embedded derivatives are accounted for as MRBs upon adoption of LDTI. The Company issues certain products and investment contracts and is a party to certain reinsurance agreements that have embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated. The embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative if:

•the contract or contract feature does not meet the definition of a MRB (as a result of the adoption of LDTI);

•the combined instrument is not accounted for in its entirety at estimated fair value with changes in estimated fair value recorded in earnings;

•the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract; and

•a separate instrument with the same terms as the embedded derivative would qualify as a derivative instrument.

Such embedded derivatives are carried on the balance sheet at estimated fair value with the host contract and changes in their estimated fair value are generally reported in net derivative gains (losses). If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire contract is carried on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income. Additionally, the Company may elect to carry an entire contract on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income if that contract contains an embedded derivative that requires bifurcation.

Recent Accounting Pronouncements

Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of ASUs to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. The following tables provide a description of ASUs recently issued by the FASB and the impact of their adoption on the Company’s interim condensed consolidated financial statements.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

Adoption of ASU 2018-12 - Targeted Improvements to the Accounting for Long-Duration Contracts

The Company adopted LDTI effective January 1, 2023 with a Transition Date of January 1, 2021. The standard required a full retrospective transition approach for MRBs, and allowed for a transition method election for FPBs and DAC, as well as other balances that have historically been amortized in a manner consistent with DAC. The Company has elected the modified retrospective transition approach for all FPBs, DAC, and related balances on all long-duration contracts, subject to the transition provisions. Additionally, an amendment in LDTI allowed entities to make an accounting policy election to exclude certain sold or disposed contracts or legal entities from application of the transition guidance. The Company did not make such an election.

Under the modified retrospective approach, the Company was required to establish LDTI-compliant FPBs, DAC and related balances for the Company’s Transition Date opening balance sheet by utilizing the Company’s December 31, 2020 balances with certain adjustments as described below.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

The following table presents a summary of the Transition Date impacts associated with the implementation of LDTI to the consolidated balance sheet:


	Premiums, Reinsurance and Other Receivables		Deferred Policy Acquisition Costs and Value of Business Acquired		Deferred Tax Asset		Other Assets		Future Policy Benefits		Policyholder Account Balances		Market Risk Benefit Liabilities		Deferred Income Tax Liability		Retained Earnings		Accumulated Other Comprehensive Income (Loss)
	(In millions)
Balances as reported, December 31, 2020	$	21,478	$	2,649	$	—	$	4,158	$	133,921	$	96,635	$	—	$	1,980	$	10,548	$	11,662
Reclassification of carrying amount of contracts and contract features that are market risk benefits	(59)		—		—		—		(1,447)		(495)		1,883		—		—		—
Adjustments for the difference between previous carrying amount and fair value measurement for market risk benefits	—		—		—		—		—		—		4,906		(1,030)		(3,897)		21
Removal of related amounts in accumulated other comprehensive income	—		1,482		—		29		(6,835)		—		—		1,751		—		6,595
Adjustment of future policy benefits to remeasure cohorts where net premiums exceed gross premiums under the modified retrospective approach	32		—		—		—		89		—		—		(12)		(45)		—
Effect of remeasurement of future policy benefits to an upper-medium grade discount rate	403		—		—		—		25,208		—		—		(5,209)		—		(19,596)
Adjustments for the cumulative effect of adoption on additional insurance assets and liabilities	29		—		—		—		36				—		—		—		(7)
Other balance sheet reclassifications and adjustments upon adoption of the LDTI standard	2		12		2,518		—		(4,794)		4,794		—		2,520		10		—
Balances as adjusted, January 1, 2021	$	21,885	$	4,143	$	2,518	$	4,187	$	146,178	$	100,934	$	6,789	$	—	$	6,616	$	(1,325)

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

The Transition Date impacts associated with the implementation of LDTI were applied as follows:

Market Risk Benefits (See Note 5)

The full retrospective transition approach for MRBs required assessing products to determine whether contract or contract features expose the Company to other than nominal capital market risk. The population of MRBs identified was then reviewed to determine the historical measurement model prior to adoption of LDTI. If the MRB was a bifurcated embedded derivative prior to the adoption of LDTI, the existing measurement approach was retained, except that the fair value of the MRB at inception was recalculated to isolate the contract issue date nonperformance risk of the Company.

If, prior to the adoption of LDTI, the MRB was partially a bifurcated embedded derivative (e.g., a contract with multiple features where one was a bifurcated embedded derivative and one was an additional insurance liability), or was accounted for under a different model, the at-inception attributed fee ratio was calculated for every identified MRB, and using the at inception attributed fee ratio, the fair value of the MRB at the contract issue date was calculated to isolate the contract issue date nonperformance risk of the Company.

At the Transition Date, the impacts to the financial statements of the full retrospective approach for MRBs include the following:

•The amounts previously recorded for these contracts within additional insurance liabilities, embedded derivatives, and other insurance liabilities were reclassified to MRB liabilities;

•The difference between the fair value of the MRBs and the previously recorded carrying value at the Transition Date, excluding the cumulative effect of changes in nonperformance risk of the Company, was recorded as an adjustment to the opening balance of retained earnings; and

•The cumulative effect of changes in nonperformance risk between the contract issue date and the Transition Date was recorded as an adjustment to opening accumulated OCI (“AOCI”) as of the Transition Date.

Future Policy Benefits (See Note 3)

Traditional Non-participating Long-duration products

•Loss recognition balances related to unrealized investment gains associated with certain long-duration products previously recorded in AOCI were removed;

•Contracts in-force as of the Transition Date were grouped into cohorts; a revised NPR was calculated for each cohort using the existing Transition Date balance, best estimate cash flow assumptions without a provision for adverse deviation, and the historical discount rates used for the contracts within the cohort prior to the adoption of LDTI (the “locked-in” discount rate). For any cohorts where the net premiums exceeded gross premiums (NPR exceeded 100%), the FPB was increased for the excess of net premiums over gross premiums, with a corresponding adjustment recorded to opening retained earnings as of the Transition Date;

•The difference between the FPB balance calculated at the current upper-medium grade discount rate and the FPB balance calculated at the locked-in discount rate was recorded as an adjustment to opening AOCI as of the Transition Date; and

•Corresponding adjustments were made to ceded reinsurance balances.

Limited-payment Long-duration products

Limited-payment long-duration products transition to LDTI follows a similar approach to traditional non-participating products, except that these product cohorts may have a DPL which is adjusted at the Transition Date. If an increase to FPB depleted the DPL, the remaining adjustment was recorded to opening retained earnings as of the Transition Date.

Additional insurance liabilities

•The contracts and contract features that met the definition of a MRB were reclassified;

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

•The impact of updating assessments used in the calculation of the additional insurance liabilities to reflect the constant margin amortization basis for UREV liabilities was recorded as an adjustment to opening retained earnings and AOCI; and

•Corresponding adjustments were made to ceded reinsurance balances.

DAC and other balances to be amortized in a manner consistent with DAC (VOBA, DSI and UREV) (See Note 7 for information on DAC, VOBA and UREV)

The opening balances of these accounts were adjusted for removal of the related amounts in AOCI, as these balances are no longer amortized using expected future gross premiums, margins, profits or earned premiums.

Other balance sheet reclassifications and adjustments at LDTI adoption (See Notes 3, 4 and 7)

Individual income annuities reclassification

Prior to the Transition Date, the Company classified all structured settlement and institutional income annuity products within FPBs. While the pre-LDTI GAAP reserving model was the same for these products, upon transition to LDTI, the reserving model for a subset of these products changed, requiring the Company to reclassify $4.7 billion of FPBs to PABs at the Transition Date.

Other reclassifications and adjustments

Other minor reclassifications and adjustments were made to conform to LDTI presentation requirements.

The following table presents the effects of the retrospective application of the adoption of the new LDTI accounting guidance to the Company’s previously reported consolidated balance sheet:


	December 31, 2022
	As Previously Reported		Adoption Adjustment		Post Adoption
	(In millions)
Assets
Premiums, reinsurance and other receivables	$	20,704	$	87	$	20,791
Market risk benefits	$	—	$	174	$	174
Deferred policy acquisition costs and value of business acquired	$	5,263	$	(1,506)	$	3,757
Deferred income tax asset	$	2,661	$	259	$	2,920
Other assets	$	4,367	$	(15)	$	4,352
Total assets	$	385,840	$	(1,001)	$	384,839

Liabilities
Future policy benefits	$	133,725	$	(6,811)	$	126,914
Policyholder account balances	$	99,967	$	3,440	$	103,407
Market risk benefits	$	—	$	3,270	$	3,270
Other policy-related balances	$	7,863	$	68	$	7,931
Other liabilities	$	24,489	$	6	$	24,495
Total liabilities	$	371,471	$	(27)	$	371,444

Equity
Retained earnings	$	10,572	$	(1,550)	$	9,022
Accumulated other comprehensive income (loss)	$	(8,896)	$	576	$	(8,320)
Total Metropolitan Life Insurance Company stockholder’s equity	$	14,157	$	(974)	$	13,183

Total equity	$	14,369	$	(974)	$	13,395
Total liabilities and equity	$	385,840	$	(1,001)	$	384,839

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

The following table presents the effects of the retrospective application of the adoption of the new LDTI accounting guidance to the Company’s previously reported interim condensed consolidated statement of operations and comprehensive income (loss):


	Three Months Ended March 31, 2022
	As Previously Reported		Adoption Adjustment		Post Adoption
	(In millions)
Revenues
Premiums	$	5,910	$	(4)	$	5,906
Universal life and investment-type product policy fees	$	524	$	(45)	$	479
Other revenues	$	412	$	(1)	$	411
Net investment gains (losses)	$	(226)	$	—	$	(226)
Net derivative gains (losses)	$	181	$	(60)	$	121
Total revenues	$	9,627	$	(110)	$	9,517
Expenses
Policyholder benefits and claims	$	6,561	$	90	$	6,651
Policyholder liability remeasurement (gains) losses	$	—	$	(29)	$	(29)
Market risk benefits remeasurement (gains) losses	$	—	$	(1,361)	$	(1,361)
Interest credited to policyholder account balances	$	491	$	11	$	502
Policyholder dividends	$	159	$	2	$	161
Other expenses	$	1,299	$	9	$	1,308
Total expenses	$	8,510	$	(1,278)	$	7,232
Income (loss) from before provisions for income taxes	$	1,117	$	1,168	$	2,285
Provision for income tax expense (benefit)	$	158	$	245	$	403
Net income (loss)	$	959	$	923	$	1,882
Net income (loss) attributable to Metropolitan Life Insurance Company	$	959	$	923	$	1,882
Comprehensive income (loss)	$	(4,278)	$	4,111	$	(167)
Comprehensive income (loss) attributable to Metropolitan Life Insurance Company	$	(4,278)	$	4,111	$	(167)

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)


	As Previously Reported		Adoption Adjustment		Post Adoption
	(In millions)
Retained Earnings
Balance at December 31, 2021	$	10,868	$	(3,935)	$	6,933
Net income (loss)	$	959	$	923	$	1,882
Balance at March 31, 2022	$	10,946	$	(3,012)	$	7,934
Balance at December 31, 2022	$	10,572	$	(1,550)	$	9,022
Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2021	$	9,917	$	(10,972)	$	(1,055)
Other comprehensive income (loss), net of income tax	$	(5,237)	$	3,188	$	(2,049)
Balance at March 31, 2022	$	4,680	$	(7,784)	$	(3,104)
Balance at December 31, 2022	$	(8,896)	$	576	$	(8,320)
Total Metropolitan Life Insurance Company Stockholders’ Equity
Balance at December 31, 2021	$	33,254	$	(14,907)	$	18,347
Balance at March 31, 2022	$	28,096	$	(10,796)	$	17,300
Balance at December 31, 2022	$	14,157	$	(974)	$	13,183
Total Equity
Balance at December 31, 2021	$	33,428	$	(14,907)	$	18,521
Balance at March 31, 2022	$	28,250	$	(10,796)	$	17,454
Balance at December 31, 2022	$	14,369	$	(974)	$	13,395


	Three Months Ended March 31, 2022
	As Previously Reported		Adoption Adjustment		Post Adoption
	(In millions)















Net cash provided by (used in) operating activities	$	853	$	147	$	1,000
Cash flows from financing activities
Policyholder account balances - deposits	$	22,794	$	(21)	$	22,773
Policyholder account balances - withdrawals	$	(20,356)	$	(126)	$	(20,482)
Net cash provided by (used in) financing activities	$	702	$	(147)	$	555

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

Other Adopted Accounting Pronouncements

The table below describes the impacts of the other ASUs ~~recently~~ adopted by the Company.


Standard	Description	Effective Date and Method of Adoption	Impact on Financial Statements
ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures	The amendments in the new ASU eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the current expected credit loss guidance while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the amendments require that a public business entity disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases.	January 1, 2023, the Company adopted, using a prospective approach.	The adoption of the new guidance has reduced the complexity involved with evaluating and accounting for certain loan modifications. The Company has included the required disclosures within its interim condensed consolidated financial statements.
ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting;as clarified and amended by ASU 2021-01, Reference Rate Reform (Topic 848):~~Scope~~ Scope; as amended by ASU 2022-06, Reference Rate Reform (Topic 848)—Deferral of the Sunset Date of Topic 848	The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, with certain exceptions. ASU 2021-01 amends the scope of the recent reference rate reform guidance. New optional expedients allow derivative instruments impacted by changes in the interest rate used for margining, discounting, or contract price alignment to qualify for certain optional relief. The amendments in ASU 2022-06 extend the sunset date of the reference rate reform optional expedients and exceptions to December 31, 2024.	Effective for contract modifications made between March 12, 2020 and December 31, ~~2022.~~ 2024.	The guidance has reduced the operational and financial impacts of contract modifications that replace a reference rate, such as London Interbank Offered Rate, ~~(“LIBOR”),~~ affected by reference rate reform. Contract modifications for invested assets and derivative instruments occurred during 2021 and 2022 and have continued into ~~2022.~~2023. Based on actions taken to date, the adoption of the guidance has not had a material impact on the Company’s ~~interim condensed~~ consolidated financial statements. The Company does not expect the adoption of this guidance to have a material ongoing impact ~~and will continue to evaluate the impacts of reference rate reform~~ on ~~contract modifications and hedging relationships through December 31, 2022.~~
~~ASU 2021-10,~~ ~~Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance~~	The guidance requires entities to provide annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy and can include tax credits and other forms of government assistance. Entities are required to disclose information about (i) the nature of the transactions and the related accounting policy used to account for the transactions; (ii) the line items on the balance sheet and income statement that are affected by the transactions, including the associated amounts; and (iii) the significant terms and conditions of the transactions, including commitments and contingencies.	~~Effective for annual periods beginning January 1, 2022, to be applied prospectively.~~	~~The Company is in the process of evaluating and preparing the required annual disclosures, as applicable, to be included in~~ its ~~2022~~interim condensed consolidated financial statements.

923

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)

Future Adoption of Accounting Pronouncements

ASUs not listed below were assessed and either determined to be not applicable or are not expected to have a material impact on the Company’s interim condensed consolidated financial statements or disclosures. ASUs issued but not yet adopted as of ~~June 30, 2022~~March 31, 2023 that are currently being assessed and may or may not have a material impact on the Company’s interim condensed consolidated financial statements or disclosures are summarized in the table below.

Standard

Description

Effective Date and
Method of Adoption

Impact on Financial Statements

ASU ~~2018-12,~~ 2023-02,~~Financial Services—Insurance (Topic 944)~~ Investments—Equity Method and Joint Ventures

(Topic 323): ~~Targeted Improvements to the~~ Accounting for ~~Long-Duration Contracts,~~ Investments in Tax Credit Structures Using the Proportional Amortization Method

~~as amended by ASU 2019-09,~~ ~~Financial Services—Insurance (Topic 944): Effective Date,~~ ~~as amended by ASU 2020-11, Financial Services—Insurance (Topic 944): Effective Date and Early Application~~

The guidance (i) prescribes the discount rate to be used in measuring the liability for future policy benefits for traditional and limited payment long-duration contracts, and requires assumptions for those liability valuations to be updated after contract inception, (ii) requires more market-based product guarantees (“market risk benefits”) on certain separate account and other account balance long-duration contracts to be accounted for at fair value, (iii) simplifies the amortization of deferred policy acquisition costs (“DAC”) for virtually all long-duration contracts, and (iv) introduces certain financial statement presentation requirements, as well as significant additional quantitative and qualitative disclosures. The amendments in ~~ASU 2019-09 defer~~this update permit reporting entities to elect to account for their tax equity investments, regardless of the ~~effective date~~tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. In addition, disclosures describing the nature of ~~ASU 2018-12 to~~ the investments and related income tax credits and benefits will be required.

January 1, ~~2022 for all entities, and the amendments in ASU 2020-11 further defer the effective date of ASU 2018-12 for an additional year to January 1, 2023 for all entities.~~

~~January 1, 2023,~~2024, to be applied ~~retrospectively~~on either a modified retrospective or a retrospective basis subject to ~~January 1, 2021~~certain exceptions (with early adoption permitted). ~~Estimated impacts from adoption as of~~

The Company is currently evaluating the ~~transition date of January 1, 2021 are measured using market assumptions appropriate as of that date. Such estimates do not reflect changes in market assumptions subsequent to January 1, 2021.~~

~~The Company’s implementation efforts and the evaluation of the impacts~~impact of the guidance on its interim condensed consolidated financial statements, as well as its systems, processes, and controls, continue to progress. Given the nature and extent of the required changes to a significant portion of the Company’s operations, the adoption of this guidance is expected to have a material impact on its financial position, results of operations, and disclosures.

The Company will adopt the guidance effective January 1, 2023. The modified retrospective approach will be used, except in regard to market risk benefits where the Company will use the full retrospective approach. Based upon these transition methods, the Company currently estimates that the January 1, 2021 transition date impact from adoption is expected to result in a decrease to total equity in a range of approximately $16.0 billion to $18.5 billion, net of income tax.

The expected decrease in total equity includes the estimated impact to Accumulated other comprehensive income (loss) (“AOCI”) which, as of the transition date, is expected to result in a decrease in a range of approximately $12.5 billion to $14.0 billion, net of income tax. The most significant drivers of the expected decrease in AOCI are the anticipated impacts of the changes in the discount rates as of the transition date to be used in measuring the liability for future policy benefits for traditional and limited payment contracts and the non-performance risk in the valuation of the Company’s market risk benefits. The expected decrease in AOCI is expected to be partially offset by the removal of loss recognition balances recorded in AOCI related to unrealized investment gains associated with certain long-duration products.

The expected decrease in total equity also includes the estimated impact to retained earnings which, from adoption, is expected to result in a decrease in a range of approximately $3.5 billion to $4.5 billion, net of income tax. This decrease results from the requirement to account for variable annuity guarantees as market risk benefits measured at fair value (except for the changes in fair value already recognized under an existing accounting model) and other valuation impacts to the liability for future policy benefits.

~~Table of Contents~~

~~Metropolitan Life Insurance Company~~

~~(A Wholly-Owned Subsidiary of MetLife, Inc.)~~

~~Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued)~~


~~Standard~~	~~Description~~	~~Effective Date and Method of Adoption~~	~~Impact on Financial Statements~~statements.
ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions	The amendments in this update clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. In addition, the amendments clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The amendments also require entities that hold equity securities subject to contractual sale restrictions to make disclosures about the fair value of such equity securities, the nature and remaining duration of the restriction(s) and the circumstances that could cause a lapse in the restriction(s).	January 1, 2024, to be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption (with early adoption permitted).	The Company is ~~currently evaluating~~continuing to evaluate the impact of the guidance, ~~on its interim condensed consolidated financial statements.~~
~~ASU 2022-02,~~ ~~Financial Instruments—Credit Losses~~ ~~(Topic 326): Troubled Debt Restructurings~~ and ~~Vintage Disclosures~~	~~The amendments in~~it does not expect the new ASU eliminate the accounting guidance for troubled debt restructurings (“TDRs”) by creditors that have adopted the current expected credit loss guidance while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the amendments require that a public business entity disclose current-period gross write-offs by year of origination for financing receivables and net investment in leases.	January 1, 2023, to be applied prospectively; however, for the transition method related to the recognition and measurement of TDRs, an entity can apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption. Entities are permitted to early adopt these amendments, including adoption in any interim period, provided that the amendments are adopted as of the beginning of the annual reporting period that includes the interim period of adoption. In addition, entities are permitted to elect to early adopt the amendments related to TDRs accounting and related disclosure enhancements separately from the amendments related to certain vintage disclosures.	~~The Company is currently evaluating the impact~~ of the guidance ~~on its interim condensed consolidated financial statements and the alternative methods of adoption.~~
~~ASU 2021-08,~~ ~~Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers~~	~~The guidance indicates how~~ to ~~determine whether~~have a contract liability is recognized by the acquirer in a business combination and provides specific guidance on how to recognize and measure acquired contract assets and contract liabilities from revenue contracts in a business combination.	~~January 1, 2023, to be applied prospectively (with early adoption permitted).~~	~~The Company is currently evaluating the~~material impact ~~of the guidance~~ on its interim condensed consolidated financial statements.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

2. Segment Information

The Company is organized into 2two segments: U.S. and MetLife Holdings. In addition, the Company reports certain of its results of operations in Corporate & Other.

U.S.

The U.S. segment offers a broad range of protection products and services aimed at serving the financial needs of customers throughout their lives. These products are sold to corporations and their respective employees, other institutions and their respective members, as well as individuals. The U.S. segment is organized into two businesses: Group Benefits and Retirement and Income Solutions (“RIS”).

•The Group Benefits business offers products such as term, variable and universal life insurance, dental, group and individual disability and accident & health insurance.

•The RIS business offers a broad range of life and annuity-based insurance and investment products, including stable value and pension risk transfer products, institutional income annuities, structured settlements, benefit funding solutions and capital markets investment products.

MetLife Holdings

The MetLife Holdings segment consists of operations relating to products and businesses that the Company no longer actively markets. These include variable, universal, term and whole life insurance, variable, fixed and index-linked annuities and long-term care insurance.

Corporate & Other

Corporate & Other contains various start-up, developing and run-off businesses, including the Company’s ancillary non-U.S. operations. Also included in Corporate & Other are: the excess capital, as well as certain charges and activities, not allocated to the segments (including enterprise-wide strategic ~~initiative restructuring charges)~~initiatives), interest expense related to the majority of the Company’s outstanding debt, expenses associated with certain legal proceedings and income tax audit issues, and the elimination of intersegment amounts (which generally relate to affiliated reinsurance and intersegment loans, bearing interest rates commensurate with related borrowings).

Financial Measures and Segment Accounting Policies

Adjusted earnings is used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, adjusted earnings is also the Company’s GAAP measure of segment performance and is reported below. Adjusted earnings should not be viewed as a substitute for net income (loss). The Company believes the presentation of adjusted earnings, as the Company measures it for management purposes, enhances the understanding of its performance by highlighting the results of operations and the underlying profitability drivers of the business.

The adoption of LDTI impacted the Company’s calculation of adjusted earnings. With the adoption of LDTI, the measurement model was simplified for DAC and VOBA, and most embedded derivatives were reclassified as MRBs. As a result, the Company updated its calculation of adjusted earnings to remove certain adjustments related to the amortization of DAC, VOBA and related intangibles and adjusted for changes in measurement of certain guarantees. Under LDTI, adjusted earnings excludes changes in fair value associated with MRBs, changes in discount rates on certain annuitization guarantees, losses at contract inception for certain single premium business, and asymmetrical accounting associated with in-force reinsurance. All periods presented herein reflect the updated calculation of adjusted earnings.

Adjusted earnings is defined as adjusted revenues less adjusted expenses, net of income tax.

~~The~~These financial measures ~~of adjusted revenues and adjusted expenses~~ focus on the Company’s primary businesses principally by excluding the impact of (i) market volatility which could distort trends, (ii) asymmetrical and non-economic accounting, and (iii) revenues and costs related to divested businesses, non-core products and certain entities required to be consolidated under GAAP. Also, these measures exclude results of discontinued operations under ~~GAAP~~GAAP.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

2. Segment Information (continued)

Market volatility can have a significant impact on the Company’s financial results. Adjusted earnings excludes net investment gains (losses), net derivative gains (losses), MRBs remeasurement gains (losses) and goodwill impairments. Further, policyholder benefits and claims exclude (i) changes in the discount rate on certain annuitization guarantees accounted for as additional liabilities and (ii) market value adjustments.

Asymmetrical and non-economic accounting adjustments are made to the line items indicated in calculating adjusted earnings:

•Net investment income includes earned income on derivatives and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment.

•Other revenues include settlements of foreign currency earnings hedges.

•Policyholder benefits and claims excludes (i) amortization of basis adjustments associated with de-designated fair value hedges of future policy benefits, (ii) inflation-indexed benefit adjustments associated with contracts backed by inflation-indexed investments, and (iii) non-economic losses incurred at contract inception for certain single premium annuity business. These losses are amortized into adjusted earnings within policyholder benefits and claims over the estimated lives of the contracts.

•Interest credited to PABs excludes amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass-through adjustments.

Divested businesses are those that have been or will be sold or exited by MLIC but do not meet the discontinued operations criteria under ~~GAAP and are referred to as divested businesses.~~GAAP. Divested businesses also include the net impact of transactions with exited businesses that have been eliminated in consolidation under GAAP and costs relating to businesses that have been or will be sold or exited by MLIC that do not meet the criteria to be included in results of discontinued operations under GAAP. ~~Adjusted revenues also excludes net investment gains (losses) and net derivative gains (losses).~~

~~Table of Contents~~

~~Metropolitan Life Insurance Company~~

~~(A Wholly-Owned Subsidiary of MetLife, Inc.)~~

~~Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~2. Segment Information (continued)~~

~~The following additional~~Other adjustments are made to ~~revenues, in~~ the line items indicated in calculating adjusted ~~revenues:~~

•Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity guaranteed minimum income benefits (“GMIBs”) fees (“GMIB fees”); andearnings:

•Net investment ~~income: (i) includes adjustments for earned~~ income ~~on derivatives~~ and ~~amortization of premium on derivatives that are hedges of investments or that are used~~interest credited to replicate certain investments, but do not qualify for hedge accounting treatment, (ii) excludes post-tax adjusted earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iii)PABs excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP and (iv) includes distributions of profits from certain other limited partnership interests that were previously accounted for under the cost method, but are now accounted for at estimated fair value, where the change in estimated fair value is recognized in net investment gains (losses) under GAAP.

~~The following additional adjustments are made to expenses, in the line items indicated, in calculating adjusted expenses:~~

•contractholder-directed equity securitiesPolicyholder benefits and claims and policyholder dividends excludes: (i) amortization of basis adjustments associated with de-designated fair value hedges of future policy benefits, (ii) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (iii) amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets and other pass-through adjustments, (iv) benefits and hedging costs related to GMIBs (“GMIB costs”) and (v) market value adjustments associated with surrenders or terminations of contracts (“Market value adjustments”);.

•~~Interest credited to policyholder account balances includes adjustments~~Other revenues include fee revenue on synthetic guaranteed interest contracts (“GICs”) accounted for ~~earned income on~~as freestanding derivatives ~~and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment;~~.

•~~Amortization of DAC~~Other revenues exclude and ~~value of business acquired (“VOBA”) excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB~~other expenses include fees ~~and GMIB costs and (iii) Market value adjustments;~~

•received in connection with services provided under transition service agreements~~Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and~~.

•Other expenses ~~excludes:~~exclude (i) ~~noncontrolling interests,~~implementation of new insurance regulatory requirements and other costs, and (ii) acquisition, integration and other ~~costs,~~related costs. Other expenses include (i) deductions for net income attributable to noncontrolling interests, and ~~(iii) goodwill impairments.~~(ii) benefits accrued on synthetic GICs accounted for as freestanding derivatives.

Adjusted earnings also excludes the recognition of certain contingent assets and liabilities that could not be recognized at acquisition or adjusted for during the measurement period under GAAP business combination accounting guidance.

The tax impact of the adjustments mentioned above are calculated net of the U.S. or foreign statutory tax rate, which could differ from the Company’s effective tax rate. Additionally, the provision for income tax (expense) benefit also includes the impact related to the timing of certain tax credits, as well as certain tax reforms.

Set forth in the tables below is certain financial information with respect to the Company’s segments, as well as Corporate & Other, for the ~~three months and~~ ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 and ~~2021.~~2022. The segment accounting policies are the same as those used to prepare the Company’s interim condensed consolidated financial statements, except for adjusted earnings adjustments as defined above. In addition, segment accounting policies include the method of capital allocation described below.

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 and the Company’s businesses.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

2. Segment Information (continued)

MetLife’s economic capital model, coupled with considerations of local capital requirements, aligns segment allocated equity with emerging standards and consistent risk principles. The model applies statistics-based risk evaluation principles to the material risks to which the Company is exposed. These consistent risk principles include calibrating required economic capital shock factors to a specific confidence level and time horizon while applying an industry standard method for the inclusion of diversification benefits among risk types. MetLife’s management is responsible for the ongoing production and enhancement of the economic capital model and reviews its approach periodically to ensure that it remains consistent with emerging industry practice standards.

~~Table~~ The adoption of ~~Contents~~

~~Metropolitan Life Insurance Company~~

~~(A Wholly-Owned Subsidiary of MetLife, Inc.)~~

~~Notes~~LDTI resulted in changes to the ~~Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~2. Segment Information (continued)~~

economic capital model. The changes related to this adoption do not represent a change in the composition of the segments and, in accordance with GAAP guidance for segment reporting, the Company will apply the changes to the economic capital model prospectively and did not update the economic model for 2022 and 2021.

Segment net investment income is credited or charged based on the level of allocated equity; however, changes in allocated equity do not impact the Company’s consolidated net investment income, net income (loss) or adjusted earnings.

Net investment income is based upon the actual results of each segment’s specifically identifiable investment portfolios adjusted for allocated equity. With the adoption of LDTI, net investment income was reallocated for certain segments to reflect the impact of the change to certain liability balances, with no impact to consolidated net investment income. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such costs; (ii) time studies analyzing the amount of employee compensation costs incurred by each segment; and (iii) cost estimates included in the Company’s product pricing.


Three Months Ended June 30, 2022		U.S.		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
Three Months Ended March 31, 2023														Three Months Ended March 31, 2023	U.S.		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
		(In millions)													(In millions)
Revenues	Revenues													Revenues
Premiums	Premiums	$	5,046	$	622	$	—	$	5,668	$	—	$	5,668	Premiums	$	5,270	$	578	$	1	$	5,849	$	—	$	5,849
Universal life and investment-type product policy fees	Universal life and investment-type product policy fees	277		219		—		496		19		515		Universal life and investment-type product policy fees	285		145		—		430		—		430
Net investment income	Net investment income	1,477		1,146		(62)		2,561		(119)		2,442		Net investment income	1,854		989		43		2,886		(201)		2,685
Other revenues	Other revenues	220		27		126		373		—		373		Other revenues	242		56		122		420		(5)		415
Net investment gains (losses)	Net investment gains (losses)	—		—		—		—		(83)		(83)		Net investment gains (losses)	—		—		—		—		(102)		(102)
Net derivative gains (losses)	Net derivative gains (losses)	—		—		—		—		345		345		Net derivative gains (losses)	—		—		—		—		(560)		(560)
Total revenues	Total revenues	7,020		2,014		64		9,098		162		9,260		Total revenues	7,651		1,768		166		9,585		(868)		8,717
Expenses	Expenses													Expenses
Policyholder benefits and claims and policyholder dividends	Policyholder benefits and claims and policyholder dividends	4,979		1,259		—		6,238		(148)		6,090		Policyholder benefits and claims and policyholder dividends	5,227		1,116		—		6,343		3		6,346
Policyholder liability remeasurement (gains) losses														Policyholder liability remeasurement (gains) losses	(72)		15		—		(57)		—		(57)
Market risk benefit remeasurement (gains) losses														Market risk benefit remeasurement (gains) losses	—		—		—		—		244		244
Interest credited to policyholder account balances	Interest credited to policyholder account balances	364		161		5		530		—		530		Interest credited to policyholder account balances	609		155		66		830		1		831
Capitalization of DAC	Capitalization of DAC	(12)		—		(23)		(35)		—		(35)		Capitalization of DAC	(25)		—		(52)		(77)		—		(77)
Amortization of DAC and VOBA	Amortization of DAC and VOBA	12		59		1		72		31		103		Amortization of DAC and VOBA	14		59		4		77		—		77
Interest expense on debt	Interest expense on debt	1		2		22		25		—		25		Interest expense on debt	3		3		24		30		—		30
Other expenses	Other expenses	823		190		311		1,324		2		1,326		Other expenses	1,106		206		201		1,513		5		1,518
Total expenses	Total expenses	6,167		1,671		316		8,154		(115)		8,039		Total expenses	6,862		1,554		243		8,659		253		8,912
Provision for income tax expense (benefit)	Provision for income tax expense (benefit)	178		68		(97)		149		58		207		Provision for income tax expense (benefit)	165		41		(75)		131		(235)		(104)
Adjusted earnings	Adjusted earnings	$	675	$	275	$	(155)	795						Adjusted earnings	$	624	$	173	$	(2)	795
Adjustments to:	Adjustments to:													Adjustments to:
Total revenues	Total revenues							162						Total revenues							(868)
Total expenses	Total expenses							115						Total expenses							(253)
Provision for income tax (expense) benefit	Provision for income tax (expense) benefit							(58)						Provision for income tax (expense) benefit							235
Net income (loss)	Net income (loss)							$	1,014			$	1,014	Net income (loss)							$	(91)			$	(91)

1427

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

2. Segment Information (continued)

Three Months Ended June 30, 2021 U.S. MetLife
Holdings
Corporate
& Other
Total Adjustments
Total
Consolidated
(In millions)
Revenues
Premiums $ 5,760 $ 691 $ — $ 6,451 $ — $ 6,451
Universal life and investment-type product policy fees 274 221 — 495 19 514
Net investment income 1,804 1,400 (28) 3,176 (142) 3,034
Other revenues 222 66 144 432 — 432
Net investment gains (losses) — — — — 342 342
Net derivative gains (losses) — — — — 25 25
Total revenues 8,060 2,378 116 10,554 244 10,798
Expenses
Policyholder benefits and claims and policyholder dividends 5,917 1,319 — 7,236 93 7,329
Interest credited to policyholder account balances 346 167 — 513 (1) 512
Capitalization of DAC (10) — — (10) — (10)
Amortization of DAC and VOBA 6 38 — 44 (12) 32
Interest expense on debt 1 1 22 24 — 24
Other expenses 813 210 141 1,164 (5) 1,159
Total expenses 7,073 1,735 163 8,971 75 9,046
Provision for income tax expense (benefit) 205 130 (74) 261 47 308
Adjusted earnings $ 782 $ 513 $ 27 1,322
Adjustments to:
Total revenues 244
Total expenses (75)
Provision for income tax (expense) benefit (47)
Net income (loss) $ 1,444 $ 1,444

Six Months Ended June 30, 2022 U.S. MetLife
Holdings
Corporate
& Other
Total Adjustments
Total
Consolidated
(In millions)
Revenues
Premiums $ 10,334 $ 1,244 $ — $ 11,578 $ — $ 11,578
Universal life and investment-type product policy fees 563 438 — 1,001 38 1,039
Net investment income 3,106 2,426 (14) 5,518 (250) 5,268
Other revenues 463 70 252 785 — 785
Net investment gains (losses) — — — — (309) (309)
Net derivative gains (losses) — — — — 526 526
Total revenues 14,466 4,178 238 18,882 5 18,887
Expenses
Policyholder benefits and claims and policyholder dividends 10,539 2,514 — 13,053 (243) 12,810
Interest credited to policyholder account balances 693 322 6 1,021 — 1,021
Capitalization of DAC (35) — (27) (62) — (62)
Amortization of DAC and VOBA 26 119 1 146 28 174
Interest expense on debt 3 3 43 49 — 49
Other expenses 1,684 391 480 2,555 2 2,557
Total expenses 12,910 3,349 503 16,762 (213) 16,549
Provision for income tax expense (benefit) 324 166 (172) 318 47 365
Adjusted earnings $ 1,232 $ 663 $ (93) 1,802
Adjustments to:
Total revenues 5
Total expenses 213
Provision for income tax (expense) benefit (47)
Net income (loss) $ 1,973 $ 1,973

~~Table of Contents~~

~~Metropolitan Life Insurance Company~~

~~(A Wholly-Owned Subsidiary of MetLife, Inc.)~~

~~Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~2. Segment Information (continued)~~


Six Months Ended June 30, 2021		U.S.		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
Three Months Ended March 31, 2022														Three Months Ended March 31, 2022	U.S.		MetLife Holdings		Corporate & Other		Total		Adjustments		Total Consolidated
		(In millions)													(In millions)
Revenues	Revenues													Revenues
Premiums	Premiums	$	10,897	$	1,359	$	—	$	12,256	$	—	$	12,256	Premiums	$	5,284	$	622	$	—	$	5,906	$	—	$	5,906
Universal life and investment-type product policy fees	Universal life and investment-type product policy fees	561		449		—		1,010		39		1,049		Universal life and investment-type product policy fees	286		193		—		479		—		479
Net investment income	Net investment income	3,651		2,891		(29)		6,513		(292)		6,221		Net investment income	1,629		1,264		64		2,957		(131)		2,826
Other revenues	Other revenues	446		124		287		857		—		857		Other revenues	242		43		126		411		—		411
Net investment gains (losses)	Net investment gains (losses)	—		—		—		—		502		502		Net investment gains (losses)	—		—		—		—		(226)		(226)
Net derivative gains (losses)	Net derivative gains (losses)	—		—		—		—		(990)		(990)		Net derivative gains (losses)	—		—		—		—		121		121
Total revenues	Total revenues	15,555		4,823		258		20,636		(741)		19,895		Total revenues	7,441		2,122		190		9,753		(236)		9,517
Expenses	Expenses													Expenses
Policyholder benefits and claims and policyholder dividends	Policyholder benefits and claims and policyholder dividends	11,368		2,583		—		13,951		162		14,113		Policyholder benefits and claims and policyholder dividends	5,577		1,226		—		6,803		9		6,812
Policyholder liability remeasurement (gains) losses														Policyholder liability remeasurement (gains) losses	(45)		16		—		(29)		—		(29)
Market risk benefit remeasurement (gains) losses														Market risk benefit remeasurement (gains) losses	—		—		—		—		(1,361)		(1,361)
Interest credited to policyholder account balances	Interest credited to policyholder account balances	691		334		—		1,025		(2)		1,023		Interest credited to policyholder account balances	362		161		1		524		(22)		502
Capitalization of DAC	Capitalization of DAC	(29)		—		—		(29)		—		(29)		Capitalization of DAC	(23)		—		(4)		(27)		—		(27)
Amortization of DAC and VOBA	Amortization of DAC and VOBA	22		69		—		91		(19)		72		Amortization of DAC and VOBA	15		65		—		80		—		80
Interest expense on debt	Interest expense on debt	3		2		43		48		—		48		Interest expense on debt	2		1		21		24		—		24
Other expenses	Other expenses	1,609		431		268		2,308		(8)		2,300		Other expenses	861		201		169		1,231		—		1,231
Total expenses	Total expenses	13,664		3,419		311		17,394		133		17,527		Total expenses	6,749		1,670		187		8,606		(1,374)		7,232
Provision for income tax expense (benefit)	Provision for income tax expense (benefit)	393		285		(149)		529		(172)		357		Provision for income tax expense (benefit)	143		91		(71)		163		240		403
Adjusted earnings	Adjusted earnings	$	1,498	$	1,119	$	96	2,713						Adjusted earnings	$	549	$	361	$	74	984
Adjustments to:	Adjustments to:													Adjustments to:
Total revenues	Total revenues							(741)						Total revenues							(236)
Total expenses	Total expenses							(133)						Total expenses							1,374
Provision for income tax (expense) benefit	Provision for income tax (expense) benefit							172						Provision for income tax (expense) benefit							(240)
Net income (loss)	Net income (loss)							$	2,011			$	2,011	Net income (loss)							$	1,882			$	1,882

The following table presents total assets with respect to the Company’s segments, as well as Corporate & Other, at:


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(In millions)					(In millions)
U.S.	U.S.	$	219,410	$	256,381	U.S.	$	219,424	$	220,658
MetLife Holdings	MetLife Holdings	138,644		161,614		MetLife Holdings	135,580		133,393
Corporate & Other	Corporate & Other	29,768		28,562		Corporate & Other	31,817		30,788
Total	Total	$	387,822	$	446,557	Total	$	386,821	$	384,839

3. ~~Insurance~~Future Policy Benefits

~~Guarantees~~

As discussed in Notes 1 and 3 of the Notes to the Consolidated Financial Statements included in the 2021 Annual Report, the Company issues directly and assumes through reinsurance variable annuity products with guaranteed minimum benefits. Guaranteed minimum accumulation benefits (“GMABs”), the non-life contingent portion of guaranteed minimum withdrawal benefits (“GMWBs”) and certain non-life contingent portions of GMIBs are accounted for as embedded derivatives in policyholder account balances and are further discussed in Note 6.

The Company ~~also issues other annuity~~establishes liabilities for amounts payable under insurance policies. These liabilities are comprised of traditional and limited-payment contracts ~~that apply a lower rate on funds deposited if~~and associated DPLs, additional insurance liabilities, participating life and short-duration contracts.

The LDTI transition adjustments related to traditional and limited-payment contracts, DPLs, and additional insurance liabilities, as well as the ~~contractholder elects to surrender~~associated ceded recoverables, as described in Note 1, were as follows at the contract for cash and a higher rate if the contractholder elects to annuitize. These guarantees include benefits that are payable in the event of death, maturity or at annuitization. Certain other annuity contracts contain guaranteed annuitization benefits that may be above what would be provided by the current account value of the contract. Additionally, the Company issues universal and variable life contracts where the Company contractually guarantees to the contractholder a secondary guarantee or a guaranteed paid-up benefit.Transition Date:

1628

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. ~~Insurance~~Future Policy Benefits (continued)

~~Information regarding~~


	U.S. Annuities		MetLife Holdings Long-Term Care		MetLife Holdings Participating Life		Other Long-Duration		Short-Duration and Other		Total
	(In millions)
Balance, future policy benefits, at December 31, 2020	$	54,535	$	14,281	$	45,349	$	9,625	$	10,131	$	133,921
Removal of additional insurance liabilities for separate presentation (1)	(4)		—		—		(2,925)		—		(2,929)
Subtotal - pre-adoption balance, excluding additional liabilities	54,531		14,281		45,349		6,700		10,131		130,992
Removal of related amounts in accumulated other comprehensive income	(5,571)		(1,210)		—		(54)		—		(6,835)
Adjustment of future policy benefits to remeasure cohorts where net premiums exceed gross premiums under the modified retrospective approach	41		—		—		48		—		89
Effect of remeasurement of future policy benefits to an upper-medium grade discount rate	15,011		8,270		—		1,927		—		25,208
Other balance sheet reclassifications and adjustments upon adoption of the LDTI standard	(4,747)		—		—		(47)		—		(4,794)
Removal of remeasured deferred profit liabilities for separate presentation (1)	(2,413)		—		—		(250)		—		(2,663)
Balance, traditional and limited-payment contracts, at January 1, 2021	$	56,852	$	21,341	$	45,349	$	8,324	$	10,131	$	141,997

Balance, deferred profit liabilities at January 1, 2021	$	2,413	$	—	$	—	$	250	$	—	$	2,663

Balance, ceded recoverables on traditional and limited-payment contracts at December 31, 2020	$	203	$	—			$	752			$	955
Effect of remeasurement of the ceded recoverable to an upper-medium grade discount rate	135		—				268				403
Adjustments for loss contracts (with net premiums in excess of gross premiums) under the modified retrospective approach	—		—				32				32
Adjustments for the cumulative effect of adoption on ceded recoverables on traditional and limited-payment contract	6		—				20				26
Balance ceded recoverables on traditional and limited-payment contracts at January 1, 2021	$	344	$	—			$	1,072			$	1,416

__________________

(1) LDTI requires separate disaggregated rollforwards of the additional insurance liabilities balance and the traditional and limited-payment FPBs. Therefore, the additional insurance liabilities and DPL amounts that are recorded in the FPB financial statement line item are removed to derive the opening balance of traditional and limited-payment contracts at the Transition Date.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)


	MetLife Holdings Universal and Variable Universal Life		Other Long-Duration		Total
	(In millions)
Additional insurance liabilities at December 31, 2020	$	1,478	$	1,451	$	2,929
Reclassification of carrying amount of contracts and contract features that are market risk benefits	—		(1,447)		(1,447)
Adjustments for the cumulative effect of adoption on additional insurance liabilities	36		—		36
Additional insurance liabilities at January 1, 2021	$	1,514	$	4	$	1,518

Ceded recoverables on additional insurance liabilities at December 31, 2020	$	554	$	—	$	554
Adjustments for the cumulative effect of adoption on ceded recoverables on additional insurance liabilities	9		—		9
Ceded recoverables on additional insurance liabilities at January 1, 2021	$	563	$	—	$	563

Balance, traditional and limited-payment contracts, at January 1, 2021					$	141,997
Balance, deferred profit liabilities at January 1, 2021					2,663
Balance, additional insurance liabilities at January 1, 2021					1,518
Total future policy benefits at January 1, 2021					$	146,178

__________________

The Company’s ~~guarantee exposure, which includes direct business, but excludes offsets from hedging or reinsurance, if any,~~future policy benefits on the interim condensed consolidated balance sheets was as follows at:

June 30, 2022 December 31, 2021
In the
Event of Death
At
Annuitization
In the
Event of Death
At
Annuitization
(Dollars in millions)
Annuity Contracts:
Variable Annuity Guarantees:
Total account value (1), (2) $ 38,733 $ 15,503 $ 48,868 $ 20,140
Separate account value (1) $ 29,933 $ 14,726 $ 39,882 $ 19,347
Net amount at risk $ 4,055 (3) $ 569 (4) $ 1,160 (3) $ 461 (4)
Average attained age of contractholders 69 years 69 years 69 years 66 years
Other Annuity Guarantees:
Total account value (1), (2) N/A $ 135 N/A $ 135
Net amount at risk N/A $ 67 (5) N/A $ 70 (5)
Average attained age of contractholders N/A 56 years N/A 55 years


	March 31, 2023		December 31, 2022
	(In millions)
Traditional and Limited-Payment Contracts:
U.S. - Annuities	$	48,491	$	47,990
MetLife Holdings - Long-term care	14,617		13,845
Deferred Profit Liabilities:
U.S. - Annuities	2,865		2,699
Additional Insurance Liabilities:
MetLife Holdings - Universal and variable universal life	1,686		1,641
MetLife Holdings - Participating life	44,163		44,434
Other long-duration (1)	6,303		6,297
Short-duration and other	10,073		10,008
Total	$	128,198	$	126,914

June 30, 2022 December 31, 2021
Secondary
Guarantees
Paid-Up
Guarantees
Secondary
Guarantees
Paid-Up
Guarantees
(Dollars in millions)
Universal and Variable Life Contracts:
Total account value (1), (2) $ 4,793 $ 807 $ 5,935 $ 826
Net amount at risk (6) $ 37,736 $ 5,010 $ 37,482 $ 5,181
Average attained age of policyholders 59 years 66 years 59 years 65 years
__________________

(1) This balance represents liabilities for various smaller product lines across both segments, as well as Corporate & Other.

Rollforwards - Traditional and Limited-Payment Contracts

The following information about the direct and assumed liability for future policy benefits includes disaggregated rollforwards of expected future net premiums and expected future benefits. The products grouped within these rollforwards were selected based upon common characteristics and valuations using similar inputs, judgments, assumptions and methodologies within a particular segment of the business. The adjusted balance in each disaggregated rollforward reflects the remeasurement (gains) losses.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)

U.S. - Annuities

The U.S segment’s annuities products include pension risk transfers, certain structured settlements and certain institutional income annuities, which are mainly single premium spread-based products. Information regarding these products was as follows:


	Three Months Ended March 31,
	2023			2022
	(Dollars in millions)
Present Value of Expected Net Premiums
Balance, beginning of period, at current discount rate at balance sheet date	$	—		$	—

Balance, beginning of period, at original discount rate	$	—		$	—
Effect of actual variances from expected experience (1)	2			—
Adjusted balance	2			—
Issuances	66			48
Net premiums collected	(68)			(48)
Ending balance at original discount rate	—			—
Balance, end of period, at current discount rate at balance sheet date	$	—		$	—

Present Value of Expected Future Policy Benefits
Balance, beginning of period, at current discount rate at balance sheet date	$	48,190		$	54,172

Balance, beginning of period, at original discount rate	$	49,194		$	42,453
Effect of actual variances from expected experience (1)	(262)			(77)
Adjusted balance	48,932			42,376
Issuances	64			48
Interest accrual	600			523
Benefit payments	(1,309)			(914)
Ending balance at original discount rate	48,287			42,033
Effect of changes in discount rate assumptions	281			6,549
Balance, end of period, at current discount rate at balance sheet date	48,568			48,582

Cumulative amount of fair value hedging adjustments	(77)			367
Net liability for future policy benefits, exclusive of net premiums	48,491			48,949
Less: Reinsurance recoverable	—			271
Net liability for future policy benefits, exclusive of net premiums, after reinsurance	$	48,491		$	48,678

Undiscounted - Expected future benefit payments	$	94,225		$	83,794
Discounted - Expected future benefit payments (at current discount rate at balance sheet date)	$	48,568		$	48,582
Weighted-average duration of the liability	10 years			11 years
Weighted-average interest accretion (original locked-in) rate	5.1		%	5.1		%
Weighted-average current discount rate at balance sheet date	5.2		%	3.7		%

__________________

(1)~~The Company’s annuity and life contracts~~For the three months ended March 31, 2023, the net effect of actual variances from expected experience was largely offset by the corresponding impact in DPL associated with ~~guarantees may offer more than one type~~the U.S. segment’s annuities products of ~~guarantee~~$196 million. For the three months ended March 31, 2022, the net effect of actual variances from expected experience was partially offset by the corresponding impact in ~~each contract. Therefore,~~DPL associated with the ~~amounts listed above may not be mutually exclusive.~~U.S. segment’s annuities products of $35 million.

~~(2)Includes the contractholders’ investments~~Significant Methodologies and Assumptions

The principal inputs used in the ~~general account and separate account, if applicable.~~

~~(3)Defined as the death benefit less the total account value, as~~establishment of the ~~balance sheet date. It represents~~FPB for the ~~amount of~~U.S. segment’s annuities products include actual premiums, actual benefits, in-force data, locked-in claim-related expense, the ~~claim that~~locked-in interest accretion rate, the ~~Company would incur if death claims were filed on all contracts on~~current upper-medium grade discount rate at the balance sheet date and ~~includes any additional contractual claims associated with riders purchased~~best estimate mortality assumptions.

For the three months ended March 31, 2023, the effect of actual variances from expected experience was primarily driven by favorable mortality and the amendment of an affiliated reinsurance treaty.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to ~~assist with covering income taxes payable upon death.~~the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)

~~(4)~~
~~Defined~~

For the three months ended March 31, 2022, the effect of actual variances from expected experience was primarily driven by increased mortality.

MetLife Holdings - Long-term Care

The MetLife Holdings segment’s long-term care products offer protection against potentially high costs of long-term health care services. Information regarding these products was as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. This amount represents the Company’s potential economic exposure to such guaranteesfollows:


	Three Months Ended March 31,
		2023			2022
		(Dollars in millions)
Present Value of Expected Net Premiums
Balance, beginning of period, at current discount rate at balance sheet date		$	5,775		$	7,058

Balance, beginning of period, at original discount rate		$	5,807		$	5,699
Effect of actual variances from expected experience		26			87
Adjusted balance		5,833			5,786
Interest accrual		75			74
Net premiums collected		(146)			(145)
Ending balance at original discount rate		5,762			5,715
Effect of changes in discount rate assumptions		104			796
Balance, end of period, at current discount rate at balance sheet date		$	5,866		$	6,511

Present Value of Expected Future Policy Benefits
Balance, beginning of period, at current discount rate at balance sheet date		$	19,619		$	27,627

Balance, beginning of period, at original discount rate		$	20,165		$	19,406
Effect of actual variances from expected experience		28			96
Adjusted balance		20,193			19,502
Interest accrual		266			257
Benefit payments		(191)			(170)
Ending balance at original discount rate		20,268			19,589
Effect of changes in discount rate assumptions		215			4,677
Balance, end of period, at current discount rate at balance sheet date		20,483			24,266

Net liability for future policy benefits, exclusive of net premiums		$	14,617		$	17,755

Undiscounted:
Expected future gross premiums		$	11,053		$	11,209
Expected future benefit payments		$	45,741		$	45,898
Discounted (at current discount rate at balance sheet date):
Expected future gross premiums		$	7,295		$	8,210
Expected future benefit payments		$	20,483		$	24,266
Weighted-average duration of the liability		15 years			17 years
Weighted -average interest accretion (original locked-in) rate		5.4		%	5.5		%
Weighted-average current discount rate at balance sheet date		5.3		%	3.9		%

Significant Methodologies and Assumptions

The principal inputs used in the ~~event all contractholders were to annuitize on~~establishment of the FPB reserve for long-term care products include actual premiums, actual benefits, in-force data, locked-in claim-related expense, the locked-in interest accretion rate, current upper-medium grade discount rate at the balance sheet date ~~even though the contracts contain terms that allow annuitization of the guaranteed amount only after the 10th anniversary of the contract, which not all contractholders have achieved.~~

~~(5)~~Defined as either the excess of the upper tier, adjusted for a profit margin, less the lower tier, as of the balance sheet date or the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. These amounts represent the Company’s potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date.

~~(6)Defined as the guarantee amount less the account value, as of the balance sheet date. It represents the amount of the~~and best estimate assumptions. The best estimate assumptions include mortality, lapse, incidence, claim ~~that the Company would incur if death claims were filed on all contracts on the balance sheet date.~~utilization, claim cost inflation, claim continuance, and premium rate increases.

1732

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)

Rollforwards - Additional Insurance Liabilities

The Company establishes additional insurance liabilities for annuitization, death or other insurance benefits for universal life and variable universal life contract features where the Company guarantees to the contractholder either a secondary guarantee or a guaranteed paid-up benefit. The policy can remain in force, even if the base policy account value is zero, as long as contractual secondary guarantee requirements have been met.

The following information about the direct liability for additional insurance liabilities includes disaggregated rollforwards. The products grouped within these rollforwards were selected based upon common characteristics and valuations using similar inputs, judgments, assumptions and methodologies within a particular segment of the business. The adjusted balance in each disaggregated rollforward reflects the remeasurement (gains) losses.

MetLife Holdings

The MetLife Holdings segment’s universal life and variable universal life products offer a contract feature where the Company guarantees to the contractholder a secondary guarantee or a guaranteed paid-up benefit. Information regarding these additional insurance liabilities was as follows:


	Three Months Ended March 31,
	2023			2022
	Universal and Variable Universal Life
	(Dollars in millions)
Balance, beginning of period	$	1,642		$	1,623
Less: AOCI adjustment	(63)			66
Balance, beginning of period, before AOCI adjustment	1,705			1,557
Effect of actual variances from expected experience	14			9
Adjusted balance	1,719			1,566
Assessments accrual	24			23
Interest accrual	22			20
Excess benefits paid	(29)			(19)
Balance, end of period, before AOCI adjustment	1,736			1,590
Add: AOCI adjustment	(50)			23
Balance, end of period	1,686			1,613
Less: Reinsurance recoverable	636			619
Balance, end of period, net of reinsurance	$	1,050		$	994

Weighted-average duration of the liability	17 years			18 years
Weighted-average interest accretion rate	5.2		%	5.2		%

Significant Methodologies and Assumptions

Liabilities for ULSG and paid-up guarantees are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the life of the contract based on total expected assessments.

The guaranteed benefits are estimated over a range of scenarios. The significant assumptions used in estimating the ULSG and paid-up guarantee liabilities are investment income, mortality, lapses, and premium payment pattern and persistency. In addition, projected earned rate and crediting rates are used to project the account values and excess death benefits and assessments. The discount rate is equal to the crediting rate for each annual cohort and is locked-in at inception.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)

The Company’s revenue and interest recognized in the interim condensed consolidated statements of operations and comprehensive income (loss) for long-duration contracts, excluding MetLife Holdings’ participating life contracts, were as follows:


	Three Months Ended March 31,
	2023				2022
	Gross Premiums or Assessments (1)		Interest Expense (2)		Gross Premiums or Assessments (1)		Interest Expense (2)
	(In millions)
Traditional and Limited-Payment Contracts:
U.S. - Annuities	$	41	$	600	$	61	$	523
MetLife Holdings - Long-term care	183		$	191	183		183
Deferred Profit Liabilities:
U.S. - Annuities	N/A		$	35	N/A		34
Additional Insurance Liabilities:
MetLife Holdings - Universal and variable universal life	120		22		122		20
Other long duration	164		76		177		76
Total	$	508	$	924	$	543	$	836

__________________

(1) Gross premiums are related to traditional and limited-payment contracts and are included in premiums. Assessments are related to additional insurance liabilities and are included in universal life and investment-type product policy fees and net investment income.

(2) Interest expense is included in policyholder benefits and claims.

Liabilities for Unpaid Claims and Claim Expenses

Rollforward of Claims and Claim Adjustment Expenses

Information regarding the liabilities for unpaid claims and claim adjustment expenses was as follows:


		Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021			2023		2022
		(In millions)					(In millions)
Balance, beginning of period	Balance, beginning of period	$	15,059	$	13,523	Balance, beginning of period	$	11,300	$	10,820
Less: Reinsurance recoverables	Less: Reinsurance recoverables	2,263		1,639		Less: Reinsurance recoverables	1,633		1,857
Net balance, beginning of period	Net balance, beginning of period	12,796		11,884		Net balance, beginning of period	9,667		8,963
Incurred related to:	Incurred related to:					Incurred related to:
Current period	Current period	10,379		9,917		Current period	5,151		5,377
Prior periods (1)	Prior periods (1)	316		436		Prior periods (1)	(28)		230
Total incurred	Total incurred	10,695		10,353		Total incurred	5,123		5,607
Paid related to:	Paid related to:					Paid related to:
Current period	Current period	(5,911)		(6,044)		Current period	(2,025)		(2,102)
Prior periods	Prior periods	(4,411)		(4,135)		Prior periods	(2,999)		(2,947)
Total paid	Total paid	(10,322)		(10,179)		Total paid	(5,024)		(5,049)
Net balance, end of period	Net balance, end of period	13,169		12,058		Net balance, end of period	9,766		9,521
Add: Reinsurance recoverables	Add: Reinsurance recoverables	2,147		2,078		Add: Reinsurance recoverables	1,816		1,843
Balance, end of period (included in future policy benefits and other policy-related balances)	Balance, end of period (included in future policy benefits and other policy-related balances)	$	15,316	$	14,136	Balance, end of period (included in future policy benefits and other policy-related balances)	$	11,582	$	11,364

~~__________________~~______________

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

3. Future Policy Benefits (continued)

(1)~~The six~~For the three months ended ~~June 30, 2022 and 2021 include~~March 31, 2023, incurred ~~claim activity~~claims and claim adjustment expenses associated with prior periods decreased due to favorable claims experience in the current period. For the three months ended March 31, 2022, incurred claims and claim adjustment expenses include expenses associated with prior periods but reported in the respective current period, which contain impacts related to the COVID-19 pandemic, partially offset by additional premiums recorded for experience-rated contracts that are not reflected in the table above.

4. Policyholder Account Balances

The Company establishes liabilities for PABs, which are generally equal to the account value, and which includes accrued interest credited, but excludes the impact of any applicable charge that may be incurred upon surrender.

The LDTI transition adjustments related to PABs, as described in Note 1, were as follows at the Transition Date:


	U.S. Group Life		U.S. Capital Markets Investment Products and Stable Value GICs		U.S. Annuities and Risk Solutions		MetLife Holdings Annuities		Other		Total
	(In millions)
Balance at December 31, 2020	$	7,585	$	60,641	$	5,316	$	15,012	$	8,081	$	96,635
Reclassification of carrying amount of contracts and contract features that are market risk benefits	—		—		(1)		(494)		—		(495)
Other balance sheet reclassifications and adjustments upon adoption of the LDTI standard	—		—		4,747		—		47		4,794
Balance at January 1, 2021	$	7,585	$	60,641	$	10,062	$	14,518	$	8,128	$	100,934

The Company’s PABs on the interim condensed consolidated balance sheets were as follows at:


	March 31, 2023		December 31, 2022
	(In millions)
U.S:
Group Life	$	7,888	$	7,954
Capital Markets Investment Products and Stable Value GICs	58,110		58,508
Annuities and Risk Solutions	10,450		10,244


MetLife Holdings - Annuities	12,143		12,598

Other	16,363		14,103
Total	$	104,954	$	103,407

Rollforwards

The following information about the direct and assumed liability for PABs includes year-to-date disaggregated rollforwards. The products grouped within these rollforwards were selected based upon common characteristics and valuations using similar inputs, judgments, assumptions and methodologies within a particular segment of the business. Policy charges presented in each disaggregated rollforward reflect a premium and/or assessment based on the account balance.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

U.S.

Group Life

The U.S. segment’s group life PABs predominantly consist of retained asset accounts, universal life products, and the fixed account of variable life insurance products. Information regarding this liability was as follows:


	Three Months Ended March 31,
	2023			2022
	(Dollars in millions)
Balance, beginning of period	$	7,954		$	7,889
Deposits	830			869
Policy charges	(160)			(150)
Surrenders and withdrawals	(782)			(664)
Benefit payments	(1)			(4)
Net transfers from (to) separate accounts	1			—
Interest credited	46			31
Balance, end of period	$	7,888		$	7,971

Weighted-average annual crediting rate	2.3		%	1.6		%
Cash surrender value	$	7,827		$	7,917

Information regarding the Company’s net amount at risk, excluding offsets from ceded reinsurance, if any, for the U.S. segment’s group life products was as follows at:


	March 31,
	2023			2022
	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits
	(In millions)
Net amount at risk	$	249,463	N/A	$	240,610	N/A

__________________

(1)For benefits that are payable in the event of death, the net amount at risk is generally defined as the current death benefit in excess of the current account balance at the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts at the balance sheet date.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

The U.S. segment’s group life product account values by range of guaranteed minimum crediting rates (“GMCR”) and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:


Range of GMCR	At GMCR		Greater than 0% but less than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50% above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
March 31, 2023
Equal to or greater than 0% but less than 2%	$	—	$	—	$	935	$	4,640	$	5,575
Equal to or greater than 2% but less than 4%	1,277		10		63		2		1,352
Equal to or greater than 4%	759		1		43		33		836
Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		125
Total	$	2,036	$	11	$	1,041	$	4,675	$	7,888

March 31, 2022
Equal to or greater than 0% but less than 2%	$	5,318	$	131	$	—	$	132	$	5,581
Equal to or greater than 2% but less than 4%	1,355		51		16		—		1,422
Equal to or greater than 4%	808		—		—		30		838
Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		130
Total	$	7,481	$	182	$	16	$	162	$	7,971

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

Capital Markets Investment Products and Stable Value GICs

The U.S. segment’s capital markets investment products and stable value GICs PABs are investment-type products, mainly funding agreements. Information regarding this liability was as follows:


	Three Months Ended March 31,
	2023			2022
	(Dollars in millions)
Balance, beginning of period	$	58,508		$	58,495
Deposits	19,546			21,693

Surrenders and withdrawals	(20,825)			(19,053)


Interest credited	422			216
Effect of foreign currency translation and other, net	459			(167)
Balance, end of period	$	58,110		$	61,184

Weighted-average annual crediting rate	2.9		%	1.5		%
Cash surrender value	$	1,565		$	1,822

The U.S. segment’s capital markets investment products and stable value GICs account values by range of GMCR and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:


Range of GMCR	At GMCR		Greater than 0% but less than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50% above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
March 31, 2023
Equal to or greater than 0% but less than 2%	$	—	$	—	$	1	$	1,835	$	1,836


Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		56,274
Total	$	—	$	—	$	1	$	1,835	$	58,110

March 31, 2022
Equal to or greater than 0% but less than 2%	$	—	$	300	$	3,024	$	1,158	$	4,482


Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		56,702
Total	$	—	$	300	$	3,024	$	1,158	$	61,184

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

Annuities and Risk Solutions

The U.S. segment’s annuities and risk solutions PABs include certain structured settlements and institutional income annuities, and benefit funding solutions that include postretirement benefits and company-, bank- or trust-owned life insurance used to finance nonqualified benefit programs for executives. Information regarding this liability was as follows:


	Three Months Ended March 31,
	2023			2022
	(Dollars in millions)
Balance, beginning of period	$	10,244		$	10,009
Deposits	240			26
Policy charges	(43)			(41)
Surrenders and withdrawals	(40)			(40)
Benefit payments	(134)			(143)
Net transfers from (to) separate accounts	55			(2)
Interest credited	107			95
Other	21			(82)
Balance, end of period	$	10,450		$	9,822

Weighted-average annual crediting rate	4.1		%	3.9		%
Cash surrender value	$	6,621		$	5,602

Information regarding the Company’s net amount at risk, excluding offsets from ceded reinsurance, if any, for the U.S. segment’s annuities and risk solutions products was as follows at:


	March 31,
	2023			2022
	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits
	(In millions)
Net amount at risk	$	35,177	N/A	$	33,538	N/A

__________________

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

The U.S. segment’s annuities and risk solutions account values by range of GMCR and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:


Range of GMCR	At GMCR		Greater than 0% but less than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50% above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
March 31, 2023
Equal to or greater than 0% but less than 2%	$	—	$	—	$	58	$	1,394	$	1,452
Equal to or greater than 2% but less than 4%	230		39		40		441		750
Equal to or greater than 4%	3,689		120		12		5		3,826
Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		4,422
Total	$	3,919	$	159	$	110	$	1,840	$	10,450

March 31, 2022
Equal to or greater than 0% but less than 2%	$	—	$	—	$	115	$	493	$	608
Equal to or greater than 2% but less than 4%	301		36		40		421		798
Equal to or greater than 4%	3,634		125		1		4		3,764
Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		4,652
Total	$	3,935	$	161	$	156	$	918	$	9,822

MetLife Holdings

Annuities

The MetLife Holdings segment’s annuities PABs primarily includes fixed deferred annuities, the fixed account portion of variable annuities, certain income annuities, and embedded derivatives related to equity-indexed annuities. Information regarding this liability was as follows:


	Three Months Ended March 31,
	2023			2022
	(Dollars in millions)
Balance, beginning of period	$	12,598		$	13,692
Deposits	41			65
Policy charges	(3)			(3)
Surrenders and withdrawals	(510)			(315)
Benefit payments	(117)			(109)
Net transfers from (to) separate accounts	35			66
Interest credited	90			94
Other	9			(11)
Balance, end of period	$	12,143		$	13,479

Weighted-average annual crediting rate	2.9		%	2.8		%
Cash surrender value	$	11,309		$	12,391

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4. Policyholder Account Balances (continued)

Information regarding the Company’s net amount at risk, excluding offsets from ceded reinsurance, if any, for the MetLife Holdings segment’s annuities products was as follows at:


	March 31,
	2023				2022
	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits (2)		In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits (2)
	(In millions)
Net amount at risk (3)	$	3,600	$	788	$	2,003	$	711

__________________

(2)For benefits that are payable in the event of annuitization or exercise of other living benefits, the net amount at risk is generally defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates or to provide other living benefits. This amount represents the Company’s potential economic exposure in the event all contractholders were to annuitize or to exercise other living benefits at the balance sheet date.

(3)Includes amounts for certain variable annuities with guarantees, which are also disclosed in “MetLife Holdings – Annuities” in Note 5, due to contracts recorded as PABs, along with related guarantees recorded as MRBs.

The MetLife Holdings segment’s annuities account values by range of GMCR and the related range of differences between rates being credited to policyholders and the respective guaranteed minimums were as follows at:


Range of GMCR	At GMCR		Greater than 0% but less than 0.50% above GMCR		Equal to or greater than 0.50% but less than 1.50% above GMCR		Equal to or greater than 1.50% above GMCR		Total Account Value
	(In millions)
March 31, 2023
Equal to or greater than 0% but less than 2%	$	658	$	90	$	136	$	24	$	908
Equal to or greater than 2% but less than 4%	6,516		3,197		371		36		10,120
Equal to or greater than 4%	587		44		6		—		637
Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		478
Total	$	7,761	$	3,331	$	513	$	60	$	12,143

March 31, 2022
Equal to or greater than 0% but less than 2%	$	1,038	$	7	$	13	$	11	$	1,069
Equal to or greater than 2% but less than 4%	10,595		282		177		1		11,055
Equal to or greater than 4%	615		40		—		—		655
Products with either a fixed rate or no guaranteed minimum crediting rate	N/A		N/A		N/A		N/A		700
Total	$	12,248	$	329	$	190	$	12	$	13,479

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5. Market Risk Benefits

The Company establishes liabilities for variable annuity contract features which include a minimum benefit guarantee that provides to the contractholder a minimum return based on their initial deposit less withdrawals. In some cases, the benefit base may be increased by additional deposits, bonus amounts, accruals or optional market value resets.

The LDTI transition adjustments related to market risk benefit liabilities, as described in Note 1, were as follows at the Transition Date:


	MetLife Holdings Annuities		Other		Total
	(In millions)
Direct and assumed MRB liabilities at December 31, 2020	$	—	$	—	$	—
Reclassification of carrying amount of contracts and contract features that are market risk benefits	1,882		1		1,883
Adjustments for the cumulative effect of changes in nonperformance risk between contract issue date and Transition Date	(9)		(17)		(26)
Adjustments for the difference between the fair value of the MRB balance, excluding the cumulative effect of changes in nonperformance risk, and the historical carrying value	4,728		204		4,932
Direct and assumed MRB liabilities at January 1, 2021	$	6,601	$	188	$	6,789

The Company’s MRB assets and MRB liabilities on the interim condensed consolidated balance sheets were as follows at:


	March 31, 2023						December 31, 2022
	Asset		Liability		Net		Asset		Liability		Net
	(In millions)
MetLife Holdings - Annuities	$	108	$	3,363	$	3,255	$	153	$	3,224	$	3,071
Other	16		69		53		21		46		25
Total	$	124	$	3,432	$	3,308	$	174	$	3,270	$	3,096

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5. Market Risk Benefits (continued)

Rollforwards

The following information about the direct liability for MRBs includes a disaggregated rollforward. The products grouped within this rollforward were selected based upon common characteristics and valuations using similar inputs, judgments, assumptions and methodologies within a particular segment of the business.

MetLife Holdings - Annuities

The MetLife Holdings segment’s variable annuity products offer contract features where the Company guarantees to the contractholder a minimum benefit, which includes guaranteed minimum death benefits (“GMDBs”) and living benefit guarantees. The GMDB contract features include return of premium, which provides a return of the purchase payment upon death, annual step-up and roll-up and step-up combinations. The living benefit guarantees contract features primarily include guaranteed minimum income benefits (“GMIBs”), which provide a minimum accumulation of purchase payments that can be annuitized to receive a monthly income stream, and guaranteed minimum withdrawal benefits (“GMWBs”), which provide a series of withdrawals, provided that withdrawals in a contract year do not exceed a contractual limit. Information regarding MetLife Holdings annuities products was as follows:


	Three Months Ended March 31,
		2023		2022
	(In millions)
Balance, beginning of period		$	3,071	$	5,715

Balance, beginning of period, before effect of cumulative changes in the instrument-specific credit risk		$	3,164	$	6,017

Attributed fees collected		80		79
Benefit payments		(10)		(10)
Effect of changes in interest rates		344		(1,365)
Effect of changes in capital markets		(303)		275
Effect of changes in equity index volatility		(121)		39
Actual policyholder behavior different from expected behavior		21		(11)

Effect of foreign currency translation and other, net (1)		251		(112)
Effect of changes in risk margin		3		(90)
Balance, end of period, before the cumulative effect of changes in the instrument-specific credit risk		3,429		4,822
Cumulative effect of changes in the instrument-specific credit risk		(174)		(207)

Balance, end of period		$	3,255	$	4,615

__________________

(1) Included is the covariance impact from aggregating the market observable inputs, mostly driven by interest rate and capital market volatility.

Information regarding the Company’s net amount at risk, excluding offsets from hedging, and the weighted-average attained age of the contractholder for the MetLife Holdings segment’s annuities products was as follows at:


	March 31,
	2023				2022
	In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits (2)		In the Event of Death (1)		At Annuitization or Exercise of Other Living Benefits (2)
	(Dollars in millions)
Net amount at risk (3)	$	3,600	$	788	$	2,003	$	711
Weighted-average attained age of contractholders	70 years		70 years		69 years		69 years

__________________

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5. Market Risk Benefits (continued)

(1) For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts at the balance sheet date.

(2) For benefits that are payable in the event of annuitization or exercise of other living benefits, the net amount at risk is generally defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates or to provide other living benefits. This amount represents the Company’s potential economic exposure in the event all contractholders were to annuitize or to exercise other living benefits at the balance sheet date.

(3) Includes amounts for certain variable annuities with guarantees, which are also disclosed in “MetLife Holdings – Annuities” in Note 4, due to contracts recorded as PABs, along with related guarantees recorded as MRBs.

Significant Methodologies and Assumptions

The Company issues GMDBs, GMWBs, guaranteed minimum accumulation benefits (“GMABs”) and GMIBs that typically meet the definition of MRBs, which are measured in aggregate, as one compound MRB, at estimated fair value separately from the variable annuity contract, with changes in estimated fair value reported in net income, except for changes in nonperformance risk of the Company which are recorded in OCI.

The Company calculates the fair value of these MRBs, which is estimated as the present value of projected future benefits minus the present value of projected attributed fees, using actuarial and capital market assumptions including expectations concerning policyholder behavior. The calculation is based on in-force business, projecting future cash flows from the MRB over multiple risk neutral stochastic scenarios using observable risk-free rates.

Capital market assumptions, such as risk-free rates and implied volatilities, are based on market prices for publicly traded instruments to the extent that prices for such instruments are observable. Implied volatilities beyond the observable period are extrapolated based on observable implied volatilities and historical volatilities. Actuarial assumptions, including mortality, lapse, withdrawal and utilization, are unobservable and are reviewed at least annually based on actuarial studies of historical experience. See Note 11 for additional information on significant unobservable inputs.

The valuation of these MRBs includes a nonperformance risk adjustment and adjustments for a risk margin related to non-capital market inputs. The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.’s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries as compared to MetLife, Inc.

These guarantees may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; and variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs, impact the estimated fair value of the guarantees and affect net income, and changes in nonperformance risk of the Company affect OCI.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5. Market Risk Benefits (continued)

Other

In addition to the disaggregated MRB product rollforward above, the Company offers other products with guaranteed minimum benefit features. These MRBs are measured at estimated fair value with changes in estimated fair value reported in net income, except for changes in nonperformance risk of the Company which are recorded in OCI. See Note 11 for additional information on significant unobservable inputs used in the fair value measurement of MRBs. Information regarding this liability was as follows:


	Three Months Ended March 31,
	2023		2022
	(In millions)
Balance, beginning of period	$	25	$	286

Balance, beginning of period, before effect of cumulative changes in the instrument-specific credit risk	$	34	$	322

Attributed fees collected	1		—

Effect of changes in interest rates	21		(59)
Effect of changes in capital markets	—		(5)

Actual policyholder behavior different from expected behavior	(23)		(4)

Effect of foreign currency translation and other, net	35		(41)

Balance, end of period, before the cumulative effect of changes in the instrument-specific credit risk	68		213
Cumulative effect of changes in the instrument-specific credit risk	(15)		(25)

Balance, end of period	$	53	$	188

6. Separate Accounts

Separate account assets consist of investment accounts established and maintained by the Company. The separate account investment objectives are directed by the contractholder. An equivalent amount is reported as separate account liabilities. These accounts are reported separately from the general account assets and liabilities.

Separate Account Liabilities

The Company’s separate account liabilities on the interim condensed consolidated balance sheets were as follows at:


	March 31, 2023		December 31, 2022
	(In millions)
U.S.:
Stable Value and Risk Solutions	$	40,677	$	43,249
Annuities	12,219		11,694
MetLife Holdings - Annuities	29,261		28,443
Other	6,200		5,855
Total	$	88,357	$	89,241

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

6. Separate Accounts (continued)

Rollforwards

The following information about the separate account liabilities includes disaggregated rollforwards. The products grouped within these rollforwards were selected based upon common characteristics and valuations using similar inputs, judgments, assumptions and methodologies within a particular segment of the business.

The separate account liabilities are primarily comprised of the following: U.S. stable value and risk solutions contracts, U.S. annuities participating and non-participating group contracts and MetLife Holdings variable annuities.

The balances of and changes in separate account liabilities were as follows:


	U.S. Stable Value and Risk Solutions		U.S. Annuities		MetLife Holdings Annuities
	(In millions)
Three Month Ended March 31, 2023
Balance, beginning of period	$	43,249	$	11,694	$	28,443
Premiums and deposits	645		78		67
Policy charges	(57)		(6)		(149)
Surrenders and withdrawals	(3,417)		(135)		(660)
Benefit payments	(21)		—		(120)
Investment performance	1,079		505		1,716
Net transfers from (to) general account	(57)		2		(36)
Effect of foreign currency translation and other, net	(744)		81		—
Balance, end of period	$	40,677	$	12,219	$	29,261
Three Months Ended March 31, 2022
Balance, beginning of period	$	54,391	$	21,292	$	40,096
Premiums and deposits	1,792		620		72
Policy charges	(70)		(8)		(174)
Surrenders and withdrawals	(3,082)		(5,820)		(864)
Benefit payments	(24)		—		(124)
Investment performance	(2,030)		(1,141)		(2,931)
Net transfers from (to) general account	63		(62)		(66)
Effect of foreign currency translation and other, net	(1,258)		24		—
Balance, end of period	$	49,782	$	14,905	$	36,009

Cash surrender value at March 31, 2023 (1)	$	36,594	N/A		$	29,115
Cash surrender value at March 31, 2022 (1)	$	41,427	N/A		$	35,794

_____________

(1) Cash surrender value represents the amount of the contractholders’ account balances distributable at the balance sheet date less policy loans and certain surrender charges.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

6. Separate Accounts (continued)

Separate Account Assets

The Company’s aggregate fair value of assets, by major investment asset category, supporting separate account liabilities was as follows at:


	March 31, 2023
	U.S.		MetLife Holdings		Total
	(In millions)
Fixed maturity securities AFS:
Bonds:
Foreign government	$	577	$	—	$	577
U.S. government and agency	11,128		—		11,128
Public utilities	1,264		—		1,264
Municipals	504		—		504
Corporate bonds:
Materials	211		—		211
Communications	1,084		—		1,084
Consumer	2,299		—		2,299
Energy	890		—		890
Financial	3,095		—		3,095
Industrial and other	888		—		888
Technology	700		—		700
Foreign	2,370		—		2,370
Total corporate bonds	11,537		—		11,537
Total bonds	25,010		—		25,010
Mortgage-backed securities	11,645		—		11,645
Asset-backed securities and collateralized loan obligations	2,730		—		2,730
Redeemable preferred stock	5		—		5
Total fixed maturity securities AFS	39,390		—		39,390
Equity securities:
Common stock:
Industrial, miscellaneous and all other	2,611		—		2,611
Banks, trust and insurance companies	496		—		496
Public utilities	71		—		71
Non-redeemable preferred stock	2		—		2
Mutual funds	4,607		34,333		38,940
Total equity securities	7,787		34,333		42,120
Other invested assets	1,337		—		1,337
Total investments	48,514		34,333		82,847
Other assets	5,510		—		5,510
Total	$	54,024	$	34,333	$	88,357

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

6. Separate Accounts (continued)


	December 31, 2022
	U.S.		MetLife Holdings		Total
	(In millions)
Fixed maturity securities AFS:
Bonds:
Foreign government	$	588	$	—	$	588
U.S. government and agency	11,189		—		11,189
Public utilities	1,174		—		1,174
Municipals	475		—		475
Corporate bonds:
Materials	242		—		242
Communications	1,174		—		1,174
Consumer	2,365		—		2,365
Energy	861		—		861
Financial	3,495		—		3,495
Industrial and other	876		—		876
Technology	711		—		711
Foreign	2,451		—		2,451
Total corporate bonds	12,175		—		12,175
Total bonds	25,601		—		25,601
Mortgage-backed securities	12,202		—		12,202
Asset-backed securities and collateralized loan obligations	2,763		—		2,763
Redeemable preferred stock	4		—		4
Total fixed maturity securities AFS	40,570		—		40,570
Equity securities:
Common stock:
Industrial, miscellaneous and all other	2,853		—		2,853
Banks, trust and insurance companies	586		—		586
Public utilities	94		—		94
Non-redeemable preferred stock	2		—		2
Mutual funds	4,355		33,231		37,586
Total equity securities	7,890		33,231		41,121
Other invested assets	1,636		—		1,636
Total investments	50,096		33,231		83,327
Other assets	5,914		—		5,914
Total	$	56,010	$	33,231	$	89,241

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7. Deferred Policy Acquisition Costs, Value of Business Acquired and Unearned Revenue

The transition adjustments related to DAC, VOBA, and UREV, as described in Note 1, were as follows at the Transition Date:


	U.S.		MetLife Holdings		Total
	(In millions)
DAC:
Balance at December 31, 2020	$	378	$	2,248	$	2,626
Removal of related amounts in AOCI	—		1,480		1,480
Other adjustments upon adoption of the LDTI standard	—		12		12
Balance at January 1, 2021	$	378	$	3,740	$	4,118

VOBA:
Balance at December 31, 2020	$	20	$	3	$	23
Removal of related amounts in AOCI	—		2		2
Balance at January 1, 2021	$	20	$	5	$	25

UREV:
Balance at December 31, 2020	$	22	$	157	$	179
Removal of related amounts in AOCI	—		—		—
Balance at January 1, 2021	$	22	$	157	$	179

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7. Deferred Policy Acquisition Costs, Value of Business Acquired and Unearned Revenue (continued)

DAC and VOBA

Information regarding total DAC and VOBA by segment, as well as Corporate & Other, was as follows at:


	U.S.		MetLife Holdings (1)		Corporate & Other		Total
	(In millions)
DAC:
Balance at January 1, 2023	$	401	$	3,220	$	120	$	3,741
Capitalizations	25		—		52		77
Amortization	(13)		(59)		(4)		(76)

Balance at March 31, 2023	$	413	$	3,161	$	168	$	3,742

Balance at January 1, 2022	$	384	$	3,457	$	6	$	3,847
Capitalizations	23		—		4		27
Amortization	(14)		(65)		—		(79)

Balance at March 31, 2022	$	393	$	3,392	$	10	$	3,795

VOBA:
Balance at January 1, 2023	$	16	$	—	$	—	$	16
Amortization	(1)		—		—		(1)
Balance at March 31, 2023	$	15	$	—	$	—	$	15

Balance at January 1, 2022	$	18	$	—	$	—	$	18
Amortization	(1)		—		—		(1)
Balance at March 31, 2022	$	17	$	—	$	—	$	17

Total DAC and VOBA:
Balance at March 31, 2023							$	3,757
Balance at March 31, 2022							$	3,812
Balance at December 31, 2022							$	3,757

__________________

(1)Includes DAC balances primarily related to universal life, variable universal life, whole life, term life and variable annuities products.

Significant Methodologies and Assumptions

The Company amortizes DAC and VOBA related to long-duration contracts over the estimated lives of the contracts in proportion to benefits in-force for U.S. annuities and policy count for all other products. The amortization amount is calculated using the same cohorts as the corresponding liabilities on a quarterly basis, using an amortization rate that includes current period reporting experience and end of period persistency assumptions that are consistent with those used to measure the corresponding liabilities.

The Company amortizes DAC for short-duration contracts, which is primarily comprised of commissions and certain underwriting expenses, in proportion to actual and future earned premium over the applicable contract term.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7. Deferred Policy Acquisition Costs, Value of Business Acquired and Unearned Revenue (continued)

Unearned Revenue

Information regarding the Company’s UREV primarily related to universal life and variable universal life products by segment included in other policy-related balances was as follows:


	U.S.		MetLife Holdings		Total
	(In millions)
Balance at January 1, 2023	$	18	$	227	$	245
Deferrals	1		9		10
Amortization	(1)		(5)		(6)
Balance at March 31, 2023	$	18	$	231	$	249


	U.S.		MetLife Holdings		Total
	(In millions)
Balance at January 1, 2022	$	21	$	195	$	216
Deferrals	—		12		12
Amortization	(1)		(4)		(5)
Balance at March 31, 2022	$	20	$	203	$	223

Significant Methodologies and Assumptions

UREV is amortized similarly to DAC and VOBA, see “— DAC and VOBA.”

8. Closed Block

On April 7, 2000 (the “Demutualization Date”), Metropolitan Life Insurance Company converted from a mutual life insurance company to a stock life insurance company and became a wholly-owned subsidiary of MetLife, Inc. The conversion was pursuant to an order by the New York Superintendent of Insurance approving Metropolitan Life Insurance Company’s plan of reorganization, as amended (the “Plan of Reorganization”). On the Demutualization Date, Metropolitan Life Insurance Company established a closed block for the benefit of holders of certain individual life insurance policies of Metropolitan Life Insurance Company. Assets have been allocated to the closed block in an amount that has been determined to produce cash flows which, together with anticipated revenues from the policies included in the closed block, are reasonably expected to be sufficient to support obligations and liabilities relating to these policies, including, but not limited to, provisions for the payment of claims and certain expenses and taxes, and to provide for the continuation of policyholder dividend scales in effect for 1999, if the experience underlying such dividend scales continues, and for appropriate adjustments in such scales if the experience changes. At least annually, the Company compares actual and projected experience against the experience assumed in the then-current dividend scales. Dividend scales are adjusted periodically to give effect to changes in experience.

The closed block assets, the cash flows generated by the closed block assets and the anticipated revenues from the policies in the closed block will benefit only the holders of the policies in the closed block. To the extent that, over time, cash flows from the assets allocated to the closed block and claims and other experience related to the closed block are, in the aggregate, more or less favorable than what was assumed when the closed block was established, total dividends paid to closed block policyholders in the future may be greater than or less than the total dividends that would have been paid to these policyholders if the policyholder dividend scales in effect for 1999 had been continued. Any cash flows in excess of amounts assumed will be available for distribution over time to closed block policyholders and will not be available to stockholders. If the closed block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside of the closed block. The closed block will continue in effect as long as any policy in the closed block remains in-force. The expected life of the closed block is over 100 years from the Demutualization Date.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

8. Closed Block (continued)

The Company uses the same accounting principles to account for the participating policies included in the closed block as it used prior to the Demutualization Date. However, the Company establishes a policyholder dividend obligation for earnings that will be paid to policyholders as additional dividends as described below. The excess of closed block liabilities over closed block assets at the Demutualization Date (adjusted to eliminate the impact of related amounts in AOCI) represents the estimated maximum future earnings from the closed block expected to result from operations, attributed net of income tax, to the closed block. Earnings of the closed block are recognized in income over the period the policies and contracts in the closed block remain in-force.

If, over the period the closed block remains in existence, the actual cumulative earnings of the closed block are greater than the expected cumulative earnings of the closed block, the Company will pay the excess to closed block policyholders as additional policyholder dividends unless offset by future unfavorable experience of the closed block and, accordingly, will recognize only the expected cumulative earnings in income with the excess recorded as a policyholder dividend obligation. If over such period, the actual cumulative earnings of the closed block are less than the expected cumulative earnings of the closed block, the Company will recognize only the actual earnings in income. However, the Company may change policyholder dividend scales in the future, which would be intended to increase future actual earnings until the actual cumulative earnings equal the expected cumulative earnings.

At least annually, management performs a premium deficiency test using best estimate assumptions to determine whether the projected future earnings of the closed block are sufficient to support the payment of future closed block contractual benefits. The most recent deficiency test demonstrated that the projected future earnings of the closed block are sufficient to support the payment of future closed block contractual benefits.

Experience within the closed block, in particular mortality and investment yields, as well as realized and unrealized gains and losses, directly impact the policyholder dividend obligation. Amortization of the closed block DAC, which resides outside of the closed block, is based upon ~~cumulative actual and expected earnings~~policy count within ~~the closed block. Accordingly, the Company’s net income continues to be sensitive to the actual performance of~~ the closed block.

Closed block assets, liabilities, revenues and expenses are combined on a line-by-line basis with the assets, liabilities, revenues and expenses outside the closed block based on the nature of the particular item.

1852

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4.8. Closed Block (continued)

Information regarding the closed block liabilities and assets designated to the closed block was as follows at:


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(In millions)					(In millions)
Closed Block Liabilities	Closed Block Liabilities					Closed Block Liabilities
Future policy benefits	Future policy benefits	$	37,593	$	38,046	Future policy benefits	$	36,898	$	37,222
Other policy-related balances	Other policy-related balances	274		290		Other policy-related balances	274		273
Policyholder dividends payable	Policyholder dividends payable	250		253		Policyholder dividends payable	177		181
Policyholder dividend obligation		—		1,682
Deferred income tax liability		—		210
Other liabilities	Other liabilities	368		263		Other liabilities	504		455
Total closed block liabilities	Total closed block liabilities	38,485		40,744		Total closed block liabilities	37,853		38,131
Assets Designated to the Closed Block	Assets Designated to the Closed Block					Assets Designated to the Closed Block
Investments:	Investments:					Investments:
Fixed maturity securities available-for-sale, at estimated fair value	Fixed maturity securities available-for-sale, at estimated fair value	21,257		25,669		Fixed maturity securities available-for-sale, at estimated fair value	20,033		19,648
Mortgage loans	Mortgage loans	6,624		6,417		Mortgage loans	6,488		6,564
Policy loans	Policy loans	4,120		4,191		Policy loans	4,044		4,084
Real estate and real estate joint ventures	Real estate and real estate joint ventures	583		565		Real estate and real estate joint ventures	647		635
Other invested assets	Other invested assets	726		556		Other invested assets	666		705
Total investments	Total investments	33,310		37,398		Total investments	31,878		31,636
Cash and cash equivalents	Cash and cash equivalents	201		126		Cash and cash equivalents	477		437
Accrued investment income	Accrued investment income	379		384		Accrued investment income	376		375
Premiums, reinsurance and other receivables	Premiums, reinsurance and other receivables	43		50		Premiums, reinsurance and other receivables	70		52
Current income tax recoverable	Current income tax recoverable	91		81		Current income tax recoverable	79		88
Deferred income tax asset	Deferred income tax asset	196		—		Deferred income tax asset	311		423
Total assets designated to the closed block	Total assets designated to the closed block	34,220		38,039		Total assets designated to the closed block	33,191		33,011
Excess of closed block liabilities over assets designated to the closed block	Excess of closed block liabilities over assets designated to the closed block	4,265		2,705		Excess of closed block liabilities over assets designated to the closed block	4,662		5,120
AOCI:	AOCI:					AOCI:
Unrealized investment gains (losses), net of income tax	Unrealized investment gains (losses), net of income tax	(460)		2,562		Unrealized investment gains (losses), net of income tax	(924)		(1,357)
Unrealized gains (losses) on derivatives, net of income tax	Unrealized gains (losses) on derivatives, net of income tax	257		107		Unrealized gains (losses) on derivatives, net of income tax	253		262
Allocated to policyholder dividend obligation, net of income tax		—		(1,329)
Total amounts included in AOCI	Total amounts included in AOCI	(203)		1,340		Total amounts included in AOCI	(671)		(1,095)
Maximum future earnings to be recognized from closed block assets and liabilities	Maximum future earnings to be recognized from closed block assets and liabilities	$	4,062	$	4,045	Maximum future earnings to be recognized from closed block assets and liabilities	$	3,991	$	4,025

Information regarding the closed block policyholder dividend obligation was as follows:

Six Months
Ended
June 30, 2022 Year
Ended
December 31, 2021
(In millions)
Balance, beginning of period $ 1,682 $ 2,969
Change in unrealized investment and derivative gains (losses) (1,682) (1,287)
Balance, end of period $ — $ 1,682


	Three Months Ended March 31, 2023		Year Ended December 31, 2022
	(In millions)
Balance, beginning of period	$	—	$	1,682
Change in unrealized investment and derivative gains (losses)	—		(1,682)
Balance, end of period	$	—	$	—

1953

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

4.8. Closed Block (continued)

Information regarding the closed block revenues and expenses was as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(In millions)									(In millions)
Revenues	Revenues									Revenues
Premiums	Premiums	$	274	$	325	$	549	$	645	Premiums	$	235	$	275
Net investment income	Net investment income	352		382		713		775		Net investment income	338		361
Net investment gains (losses)	Net investment gains (losses)	(16)		(11)		(48)		(5)		Net investment gains (losses)	4		(32)
Net derivative gains (losses)	Net derivative gains (losses)	8		6		11		7		Net derivative gains (losses)	(2)		3
Total revenues	Total revenues	618		702		1,225		1,422		Total revenues	575		607
Expenses	Expenses									Expenses
Policyholder benefits and claims	Policyholder benefits and claims	462		520		945		1,066		Policyholder benefits and claims	413		483
Policyholder dividends	Policyholder dividends	128		173		261		351		Policyholder dividends	97		134
Other expenses	Other expenses	23		24		46		49		Other expenses	22		23
Total expenses	Total expenses	613		717		1,252		1,466		Total expenses	532		640
Revenues, net of expenses before provision for income tax expense (benefit)	Revenues, net of expenses before provision for income tax expense (benefit)	5		(15)		(27)		(44)		Revenues, net of expenses before provision for income tax expense (benefit)	43		(33)
Provision for income tax expense (benefit)	Provision for income tax expense (benefit)	1		(3)		(6)		(9)		Provision for income tax expense (benefit)	9		(7)
Revenues, net of expenses and provision for income tax expense (benefit)	Revenues, net of expenses and provision for income tax expense (benefit)	$	4	$	(12)	$	(21)	$	(35)	Revenues, net of expenses and provision for income tax expense (benefit)	$	34	$	(26)

Metropolitan Life Insurance Company charges the closed block with federal income taxes, state and local premium taxes and other state or local taxes, as well as investment management expenses relating to the closed block as provided in the Plan of Reorganization. Metropolitan Life Insurance Company also charges the closed block for expenses of maintaining the policies included in the closed block.

2054

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5.9. Investments

Fixed Maturity Securities Available-for-Sale

Fixed Maturity Securities Available-for-Sale by Sector

The following table presents fixed maturity securities available-for-sale (“AFS”) by sector. U.S. corporate and foreign corporate sectors include redeemable preferred stock. Residential mortgage-backed securities (“RMBS”) includes agency, prime, prime investor, non-qualified residential mortgage, alternative, reperforming and sub-prime mortgage-backed securities. Asset-backed securities and collateralized loan obligations ~~(“ABS~~(collectively, “ABS & CLO”)~~, previously disclosed as ABS in the 2021 Annual Report,~~ includes securities collateralized by consumer loans, corporate loans and broadly syndicated bank loans. Municipals includes taxable and tax-exempt revenue bonds and, to a much lesser extent, general obligations of states, municipalities and political subdivisions. Commercial mortgage-backed securities (“CMBS”) primarily includes securities collateralized by multiple commercial mortgage loans. RMBS, ABS & CLO and CMBS are, collectively, “Structured Products.”


		June 30, 2022										December 31, 2021											March 31, 2023										December 31, 2022
		Amortized Cost				Gross Unrealized				Estimated Fair Value		Amortized Cost				Gross Unrealized				Estimated Fair Value			Amortized Cost				Gross Unrealized				Estimated Fair Value		Amortized Cost				Gross Unrealized				Estimated Fair Value
Sector	Sector			Allowance for Credit Loss		Gains		Losses						Allowance for Credit Loss		Gains		Losses				Sector			Allowance for Credit Loss		Gains		Losses						Allowance for Credit Loss		Gains		Losses
		(In millions)																					(In millions)

U.S. corporate	U.S. corporate	$	52,289	$	(27)	$	1,174	$	3,389	$	50,047	$	51,328	$	(30)	$	7,257	$	153	$	58,402	U.S. corporate	$	56,356	$	(57)	$	1,031	$	3,834	$	53,496	$	55,280	$	(28)	$	649	$	4,811	$	51,090
Foreign corporate																						Foreign corporate	28,581		(3)		323		3,830		25,071		28,328		(3)		206		4,538		23,993
U.S. government and agency	U.S. government and agency	22,219		—		1,295		1,175		22,339		26,782		—		4,568		128		31,222		U.S. government and agency	24,180		—		365		1,732		22,813		24,409		—		333		2,384		22,358
Foreign corporate		27,944		(7)		282		3,653		24,566		27,475		(10)		2,651		431		29,685
RMBS	RMBS	21,279		—		321		1,453		20,147		22,082		—		1,198		135		23,145		RMBS	22,008		—		201		2,062		20,147		21,539		—		177		2,383		19,333
ABS & CLO	ABS & CLO	12,429		—		10		629		11,810		12,787		—		127		35		12,879		ABS & CLO	12,682		—		22		683		12,021		12,639		—		9		812		11,836
Municipals	Municipals	7,157		—		526		383		7,300		6,884		—		1,849		5		8,728		Municipals	7,863		—		422		506		7,779		7,880		—		256		672		7,464
CMBS	CMBS	6,485		(13)		4		382		6,094		6,686		(13)		237		32		6,878		CMBS	6,712		(7)		7		605		6,107		6,691		(15)		7		640		6,043
Foreign government	Foreign government	4,010		(77)		203		332		3,804		4,330		—		698		82		4,946		Foreign government	3,713		(68)		160		279		3,526		3,711		(68)		140		324		3,459
Total fixed maturity securities AFS	Total fixed maturity securities AFS	$	153,812	$	(124)	$	3,815	$	11,396	$	146,107	$	158,354	$	(53)	$	18,585	$	1,001	$	175,885	Total fixed maturity securities AFS	$	162,095	$	(135)	$	2,531	$	13,531	$	150,960	$	160,477	$	(114)	$	1,777	$	16,564	$	145,576

The Company held non-income producing fixed maturity securities AFS with an estimated fair value of ~~$105~~$84 million and ~~$19~~$71 million at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively, with unrealized gains (losses) of ($~~13)~~23) million and ~~$10~~($1) million at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

Maturities of Fixed Maturity Securities AFS

The amortized cost, net of ~~allowance for credit loss (“ACL”),~~ACL, and estimated fair value of fixed maturity securities AFS, by contractual maturity date, were as follows at ~~June 30, 2022:~~March 31, 2023:


		Due in One Year or Less		Due After One Year Through Five Years		Due After Five Years Through Ten Years		Due After Ten Years		Structured Products		Total Fixed Maturity Securities AFS			Due in One Year or Less		Due After One Year Through Five Years		Due After Five Years Through Ten Years		Due After Ten Years		Structured Products		Total Fixed Maturity Securities AFS
		(In millions)													(In millions)
Amortized cost, net of ACL	Amortized cost, net of ACL	$	2,828	$	25,685	$	27,523	$	57,472	$	40,180	$	153,688	Amortized cost, net of ACL	$	3,317	$	25,762	$	28,441	$	63,045	$	41,395	$	161,960
Estimated fair value	Estimated fair value	$	2,674	$	24,756	$	26,154	$	54,472	$	38,051	$	146,107	Estimated fair value	$	3,214	$	24,774	$	26,849	$	57,848	$	38,275	$	150,960

Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities AFS not due at a single maturity date have been presented in the year of final contractual maturity. Structured Products are shown separately, as they are not due at a single maturity.

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5.9. Investments (continued)

Continuous Gross Unrealized Losses for Fixed Maturity Securities AFS by Sector

The following table presents the estimated fair value and gross unrealized losses of fixed maturity securities AFS in an unrealized loss position without an ACL by sector and aggregated by length of time that the securities have been in a continuous unrealized loss position.


		June 30, 2022								December 31, 2021									March 31, 2023								December 31, 2022
		Less than 12 Months				Equal to or Greater than 12 Months				Less than 12 Months				Equal to or Greater than 12 Months					Less than 12 Months				Equal to or Greater than 12 Months				Less than 12 Months				Equal to or Greater than 12 Months
Sector & Credit Quality	Sector & Credit Quality	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Sector & Credit Quality	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
		(Dollars in millions)																	(Dollars in millions)

U.S. corporate	U.S. corporate	$	31,816	$	3,130	$	1,350	$	258	$	4,503	$	83	$	784	$	70	U.S. corporate	$	23,203	$	1,587	$	12,221	$	2,218	$	34,358	$	3,953	$	3,383	$	856
Foreign corporate																		Foreign corporate	9,697		1,110		10,551		2,720		16,834		3,350		3,977		1,188
U.S. government and agency	U.S. government and agency	11,211		1,019		464		156		10,063		78		523		49		U.S. government and agency	10,775		779		5,042		953		13,489		1,895		2,756		489
Foreign corporate		19,028		3,215		1,575		438		4,079		199		1,348		232
RMBS	RMBS	14,320		1,219		1,352		234		7,481		111		314		24		RMBS	7,145		442		8,969		1,620		11,622		1,280		4,585		1,103
ABS & CLO	ABS & CLO	10,213		564		921		65		5,643		25		593		10		ABS & CLO	2,640		81		7,907		602		7,725		499		3,009		313
Municipals	Municipals	2,696		378		13		5		154		4		17		1		Municipals	1,790		146		1,218		360		3,526		616		133		56
CMBS	CMBS	5,260		331		507		51		1,613		20		355		12		CMBS	2,593		137		3,047		467		4,376		426		1,254		213
Foreign government	Foreign government	1,778		271		145		57		497		37		148		45		Foreign government	1,098		70		781		208		1,803		209		306		115
Total fixed maturity securities AFS	Total fixed maturity securities AFS	$	96,322	$	10,127	$	6,327	$	1,264	$	34,033	$	557	$	4,082	$	443	Total fixed maturity securities AFS	$	58,941	$	4,352	$	49,736	$	9,148	$	93,733	$	12,228	$	19,403	$	4,333
Investment grade	Investment grade	$	89,669	$	9,247	$	5,325	$	1,060	$	31,419	$	454	$	3,273	$	353	Investment grade	$	55,769	$	4,215	$	45,957	$	8,514	$	88,059	$	11,710	$	17,470	$	3,897
Below investment grade	Below investment grade	6,653		880		1,002		204		2,614		103		809		90		Below investment grade	3,172		137		3,779		634		5,674		518		1,933		436
Total fixed maturity securities AFS	Total fixed maturity securities AFS	$	96,322	$	10,127	$	6,327	$	1,264	$	34,033	$	557	$	4,082	$	443	Total fixed maturity securities AFS	$	58,941	$	4,352	$	49,736	$	9,148	$	93,733	$	12,228	$	19,403	$	4,333
Total number of securities in an unrealized loss position	Total number of securities in an unrealized loss position	9,492				727				2,549				427				Total number of securities in an unrealized loss position	6,327				5,858				10,688				2,110

Evaluation of Fixed Maturity Securities AFS for Credit Loss

Evaluation and Measurement Methodologies

Management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the credit loss evaluation process include, but are not limited to: (i) the extent to which the estimated fair value has been below amortized cost, (ii) adverse conditions specifically related to a security, an industry sector or sub-sector, or an economically depressed geographic area, adverse change in the financial condition of the issuer of the security, changes in technology, discontinuance of a segment of the business that may affect future earnings, and changes in the quality of credit enhancement, (iii) payment structure of the security and likelihood of the issuer being able to make payments, (iv) failure of the issuer to make scheduled interest and principal payments, (v) whether the issuer, or series of issuers or an industry has suffered a catastrophic loss or has exhausted natural resources, (vi) whether the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers, (vii) with respect to Structured Products, changes in forecasted cash flows after considering the changes in the financial condition of the underlying loan obligors and quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying assets backing a particular security, and the payment priority within the tranche structure of the security, (viii) changes in the rating of the security by a rating agency, and (ix) other subjective factors, including concentrations and information obtained from regulators.

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

•The Company calculates the recovery value by performing a discounted cash flow analysis based on the present value of future cash flows. The discount rate is generally the effective interest rate of the security at the time of purchase for fixed-rate securities and the spot rate at the date of evaluation of credit loss for floating-rate securities.

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5.9. Investments (continued)

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

•Additional considerations are made when assessing the unique features that apply to certain Structured Products including, but not limited to: the quality of underlying collateral, historical performance of the underlying loan obligors, historical rent and vacancy levels, changes in the financial condition of the underlying loan obligors, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying loans or assets backing a particular security, changes in the quality of credit enhancement and the payment priority within the tranche structure of the security.

With respect to securities that have attributes of debt and equity (“perpetual hybrid securities”), consideration is given in the credit loss analysis as to whether there has been any deterioration in the credit of the issuer and the likelihood of recovery in value of the securities that are in a severe unrealized loss position. Consideration is also given as to whether any perpetual hybrid securities with an unrealized loss, regardless of credit rating, have deferred any dividend payments.

In periods subsequent to the recognition of an initial ACL on a security, the Company reassesses credit loss quarterly. Subsequent increases or decreases in the expected cash flow from the security result in corresponding decreases or increases in the ACL which are recognized in earnings and reported within net investment gains (losses); however, the previously recorded ACL is not reduced to an amount below zero. Full or partial write-offs are deducted from the ACL in the period the security, or a portion thereof, is considered uncollectible. Recoveries of amounts previously written off are recorded to the ACL in the period received. When the Company has the intent-to-sell the security or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, any ACL is written off and the amortized cost is written down to estimated fair value through a charge within net investment gains (losses), which becomes the new amortized cost of the security.

Evaluation of Fixed Maturity Securities AFS in an Unrealized Loss Position

Gross unrealized losses on securities without an ACL ~~increased $10.4~~decreased $3.1 billion for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 to ~~$11.4~~$13.5 billion primarily due to ~~increases~~decreases in interest rates ~~widening credit spreads,~~ and the impact of ~~weakening~~strengthening foreign currencies on certain non-functional currency denominated fixed maturity ~~securities.~~securities, partially offset by widening credit spreads.

Gross unrealized losses on securities without an ACL that have been in a continuous gross unrealized loss position for 12 months or greater were ~~$1.3~~$9.1 billion at ~~June 30, 2022,~~March 31, 2023, or ~~11%~~68% of the total gross unrealized losses on securities without an ACL.

Investment Grade Fixed Maturity Securities AFS

Of the ~~$1.3~~$9.1 billion of gross unrealized losses on securities without an ACL that have been in a continuous gross unrealized loss position for 12 months or greater, ~~$1.1~~$8.5 billion, or ~~85%~~93%, were related to ~~586~~5,228 investment grade securities. Unrealized losses on investment grade securities are principally related to widening credit spreads since purchase and, with respect to fixed-rate securities, rising interest rates since purchase.

2357

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5.9. Investments (continued)

Below Investment Grade Fixed Maturity Securities AFS

Of the ~~$1.3~~$9.1 billion of gross unrealized losses on securities without an ACL that have been in a continuous gross unrealized loss position for 12 months or greater, ~~$204~~$634 million, or ~~15%~~7%, were related to ~~141~~630 below investment grade securities. Unrealized losses on below investment grade securities are principally related to foreign corporate and U.S. corporate securities (primarily ~~industrial~~transportation, consumer and ~~consumer) and~~communications). These unrealized losses are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainty, as well as with respect to fixed-rate securities, rising interest rates since purchase. Management evaluates U.S. corporate and foreign corporate securities based on several factors such as expected cash flows, financial condition and near-term and long-term prospects of the issuers.

Current Period Evaluation

At ~~June 30, 2022,~~March 31, 2023, with respect to securities in an unrealized loss position without an ACL, the Company did not intend to sell these securities, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the remaining amortized cost. Based on the Company’s current evaluation of its securities in an unrealized loss position without an ACL, the Company concluded that these securities had not incurred a credit loss and should not have an ACL at ~~June 30, 2022.~~March 31, 2023.

Future provisions for credit loss will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), changes in credit ratings and collateral valuation.

Rollforward of Allowance for Credit Loss for Fixed Maturity Securities AFS byBy Sector

The rollforward of ACL for fixed maturity securities AFS by sector is as follows:


		U.S. Corporate		Foreign Corporate		CMBS		Foreign Government		Total			U.S. Corporate		Foreign Corporate		CMBS		Foreign Government		Total
Three Months Ended June 30, 2022		(In millions)
Three Months Ended March 31, 2023												Three Months Ended March 31, 2023	(In millions)
Balance, at beginning of period	Balance, at beginning of period	$	13	$	25	$	13	$	104	$	155	Balance, at beginning of period	$	28	$	3	$	15	$	68	$	114
Additions:
ACL not previously recorded	ACL not previously recorded	—		—		—		—		—		ACL not previously recorded	31		—		—		—		31
Changes for securities with previously recorded ACL	Changes for securities with previously recorded ACL	14		(1)		—		(7)		6		Changes for securities with previously recorded ACL	—		—		2		—		2
Reductions:
Securities sold or exchanged	Securities sold or exchanged	—		(17)		—		(20)		(37)		Securities sold or exchanged	(2)		—		(10)		—		(12)
Write-offs	Write-offs	—		—		—		—		—		Write-offs	—		—		—		—		—
Balance, at end of period	Balance, at end of period	$	27	$	7	$	13	$	77	$	124	Balance, at end of period	$	57	$	3	$	7	$	68	$	135
Three Months Ended June 30, 2021
Three Months Ended March 31, 2022												Three Months Ended March 31, 2022
Balance, at beginning of period	Balance, at beginning of period	$	43	$	17	$	6	$	—	$	66	Balance, at beginning of period	$	30	$	10	$	13	$	—	$	53
Additions:
ACL not previously recorded	ACL not previously recorded	—		—		3		—		3		ACL not previously recorded	13		11		—		104		128
Changes for securities with previously recorded ACL	Changes for securities with previously recorded ACL	3		—		(3)		—		—		Changes for securities with previously recorded ACL	—		4		—		—		4
Reductions:
Securities sold or exchanged	Securities sold or exchanged	(7)		(3)		—		—		(10)		Securities sold or exchanged	(8)		—		—		—		(8)
Write-offs	Write-offs	—		—		—		—		—		Write-offs	(22)		—		—		—		(22)
Balance, at end of period	Balance, at end of period	$	39	$	14	$	6	$	—	$	59	Balance, at end of period	$	13	$	25	$	13	$	104	$	155

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

Mortgage Loans

Mortgage Loans by Portfolio Segment

Mortgage loans are summarized as follows at:


	March 31, 2023				December 31, 2022
Portfolio Segment	Carrying Value		% of Total		Carrying Value		% of Total
	(Dollars in millions)
Commercial	$	38,262	59.7	%	$	37,196	59.4	%
Agricultural	15,848		24.8		15,869		25.4
Residential	10,530		16.4		9,953		15.9
Total amortized cost	64,640		100.9		63,018		100.7
Allowance for credit loss	(587)		(0.9)		(448)		(0.7)




Total mortgage loans, net	$	64,053	100.0	%	$	62,570	100.0	%

The amount of net (discounts) premiums and deferred (fees) expenses, included within total amortized cost, primarily attributable to residential mortgage loans was ($739) million and ($717) million at March 31, 2023 and December 31, 2022, respectively. The accrued interest income excluded from total amortized cost for commercial, agricultural and residential mortgage loans at March 31, 2023 was $185 million, $124 million and $79 million, respectively. The accrued interest income excluded from total amortized cost for commercial, agricultural and residential mortgage loans at December 31, 2022 was $171 million, $147 million and $70 million, respectively.

Purchases of mortgage loans, consisting primarily of residential mortgage loans, were $757 million and $533 million for the three months ended March 31, 2023 and 2022, respectively. See “— Related Party Investment Transactions” for information regarding transfers of mortgage loans from affiliates.

Rollforward of Allowance for Credit Loss for Mortgage Loans by Portfolio Segment

The rollforward of ACL for mortgage loans, by portfolio segment, is as follows:


	Three Months Ended March 31,
	2023								2022
	Commercial		Agricultural		Residential		Total		Commercial		Agricultural		Residential		Total
	(In millions)
Balance, beginning of period	$	174	$	105	$	169	$	448	$	260	$	79	$	197	$	536
Provision (release)	79		49		18		146		(11)		11		(25)		(25)

Charge-offs, net of recoveries	—		(7)		—		(7)		—		—		(1)		(1)
Balance, end of period	$	253	$	147	$	187	$	587	$	249	$	90	$	171	$	510

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5.9. Investments (continued)

U.S.
Corporate Foreign Corporate CMBS Foreign
Government Total
Six Months Ended June 30, 2022 (In millions)
Balance, at beginning of period $ 30 $ 10 $ 13 $ — $ 53
Additions:
ACL not previously recorded 13 11 — 104 128
Changes for securities with previously recorded ACL 14 3 — (7) 10
Reductions:
Securities sold or exchanged (8) (17) — (20) (45)
Write-offs (22) — — — (22)
Balance, at end of period $ 27 $ 7 $ 13 $ 77 $ 124
Six Months Ended June 30, 2021
Balance, at beginning of period $ 43 $ 8 $ — $ — $ 51
Additions:
ACL not previously recorded — 12 9 — 21
Reductions:
Changes for securities with previously recorded ACL 3 (3) (3) — (3)
Securities sold or exchanged (7) (3) — — (10)
Write-offs — — — — —
Balance, at end of period $ 39 $ 14 $ 6 $ — $ 59

~~Mortgage Loans~~

~~Mortgage Loans by Portfolio Segment~~

~~Mortgage loans are summarized as follows at:~~

June 30, 2022 December 31, 2021
Portfolio Segment Carrying
Value % of
Total Carrying
Value % of
Total
(Dollars in millions)
Commercial $ 36,918 60.2 % $ 35,772 59.4 %
Agricultural 15,431 25.1 15,450 25.7
Residential 9,326 15.2 9,406 15.6
Total amortized cost 61,675 100.5 60,628 100.7
Allowance for credit loss (416) (0.7) (536) (0.9)
Subtotal mortgage loans, net 61,259 99.8 60,092 99.8
Residential — FVO 109 0.2 127 0.2
Total mortgage loans held-for-investment, net 61,368 100.0 60,219 100.0
Mortgage loans held-for-sale 24 — — —
Total mortgage loans, net $ 61,392 100.0 % $ 60,219 100.0 %

The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis, with changes in estimated fair value included in net investment income. See Note 7 for further information.

The amount of net (discounts) premiums and deferred (fees) expenses, included within total amortized cost, primarily attributable to residential mortgage loans was ($678) million and ($736) million at June 30, 2022 and December 31, 2021, respectively. The accrued interest income excluded from total amortized cost for commercial, agricultural and residential mortgage loans at June 30, 2022 was $149 million, $128 million and $69 million, respectively. The accrued interest income excluded from total amortized cost for commercial, agricultural and residential mortgage loans at December 31, 2021 was $140 million, $136 million and $77 million, respectively.

~~Table of Contents~~

~~Metropolitan Life Insurance Company~~

~~(A Wholly-Owned Subsidiary of MetLife, Inc.)~~

~~Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~5. Investments (continued)~~

~~Purchases of mortgage loans, consisting primarily of residential mortgage loans, were $596 million and $1.1 billion for the three months andsix months ended June 30, 2022, respectively, and $461 million and $838 million for the three months andsix months ended June 30, 2021, respectively. See “— Related Party Investment Transactions” for information regarding transfers of mortgage loans from affiliates.~~

~~Rollforward of Allowance for Credit Loss for Mortgage Loans by Portfolio Segment~~

~~The rollforward of ACL for mortgage loans, by portfolio segment, is as follows:~~

Six Months Ended June 30,
2022 2021
Commercial Agricultural Residential Total Commercial Agricultural Residential Total
(In millions)
Balance, beginning of period $ 260 $ 79 $ 197 $ 536 $ 199 $ 97 $ 221 $ 517
Provision (release) (13) 36 (38) (15) 17 (7) (20) (10)
Initial credit losses on PCD loans (1) — — — — — — 2 2
Charge-offs, net of recoveries (82) (22) (1) (105) — (13) (1) (14)
Balance, end of period $ 165 $ 93 $ 158 $ 416 $ 216 $ 77 $ 202 $ 495

~~________________~~

~~(1)Represents the initial credit losses on purchased mortgage loans accounted for as purchased financial assets with credit deterioration (“PCD”).~~

Allowance for Credit Loss Methodology

The Company records an allowance for expected lifetime credit loss in earnings within net investment gains (losses) in an amount that represents the portion of the amortized cost basis of mortgage loans that the Company does not expect to collect, resulting in mortgage loans being presented at the net amount expected to be collected. In determining the Company’s ACL, management applies significant judgment to estimate expected lifetime credit loss, including: (i) pooling mortgage loans that share similar risk characteristics, (ii) considering expected lifetime credit loss over the contractual term of its mortgage loans adjusted for expected prepayments and any extensions, and (iii) considering past events and current and forecasted economic conditions. Each of the Company’s commercial, agricultural and residential mortgage loan portfolio segments are evaluated separately. The ACL is calculated for each mortgage loan portfolio segment based on inputs unique to each loan portfolio segment. On a quarterly basis, mortgage loans within a portfolio segment that share similar risk characteristics, such as internal risk ratings or consumer credit scores, are pooled for calculation of ACL. On an ongoing basis, mortgage loans with dissimilar risk characteristics (i.e., loans with significant declines in credit quality), such as collateral dependent mortgage loans (i.e., when the borrower is experiencing financial difficulty, including when foreclosure is reasonably possible or probable) ~~and reasonably expected TDRs (i.e.~~, ~~the Company grants concessions to borrower that is experiencing financial difficulties)~~ are evaluated individually for credit loss. The ACL for loans evaluated individually are established using the same methodologies for all three portfolio segments. For example, the ACL for a collateral dependent loan is established as the excess of amortized cost over the estimated fair value of the loan’s underlying collateral, less selling cost when foreclosure is probable. Accordingly, the change in the estimated fair value of collateral dependent loans, which are evaluated individually for credit loss, is recorded as a change in the ACL which is recorded on a quarterly basis as a charge or credit to earnings in net investment gains (losses).

~~Table of Contents~~

~~Metropolitan Life Insurance Company~~

~~(A Wholly-Owned Subsidiary of MetLife, Inc.)~~

~~Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~5. Investments (continued)~~

Commercial and Agricultural Mortgage Loan Portfolio Segments

Commercial and agricultural mortgage loan ACL are calculated in a similar manner. Within each loan portfolio segment, commercial and agricultural loans are pooled by internal risk rating. Estimated lifetime loss rates, which vary by internal risk rating, are applied to the amortized cost of each loan, excluding accrued investment income, on a quarterly basis to develop the ACL. Internal risk ratings are based on an assessment of the loan’s credit quality, which can change over time. The estimated lifetime loss rates are based on several loan portfolio segment-specific factors, including (i) the Company’s experience with defaults and loss severity, (ii) expected default and loss severity over the forecast period, (iii) current and forecasted economic conditions including growth, inflation, interest rates and unemployment levels, (iv) loan specific characteristics including loan-to-value (“LTV”) ratios, and (v) internal risk ratings. These evaluations are revised as conditions change and new information becomes available. The Company uses its several decades of historical default and loss severity experience which capture multiple economic cycles. The Company uses a forecast of economic assumptions for a two-year period for most of its commercial and agricultural mortgage loans, while a one-year period is used for loans originated in certain markets. After the applicable forecast period, the Company reverts to its historical loss experience using a straight-line basis over two years. For evaluations of commercial mortgage loans, in addition to historical experience, management considers factors that include the impact of a rapid change to the economy, which may not be reflected in the loan portfolio, recent loss and recovery trend experience as compared to historical loss and recovery experience, and loan specific characteristics including debt service coverage ratios (“DSCR”). In estimating expected lifetime credit loss over the term of its commercial mortgage loans, the Company adjusts for expected prepayment and extension experience during the forecast period using historical prepayment and extension experience considering the expected position in the economic cycle and the loan profile (i.e., floating rate, shorter-term fixed rate and longer-term fixed rate) and after the forecast period using long-term historical prepayment experience. For evaluations of agricultural mortgage loans, in addition to historical experience, management considers factors that include increased stress in certain sectors, which may be evidenced by higher delinquency rates, or a change in the number of higher risk loans. In estimating expected lifetime credit loss over the term of its agricultural mortgage loans, the Company’s experience is much less sensitive to the position in the economic cycle and by loan profile; accordingly, historical prepayment experience is used, while extension terms are not prevalent with the Company’s agricultural mortgage loans.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)

Commercial mortgage loans are reviewed on an ongoing basis, which review includes, but is not limited to, an analysis of the property financial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, LTV ratios, DSCR and tenant creditworthiness. The monitoring process focuses on higher risk loans, which include those that are classified as restructured, delinquent or in foreclosure, as well as loans with higher LTV ratios and lower DSCR. Agricultural mortgage loans are reviewed on an ongoing basis, which review includes, but is not limited to, property inspections, market analysis, estimated valuations of the underlying collateral, LTV ratios and borrower creditworthiness, as well as reviews on a geographic and property-type basis. The monitoring process for agricultural mortgage loans also focuses on higher risk loans.

For commercial mortgage loans, the primary credit quality indicator is the DSCR, which compares a property’s net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the DSCR, the higher the risk of experiencing a credit loss. The Company also reviews the LTV ratio of its commercial mortgage loan portfolio. LTV ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. Generally, the higher the LTV ratio, the higher the risk of experiencing a credit loss. The DSCR and the values utilized in calculating the ratio are updated routinely. In addition, the LTV ratio is routinely updated for all but the lowest risk loans as part of the Company’s ongoing review of its commercial mortgage loan portfolio.

For agricultural mortgage loans, the Company’s primary credit quality indicator is the LTV ratio. The values utilized in calculating this ratio are developed in connection with the ongoing review of the agricultural mortgage loan portfolio and are routinely updated.

~~Table of Contents~~

~~Metropolitan Life Insurance Company~~

~~(A Wholly-Owned Subsidiary of MetLife, Inc.)~~

~~Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~5. Investments (continued)~~

Commitments to lend: After loans are approved, the Company makes commitments to lend and, typically, borrowers draw down on some or all of the commitments. The timing of mortgage loan funding is based on the commitment expiration dates. A liability for credit loss for unfunded commercial and agricultural mortgage loan commitments that are not unconditionally cancellable is recognized in earnings and is reported within net investment gains (losses). The liability is based on estimated lifetime loss rates as described above and the amount of the outstanding commitments, which for lines of credit, considers estimated utilization rates. When the commitment is funded or expires, the liability is adjusted accordingly.

Residential Mortgage Loan Portfolio Segment

The Company’s residential mortgage loan portfolio is comprised primarily of purchased closed end, amortizing residential mortgage loans, including both performing loans purchased within 12 months of origination and reperforming loans purchased after they have been performing for at least 12 months post-modification. Residential mortgage loans are pooled by loan type (i.e., new origination and reperforming) and pooled by similar risk profiles (including consumer credit score and LTV ratios). Estimated lifetime loss rates, which vary by loan type and risk profile, are applied to the amortized cost of each loan excluding accrued investment income on a quarterly basis to develop the ACL. The estimated lifetime loss rates are based on several factors, including (i) industry historical experience and expected results over the forecast period for defaults, (ii) loss severity, (iii) prepayment rates, (iv) current and forecasted economic conditions including growth, inflation, interest rates and unemployment levels, and (v) loan pool specific characteristics including consumer credit scores, LTV ratios, payment history and home prices. These evaluations are revised as conditions change and new information becomes available. The Company uses industry historical experience which captures multiple economic cycles as the Company has purchased most of its residential mortgage loans in the last five years. The Company uses a forecast of economic assumptions for a two-year period for most of its residential mortgage loans. After the applicable forecast period, the Company ~~immediately~~ reverts to industry historical loss ~~experience.~~experience using a straight-line basis over one year.

For residential mortgage loans, the Company’s primary credit quality indicator is whether the loan is performing or nonperforming. The Company generally defines nonperforming residential mortgage loans as those that are 60 or more days past due and/or in nonaccrual status which is assessed monthly. Generally, nonperforming residential mortgage loans have a higher risk of experiencing a credit loss.

~~Credit Quality of Mortgage Loans by Portfolio Segment~~

~~The amortized cost of commercial mortgage loans by credit quality indicator and vintage year was as follows at June 30, 2022:~~

Credit Quality Indicator 2022 2021 2020 2019 2018 Prior Revolving
Loans Total % of
Total
(Dollars in millions)
LTV ratios:
Less than 65% $ 2,585 $ 3,222 $ 2,368 $ 3,109 $ 3,559 $ 11,422 $ 2,597 $ 28,862 78.2 %
65% to 75% 705 1,124 631 1,661 917 1,306 — 6,344 17.2
76% to 80% — — 18 138 199 248 — 603 1.6
Greater than 80% 43 — — — 48 1,018 — 1,109 3.0
Total $ 3,333 $ 4,346 $ 3,017 $ 4,908 $ 4,723 $ 13,994 $ 2,597 $ 36,918 100.0 %
DSCR:
> 1.20x $ 3,295 $ 3,949 $ 2,844 $ 4,718 $ 4,303 $ 12,084 $ 2,242 $ 33,435 90.6 %
1.00x - 1.20x 32 156 18 — 125 324 — 655 1.8
<1.00x 6 241 155 190 295 1,586 355 2,828 7.6
Total $ 3,333 $ 4,346 $ 3,017 $ 4,908 $ 4,723 $ 13,994 $ 2,597 $ 36,918 100.0 %

~~The amortized cost of agricultural mortgage loans by credit quality indicator and vintage year was as follows at June 30, 2022:~~

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Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5.9. Investments (continued)

Credit Quality Indicator 2022 2021 2020 2019 2018 Prior Revolving
Loans Total % of
Total
(Dollars in millions)
LTV ratios:
Less than 65% $ 1,350 $ 1,447 $ 1,913 $ 1,534 $ 2,115 $ 4,450 $ 1,021 $ 13,830 89.6 %
65% to 75% 129 229 309 181 51 499 51 1,449 9.4
76% to 80% — — — — — 11 — 11 0.1
Greater than 80% — — 15 76 — 44 6 141 0.9
Total $ 1,479 $ 1,676 $ 2,237 $ 1,791 $ 2,166 $ 5,004 $ 1,078 $ 15,431 100.0 %
Modifications to Borrowers Experiencing Financial Difficulty

The Company may modify mortgage loans to borrowers. Each mortgage loan modification is evaluated to determine whether the borrower was experiencing financial difficulties. Disclosed below are those modifications where the borrower was determined to be experiencing financial difficulties and the mortgage loans were modified by any of the following means, principal forgiveness, interest rate reduction, other-than-insignificant payment delay or term extension. The amount, timing and extent of modifications granted are considered in determining any ACL recorded.

Commercial mortgage loans:

For the three months ended March 31, 2023, the Company granted an additional 3-month term extension on a previously restructured loan with an amortized cost of $31 million. This modified loan represents less than 1% of the portfolio segment.

Residential mortgage loans:

For the three months ended March 31, 2023, the Company granted term extensions on loans with an amortized cost of $3 million, term extensions and other-than-insignificant payment delays on loans with an amortized cost of $4 million and term extensions, other-than-insignificant payment delays and interest rate reductions on loans with an amortized cost of $3 million. These modified loans represent less than 1% of the portfolio segment. These loan modifications added a weighted-average of 11.1 years to the life of the modified loans, allowed for the capitalization or deferral of balances due and reduced the weighted-average interest rate of the modified loans from 5.9% to 4.2%.

All mortgage loans that were modified to borrowers experiencing financial difficulties during the three months ended March 31, 2023, are current.

Credit Quality of Mortgage Loans by Portfolio Segment

The amortized cost of commercial mortgage loans by credit quality indicator and vintage year was as follows at March 31, 2023:


Credit Quality Indicator	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total		% of Total
	(Dollars in millions)
LTV ratios:
Less than 65%	$	831	$	3,292	$	3,200	$	2,135	$	2,968	$	13,873	$	2,885	$	29,184	76.3	%
65% to 75%	—		1,548		1,002		738		1,204		2,276		—		6,768		17.7
76% to 80%	—		310		57		83		168		545		—		1,163		3.0
Greater than 80%	—		82		—		18		250		797		—		1,147		3.0
Total	$	831	$	5,232	$	4,259	$	2,974	$	4,590	$	17,491	$	2,885	$	38,262	100.0	%
DSCR:
> 1.20x	$	354	$	4,482	$	3,820	$	2,696	$	4,198	$	15,694	$	2,385	$	33,629	87.9	%
1.00x - 1.20x	477		516		259		52		178		971		204		2,657		6.9
<1.00x	—		234		180		226		214		826		296		1,976		5.2
Total	$	831	$	5,232	$	4,259	$	2,974	$	4,590	$	17,491	$	2,885	$	38,262	100.0	%

The amortized cost of agricultural mortgage loans by credit quality indicator and vintage year was as follows at March 31, 2023:

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

9. Investments (continued)


Credit Quality Indicator	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total		% of Total
	(Dollars in millions)
LTV ratios:
Less than 65%	$	357	$	1,987	$	1,500	$	1,885	$	1,581	$	5,970	$	1,108	$	14,388	90.8	%
65% to 75%	5		87		228		293		24		565		40		1,242		7.8
76% to 80%	—		—		—		—		—		11		—		11		0.1
Greater than 80%	—		—		—		14		133		51		9		207		1.3
Total	$	362	$	2,074	$	1,728	$	2,192	$	1,738	$	6,597	$	1,157	$	15,848	100.0	%

The amortized cost of residential mortgage loans by credit quality indicator and vintage year was as follows at ~~June 30, 2022:~~March 31, 2023:


Credit Quality Indicator	Credit Quality Indicator	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total		% of Total		Credit Quality Indicator	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total		% of Total
		(Dollars in millions)																			(Dollars in millions)
Performance indicators:	Performance indicators:																			Performance indicators:
Performing	Performing	$	489	$	714	$	164	$	648	$	363	$	6,512	$	—	$	8,890	95.3	%	Performing	$	177	$	1,968	$	812	$	153	$	595	$	6,423	$	—	$	10,128	96.2	%
Nonperforming (1)	Nonperforming (1)	—		3		5		39		11		378		—		436		4.7		Nonperforming (1)	—		14		9		6		37		336		—		402		3.8
Total	Total	$	489	$	717	$	169	$	687	$	374	$	6,890	$	—	$	9,326	100.0	%	Total	$	177	$	1,982	$	821	$	159	$	632	$	6,759	$	—	$	10,530	100.0	%

__________________

(1)Includes residential mortgage loans in process of foreclosure of ~~$133 million and $69~~$143 million at ~~June 30, 2022~~both March 31, 2023 and December 31, ~~2021, respectively.~~2022.

LTV ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. The amortized cost of commercial and agricultural mortgage loans with an LTV ratio in excess of 100% was ~~$474~~$655 million, or 1% of total commercial and agricultural mortgage loans, at ~~June 30, 2022.~~March 31, 2023.

Past Due and Nonaccrual Mortgage Loans

The Company has a high quality, well performing mortgage loan portfolio, with 99% of all mortgage loans classified as performing at both ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022. The Company defines delinquency consistent with industry practice, when mortgage loans are past due more than two or more months, as applicable, by portfolio segment. The past due and nonaccrual mortgage loans at amortized cost, prior to ACL, by portfolio segment, were as follows:


		Past Due				Greater than 90 Days Past Due and Still Accruing Interest				Nonaccrual					Past Due				Past Due and Still Accruing Interest				Nonaccrual
Portfolio Segment	Portfolio Segment	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021		Portfolio Segment	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
		(In millions)													(In millions)
Commercial	Commercial	$	—	$	—	$	—	$	—	$	171	$	146	Commercial	$	22	$	—	$	—	$	—	$	170	$	158
Agricultural	Agricultural	93		124		30		16		178		225		Agricultural	96		120		—		18		260		131
Residential	Residential	436		418		—		—		437		418		Residential	402		428		—		—		404		429
Total	Total	$	529	$	542	$	30	$	16	$	786	$	789	Total	$	520	$	548	$	—	$	18	$	834	$	718

The amortized cost for nonaccrual commercial, agricultural and residential mortgage loans at beginning of year ~~2021~~2022 was ~~$293~~$146 million, ~~$261~~$225 million and ~~$503~~$418 million, respectively. The amortized cost for nonaccrual agricultural mortgage loans with no ACL was ~~$86~~$77 million and ~~$134~~$7 million at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. There were no nonaccrual commercial or residential mortgage loans without an ACL at either ~~June 30, 2022~~March 31, 2023 or December 31, ~~2021.~~2022.

2963

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5.9. Investments (continued)

Real Estate and Real Estate Joint Ventures

The Company’s real estate investment portfolio is diversified by property type, geography and income stream, including income from operating leases, operating income and equity in earnings from equity method real estate joint ventures. Real estate investments, by income type, as well as income earned, were as follows at and for the periods indicated:


		June 30, 2022			December 31, 2021			Three Months Ended June 30,						Six Months Ended June 30,								March 31, 2023			December 31, 2022			Three Months Ended March 31,
							2022			2021			2022			2021								December 31, 2022				2023		2022
Income Type	Income Type			Carrying Value						Income									Income Type		Carrying Value						Income
		(In millions)																		(In millions)
Wholly-owned real estate:	Wholly-owned real estate:																								Wholly-owned real estate:
Leased real estate	Leased real estate	$	1,763		$	1,934		$	50		$	53		$	104		$	107					Leased real estate		$	1,612		$	1,618	$	42	$	54
Other real estate	Other real estate	477			473			66			46			96			80						Other real estate		489			487		46		30
Real estate joint ventures	Real estate joint ventures	5,810			5,466			122			31			232			37						Real estate joint ventures		6,391			6,311		(36)		110
Total real estate and real estate joint ventures	Total real estate and real estate joint ventures	$	8,050		$	7,873		$	238		$	130		$	432		$	224					Total real estate and real estate joint ventures		$	8,492		$	8,416	$	52	$	194

The carrying value of wholly-owned real estate acquired through foreclosure was ~~$180~~$184 million and $179 million at ~~both June 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022, respectively. Depreciation expense on real estate investments was ~~$22~~$20 million ~~and $42 million~~ for both the three months ~~andsix months~~ ended ~~June 30, 2022, respectively,~~March 31, 2023 and ~~$22 million and $43 million for the three months andsix months ended June 30, 2021, respectively.~~2022. Real estate investments were net of accumulated depreciation of ~~$613~~$586 million and ~~$581~~$566 million at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

Leases

Leased Real Estate Investments - Operating Leases

The Company, as lessor, leases investment real estate, principally commercial real estate for office, apartment and retail use, through a variety of operating lease arrangements, which typically include tenant reimbursement for property operating costs and options to renew or extend the lease. In some circumstances, leases may include an option for the lessee to purchase the property. In addition, certain leases of retail space may stipulate that a portion of the income earned is contingent upon the level of the tenants’ revenues. The Company has elected a practical expedient of not separating non-lease components related to reimbursement of property operating costs from associated lease components. These property operating costs have the same timing and pattern of transfer as the related lease component, because they are incurred over the same period of time as the operating lease. Therefore, the combined component is accounted for as a single operating lease. Risk is managed through lessee credit analysis, property type diversification, and geographic diversification.

See Note 7 of the Notes to the Consolidated Financial Statements included in the ~~2021~~2022 Annual Report for a summary of leased real estate investments and income earned, by property type.

Leveraged and Direct Financing Leases

The Company has diversified leveraged and direct financing lease portfolios. Its leveraged leases principally include ~~renewable energy generation facilities,~~ rail cars, commercial real estate and ~~commercial aircraft,~~renewable energy generation facilities, and its direct financing leases principally include renewable energy generation facilities. These assets are leased through a variety of lease arrangements, which may include options to renew or extend the lease and options for the lessee to purchase the property. Residual values are estimated using available third-party data at inception of the lease. Risk is managed through lessee credit analysis, asset allocation, geographic diversification, and ongoing reviews of estimated residual values, using available third-party data. Generally, estimated residual values are not guaranteed by the lessee or a third party.

Lease receivables are generally due in periodic installments. The payment periods for leveraged leases generally range from one to 10nine years, but in certain circumstances can be over 10nine years, while the payment periods for direct financing leases generally range from one to 1211 years.

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5.9. Investments (continued)

The Company records an allowance for expected lifetime credit loss in earnings within ~~net~~ investment gains (losses) in an amount that represents the portion of the investment in leases that the Company does not expect to collect, resulting in the investment in leases being presented at the net amount expected to be collected. In determining the ACL, management applies significant judgment to estimate expected lifetime credit loss, including: (i) pooling leases that share similar risk characteristics, (ii) considering expected lifetime credit loss over the contractual term of the lease, and (iii) considering past events and current and forecasted economic conditions. Leases with dissimilar risk characteristics are evaluated individually for credit loss. Expected lifetime credit loss on leveraged and direct financing lease receivables is estimated using a probability of default and loss given default model, where the probability of default incorporates third party credit ratings of the lessee and the related historical default data. The Company also assesses the non-guaranteed residual values for recoverability by comparison to the current estimated fair value of the leased asset and considers other relevant market information such as independent third-party forecasts, consulting, asset brokerage and investment banking reports and data, comparable market transactions, and factors such as the competitive dynamics impacting specific industries, technological change and obsolescence, government and regulatory rules, tax policy, potential environmental liabilities and litigation.

The investment in leveraged and direct financing leases, net of ACL, was ~~$788~~$725 million and ~~$132~~$123 million, respectively, at ~~June 30, 2022~~March 31, 2023 and ~~$787~~$731 million and ~~$137~~$127 million, respectively, at December 31, ~~2021.~~2022. The ACL for leveraged and direct financing leases was ~~$26~~$14 million and ~~$32~~$19 million at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

Other Invested Assets

See Note 1 of the Notes to the Consolidated Financial Statements included in the ~~2021~~2022 Annual Report for further information about Other Invested Assets, which includes securities accounted for under the FVO ~~(“FVO Securities”)~~ and equity securities.

FVO Securities and Equity Securities

The following table presents FVO Securities and equity securities by security type. Common stock includes common stock and certain mutual funds. FVO Securities includes fixed maturity and equity securities to support asset and liability management strategies for certain insurance products and investments in certain separate accounts.


		June 30, 2022						December 31, 2021												March 31, 2023						December 31, 2022
		Cost		Net Unrealized Gains (Losses) (1)		Estimated Fair Value		Cost			Net Unrealized Gains (Losses) (1)				Estimated Fair Value					Cost		Net Unrealized Gains (Losses) (1)		Estimated Fair Value		Cost		Net Unrealized Gains (Losses) (1)		Estimated Fair Value
Security Type	Security Type									Security Type
						(In millions)																		(In millions)
FVO Securities	FVO Securities	$	755	$	132	$	887	$	598				$	250				$	848		FVO Securities	$	657	$	235	$	892	$	673	$	171	$	844

Equity securities	Equity securities																Equity securities
Common stock	Common stock	$	113	$	45	$	158	$	88		$	32			$	120	Common stock			$	121	$	45	$	166	$	119	$	47	$	166
Non-redeemable preferred stock	Non-redeemable preferred stock	91		(6)		85		107			(1)				106		Non-redeemable preferred stock			62		(3)		59		77		(3)		74
Total equity securities	Total equity securities	$	204	$	39	$	243	$	195		$	31			$	226	Total equity securities			$	183	$	42	$	225	$	196	$	44	$	240

__________________

(1)Represents cumulative changes in estimated fair value, recognized in earnings, and not in ~~other comprehensive income (loss) (“OCI”).~~OCI.

Cash Equivalents

Cash equivalents, which includes securities and other investments with an original or remaining maturity of three months or less at the time of purchase, was $~~5.3~~3.3 billion and ~~$4.7~~$6.6 billion, principally at estimated fair value, at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

~~Table of Contents~~

~~Metropolitan Life Insurance Company~~

~~(A Wholly-Owned Subsidiary of MetLife, Inc.)~~

~~Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~5. Investments (continued)~~

~~Net Unrealized Investment Gains (Losses)~~

Unrealized investment gains (losses) on fixed maturity securities AFS and derivatives and the effect on policyholder liabilities, DAC, VOBA and deferred sales inducements (“DSI”) that would result from the realization of the unrealized gains (losses), are included in net unrealized investment gains (losses) in AOCI.

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

June 30, 2022 December 31, 2021
(In millions)
Fixed maturity securities AFS $ (7,548) $ 17,586
Derivatives 2,412 2,370
Other 285 377
Subtotal (4,851) 20,333
Amounts allocated from:
Policyholder liabilities 29 (5,962)
DAC, VOBA and DSI 538 (1,357)
Subtotal 567 (7,319)
Deferred income tax benefit (expense) 975 (2,657)
Net unrealized investment gains (losses) $ (3,309) $ 10,357

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


	Six Months Ended June 30, 2022
	~~(In millions)~~
~~Balance, beginning of period~~	$	~~10,357~~


~~Unrealized investment gains (losses) during the period~~	~~(25,184)~~
~~Unrealized investment gains (losses) relating to:~~
~~Policyholder liabilities~~	~~5,991~~

~~DAC, VOBA and DSI~~	~~1,895~~

~~Deferred income tax benefit (expense)~~	~~3,632~~


~~Balance, end of period~~	$	~~(3,309)~~
~~Change in net unrealized investment gains (losses)~~	$	~~(13,666)~~

Concentrations of Credit Risk

There were no investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S. government and its agencies, at both ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022.

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5.9. Investments (continued)

Securities Lending Transactions and Repurchase Agreements

Securities, Collateral and Reinvestment Portfolio

A summary of these transactions and agreements accounted for as secured borrowings ~~was~~were as follows:


		June 30, 2022						December 31, 2021								March 31, 2023						December 31, 2022
		Securities (1)						Securities (1)								Securities (1)						Securities (1)
Agreement Type	Agreement Type	Estimated Fair Value		Cash Collateral Received from Counterparties (2)		Reinvestment Portfolio at Estimated Fair Value		Estimated Fair Value		Cash Collateral Received from Counterparties (2)		Reinvestment Portfolio at Estimated Fair Value		Agreement Type		Estimated Fair Value		Cash Collateral Received from Counterparties (2)		Reinvestment Portfolio at Estimated Fair Value		Estimated Fair Value		Cash Collateral Received from Counterparties (2)		Reinvestment Portfolio at Estimated Fair Value
		(In millions)													(In millions)
Securities lending	Securities lending	$	8,271	$	8,419	$	8,257	$	14,689	$	14,977	$	15,116	Securities lending		$	6,442	$	6,521	$	6,372	$	6,601	$	6,773	$	6,625
Repurchase agreements	Repurchase agreements	$	3,208	$	3,125	$	3,065	$	3,416	$	3,325	$	3,357	Repurchase agreements		$	3,209	$	3,125	$	3,054	$	3,176	$	3,125	$	3,057

__________________

(1)These securities were included within fixed maturity securities AFS ~~short-term investments~~ and cash equivalents at ~~June 30, 2022~~March 31, 2023 and within fixed maturity securities AFS and short-term investments at December 31, ~~2021.~~2022.

(2)The liability for cash collateral is included within payables for collateral under securities loaned and other transactions.

Contractual Maturities

Contractual maturities of these transactions and agreements accounted for as secured borrowings were as follows:


		June 30, 2022										December 31, 2021												March 31, 2023										December 31, 2022
		Remaining Maturities										Remaining Maturities												Remaining Maturities										Remaining Maturities
Security Type	Security Type	Open (1)		1 Month or Less		Over 1 Month to 6 Months		Over 6 Months to 1 Year		Total		Open (1)		1 Month or Less		Over 1 Month to 6 Months		Over 6 Months to 1 Year		Total			Security Type	Open (1)		1 Month or Less		Over 1 Month to 6 Months		Over 6 Months to 1 Year		Total		Open (1)		1 Month or Less		Over 1 Month to 6 Months		Over 6 Months to 1 Year		Total
		(In millions)																				(In millions)
Cash collateral liability by security type:	Cash collateral liability by security type:																						Cash collateral liability by security type:
Securities lending:	Securities lending:																						Securities lending:
U.S. government and agency	U.S. government and agency	$	1,111	$	5,100	$	2,208	$	—	$	8,419	$	3,996	$	5,279	$	5,702	$	—	$	14,977		U.S. government and agency	$	1,122	$	2,414	$	2,985	$	—	$	6,521	$	935	$	4,233	$	1,605	$	—	$	6,773

Repurchase agreements:	Repurchase agreements:																						Repurchase agreements:
U.S. government and agency	U.S. government and agency	$	—	$	3,125	$	—	$	—	$	3,125	$	—	$	3,325	$	—	$	—	$	3,325		U.S. government and agency	$	—	$	3,125	$	—	$	—	$	3,125	$	—	$	3,125	$	—	$	—	$	3,125

__________________

(1)The related security could be returned to the Company on the next business day, which would require the Company to immediately return the cash collateral.

If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell investments to meet the return obligation, it may have difficulty selling such collateral that is invested in a timely manner, be forced to sell investments in a volatile or illiquid market for less than what otherwise would have been realized under normal market conditions, or both.

The securities lending and repurchase agreements reinvestment portfolios consist principally of high quality, liquid, publicly-traded fixed maturity securities AFS, short-term investments, cash equivalents or cash. If the securities or the reinvestment portfolio become less liquid, liquidity resources within the general account are available to meet any potential cash demands when securities are put back by the counterparty.

Invested Assets on Deposit and Pledged as Collateral

Invested assets on deposit and pledged as collateral are presented below at estimated fair value for all asset classes,

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5.9. Investments (continued)

except mortgage loans, which are presented at carrying value, and were as follows at:


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(In millions)					(In millions)
Invested assets on deposit (regulatory deposits)	Invested assets on deposit (regulatory deposits)	$	103	$	118	Invested assets on deposit (regulatory deposits)	$	101	$	98
Invested assets pledged as collateral (1)	Invested assets pledged as collateral (1)	21,888		20,390		Invested assets pledged as collateral (1)	22,097		20,612
Total invested assets on deposit and pledged as collateral	Total invested assets on deposit and pledged as collateral	$	21,991	$	20,508	Total invested assets on deposit and pledged as collateral	$	22,198	$	20,710

__________________

(1)The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements, secured debt (see Notes 3 and 11of the Notes to the Consolidated Financial Statements included in the ~~2021~~2022 Annual Report) and derivative transactions (see Note 6)10).

See “— Securities Lending Transactions and Repurchase Agreements” for information regarding securities supporting securities lending transactions and repurchase agreements and Note 48 for information regarding investments designated to the closed block. In addition, the Company’s investment in Federal Home Loan Bank of New York common stock, included within other invested assets, which is considered restricted until redeemed by the issuer, was ~~$732~~$668 million and ~~$718~~$659 million, at redemption value, at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

Variable Interest Entities

The Company has invested in legal entities that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be the primary beneficiary or consolidator of the entity. The determination of the VIE’s primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party’s relationship with or involvement in the entity.

Consolidated VIEs

Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company, as the Company’s obligation to the VIEs is limited to the amount of its committed investment.

The following table presents the total assets and total liabilities relating to ~~investment related~~investment-related VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at:


		June 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
Asset Type	Asset Type	Total Assets		Total Liabilities		Total Assets		Total Liabilities		Asset Type	Total Assets		Total Liabilities		Total Assets		Total Liabilities
		(In millions)									(In millions)
Real estate joint ventures ~~(1)~~	Real estate joint ventures ~~(1)~~	$	1,002	$	—	$	1,094	$	—	Real estate joint ventures ~~(1)~~	$	1,380	$	—	$	1,357	$	—
Investment funds (primarily mortgage loans) (2)		156		—		226		—
Other (primarily other invested assets)		100		1		101		—
Mortgage loan joint ventures										Mortgage loan joint ventures	150		—		147		—
Investment funds (primarily other invested assets)										Investment funds (primarily other invested assets)	98		—		98		—
Renewable energy partnership (primarily other invested assets)	Renewable energy partnership (primarily other invested assets)	75		—		79		—		Renewable energy partnership (primarily other invested assets)	72		—		76		—
Total	Total	$	1,333	$	1	$	1,500	$	—	Total	$	1,700	$	—	$	1,678	$	—

__________________

(1) The Company’s investment in affiliated real estate joint ventures was $892 million and $1.0 billion at June 30, 2022 and December 31, 2021, respectively. Other affiliates’ investments in these affiliated real estate joint ventures were $110 million and $112 million at June 30, 2022 and December 31, 2021, respectively.

~~(2)~~The Company’s investment in affiliated investment funds was $131 million and $187 million at June 30, 2022 and December 31, 2021, respectively. Other affiliates’ investments in these affiliated investment funds were $25 million and $39 million at June 30, 2022 and December 31, 2021, respectively.

3467

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5.9. Investments (continued)

Unconsolidated VIEs

The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable interest but is not the primary beneficiary and which have not been consolidated were as follows at:


		June 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
Asset Type	Asset Type	Carrying Amount		Maximum Exposure to Loss (1)		Carrying Amount		Maximum Exposure to Loss (1)		Asset Type	Carrying Amount		Maximum Exposure to Loss (1)		Carrying Amount		Maximum Exposure to Loss (1)
		(In millions)									(In millions)
Fixed maturity securities AFS (2)	Fixed maturity securities AFS (2)	$	38,448	$	38,448	$	43,653	$	43,653	Fixed maturity securities AFS (2)	$	37,055	$	37,055	$	35,813	$	35,813

Other limited partnership interests	Other limited partnership interests	7,637		10,286		8,005		11,057		Other limited partnership interests	7,285		9,686		7,299		9,716
Other invested assets	Other invested assets	1,440		1,653		1,605		1,815		Other invested assets	1,339		1,499		1,342		1,509
Real estate joint ventures	Real estate joint ventures	93		95		97		100		Real estate joint ventures	114		117		86		88
Total	Total	$	47,618	$	50,482	$	53,360	$	56,625	Total	$	45,793	$	48,357	$	44,540	$	47,126

__________________

(1)The maximum exposure to loss relating to fixed maturity securities AFS is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests and real estate joint ventures is equal to the carrying amounts plus any unfunded commitments. For certain of its investments in other invested assets, the Company’s return is in the form of income tax credits which are guaranteed by creditworthy third parties. For such investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by income tax credits guaranteed by third ~~parties of $6 million and $5 million at June 30, 2022 and December 31, 2021, respectively.~~parties. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee.

(2)For variable interests in Structured Products included within fixed maturity securities AFS, the Company’s involvement is limited to that of a passive investor in mortgage-backed or asset-backed securities issued by trusts that do not have substantial equity.

As described in Note ~~11,~~16, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs for either the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 or ~~2021.~~2022.

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5.9. Investments (continued)

Net Investment Income

The composition of net investment income by asset type was as follows:

Three Months
Ended
June 30, Six Months
Ended
June 30,
Asset Type 2022 2021 2022 2021
(In millions)
Fixed maturity securities AFS $ 1,543 $ 1,534 $ 3,044 $ 3,054
Equity securities 1 7 2 12
Mortgage loans 605 695 1,218 1,372
Policy loans 72 75 144 149
Real estate and real estate joint ventures 238 130 432 224
Other limited partnership interests 64 689 597 1,577
Cash, cash equivalents and short-term investments 11 2 15 5
FVO Securities (113) 35 (142) 61
Operating joint venture 26 16 42 33
Other 185 10 254 45
Subtotal investment income 2,632 3,193 5,606 6,532
Less: Investment expenses 190 159 338 311
Net investment income $ 2,442 $ 3,034 $ 5,268 $ 6,221

Net investment income included realized and unrealized gains (losses) recognized in earnings of ($79) million and ($61) million for the three months and six months ended June 30, 2022, respectively, and $49 million and $91 million for the three months and six months ended June 30, 2021, respectively. The amount includes realized gains (losses) on sales and disposals, primarily related to Residential - FVO mortgage loans and FVO Securities, of ($4) million for both the three months and six months ended June 30, 2022, and $0 and $22 million for the three months and the six months ended June 30, 2021, respectively. The amount also includes unrealized gains (losses), representing changes in estimated fair value, recognized in earnings, primarily related to real estate joint ventures and FVO Securities, of ($75) million and ($57) million for the three months and six months ended June 30, 2022, respectively, and $49 million and $69 million for the three months and six months ended June 30, 2021, respectively.

Changes in estimated fair value subsequent to purchase of equity-linked notes included within FVO Securities, still held at the end of the respective periods and included in net investment income were ($114) million and ($147) million for the three months and six months ended June 30, 2022, respectively, and $33 million and $39 million for the three months and six months ended June 30, 2021, respectively.

~~See “— Related Party Investment Transactions” for discussion of affiliated net investment income and investment expenses.~~

Net investment income from equity method investments, comprised primarily of real estate joint ventures, other limited partnership interests, tax credit and renewable energy partnerships and an operating joint venture, was $188 million and $805 million for the three months and six months ended June 30, 2022, respectively, and $679 million and $1.5 billion for the three months and six months ended June 30, 2021, respectively.


	Three Months Ended March 31,
Asset Type	2023		2022
	(In millions)
Fixed maturity securities AFS	$	1,846	$	1,501
Equity securities	1		1
Mortgage loans	790		613
Policy loans	73		72
Real estate and real estate joint ventures	52		194
Other limited partnership interests	1		533
Cash, cash equivalents and short-term investments	84		4
FVO Securities	50		(29)
Operating joint venture	14		16
Other	79		69
Subtotal investment income	2,990		2,974
Less: Investment expenses	305		148
Net investment income	$	2,685	$	2,826

Net Investment Income (“NII”) Information
Net realized and unrealized gains (losses) recognized in NII:
Net realized gains (losses) from sales and disposals	$	—	$	—
Net unrealized gains (losses) from changes in estimated fair value (primarily FVO Securities and real estate joint ventures)	58		18
Net realized and unrealized gains (losses) recognized in NII	$	58	$	18

Changes in estimated fair value subsequent to purchase of FVO Securities still held at the end of the respective periods and recognized in NII	$	47	$	(32)

Equity method investments NII (primarily real estate joint ventures, other limited partnership interests, tax credit and renewable energy partnerships and an operating joint venture)	$	(38)	$	617

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Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5.9. Investments (continued)

Net Investment Gains (Losses)

Net Investment Gains (Losses) by Asset Type and Transaction Type

The composition of net investment gains (losses) by asset type and transaction type was as follows:

Three Months
Ended
June 30, Six Months
Ended
June 30,
Asset Type 2022 2021 2022 2021
(In millions)
Fixed maturity securities AFS $ (356) $ (6) $ (658) $ (29)
Equity securities 1 26 4 45
Mortgage loans (13) (45) 10 16
Real estate and real estate joint ventures (excluding changes in estimated fair value) 159 368 163 416
Other limited partnership interests (excluding changes in estimated fair value) 2 (9) 5 (14)
Other gains (losses) 49 19 66 48
Subtotal (158) 353 (410) 482
Change in estimated fair value of other limited partnership interests and real estate joint ventures — 6 6 14
Non-investment portfolio gains (losses) 75 (17) 95 6
Subtotal 75 (11) 101 20
Net investment gains (losses) $ (83) $ 342 $ (309) $ 502
Transaction Type
Realized gains (losses) on investments sold or disposed $ (183) $ 369 $ (331) $ 414
Impairments — (13) (33) (13)
Recognized gains (losses):
Change in allowance for credit loss recognized in earnings 29 (34) (51) —
Unrealized net gains (losses) recognized in earnings (4) 37 11 95
Total recognized gains (losses) 25 3 (40) 95
Non-investment portfolio gains (losses) 75 (17) 95 6
Net investment gains (losses) $ (83) $ 342 $ (309) $ 502

Net realized investment gains (losses) of ($187) million and ($335) million for the three months and six months ended June 30, 2022, respectively, and $369 million and $436 million for the three months and six months ended June 30, 2021, respectively, represent realized gains (losses) on sales and disposals from all invested asset classes, including realized gains (losses) on sales and disposals recognized in net investment income, primarily related to Residential - FVO mortgage loans and FVO Securities.

Changes in estimated fair value subsequent to purchase of equity securities still held as of the end of the period included in net investment gains (losses) were ($1) million and $5 million for the three months and six months ended June 30, 2022, respectively, and $19 million and $32 million for the three months and six months ended June 30, 2021, respectively.

Other gains (losses) included $52 million and $70 million reclassified from AOCI to earnings due to the sale of certain investments that were hedged in qualifying cash flow hedges for the three months and six months ended June 30, 2022, respectively, and $19 million and $48 million for the three months and six months ended June 30, 2021, respectively.

~~See “— Related Party Investment Transactions” for discussion of affiliated net investment gains (losses) related to transfers of invested assets to affiliates.~~

Net investment gains (losses) includes gains (losses) from foreign currency transactions of $54 million and $66 million for the three months and six months ended June 30, 2022, respectively, and ($14) million and $19 million for the three months and six months ended June 30, 2021, respectively.


		Three Months Ended March 31,
Asset Type		2023		2022
	(In millions)
Fixed maturity securities AFS		$	52	$	(302)
Equity securities		(5)		3
Mortgage loans		(149)		23
Real estate and real estate joint ventures (excluding changes in estimated fair value)		2		4
Other limited partnership interests (excluding changes in estimated fair value)		7		3
Other gains (losses)		6		17
Subtotal		(87)		(252)
Change in estimated fair value of other limited partnership interests and real estate joint ventures		(5)		6
Non-investment portfolio gains (losses)		(10)		20
Subtotal		(15)		26
Net investment gains (losses)		$	(102)	$	(226)

Transaction Type
Realized gains (losses) on investments sold or disposed		$	83	$	(148)
Impairment (losses)		(6)		(33)
Recognized gains (losses):
Change in allowance for credit loss recognized in earnings		(162)		(80)
Unrealized net gains (losses) recognized in earnings		(7)		15
Total recognized gains (losses)		(92)		(246)
Non-investment portfolio gains (losses)		(10)		20
Net investment gains (losses)		$	(102)	$	(226)

Net Investment Gains (Losses) (“NIGL”) Information
Changes in estimated fair value subsequent to purchase of equity securities still held at the end of the respective periods and recognized in NIGL		$	(3)	$	8




Foreign currency gains (losses)		$	(15)	$	12

Net Realized Investment Gains (Losses) From Sales and Disposals of Investments:
Recognized in NIGL		$	83	$	(148)
Recognized in NII		—		—
Net realized investment gains (losses) from sales and disposals of investments		$	83	$	(148)

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

5.9. Investments (continued)

Fixed Maturity Securities AFS and Equity Securities – Composition of Net Investment Gains (Losses)

The composition of net investment gains (losses) for these securities is as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
Fixed Maturity Securities AFS	Fixed Maturity Securities AFS	2022		2021		2022		2021		Fixed Maturity Securities AFS	2023		2022
		(In millions)									(In millions)
Proceeds	Proceeds	$	12,499	$	4,757	$	19,988	$	11,844	Proceeds	$	8,422	$	7,489
Gross investment gains	Gross investment gains	$	45	$	34	$	70	$	108	Gross investment gains	$	239	$	25
Gross investment (losses)	Gross investment (losses)	(432)		(34)		(623)		(116)		Gross investment (losses)	(160)		(191)
Realized gains (losses) on sales and disposals	Realized gains (losses) on sales and disposals	(387)		—		(553)		(8)		Realized gains (losses) on sales and disposals	79		(166)
Net credit loss (provision) release (change in ACL recognized in earnings)	Net credit loss (provision) release (change in ACL recognized in earnings)	31		7		(72)		(8)		Net credit loss (provision) release (change in ACL recognized in earnings)	(21)		(103)
Impairment (loss)		—		(13)		(33)		(13)
Net credit loss (provision) release and impairment (loss)		31		(6)		(105)		(21)
Impairment (losses)										Impairment (losses)	(6)		(33)
Net credit loss (provision) release and impairment (losses)										Net credit loss (provision) release and impairment (losses)	(27)		(136)
Net investment gains (losses)	Net investment gains (losses)	$	(356)	$	(6)	$	(658)	$	(29)	Net investment gains (losses)	$	52	$	(302)

Equity Securities	Equity Securities									Equity Securities
Realized gains (losses) on sales and disposals	Realized gains (losses) on sales and disposals	$	3	$	(5)	$	(4)	$	(33)	Realized gains (losses) on sales and disposals	$	(2)	$	(7)
Unrealized net gains (losses) recognized in earnings	Unrealized net gains (losses) recognized in earnings	(2)		31		8		78		Unrealized net gains (losses) recognized in earnings	(3)		10
Net investment gains (losses)	Net investment gains (losses)	$	1	$	26	$	4	$	45	Net investment gains (losses)	$	(5)	$	3

Related Party Investment Transactions

The Company transfers invested assets primarily consisting of fixed maturity securities AFS, mortgage loans and real estate and real estate joint ventures to and from affiliates. Invested assets transferred were as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(In millions)									(In millions)
Estimated fair value of invested assets transferred to affiliates	Estimated fair value of invested assets transferred to affiliates	$	—	$	53	$	189	$	303	Estimated fair value of invested assets transferred to affiliates	$	—	$	189
Amortized cost of invested assets transferred to affiliates	Amortized cost of invested assets transferred to affiliates	$	—	$	51	$	191	$	300	Amortized cost of invested assets transferred to affiliates	$	—	$	191
Net investment gains (losses) recognized on transfers	Net investment gains (losses) recognized on transfers	$	—	$	2	$	(2)	$	3	Net investment gains (losses) recognized on transfers	$	—	$	(2)
Estimated fair value of invested assets transferred from affiliates	Estimated fair value of invested assets transferred from affiliates	$	9	$	165	$	266	$	644	Estimated fair value of invested assets transferred from affiliates	$	515	$	257

Recurring related party investments and related net investment income were as follows at and for the periods ended:


			June 30, 2022			December 31, 2021			Three Months Ended June 30,						Six Months Ended June 30,									March 31, 2023			December 31, 2022		Three Months Ended March 31,
								2022			2021			2022			2021									2023			2022
Investment Type/ Balance Sheet Category	Investment Type/ Balance Sheet Category	Related Party			Carrying Value						Net Investment Income										Investment Type/ Balance Sheet Category		Related Party				Carrying Value				Net Investment Income
			(In millions)																					(In millions)
Affiliated investments (1)	Affiliated investments (1)	MetLife, Inc.	$	1,207		$	1,399		$	4		$	8		$	10		$	16	Affiliated investments (1)		MetLife, Inc.		$	1,197		$	1,207	$	5	$	6
Affiliated investments (2)	Affiliated investments (2)	American Life Insurance Company	100			100			1			—			1			1		Affiliated investments (2)		American Life Insurance Company		100			100		—		—
Other invested assets	Other invested assets		$	1,307		$	1,499		$	5		$	8		$	11		$	17	Other invested assets				$	1,297		$	1,307	$	5	$	6

________________

(1)Represents an investment in affiliated senior unsecured notes which have maturity dates from July 2023 to December 2031 and bear interest, payable semi-annually, at rates per annum ranging from 1.60% to 1.85%. See Note 7 of the Notes to the Consolidated Financial Statements included in the ~~2021~~2022 Annual Report for further information.

(2)Represents an affiliated surplus note which matures in June 2025 and bears interest, payable semi-annually, at a rate per annum of 1.88%.

The Company incurred investment advisory charges from an affiliate of $68 million ~~and $136 million~~ for each of the three months ended March 31, 2023 and ~~six months ended June 30, 2022 and $73 million and $144 million for the three months and six months ended 2021, respectively.~~2022.

See “— Variable Interest Entities” for information on investments in affiliated real estate joint ventures and affiliated ~~investment funds.~~mortgage loan joint ventures.

See “— Related Party Reinsurance Transactions” in Note 1217 for information about affiliated funds withheld.

6.10. Derivatives

Accounting for Derivatives

See Note 1 of the Notes to the Consolidated Financial Statements included in the ~~2021~~2022 Annual Report for a description of the Company’s accounting policies for derivatives and Note 711 for information about the fair value hierarchy for derivatives.

Derivative Strategies

Types of Derivative Instruments and Derivative Strategies

The Company is exposed to various risks relating to its ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. The Company uses a variety of strategies to manage these risks, including the use of derivatives. Commonly used derivative instruments include, but are not limited to:

•Interest rate derivatives: swaps, total return swaps, caps, floors, futures, swaptions, forwards and synthetic ~~guaranteed interest contracts (“GICs”);~~GICs;

•Foreign currency exchange rate derivatives: swaps and forwards;

•Credit derivatives: purchased or written single name or index credit default swaps, and forwards; and

•Equity derivatives: index options, variance swaps, exchange-traded futures and total return swaps.

For detailed information on these contracts and the related strategies, see Note 8 of the Notes to the Consolidated Financial Statements included in the ~~2021~~2022 Annual Report.

3871

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

6.10. Derivatives (continued)

Primary Risks Managed by Derivatives

The following table presents the primary underlying risk exposure, gross notional amount, and estimated fair value of the Company’s derivatives, excluding embedded derivatives, held at:


			June 30, 2022						December 31, 2021								March 31, 2023						December 31, 2022
		Primary Underlying Risk Exposure	Gross Notional Amount		Estimated Fair Value				Gross Notional Amount		Estimated Fair Value					Primary Underlying Risk Exposure	Gross Notional Amount		Estimated Fair Value				Gross Notional Amount		Estimated Fair Value
					Assets		Liabilities				Assets		Liabilities						Assets		Liabilities				Assets		Liabilities
			(In millions)														(In millions)
Derivatives Designated as Hedging Instruments:	Derivatives Designated as Hedging Instruments:														Derivatives Designated as Hedging Instruments:
Fair value hedges:	Fair value hedges:														Fair value hedges:
Interest rate swaps	Interest rate swaps	Interest rate	$	4,224	$	1,683	$	297	$	3,540	$	2,163	$	6	Interest rate swaps	Interest rate	$	4,036	$	1,394	$	384	$	4,036	$	1,353	$	443
Foreign currency swaps	Foreign currency swaps	Foreign currency exchange rate	698		74		—		764		8		22		Foreign currency swaps	Foreign currency exchange rate	565		59		—		565		74		—

Subtotal	Subtotal		4,922		1,757		297		4,304		2,171		28		Subtotal		4,601		1,453		384		4,601		1,427		443
Cash flow hedges:	Cash flow hedges:														Cash flow hedges:
Interest rate swaps	Interest rate swaps	Interest rate	3,740		14		—		4,079		4		1		Interest rate swaps	Interest rate	3,739		42		189		3,739		7		239
Interest rate forwards	Interest rate forwards	Interest rate	2,809		—		331		3,058		69		1		Interest rate forwards	Interest rate	1,932		—		284		2,227		—		404
Foreign currency swaps	Foreign currency swaps	Foreign currency exchange rate	29,341		2,404		1,455		28,772		1,317		966		Foreign currency swaps	Foreign currency exchange rate	29,402		2,404		1,040		29,290		2,453		1,364

Subtotal	Subtotal		35,890		2,418		1,786		35,909		1,390		968		Subtotal		35,073		2,446		1,513		35,256		2,460		2,007
Total qualifying hedges	Total qualifying hedges		40,812		4,175		2,083		40,213		3,561		996		Total qualifying hedges		39,674		3,899		1,897		39,857		3,887		2,450
Derivatives Not Designated or Not Qualifying as Hedging Instruments:	Derivatives Not Designated or Not Qualifying as Hedging Instruments:														Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate swaps	Interest rate swaps	Interest rate	18,981		1,933		521		21,565		3,206		59		Interest rate swaps	Interest rate	14,602		1,640		607		15,358		1,579		704
Interest rate floors	Interest rate floors	Interest rate	7,951		29		—		7,701		145		—		Interest rate floors	Interest rate	21,495		128		—		23,371		114		—
Interest rate caps	Interest rate caps	Interest rate	64,659		701		—		64,309		117		—		Interest rate caps	Interest rate	41,290		698		—		46,666		903		—
Interest rate futures	Interest rate futures	Interest rate	100		1		—		515		—		—		Interest rate futures	Interest rate	265		1		—		414		—		1
Interest rate options	Interest rate options	Interest rate	17,212		513		—		9,703		364		—		Interest rate options	Interest rate	39,806		393		—		39,712		434		36
Interest rate forwards		Interest rate	265		—		79		265		—		20
Interest rate total return swaps		Interest rate	1,048		—		109		1,048		9		4

Synthetic GICs	Synthetic GICs	Interest rate	11,863		—		—		11,307		—		—		Synthetic GICs	Interest rate	10,525		—		—		13,044		—		—
Foreign currency swaps	Foreign currency swaps	Foreign currency exchange rate	5,156		692		—		4,800		340		75		Foreign currency swaps	Foreign currency exchange rate	4,612		621		12		4,739		720		5
Foreign currency forwards	Foreign currency forwards	Foreign currency exchange rate	2,014		26		9		1,902		11		13		Foreign currency forwards	Foreign currency exchange rate	1,398		15		17		1,328		16		25
Credit default swaps — purchased	Credit default swaps — purchased	Credit	902		26		1		956		12		8		Credit default swaps — purchased	Credit	804		11		1		843		16		—
Credit default swaps — written	Credit default swaps — written	Credit	9,280		30		77		6,074		111		12		Credit default swaps — written	Credit	10,335		112		18		9,074		113		26
Equity futures	Equity futures	Equity market	1,634		10		1		1,751		5		—		Equity futures	Equity market	1,110		2		16		1,063		2		—
Equity index options	Equity index options	Equity market	23,255		873		171		26,800		714		166		Equity index options	Equity market	15,756		499		177		14,143		585		179
Equity variance swaps	Equity variance swaps	Equity market	425		12		10		425		12		10		Equity variance swaps	Equity market	90		4		—		90		4		—
Equity total return swaps	Equity total return swaps	Equity market	2,183		197		—		2,148		11		46		Equity total return swaps	Equity market	1,980		26		24		1,922		23		103
Total non-designated or nonqualifying derivatives	Total non-designated or nonqualifying derivatives		166,928		5,043		978		161,269		5,057		413		Total non-designated or nonqualifying derivatives		164,068		4,150		872		171,767		4,509		1,079
Total	Total		$	207,740	$	9,218	$	3,061	$	201,482	$	8,618	$	1,409	Total		$	203,742	$	8,049	$	2,769	$	211,624	$	8,396	$	3,529

Based on gross notional amounts, a substantial portion of the Company’s derivatives was not designated or did not qualify as part of a hedging relationship at both ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022. The Company’s use of derivatives includes (i) derivatives that serve as macro hedges of the Company’s exposure to various risks and that generally do not qualify for hedge accounting due to the criteria required under the portfolio hedging rules, (ii) derivatives that economically hedge insurance liabilities that contain mortality or morbidity risk and that generally do not qualify for hedge accounting because the lack of these risks in the derivatives cannot support an expectation of a highly effective hedging relationship, (iii) derivatives that economically hedge ~~embedded derivatives~~MRBs that do not qualify for hedge accounting because the changes in estimated fair value of the ~~embedded derivatives~~MRBs are already recorded in net income, and (iv) written credit default swaps and interest rate swaps that are used to synthetically create investments and that do not qualify for hedge accounting because they do not involve a hedging relationship. For these nonqualified derivatives, changes in market factors can lead to the recognition of fair value changes on the statement of operations without an offsetting gain or loss recognized in earnings for the item being hedged.

3972

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

6.10. Derivatives (continued)

The Effects of Derivatives on the Interim Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

The following table presents the interim condensed consolidated financial statement location and amount of gain (loss) recognized on fair value, cash flow, nonqualifying hedging relationships and embedded derivatives:


		Three Months Ended June 30, 2022												Three Months Ended March 31, 2023
		Net Investment Income		Net Investment Gains (Losses)		Net Derivative Gains (Losses)		Policyholder Benefits and Claims		Interest Credited to Policyholder Account Balances		OCI				Net Investment Income		Net Investment Gains (Losses)		Net Derivative Gains (Losses)		Policyholder Benefits and Claims		Interest Credited to Policyholder Account Balances		OCI
		(In millions)												(In millions)
Gain (Loss) on Fair Value Hedges:	Gain (Loss) on Fair Value Hedges:														Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:	Interest rate derivatives:														Interest rate derivatives:
Derivatives designated as hedging instruments (1)	Derivatives designated as hedging instruments (1)	$	2	$	—	$	—	$	(396)	$	(10)	N/A			Derivatives designated as hedging instruments (1)	$	(1)	$	—	$	—	$	126	$	32	N/A
Hedged items	Hedged items	(4)		—		—		376		9		N/A			Hedged items	1		—		—		(126)		(32)		N/A
Foreign currency exchange rate derivatives:	Foreign currency exchange rate derivatives:														Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)	Derivatives designated as hedging instruments (1)	59		—		—		—		—		N/A			Derivatives designated as hedging instruments (1)	(16)		—		—		—		—		N/A
Hedged items	Hedged items	(58)		—		—		—		—		N/A			Hedged items	16		—		—		—		—		N/A
Subtotal	Subtotal	(1)		—		—		(20)		(1)		N/A			Subtotal	—		—		—		—		—		N/A
Gain (Loss) on Cash Flow Hedges:	Gain (Loss) on Cash Flow Hedges:														Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)	Interest rate derivatives: (1)														Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		$	(568)		Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		$	200
Amount of gains (losses) reclassified from AOCI into income	Amount of gains (losses) reclassified from AOCI into income	16		53		—		—		—		(69)			Amount of gains (losses) reclassified from AOCI into income	14		2		—		—		—		(16)
Foreign currency exchange rate derivatives: (1)	Foreign currency exchange rate derivatives: (1)														Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		472			Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		(41)
Amount of gains (losses) reclassified from AOCI into income	Amount of gains (losses) reclassified from AOCI into income	—		(555)		—		—		—		555			Amount of gains (losses) reclassified from AOCI into income	1		129		—		—		—		(130)
Foreign currency transaction gains (losses) on hedged items	Foreign currency transaction gains (losses) on hedged items	—		547		—		—		—		—			Foreign currency transaction gains (losses) on hedged items	—		(124)		—		—		—		—
Subtotal	Subtotal	16		45		—		—		—		390			Subtotal	15		7		—		—		—		13

Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:	Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:														Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1)	Interest rate derivatives (1)	2		—		(872)		—		—		N/A			Interest rate derivatives (1)	—		—		(61)		—		—		N/A
Foreign currency exchange rate derivatives (1)	Foreign currency exchange rate derivatives (1)	1		—		386		—		—		N/A			Foreign currency exchange rate derivatives (1)	—		—		(95)		—		—		N/A
Credit derivatives — purchased (1)	Credit derivatives — purchased (1)	—		—		27		—		—		N/A			Credit derivatives — purchased (1)	—		—		(9)		—		—		N/A
Credit derivatives — written (1)	Credit derivatives — written (1)	—		—		(154)		—		—		N/A			Credit derivatives — written (1)	—		—		6		—		—		N/A
Equity derivatives (1)	Equity derivatives (1)	36		—		456		180		—		N/A			Equity derivatives (1)	(6)		—		(403)		—		—		N/A
Foreign currency transaction gains (losses) on hedged items	Foreign currency transaction gains (losses) on hedged items	—		—		(179)		—		—		N/A			Foreign currency transaction gains (losses) on hedged items	—		—		32		—		—		N/A
Subtotal	Subtotal	39		—		(336)		180		—		N/A			Subtotal	(6)		—		(530)		—		—		N/A
Earned income on derivatives	Earned income on derivatives	140		—		123		46		(37)		—			Earned income on derivatives	43		—		245		5		(33)		—
Embedded derivatives (2)		N/A		N/A		558		—		N/A		N/A
Synthetic GICs															Synthetic GICs	N/A		N/A		5		N/A		N/A		N/A
Embedded derivatives															Embedded derivatives	N/A		N/A		(280)		—		N/A		N/A
Total	Total	$	194	$	45	$	345	$	206	$	(38)	$	390		Total	$	52	$	7	$	(560)	$	5	$	(33)	$	13

4073

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

6.10. Derivatives (continued)

Three Months Ended June 30, 2021
Net Investment Income Net Investment Gains (Losses) Net Derivative Gains (Losses) Policyholder Benefits and Claims Interest Credited to Policyholder Account Balances OCI
(In millions)
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1) $ — $ — $ — $ 237 $ — N/A
Hedged items 1 — — (242) — N/A
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1) (2) — — — — N/A
Hedged items 2 — — — — N/A
Subtotal 1 — — (5) — N/A
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI N/A N/A N/A N/A N/A $ 508
Amount of gains (losses) reclassified from AOCI into income 14 19 — — — (33)
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI N/A N/A N/A N/A N/A 351
Amount of gains (losses) reclassified from AOCI into income 1 108 — — — (109)
Foreign currency transaction gains (losses) on hedged items — (106) — — — —
Subtotal 15 21 — — — 717
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1) — — 358 — — N/A
Foreign currency exchange rate derivatives (1) — — 24 — — N/A
Credit derivatives — purchased (1) — — (8) — — N/A
Credit derivatives — written (1) — — 22 — — N/A
Equity derivatives (1) (1) — (270) (92) — N/A
Foreign currency transaction gains (losses) on hedged items — — (9) — — N/A
Subtotal (1) — 117 (92) — N/A
Earned income on derivatives 32 — 160 51 (38) —
Embedded derivatives (2) N/A N/A (252) — N/A N/A
Total $ 47 $ 21 $ 25 $ (46) $ (38) $ 717

~~Table of Contents~~

~~Metropolitan Life Insurance Company~~

~~(A Wholly-Owned Subsidiary of MetLife, Inc.)~~

~~Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~6. Derivatives (continued)~~

Six Months Ended June 30, 2022
Net
Investment
Income Net
Investment
Gains
(Losses) Net
Derivative
Gains
(Losses) Policyholder
Benefits and
Claims Interest Credited to Policyholder Account Balances OCI
(In millions)
Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:
Derivatives designated as hedging instruments (1) $ 6 $ — $ — $ (845) $ (10) N/A
Hedged items (8) — — 808 9 N/A
Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1) 90 — — — — N/A
Hedged items (87) — — — — N/A
Subtotal 1 — — (37) (1) N/A
Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI N/A N/A N/A N/A N/A $ (1,110)
Amount of gains (losses) reclassified from AOCI into income 31 71 — — — (102)
Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI N/A N/A N/A N/A N/A 624
Amount of gains (losses) reclassified from AOCI into income 2 (632) — — — 630
Foreign currency transaction gains (losses) on hedged items — 619 — — — —
Subtotal 33 58 — — — 42
Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1) 3 — (1,603) — — N/A
Foreign currency exchange rate derivatives (1) 2 — 509 — — N/A
Credit derivatives — purchased (1) — — 58 — — N/A
Credit derivatives — written (1) — — (190) — — N/A
Equity derivatives (1) 29 — 561 258 — N/A
Foreign currency transaction gains (losses) on hedged items — — (242) — — N/A
Subtotal 34 — (907) 258 — N/A
Earned income on derivatives 225 — 259 97 (72) —
Embedded derivatives (2) N/A N/A 1,174 — N/A N/A
Total $ 293 $ 58 $ 526 $ 318 $ (73) $ 42

~~Table of Contents~~

~~Metropolitan Life Insurance Company~~

~~(A Wholly-Owned Subsidiary of MetLife, Inc.)~~

~~Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~6. Derivatives (continued)~~


		Six Months Ended June 30, 2021												Three Months Ended March 31, 2022
		Net Investment Income		Net Investment Gains (Losses)		Net Derivative Gains (Losses)		Policyholder Benefits and Claims		Interest Credited to Policyholder Account Balances		OCI				Net Investment Income		Net Investment Gains (Losses)		Net Derivative Gains (Losses)		Policyholder Benefits and Claims		Interest Credited to Policyholder Account Balances		OCI
		(In millions)												(In millions)
Gain (Loss) on Fair Value Hedges:	Gain (Loss) on Fair Value Hedges:														Gain (Loss) on Fair Value Hedges:
Interest rate derivatives:	Interest rate derivatives:														Interest rate derivatives:
Derivatives designated as hedging instruments (1)	Derivatives designated as hedging instruments (1)	$	3	$	—	$	—	$	(365)	$	—	N/A			Derivatives designated as hedging instruments (1)	$	4	$	—	$	—	$	(373)	$	(76)	N/A
Hedged items	Hedged items	(2)		—		—		331		—		N/A			Hedged items	(4)		—		—		357		75		N/A
Foreign currency exchange rate derivatives:	Foreign currency exchange rate derivatives:														Foreign currency exchange rate derivatives:
Derivatives designated as hedging instruments (1)	Derivatives designated as hedging instruments (1)	11		—		—		—		—		N/A			Derivatives designated as hedging instruments (1)	31		—		—		—		—		N/A
Hedged items	Hedged items	(10)		—		—		—		—		N/A			Hedged items	(29)		—		—		—		—		N/A
Subtotal	Subtotal	2		—		—		(34)		—		N/A			Subtotal	2		—		—		(16)		(1)		N/A
Gain (Loss) on Cash Flow Hedges:	Gain (Loss) on Cash Flow Hedges:														Gain (Loss) on Cash Flow Hedges:
Interest rate derivatives: (1)	Interest rate derivatives: (1)														Interest rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		$	(703)		Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		$	(542)
Amount of gains (losses) reclassified from AOCI into income	Amount of gains (losses) reclassified from AOCI into income	27		48		—		—		—		(75)			Amount of gains (losses) reclassified from AOCI into income	15		18		—		—		—		(33)
Foreign currency exchange rate derivatives: (1)	Foreign currency exchange rate derivatives: (1)														Foreign currency exchange rate derivatives: (1)
Amount of gains (losses) deferred in AOCI	Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		302			Amount of gains (losses) deferred in AOCI	N/A		N/A		N/A		N/A		N/A		152
Amount of gains (losses) reclassified from AOCI into income	Amount of gains (losses) reclassified from AOCI into income	2		(8)		—		—		—		6			Amount of gains (losses) reclassified from AOCI into income	2		(77)		—		—		—		75
Foreign currency transaction gains (losses) on hedged items	Foreign currency transaction gains (losses) on hedged items	—		4		—		—		—		—			Foreign currency transaction gains (losses) on hedged items	—		72		—		—		—		—
Subtotal	Subtotal	29		44		—		—		—		(470)			Subtotal	17		13		—		—		—		(348)

Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:	Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:														Gain (Loss) on Derivatives Not Designated or Not Qualifying as Hedging Instruments:
Interest rate derivatives (1)	Interest rate derivatives (1)	2		—		(1,187)		—		—		N/A			Interest rate derivatives (1)	1		—		(731)		—		—		N/A
Foreign currency exchange rate derivatives (1)	Foreign currency exchange rate derivatives (1)	—		—		43		—		—		N/A			Foreign currency exchange rate derivatives (1)	1		—		123		—		—		N/A
Credit derivatives — purchased (1)	Credit derivatives — purchased (1)	—		—		4		—		—		N/A			Credit derivatives — purchased (1)	—		—		31		—		—		N/A
Credit derivatives — written (1)	Credit derivatives — written (1)	—		—		21		—		—		N/A			Credit derivatives — written (1)	—		—		(36)		—		—		N/A
Equity derivatives (1)	Equity derivatives (1)	(2)		—		(827)		(182)		—		N/A			Equity derivatives (1)	(7)		—		182		—		—		N/A
Foreign currency transaction gains (losses) on hedged items	Foreign currency transaction gains (losses) on hedged items	—		—		(12)		—		—		N/A			Foreign currency transaction gains (losses) on hedged items	—		—		(63)		—		—		N/A
Subtotal	Subtotal	—		—		(1,958)		(182)		—		N/A			Subtotal	(5)		—		(494)		—		—		N/A
Earned income on derivatives	Earned income on derivatives	78		—		334		102		(77)		—			Earned income on derivatives	85		—		137		41		(26)		—
Embedded derivatives (2)		N/A		N/A		634		—		N/A		N/A
Synthetic GICs															Synthetic GICs	N/A		N/A		—		N/A		N/A		N/A
Embedded derivatives															Embedded derivatives	N/A		N/A		478		—		N/A		N/A
Total	Total	$	109	$	44	$	(990)	$	(114)	$	(77)	$	(470)		Total	$	99	$	13	$	121	$	25	$	(27)	$	(348)

__________________

(1)Excludes earned income on derivatives.

~~(2)The valuation of guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net derivative gains (losses) in connection with this adjustment were $14 million~~ ~~and ($1) million for the three months and six months ended June 30, 2022, respectively, and $3 million and ($15) million for the three months and six months ended June 30, 2021, respectively.~~

Fair Value Hedges

The Company designates and accounts for the following as fair value hedges when they have met the requirements of fair value hedging: (i) interest rate swaps to convert fixed rate assets and liabilities to floating rate assets and liabilities and (ii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated assets and liabilities.

The following table presents the balance sheet classification, carrying amount and cumulative fair value hedging adjustments for items designated and qualifying as hedged items in fair value hedges:

4374

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

6.10. Derivatives (continued)


Balance Sheet Line Item	Balance Sheet Line Item	Carrying Amount of the Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets/(Liabilities) (1)				Balance Sheet Line Item	Carrying Amount of the Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets/(Liabilities) (1)
		June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
		(In millions)									(In millions)
Fixed maturity securities AFS	Fixed maturity securities AFS	$	303	$	366	$	—	$	(1)	Fixed maturity securities AFS	$	253	$	247	$	1	$	1
Mortgage loans	Mortgage loans	$	430	$	617	$	(7)	$	3	Mortgage loans	$	342	$	319	$	(16)	$	(18)
Future policy benefits	Future policy benefits	$	(4,027)	$	(4,735)	$	(56)	$	(877)	Future policy benefits	$	(2,982)	$	(2,816)	$	78	$	200
Policyholder account balances	Policyholder account balances	$	(1,082)	$	—	$	9	$	—	Policyholder account balances	$	(1,807)	$	(1,735)	$	22	$	80

__________________

(1)Includes ($~~149)~~130) million and ($~~161)~~136) million of hedging adjustments on discontinued hedging relationships at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

Cash Flow Hedges

The Company designates and accounts for the following as cash flow hedges when they have met the requirements of cash flow hedging: (i) interest rate swaps to convert floating rate assets and liabilities to fixed rate assets and liabilities, (ii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated assets and liabilities, (iii) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments, and (iv) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed-rate investments.

In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions were no longer probable of occurring. Because certain of the forecasted transactions also were not probable of occurring within two months of the anticipated date, the Company reclassified amounts from AOCI into income. These amounts were $4$1 million and $0 for ~~both~~ the three months ended March 31, 2023 and ~~six months ended June 30,~~ 2022, ~~and $6 million for both the three months and six months ended June 30, 2021.~~respectively.

At both ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions did not exceed ~~seven~~six years.

At both ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the balance in AOCI associated with cash flow hedges was ~~$2.4~~$2.0 billion.

All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

At ~~June 30, 2022,~~March 31, 2023, the Company expected to reclassify ~~$438~~$115 million of deferred net gains (losses) on derivatives in AOCI to earnings within the next 12 months.

Credit Derivatives

In connection with synthetically created credit investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk. Such credit derivatives are included within the effects of derivatives on the interim condensed consolidated statements of operations and comprehensive income (loss) table. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the Company paying the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current estimated fair value of the credit default swaps.

4475

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

6.10. Derivatives (continued)

The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at:


		June 30, 2022					December 31, 2021						March 31, 2023					December 31, 2022
Rating Agency Designation of Referenced Credit Obligations (1)	Rating Agency Designation of Referenced Credit Obligations (1)	Estimated Fair Value of Credit Default Swaps		Maximum Amount of Future Payments under Credit Default Swaps		Weighted Average Years to Maturity (2)	Estimated Fair Value of Credit Default Swaps		Maximum Amount of Future Payments under Credit Default Swaps		Weighted Average Years to Maturity (2)	Rating Agency Designation of Referenced Credit Obligations (1)	Estimated Fair Value of Credit Default Swaps		Maximum Amount of Future Payments under Credit Default Swaps		Weighted Average Years to Maturity (2)	Estimated Fair Value of Credit Default Swaps		Maximum Amount of Future Payments under Credit Default Swaps		Weighted Average Years to Maturity (2)
		(Dollars in millions)											(Dollars in millions)
Aaa/Aa/A	Aaa/Aa/A											Aaa/Aa/A
Single name credit default swaps (3)	Single name credit default swaps (3)	$	—	$	10	2.0	$	—	$	10	2.5	Single name credit default swaps (3)	$	—	$	10	1.2	$	1	$	10	1.5
Credit default swaps referencing indices	Credit default swaps referencing indices	4		2,742		3.3	17		1,191		2.5	Credit default swaps referencing indices	82		4,251		3.2	79		4,251		3.4
Subtotal	Subtotal	4		2,752		3.3	17		1,201		2.5	Subtotal	82		4,261		3.2	80		4,261		3.4
Baa	Baa											Baa
Single name credit default swaps (3)	Single name credit default swaps (3)	1		60		2.5	1		60		3.3	Single name credit default swaps (3)	1		40		2.2	—		40		2.5
Credit default swaps referencing indices	Credit default swaps referencing indices	(40)		6,368		5.6	90		4,698		5.1	Credit default swaps referencing indices	15		5,859		5.9	13		4,598		5.9
Subtotal	Subtotal	(39)		6,428		5.6	91		4,758		5.1	Subtotal	16		5,899		5.8	13		4,638		5.8
Ba	Ba											Ba
Single name credit default swaps (3)	Single name credit default swaps (3)	1		25		1.0	1		65		0.5	Single name credit default swaps (3)	1		45		0.4	1		45		0.7
Credit default swaps referencing indices	Credit default swaps referencing indices	(2)		45		4.5	(1)		20		5.0	Credit default swaps referencing indices	2		25		3.7	2		25		4.0
Subtotal	Subtotal	(1)		70		3.2	—		85		1.5	Subtotal	3		70		1.6	3		70		1.9
B												B

Caa3
Credit default swaps referencing indices												Credit default swaps referencing indices	1		75		5.2	1		75		4.5
Subtotal												Subtotal	1		75		5.2	1		75		4.5
Caa												Caa

Credit default swaps referencing indices	Credit default swaps referencing indices	(11)		30		4.0	(9)		30		4.5	Credit default swaps referencing indices	(8)		30		3.2	(10)		30		3.5
Subtotal	Subtotal	(11)		30		4.0	(9)		30		4.5	Subtotal	(8)		30		3.2	(10)		30		3.5
Total	Total	$	(47)	$	9,280	4.9	$	99	$	6,074	4.6	Total	$	94	$	10,335	4.7	$	87	$	9,074	4.6

__________________

(1)The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s Investors Service (“Moody’s”), S&P ~~Global Ratings (“S&P”)~~ and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used.

(2)The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts.

(3)Single name credit default swaps may be referenced to the credit of corporations, foreign governments, or municipals.

Credit Risk on Freestanding Derivatives

The Company may be exposed to credit-related losses in the event of nonperformance by its counterparties to derivatives. Generally, the current credit exposure of the Company’s derivatives is limited to the net positive estimated fair value of derivatives at the reporting date after taking into consideration the existence of master netting or similar agreements and any collateral received pursuant to such agreements.

Derivatives may be exchange-traded or contracted in the over-the-counter (“OTC”) market. Certain of the Company’s OTC derivatives are cleared and settled through central clearinghouses (“OTC-cleared”), while others are bilateral contracts between two counterparties (“OTC-bilateral”).

4576

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

6.10. Derivatives (continued)

The Company manages its credit risk related to derivatives by entering into transactions with creditworthy counterparties in jurisdictions in which it understands that close-out netting should be enforceable and establishing and monitoring exposure limits. The Company’s ~~OTC-bilateral~~over-the-counter bilateral (“OTC-bilateral”), contracts between two counterparties, derivative transactions are governed by International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreements which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties in the event of early termination of a transaction, which includes, but is not limited to, events of default and bankruptcy. In the event of an early termination, close-out netting permits the Company (subject to financial regulations such as the Orderly Liquidation Authority under Title II of ~~Dodd-Frank)~~the Dodd-Frank Wall Street Reform and Consumer Protection Act) to set off receivables from the counterparty against payables to the same counterparty arising out of all included transactions and to apply collateral to the obligations without application of the automatic stay, upon the counterparty’s bankruptcy. All of the Company’s ISDA Master Agreements also include Credit Support Annex provisions which require both the pledging and accepting of collateral in connection with its OTC-bilateral derivatives as required by applicable law. Additionally, ~~effective September 1, 2021,~~ the Company is required to pledge initial margin for certain new OTC-bilateral derivative transactions to third party custodians.

The Company’s ~~OTC-cleared~~over-the-counter cleared (“OTC-cleared”) derivatives are effected through central clearing counterparties and its exchange-traded derivatives are effected through regulated exchanges. Such positions are marked to market and margined on a daily basis (both initial margin and variation margin), and the Company has minimal exposure to credit-related losses in the event of nonperformance by brokers and central clearinghouses to such derivatives.

See Note 711 for a description of the impact of credit risk on the valuation of derivatives.

The estimated fair values of the Company’s net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:


		June 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement	Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement	Assets		Liabilities		Assets		Liabilities		Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement	Assets		Liabilities		Assets		Liabilities
		(In millions)									(In millions)
Gross estimated fair value of derivatives:	Gross estimated fair value of derivatives:									Gross estimated fair value of derivatives:
OTC-bilateral (1)	OTC-bilateral (1)	$	9,263	$	2,988	$	8,602	$	1,379	OTC-bilateral (1)	$	8,095	$	2,784	$	8,456	$	3,499
OTC-cleared (1)	OTC-cleared (1)	42		65		104		8		OTC-cleared (1)	74		8		57		29
Exchange-traded	Exchange-traded	11		1		5		—		Exchange-traded	3		16		2		1
Total gross estimated fair value of derivatives presented on the interim condensed consolidated balance sheets (1)	Total gross estimated fair value of derivatives presented on the interim condensed consolidated balance sheets (1)	9,316		3,054		8,711		1,387		Total gross estimated fair value of derivatives presented on the interim condensed consolidated balance sheets (1)	8,172		2,808		8,515		3,529

Gross amounts not offset on the interim condensed consolidated balance sheets:	Gross amounts not offset on the interim condensed consolidated balance sheets:									Gross amounts not offset on the interim condensed consolidated balance sheets:
Gross estimated fair value of derivatives: (2)	Gross estimated fair value of derivatives: (2)									Gross estimated fair value of derivatives: (2)
OTC-bilateral	OTC-bilateral	(2,961)		(2,961)		(1,364)		(1,364)		OTC-bilateral	(2,640)		(2,640)		(3,317)		(3,317)
OTC-cleared	OTC-cleared	(14)		(14)		(3)		(3)		OTC-cleared	6		6		(14)		(14)
Exchange-traded	Exchange-traded	(1)		(1)		—		—		Exchange-traded	(2)		(2)		—		—
Cash collateral: (3), (4)	Cash collateral: (3), (4)									Cash collateral: (3), (4)
OTC-bilateral	OTC-bilateral	(5,486)		—		(6,414)		—		OTC-bilateral	(3,576)		—		(4,044)		—
OTC-cleared	OTC-cleared	—		(36)		(91)		—		OTC-cleared	(16)		—		(18)		(1)

Securities collateral: (5)	Securities collateral: (5)									Securities collateral: (5)
OTC-bilateral	OTC-bilateral	(739)		(26)		(767)		(14)		OTC-bilateral	(1,842)		(144)		(1,078)		(182)
OTC-cleared	OTC-cleared	—		(15)		—		(5)		OTC-cleared	—		(14)		—		(14)

Exchange-traded										Exchange-traded	—		(14)		—		(1)
Net amount after application of master netting agreements and collateral	Net amount after application of master netting agreements and collateral	$	115	$	1	$	72	$	1	Net amount after application of master netting agreements and collateral	$	102	$	—	$	44	$	—

__________________

(1)At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, derivative assets included income (expense) accruals reported in accrued investment income or in other liabilities of ~~$98~~$123 million and ~~$93~~$119 million, respectively, and derivative liabilities included (income) expense accruals reported in accrued investment income or in other liabilities of ~~($7)~~$39 million and ~~($22) million,~~$0, respectively.

~~(2)Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals.~~

4677

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

6.10. Derivatives (continued)

(2)Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals.

(3)Cash collateral received by the Company for OTC-bilateral and OTC-cleared derivatives, where the centralized clearinghouse treats variation margin as collateral, is included in cash and cash equivalents, short-term investments or in fixed maturity securities AFS, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet.

(4)The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-traded and OTC-cleared derivatives and is included in premiums, reinsurance and other receivables on the balance sheet. The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements. At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the Company received excess cash collateral of ~~$459~~$204 million and ~~$60~~$210 million, respectively, and provided no excess cash ~~collateral.~~collateral of $0 and $1 million, respectively.

(5)Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at ~~June 30, 2022,~~March 31, 2023, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities AFS on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge this collateral. The amount of securities collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the Company received excess securities collateral with an estimated fair value of ~~$97~~$305 million and ~~$47~~$366 million, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the Company provided excess securities collateral with an estimated fair value of ~~$709~~$991 million and ~~$95~~$934 million, respectively, for its OTC-bilateral derivatives, ~~$548~~$502 million and ~~$584~~$442 million, respectively, for its OTC-cleared derivatives, and ~~$96~~$60 million and ~~$106~~$96 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation.

The Company’s collateral arrangements for its OTC-bilateral derivatives generally require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the collateral amount owed by that counterparty reaches a minimum transfer amount. All of the Company’s netting agreements for derivatives contain provisions that require both Metropolitan Life Insurance Company and the counterparty to maintain a specific investment grade financial strength or credit rating from each of Moody’s and S&P. If a party’s financial strength or credit rating were to fall below that specific investment grade financial strength or credit rating, that party would be in violation of these provisions, and the other party to the derivatives could terminate the transactions and demand immediate settlement and payment based on such party’s reasonable valuation of the derivatives.

The following table presents the estimated fair value of the Company’s OTC-bilateral derivatives that were in a net liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged.


		Derivatives Subject to Financial Strength-Contingent Provisions					Derivatives Subject to Financial Strength-Contingent Provisions
		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(In millions)					(In millions)
Estimated fair value of derivatives in a net liability position (1)	Estimated fair value of derivatives in a net liability position (1)	$	26	$	15	Estimated fair value of derivatives in a net liability position (1)	$	144	$	182
Estimated fair value of collateral provided:	Estimated fair value of collateral provided:					Estimated fair value of collateral provided:
Fixed maturity securities AFS	Fixed maturity securities AFS	$	35	$	17	Fixed maturity securities AFS	$	216	$	221

__________________

(1)After taking into consideration the existence of netting agreements.

4778

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

6.10. Derivatives (continued)

Embedded Derivatives

The Company issues certain products or purchases certain investments that contain embedded derivatives that are required to be separated from their host contracts and accounted for as freestanding derivatives.

The following table presents the estimated fair value and balance sheet location of the Company’s embedded derivatives that have been separated from their host contracts at:


		Balance Sheet Location	June 30, 2022		December 31, 2021			Balance Sheet Location	March 31, 2023		December 31, 2022
			(In millions)						(In millions)
Embedded derivatives within asset host contracts:	Embedded derivatives within asset host contracts:						Embedded derivatives within asset host contracts:
Assumed on affiliated reinsurance	Assumed on affiliated reinsurance	Other invested assets	$	42	$	—	Assumed on affiliated reinsurance	Other invested assets	$	42	$	149
Funds withheld on affiliated reinsurance							Funds withheld on affiliated reinsurance	Other invested assets	49		—
Total							Total		$	91	$	149
Embedded derivatives within liability host contracts:	Embedded derivatives within liability host contracts:						Embedded derivatives within liability host contracts:
Direct guaranteed minimum benefits		Policyholder account balances	$	254	$	257
Assumed guaranteed minimum benefits		Policyholder account balances	6		5

Funds withheld and guarantees on reinsurance (including affiliated)		Other liabilities	(20)		1,072

Assumed on affiliated reinsurance							Assumed on affiliated reinsurance	Other liabilities	53		—
Funds withheld on affiliated reinsurance							Funds withheld on affiliated reinsurance	Other liabilities	(280)		(450)
Fixed annuities with equity indexed returns	Fixed annuities with equity indexed returns	Policyholder account balances	143		165		Fixed annuities with equity indexed returns	Policyholder account balances	150		141
Embedded derivatives within liability host contracts			$	383	$	1,499
Total							Total		$	(77)	$	(309)

4879

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7.11. Fair Value

Considerable judgment is often required in interpreting the market data used to develop estimates of fair value, and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts.

Recurring Fair Value Measurements

The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy, including those items for which the Company has elected the FVO, are presented below at:


		June 30, 2022									March 31, 2023
		Fair Value Hierarchy									Fair Value Hierarchy
		Level 1		Level 2		Level 3		Total Estimated Fair Value			Level 1		Level 2		Level 3		Total Estimated Fair Value
		(In millions)									(In millions)
Assets	Assets									Assets
Fixed maturity securities AFS:	Fixed maturity securities AFS:									Fixed maturity securities AFS:
U.S. corporate	U.S. corporate	$	—	$	43,454	$	6,593	$	50,047	U.S. corporate	$	—	$	44,957	$	8,539	$	53,496
Foreign corporate										Foreign corporate	—		17,893		7,178		25,071
U.S. government and agency	U.S. government and agency	8,879		13,460		—		22,339		U.S. government and agency	9,397		13,416		—		22,813
Foreign corporate		—		18,155		6,411		24,566
RMBS	RMBS	100		17,705		2,342		20,147		RMBS	4		18,656		1,487		20,147
ABS & CLO	ABS & CLO	—		10,358		1,452		11,810		ABS & CLO	—		10,309		1,712		12,021
Municipals	Municipals	—		7,300		—		7,300		Municipals	—		7,779		—		7,779
CMBS	CMBS	—		5,798		296		6,094		CMBS	—		5,805		302		6,107
Foreign government	Foreign government	—		3,783		21		3,804		Foreign government	—		3,511		15		3,526
Total fixed maturity securities AFS	Total fixed maturity securities AFS	8,979		120,013		17,115		146,107		Total fixed maturity securities AFS	9,401		122,326		19,233		150,960

Short-term investments	Short-term investments	1,355		95		100		1,550		Short-term investments	1,872		117		57		2,046
Residential mortgage loans — FVO		—		—		109		109

Other investments	Other investments	292		285		961		1,538		Other investments	258		199		1,052		1,509
Derivative assets: (1)	Derivative assets: (1)									Derivative assets: (1)
Interest rate	Interest rate	1		4,561		312		4,874		Interest rate	1		4,295		—		4,296
Foreign currency exchange rate	Foreign currency exchange rate	—		3,196		—		3,196		Foreign currency exchange rate	—		3,099		—		3,099
Credit	Credit	—		30		26		56		Credit	—		116		7		123
Equity market	Equity market	10		1,075		7		1,092		Equity market	2		522		7		531
Total derivative assets	Total derivative assets	11		8,862		345		9,218		Total derivative assets	3		8,032		14		8,049
Embedded derivatives within asset host contracts (4)	Embedded derivatives within asset host contracts (4)	—		—		42		42		Embedded derivatives within asset host contracts (4)	—		—		91		91
Market risk benefits										Market risk benefits	—		—		124		124

Separate account assets (2)	Separate account assets (2)	18,321		73,846		1,039		93,206		Separate account assets (2)	15,248		72,108		1,001		88,357
Total assets (3)	Total assets (3)	$	28,958	$	203,101	$	19,711	$	251,770	Total assets (3)	$	26,782	$	202,782	$	21,572	$	251,136
Liabilities	Liabilities									Liabilities
Derivative liabilities: (1)	Derivative liabilities: (1)									Derivative liabilities: (1)
Interest rate	Interest rate	$	—	$	927	$	410	$	1,337	Interest rate	$	—	$	1,180	$	284	$	1,464
Foreign currency exchange rate	Foreign currency exchange rate	—		1,464		—		1,464		Foreign currency exchange rate	—		1,069		—		1,069
Credit	Credit	—		40		38		78		Credit	—		18		1		19
Equity market	Equity market	1		181		—		182		Equity market	16		201		—		217
Total derivative liabilities	Total derivative liabilities	1		2,612		448		3,061		Total derivative liabilities	16		2,468		285		2,769
Embedded derivatives within liability host contracts (4)	Embedded derivatives within liability host contracts (4)	—		—		383		383		Embedded derivatives within liability host contracts (4)	—		—		(77)		(77)

Market risk benefits										Market risk benefits	—		—		3,432		3,432
Separate account liabilities (2)	Separate account liabilities (2)	14		21		10		45		Separate account liabilities (2)	12		2		1		15
Total liabilities	Total liabilities	$	15	$	2,633	$	841	$	3,489	Total liabilities	$	28	$	2,470	$	3,641	$	6,139

4980

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7.11. Fair Value (continued)


		December 31, 2021									December 31, 2022
		Fair Value Hierarchy									Fair Value Hierarchy
		Level 1		Level 2		Level 3		Total Estimated Fair Value			Level 1		Level 2		Level 3		Total Estimated Fair Value
		(In millions)									(In millions)
Assets	Assets									Assets
Fixed maturity securities AFS:	Fixed maturity securities AFS:									Fixed maturity securities AFS:
U.S. corporate	U.S. corporate	$	—	$	51,290	$	7,112	$	58,402	U.S. corporate	$	—	$	43,147	$	7,943	$	51,090
Foreign corporate										Foreign corporate	—		17,203		6,790		23,993
U.S. government and agency	U.S. government and agency	15,041		16,181		—		31,222		U.S. government and agency	9,126		13,232		—		22,358
Foreign corporate		—		21,862		7,823		29,685
RMBS	RMBS	7		20,333		2,805		23,145		RMBS	4		17,804		1,525		19,333
ABS & CLO	ABS & CLO	—		11,455		1,424		12,879		ABS & CLO	—		10,329		1,507		11,836
Municipals	Municipals	—		8,728		—		8,728		Municipals	—		7,464		—		7,464
CMBS	CMBS	—		6,507		371		6,878		CMBS	—		5,702		341		6,043
Foreign government	Foreign government	—		4,934		12		4,946		Foreign government	—		3,444		15		3,459
Total fixed maturity securities AFS	Total fixed maturity securities AFS	15,048		141,290		19,547		175,885		Total fixed maturity securities AFS	9,130		118,325		18,121		145,576

Short-term investments	Short-term investments	4,187		677		2		4,866		Short-term investments	2,677		35		47		2,759
Residential mortgage loans — FVO		—		—		127		127

Other investments	Other investments	328		192		894		1,414		Other investments	246		212		1,022		1,480
Derivative assets: (1)	Derivative assets: (1)									Derivative assets: (1)
Interest rate	Interest rate	—		5,982		95		6,077		Interest rate	—		4,390		—		4,390
Foreign currency exchange rate	Foreign currency exchange rate	—		1,676		—		1,676		Foreign currency exchange rate	—		3,263		—		3,263
Credit	Credit	—		106		17		123		Credit	—		47		82		129
Equity market	Equity market	5		730		7		742		Equity market	2		605		7		614
Total derivative assets	Total derivative assets	5		8,494		119		8,618		Total derivative assets	2		8,305		89		8,396
Embedded derivatives within asset host contracts (4)	Embedded derivatives within asset host contracts (4)	—		—		—		—		Embedded derivatives within asset host contracts (4)	—		—		149		149
Market risk benefits										Market risk benefits	—		—		174		174

Separate account assets (2)	Separate account assets (2)	28,231		93,656		1,964		123,851		Separate account assets (2)	16,206		72,022		1,013		89,241
Total assets (3)	Total assets (3)	$	47,799	$	244,309	$	22,653	$	314,761	Total assets (3)	$	28,261	$	198,899	$	20,615	$	247,775
Liabilities	Liabilities									Liabilities
Derivative liabilities: (1)	Derivative liabilities: (1)									Derivative liabilities: (1)
Interest rate	Interest rate	$	—	$	70	$	21	$	91	Interest rate	$	1	$	1,421	$	405	$	1,827
Foreign currency exchange rate	Foreign currency exchange rate	—		1,076		—		1,076		Foreign currency exchange rate	—		1,394		—		1,394
Credit	Credit	—		8		12		20		Credit	—		11		15		26
Equity market	Equity market	—		222		—		222		Equity market	—		282		—		282
Total derivative liabilities	Total derivative liabilities	—		1,376		33		1,409		Total derivative liabilities	1		3,108		420		3,529
Embedded derivatives within liability host contracts (4)	Embedded derivatives within liability host contracts (4)	—		—		1,499		1,499		Embedded derivatives within liability host contracts (4)	—		—		(309)		(309)

Market risk benefits										Market risk benefits	—		—		3,270		3,270
Separate account liabilities (2)	Separate account liabilities (2)	7		12		6		25		Separate account liabilities (2)	8		15		18		41
Total liabilities	Total liabilities	$	7	$	1,388	$	1,538	$	2,933	Total liabilities	$	9	$	3,123	$	3,399	$	6,531

__________________

(1)Derivative assets are presented within other invested assets on the interim condensed consolidated balance sheets and derivative liabilities are presented within other liabilities on the interim condensed consolidated balance sheets. The amounts are presented gross in the tables above to reflect the presentation on the interim condensed consolidated balance sheets, but are presented net for purposes of the rollforward in the Fair Value Measurements Using Significant Unobservable Inputs (Level 3) tables.

(2)Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities. Separate account liabilities are set equal to the estimated fair value of separate account assets. Separate account liabilities presented in the tables above represent derivative liabilities.

5081

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7.11. Fair Value (continued)

(3)Total assets included in the fair value hierarchy exclude other limited partnership interests that are measured at estimated fair value using the net asset value (“NAV”) per share (or its equivalent) practical expedient. At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the estimated fair value of such investments was ~~$91~~$59 million and ~~$95~~$61 million, respectively.

(4)Embedded derivatives within asset host contracts are presented within other invested assets on the interim condensed consolidated balance sheets. Embedded derivatives within liability host contracts are presented within ~~policyholder account balances~~PABs and other liabilities on the interim condensed consolidated balance sheets.

The following describes the valuation methodologies used to measure assets and liabilities at fair value.

Investments

Securities, Short-term Investments and Other Investments

When available, the estimated fair value of these financial instruments is based on quoted prices in active markets that are readily and regularly obtainable. Generally, these are the most liquid of the Company’s securities holdings and valuation of these securities does not involve management’s judgment.

When quoted prices in active markets are not available, the determination of estimated fair value of securities is based on market standard valuation methodologies, giving priority to observable inputs. The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price transparency are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. When observable inputs are not available, the market standard valuation methodologies rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs can be based, in large part, on management’s judgment or estimation and cannot be supported by reference to market activity. Unobservable inputs are based on management’s assumptions about the inputs market participants would use in pricing such investments.

The estimated fair value of short-term investments and other investments is determined on a basis consistent with the methodologies described herein.

The valuation approaches and key inputs for each category of assets or liabilities that are classified within Level 2 and Level 3 of the fair value hierarchy are presented below. The primary valuation approaches are the market approach, which considers recent prices from market transactions involving identical or similar assets or liabilities, and the income approach, which converts expected future amounts (e.g., cash flows) to a single current, discounted amount. The valuation of most instruments listed below is determined using independent pricing sources, matrix pricing, discounted cash flow methodologies or other similar techniques that use either observable market inputs or unobservable inputs.

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Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7.11. Fair Value (continued)

Instrument

Level 2

Observable Inputs

Level 3

Unobservable Inputs

Fixed maturity securities AFS

U.S. corporate and Foreign corporate securities

Valuation Approaches: Principally the market and income approaches.

Valuation Approaches: Principally the market approach.

Key Inputs:

•

quoted prices in markets that are not active

•

illiquidity premium

•

benchmark yields; spreads off benchmark yields; new issuances; issuer ratings

•

delta spread adjustments to reflect specific credit-related issues

•

trades of identical or comparable securities; duration

•

credit spreads

•

privately-placed securities are valued using the additional key inputs:

•

quoted prices in markets that are not active for identical or similar

securities that are less liquid and based on lower levels of trading

activity than securities classified in Level 2

•

market yield curve; call provisions

•

observable prices and spreads for similar public or private securities that

incorporate the credit quality and industry sector of the issuer

•

independent non-binding broker quotations

•

delta spread adjustments to reflect specific credit-related issues

U.S. government and agency securities, Municipals and Foreign government securities

Valuation Approaches: Principally the market approach.

Key Inputs:

•

quoted prices in markets that are not active

•

independent non-binding broker quotations

•

benchmark U.S. Treasury yield or other yields

•

quoted prices in markets that are not active for identical or similar

securities that are less liquid and based on lower levels of trading

activity than securities classified in Level 2

•

the spread off the U.S. Treasury yield curve for the identical security

•

issuer ratings and issuer spreads; broker-dealer quotations

•

credit spreads

•

comparable securities that are actively traded

Structured Products

Valuation Approaches: Principally the market and income approaches.

Key Inputs:

•

quoted prices in markets that are not active

•

credit spreads

•

spreads for actively traded securities; spreads off benchmark yields

•

quoted prices in markets that are not active for identical or similar

securities that are less liquid and based on lower levels of trading

activity than securities classified in Level 2

•

expected prepayment speeds and volumes

•

current and forecasted loss severity; ratings; geographic region

•

independent non-binding broker quotations

•

weighted average coupon and weighted average maturity

•

credit ratings

•

average delinquency rates; DSCR

•

credit ratings

•

issuance-specific information, including, but not limited to:

•

collateral type; structure of the security; vintage of the loans

•

payment terms of the underlying assets

•

payment priority within the tranche; deal performance

5283

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7.11. Fair Value (continued)

Instrument

Level 2

Observable Inputs

Level 3

Unobservable Inputs

Short-term investments and Other investments

•

Certain short-term investments and certain other investments are of a similar nature and class to the fixed maturity securities AFS described above; while certain other investments are similar to equity securities. The valuation approaches and observable inputs used in their valuation are also similar to those described above. Other investments contain equity securities valued using quoted prices in markets that are not considered active.

•

Certain short-term investments and certain other investments are of a similar nature and class to the fixed maturity securities AFS described above, while certain other investments are similar to equity securities. The valuation approaches and unobservable inputs used in their valuation are also similar to those described above. Other investments contain equity securities that use key unobservable inputs such as credit ratings; issuance structures, in addition to those described above for fixed maturities AFS. Other investments also include certain real estate joint ventures and use the valuation approach and key inputs as described for other limited partnership interests below.

~~Residential mortgage loans — FVO~~

•

~~N/A~~

~~Valuation Approaches: Principally the market approach.~~

Valuation Techniques and Key Inputs: These investments are based primarily on matrix pricing or other similar techniques that utilize inputs from mortgage servicers that are unobservable or cannot be derived principally from, or corroborated by, observable market data.

Separate account assets and Separate account liabilities (1)

Mutual funds and hedge funds without readily determinable fair values as prices are not published publicly

Key Input:

•

N/A

•

quoted prices or reported NAV provided by the fund managers

Other limited partnership interests

•

N/A

Valued giving consideration to the underlying holdings
of the partnerships and adjusting, if appropriate.

Key Inputs:

•

liquidity; bid/ask spreads; performance record of the fund manager

•

other relevant variables that may impact the exit value of the particular

partnership interest

__________________

(1)Estimated fair value equals carrying value, based on the value of the underlying assets, including: mutual fund interests, fixed maturity securities, equity securities, derivatives, hedge funds, other limited partnership interests, short-term investments and cash and cash equivalents. The estimated fair value of fixed maturity securities, equity securities, derivatives, short-term investments and cash and cash equivalents is determined on a basis consistent with the assets described under “— Securities, Short-term Investments and Other Investments” and “— Derivatives — Freestanding Derivatives.”

Derivatives

The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives, or through the use of pricing models for OTC-bilateral and OTC-cleared derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that management believes are consistent with what other market participants would use when pricing such instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk, nonperformance risk, volatility, liquidity and changes in estimates and assumptions used in the pricing models.

The significant inputs to the pricing models for most OTC-bilateral and OTC-cleared derivatives are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. ~~Certain~~With respect to certain OTC-bilateral and OTC-cleared derivatives, management may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs may involve significant management judgment or estimation. Unobservable inputs are based on management’s assumptions about the inputs market participants would use in pricing such derivatives.

5384

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7.11. Fair Value (continued)

Most inputs for OTC-bilateral and OTC-cleared derivatives are mid-market inputs but, in certain cases, liquidity adjustments are made when they are deemed more representative of exit value. Market liquidity, as well as the use of different methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company’s derivatives and could materially affect net income.

The credit risk of both the counterparty and the Company ~~are~~is considered in determining the estimated fair value for all OTC-bilateral and OTC-cleared derivatives, and any potential credit adjustment is based on the net exposure by counterparty after taking into account the effects of netting agreements and collateral arrangements. The Company values its OTC-bilateral and OTC-cleared derivatives using standard swap curves which may include a spread to the risk-free rate, depending upon specific collateral arrangements. This credit spread is appropriate for those parties that execute trades at pricing levels consistent with similar collateral arrangements. As the Company and its significant derivative counterparties generally execute trades at such pricing levels and hold sufficient collateral, additional credit risk adjustments are not currently required in the valuation process. The Company’s ability to consistently execute at such pricing levels is, in part, due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. An evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period.

Freestanding Derivatives

Level 2 Valuation Approaches and Key Inputs:

This level includes all types of derivatives utilized by the Company with the exception of exchange-traded derivatives included within Level 1 and those derivatives with unobservable inputs as described in Level 3.

Level 3 Valuation Approaches and Key Inputs:

These valuation methodologies generally use the same inputs as described in the corresponding sections for Level 2 measurements of derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data.

Freestanding derivatives are principally valued using the income approach. Valuations of non-option-based derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models. Key inputs are as follows:

Instrument

Interest Rate

Foreign Currency
Exchange Rate

Credit

Equity Market

Inputs common to Level 2 and Level 3 by instrument type

•

swap yield curves

•

swap yield curves

•

swap yield curves

•

swap yield curves

•

basis curves

•

basis curves

•

credit curves

•

spot equity index levels

•

interest rate volatility (1)

•

currency spot rates

•

recovery rates

•

dividend yield curves

•

cross currency basis curves

•

equity volatility (1)

Level 3

•

swap yield curves (2)

•

swap yield curves (2)

•

swap yield curves (2)

•

dividend yield curves (2)

•

basis curves (2)

•

basis curves (2)

•

credit curves (2)

•

equity volatility (1), (2)

•

repurchase rates

•

cross currency basis curves (2)

•

credit spreads

•

correlation between model inputs (1)

•

interest rate volatility (1), (2)

•

currency correlation

•

repurchase rates

•

independent non-binding

broker quotations

__________________

(1)Option-based only.

(2)Extrapolation beyond the observable limits of the curve(s).

5485

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7.11. Fair Value (continued)

Embedded Derivatives

Embedded derivatives principally include ~~certain direct and assumed variable~~equity-indexed annuity ~~guarantees, annuity~~ contracts ~~guarantees on reinsurance,~~ and investment risk within funds withheld related to certain reinsurance agreements. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value reported in net income.

The Company issues certain variable annuity products with guaranteed minimum benefits. GMWBs, GMABs and certain GMIBs contain embedded derivatives, which are measured at estimated fair value separately from the host variable annuity contract, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives are classified within policyholder account balances on the interim condensed consolidated balance sheets.

The Company calculates the fair value of these embedded derivatives, which is estimated as the present value of projected future benefits minus the present value of projected future fees using actuarial and capital market assumptions including expectations concerning policyholder behavior. The calculation is based on in-force business, projecting future cash flows from the embedded derivative over multiple risk neutral stochastic scenarios using observable risk-free rates.

The valuation of these guarantee liabilities includes nonperformance risk adjustments and adjustments for a risk margin related to non-capital market inputs. The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.’s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries as compared to MetLife, Inc.

Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees. These guarantees may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; changes in nonperformance risk; and variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs, may result in significant fluctuations in the estimated fair value of the guarantees that could materially affect net income.

~~The~~ estimated fair value of the embedded derivatives within funds withheld related to certain ceded reinsurance and experience refund related to certain assumed reinsurance is determined based on the change in estimated fair value of the underlying assets held by the Company in a reference portfolio backing the ~~funds withheld~~reinsurance liability. The estimated fair value of the underlying assets is determined as described in “— Investments — Securities, Short-term Investments and Other Investments.” The estimated fair value of guarantees related to reinsurance is determined based on multiple stochastic scenarios and includes a nonperformance risk adjustment. The estimated fair value of these embedded derivatives is included, along with their underlying host contracts, in other liabilities and other invested assets on the interim condensed consolidated balance sheets with changes in estimated fair value recorded in net derivative gains (losses). Changes in the credit spreads on the underlying assets, interest rates and market volatility may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially affect net income.

The Company issues certain annuity contracts which allow the policyholder to participate in returns from equity indices. These equity indexed features are embedded derivatives which are measured at estimated fair value separately from the host fixed annuity contract, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives are classified within policyholder account balances on the interim condensed consolidated balance sheets.

~~Table of Contents~~

~~Metropolitan Life Insurance Company~~

~~(A Wholly-Owned Subsidiary of MetLife, Inc.)~~

~~Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~7. Fair Value (continued)~~

The estimated fair value of the embedded equity indexed derivatives, based on the present value of future equity returns to the policyholder using actuarial and present value assumptions including expectations concerning policyholder behavior, is calculated by the Company’s actuarial department. The calculation is based on in-force business and uses standard capital market techniques, such as Black-Scholes, to calculate the value of the portion of the embedded derivative for which the terms are set. The portion of the embedded derivative covering the period beyond where terms are set is calculated as the present value of amounts expected to be spent to provide equity indexed returns in those periods. The valuation of these embedded derivatives also includes the establishment of a risk margin, as well as changes in nonperformance risk.

~~Embedded Derivatives Within Asset~~Market Risk Benefits

See Note 5 for information on the Company’s valuation approaches and ~~Liability Host Contracts~~

~~Level 3 Valuation Approaches and Key Inputs:~~

~~Direct and assumed guaranteed minimum benefits~~

~~These embedded derivatives are principally valued using the income approach. Valuations are based on option pricing techniques, which utilize significant~~key inputs that may include swap yield curves, currency exchange rates and implied volatilities. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include: the extrapolation beyond observable limits of the swap yield curves and implied volatilities, actuarial assumptions for ~~policyholder behavior and mortality and the potential variability in policyholder behavior and mortality, nonperformance risk and cost of capital for purposes of calculating the risk margin.~~

~~Embedded derivatives within funds withheld related to certain ceded reinsurance~~

These embedded derivatives are principally valued using the income approach. The valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curves and the fair value of assets within the reference portfolio. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include the fair value of certain assets within the reference portfolio which are not observable in the market and cannot be derived principally from, or corroborated by, observable market data.MRBs.

Transfers between Levels

Overall, transfers between levels occur when there are changes in the observability of inputs and market activity.

Transfers into or out of Level 3:

Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable.

5686

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7.11. Fair Value (continued)

Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)

The following table presents certain quantitative information about the significant unobservable inputs used in the fair value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at:


						June 30, 2022				December 31, 2021				Impact of Increase in Input on Estimated Fair Value (2)						March 31, 2023				December 31, 2022				Impact of Increase in Input on Estimated Fair Value (2)
		Valuation Techniques		Significant Unobservable Inputs		Range			Weighted Average (1)	Range			Weighted Average (1)			Valuation Techniques		Significant Unobservable Inputs		Range			Weighted Average (1)	Range			Weighted Average (1)
Fixed maturity securities AFS (3)	Fixed maturity securities AFS (3)														Fixed maturity securities AFS (3)
U.S. corporate and foreign corporate	U.S. corporate and foreign corporate	•	Matrix pricing	•	Offered quotes (4)	—	-	132	93	1	-	165	110	Increase	U.S. corporate and foreign corporate	•	Matrix pricing	•	Offered quotes (4)	12	-	130	92	—	-	126	89	Increase
		•	Market pricing	•	Quoted prices (4)	20	-	102	97	—	-	117	101	Increase		•	Market pricing	•	Quoted prices (4)	18	-	110	92	20	-	107	92	Increase
RMBS	RMBS	•	Market pricing	•	Quoted prices (4)	—	-	117	93	—	-	121	99	Increase (5)	RMBS	•	Market pricing	•	Quoted prices (4)	—	-	108	93	—	-	106	93	Increase (5)
ABS & CLO	ABS & CLO	•	Market pricing	•	Quoted prices (4)	78	-	102	94	91	-	110	102	Increase (5)	ABS & CLO	•	Market pricing	•	Quoted prices (4)	74	-	102	93	74	-	101	91	Increase (5)
Derivatives	Derivatives														Derivatives
Interest rate	Interest rate	•	Present value techniques	•	Swap yield (6)	299	-	317	310	151	-	200	188	Increase (7)	Interest rate	•	Present value techniques	•	Swap yield (6)	329	-	360	343	372	-	392	381	Increase (7)
				•	Volatility (8)	1%	-	1%	1%	1%	-	1%	1%	Increase (7)
Credit	Credit	•	Present value techniques	•	Credit spreads (9)	85	-	148	112	96	-	133	109	Decrease (7)	Credit	•	Present value techniques	•	Credit spreads (8)	—	-	—	—	84	-	138	101	Decrease (7)
		•	Consensus pricing	•	Offered quotes (10)											•	Consensus pricing	•	Offered quotes (9)
Embedded derivatives
Market Risk Benefits															Market Risk Benefits
Direct and assumed guaranteed minimum benefits	Direct and assumed guaranteed minimum benefits	•	Option pricing techniques	•	Mortality rates:										Direct and assumed guaranteed minimum benefits	•	Option pricing techniques	•	Mortality rates:
					Ages 0 - 40	0.01%	-	0.14%	0.08%	0.01%	-	0.12%	0.08%	Decrease (11)					Ages 0 - 40	0.01%	-	0.13%	0.05%	0.01%	-	0.08%	0.05%	(10)
					Ages 41 - 60	0.05%	-	0.65%	0.27%	0.05%	-	0.65%	0.27%	Decrease (11)					Ages 41 - 60	0.05%	-	0.67%	0.20%	0.05%	-	0.43%	0.20%	(10)
					Ages 61 - 115	0.32%	-	100%	2.07%	0.32%	-	100%	2.08%	Decrease (11)					Ages 61 - 115	0.34%	-	100%	1.44%	0.34%	-	100%	1.44%	(10)
				•	Lapse rates:													•	Lapse rates:
					Durations 1 - 10	0%	-	100%	6.24%	0.25%	-	100%	6.30%	Decrease (12)					Durations 1 - 10	0.50%	-	32.80%	8.96%	0.50%	-	37.50%	8.96%	Decrease (11)
					Durations 11 - 20	0.70%	-	100%	5.18%	0.70%	-	100%	5.22%	Decrease (12)					Durations 11 - 20	0.70%	-	18.20%	6.52%	0.70%	-	35.75%	6.52%	Decrease (11)
					Durations 21 - 116	1.60%	-	100%	5.18%	1.60%	-	100%	5.22%	Decrease (12)					Durations 21 - 116	0.75%	-	10%	2.89%	1.60%	-	35.75%	2.89%	Decrease (11)

				•	Utilization rates	0%	-	22%	0.22%	0%	-	22%	0.22%	Increase (13)				•	Utilization rates	0.20%	-	22%	0.38%	0.20%	-	22%	0.38%	Increase (12)
				•	Withdrawal rates	0%	-	10%	3.70%	0.25%	-	10%	3.72%	(14)				•	Withdrawal rates	0.25%	-	7%	4.02%	0.25%	-	10%	4.02%	(13)
				•	Long-term equity volatilities	16.44%	-	22.16%	18.60%	16.44%	-	22.16%	18.60%	Increase (15)				•	Long-term equity volatilities	16.46%	-	22.01%	18.49%	16.46%	-	22.01%	18.49%	Increase (14)
				•	Nonperformance risk spread	0.33%	-	0.78%	0.35%	0.04%	-	0.40%	0.35%	Decrease (16)				•	Nonperformance risk spread	0.45%	-	0.85%	0.75%	0.34%	-	0.74%	0.75%	Decrease (15)

__________________

(1)The weighted average for fixed maturity securities AFS and derivatives is determined based on the estimated fair value of the securities and derivatives. The weighted average for ~~embedded derivatives~~MRBs is determined based on a combination of account values and experience data.

(2)The impact of a decrease in input would have resulted in the opposite impact on estimated fair value. For ~~embedded derivatives,~~MRBs, changes to direct and assumed guaranteed minimum benefits are based on liability positions.

(3)Significant increases (decreases) in expected default rates in isolation would have resulted in substantially lower (higher) valuations.

(4)Range and weighted average are presented in accordance with the market convention for fixed maturity securities AFS of dollars per hundred dollars of par.

~~Table of Contents~~

~~Metropolitan Life Insurance Company~~

~~(A Wholly-Owned Subsidiary of MetLife, Inc.)~~

~~Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~7. Fair Value (continued)~~

(5)Changes in the assumptions used for the probability of default would have been accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumptions used for prepayment rates.

(6)Ranges represent the rates across different yield curves and are presented in basis points. The swap yield curves are utilized among different types of derivatives to project cash flows, as well as to discount future cash flows to present value. Since this valuation methodology uses a range of inputs across a yield curve to value the derivative, presenting a range is more representative of the unobservable input used in the valuation.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

11. Fair Value (continued)

(7)Changes in estimated fair value are based on long U.S. dollar net asset positions and will be inversely impacted for short U.S. dollar net asset positions.

(8)Ranges represent the underlying interest rate volatility quoted in percentage points. Since this valuation methodology uses an equivalent of LIBOR for secured overnight financing rate volatility, presenting a range is more representative of the unobservable input used in the valuation.

~~(9)~~Represents the risk quoted in basis points of a credit default event on the underlying instrument. Credit derivatives with significant unobservable inputs are primarily comprised of written credit default swaps.

~~(10)~~(9)At both ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, independent non-binding broker quotations were used in the determination of 1% or less ~~than 1%~~ of the total net derivative estimated fair value.

~~(11)~~(10)Mortality rates vary by age and by demographic characteristics such as gender. Mortality rate assumptions are based on company experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuing the ~~embedded derivative.~~MRBs. For contracts that contain only a GMDB, any increase (decrease) in mortality rates result in an increase (decrease) in the estimated fair value of MRBs. Generally, for contracts that contain both a GMDB and a living benefit (e.g., GMIB, GMWB, GMAB), any increase (decrease) in mortality rates result in a decrease (increase) in the estimated fair value of MRBs.

~~(12)~~(11)Base lapse rates are adjusted at the contract level based on a comparison of the actuarially calculated guaranteed values and the current policyholder account value, as well as other factors, such as the applicability of any surrender charges. A dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in the money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower in periods when a surrender charge applies. For any given contract, lapse rates vary throughout the period over which cash flows are projected for purposes of valuing the ~~embedded derivative.~~MRBs.

~~(13)~~(12)The utilization rate assumption estimates the percentage of contractholders with GMIBs or a lifetime withdrawal benefit who will elect to utilize the benefit upon becoming eligible. The rates may vary by the type of guarantee, the amount by which the guaranteed amount is greater than the account value, the contract’s withdrawal history and by the age of the policyholder. For any given contract, utilization rates vary throughout the period over which cash flows are projected for purposes of valuing the ~~embedded derivative.~~MRBs.

~~(14)~~(13)The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw from the contract each year. The withdrawal rate assumption varies by age and duration of the contract, and also by other factors such as benefit type. For any given contract, withdrawal rates vary throughout the period over which cash flows are projected for purposes of valuing the ~~embedded derivative.~~MRB. For GMWBs, any increase (decrease) in withdrawal rates results in an increase (decrease) in the estimated fair value of the guarantees. For GMABs and GMIBs, any increase (decrease) in withdrawal rates results in a decrease (increase) in the estimated fair value.

~~(15)~~(14)Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are available. For any given contract, long-term equity volatility rates vary throughout the period over which cash flows are projected for purposes of valuing the ~~embedded derivative.~~MRBs.

~~(16)~~(15)Nonperformance risk spread varies by duration and by currency. For any given contract, multiple nonperformance risk spreads will apply, depending on the duration of the cash flow being discounted for purposes of valuing the ~~embedded derivative.~~MRBs.

All other classes of securities classified within Level 3, including those within Other investments, Separate account assets, and Embedded derivatives within funds withheld related to certain ceded reinsurance, use the same valuation techniques and significant unobservable inputs as previously described for Level 3 securities. Generally, all other classes of assets and liabilities classified within Level 3 that are not included ~~in the preceding table~~above use the same valuation techniques and significant unobservable inputs as previously described for Level 3. The sensitivity of the estimated fair value to changes in the significant unobservable inputs for these other assets and liabilities is similar in nature to that described in the preceding table. The valuation techniques and significant unobservable inputs used in the fair value measurement for the more significant assets measured at estimated fair value on a nonrecurring basis and determined using significant unobservable inputs (Level 3) are summarized in “— Nonrecurring Fair Value Measurements.”

5888

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7.11. Fair Value (continued)

The following tables summarize the change of all assets (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3):


		Fair Value Measurements Using Significant Unobservable Inputs (Level 3)								Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
		Fixed Maturity Securities AFS									Fixed Maturity Securities AFS
		Corporate (6)		Structured Products		Foreign Government		Short-term Investments					Corporate (6)		Structured Products		Foreign Government		Short-term Investments
		(In millions)								(In millions)
Three Months Ended June 30, 2022
Three Months Ended March 31, 2023												Three Months Ended March 31, 2023
Balance, beginning of period	Balance, beginning of period	$	13,940	$	4,566	$	13	$	—			Balance, beginning of period	$	14,733	$	3,373	$	15	$	47
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	(11)		12		5		—				Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	2		(5)		—		—
Total realized/unrealized gains (losses) included in AOCI	Total realized/unrealized gains (losses) included in AOCI	(1,496)		(142)		4		—				Total realized/unrealized gains (losses) included in AOCI	376		20		(1)		1
Purchases (3)	Purchases (3)	945		321		—		—				Purchases (3)	1,355		189		2		52
Sales (3)	Sales (3)	(211)		(394)		(1)		—				Sales (3)	(463)		(100)		(1)		(43)
Issuances (3)	Issuances (3)	—		—		—		—				Issuances (3)	—		—		—		—
Settlements (3)	Settlements (3)	—		—		—		—				Settlements (3)	—		—		—		—
Transfers into Level 3 (4)	Transfers into Level 3 (4)	137		79		2		100				Transfers into Level 3 (4)	161		70		—		—
Transfers out of Level 3 (4)	Transfers out of Level 3 (4)	(300)		(352)		(2)		—				Transfers out of Level 3 (4)	(447)		(46)		—		—
Balance, end of period	Balance, end of period	$	13,004	$	4,090	$	21	$	100			Balance, end of period	$	15,717	$	3,501	$	15	$	57
Three Months Ended June 30, 2021
Three Months Ended March 31, 2022												Three Months Ended March 31, 2022
Balance, beginning of period	Balance, beginning of period	$	14,248	$	4,490	$	7	$	37			Balance, beginning of period	$	14,935	$	4,600	$	12	$	2
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	(6)		14		—		—				Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	(15)		12		—		—
Total realized/unrealized gains (losses) included in AOCI	Total realized/unrealized gains (losses) included in AOCI	220		16		—		—				Total realized/unrealized gains (losses) included in AOCI	(1,114)		(160)		(1)		—
Purchases (3)	Purchases (3)	344		588		8		24				Purchases (3)	528		473		2		—
Sales (3)	Sales (3)	(235)		(308)		(3)		(34)				Sales (3)	(382)		(187)		—		(2)
Issuances (3)	Issuances (3)	—		—		—		—				Issuances (3)	—		—		—		—
Settlements (3)	Settlements (3)	—		—		—		—				Settlements (3)	—		—		—		—
Transfers into Level 3 (4)	Transfers into Level 3 (4)	38		307		—		50				Transfers into Level 3 (4)	307		102		—		—
Transfers out of Level 3 (4)	Transfers out of Level 3 (4)	(504)		(276)		(1)		—				Transfers out of Level 3 (4)	(319)		(274)		—		—
Balance, end of period	Balance, end of period	$	14,105	$	4,831	$	11	$	77			Balance, end of period	$	13,940	$	4,566	$	13	$	—
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2022 (5)		$	(11)	$	12	$	5	$	—
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2021 (5)		$	(7)	$	14	$	—	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at June 30, 2022 (5)		$	(1,495)	$	(139)	$	4	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at June 30, 2021 (5)		$	221	$	15	$	—	$	—
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2023 (5)												Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2023 (5)	$	1	$	(1)	$	—	$	—
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2022 (5)												Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2022 (5)	$	(15)	$	12	$	—	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at March 31, 2023 (5)												Changes in unrealized gains (losses) included in AOCI for the instruments still held at March 31, 2023 (5)	$	374	$	17	$	(1)	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at March 31, 2022 (5)												Changes in unrealized gains (losses) included in AOCI for the instruments still held at March 31, 2022 (5)	$	(1,120)	$	(160)	$	(1)	$	—

5989

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7.11. Fair Value (continued)

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Residential
Mortgage
Loans - FVO
Other
Investments
Net
Derivatives (7) Net Embedded
Derivatives (8) Separate
Accounts (9)
(In millions)
Three Months Ended June 30, 2022
Balance, beginning of period $ 119 $ 1,123 $ 29 $ (884) $ 1,931
Total realized/unrealized gains (losses) included in net income (loss) (1), (2) (5) (64) (88) 558 11
Total realized/unrealized gains (losses) included in AOCI — — (207) — —
Purchases (3) — 10 145 — 35
Sales (3) — (8) — — (949)
Issuances (3) — — — — (5)
Settlements (3) (5) — 18 (15) 6
Transfers into Level 3 (4) — — — — —
Transfers out of Level 3 (4) — (100) — — —
Balance, end of period $ 109 $ 961 $ (103) $ (341) $ 1,029
Three Months Ended June 30, 2021
Balance, beginning of period $ 149 $ 673 $ (277) $ (1,216) $ 992
Total realized/unrealized gains (losses) included in net income (loss) (1), (2) (1) 42 35 (252) 9
Total realized/unrealized gains (losses) included in AOCI — — 206 — —
Purchases (3) — 27 3 — 118
Sales (3) (2) (13) — — (27)
Issuances (3) — — (5) — 1
Settlements (3) (6) — 12 (43) 3
Transfers into Level 3 (4) — — — — 9
Transfers out of Level 3 (4) — (5) 65 — —
Balance, end of period $ 140 $ 724 $ 39 $ (1,511) $ 1,105
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held
at June 30, 2022 (5)
$ (5) $ (64) $ (87) $ 559 $ —
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2021 (5) $ (2) $ 38 $ 16 $ (249) $ —
Changes in unrealized gains (losses) included in AOCI for the instruments still held at June 30, 2022 (5) $ — $ — $ (199) $ — $ —
Changes in unrealized gains (losses) included in AOCI for the instruments still held at June 30, 2021 (5) $ — $ — $ 200 $ — $ —

~~Table of Contents~~

~~Metropolitan Life Insurance Company~~

~~(A Wholly-Owned Subsidiary of MetLife, Inc.)~~

~~Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~7. Fair Value (continued)~~

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Fixed Maturity Securities AFS
Corporate (6) Structured
Products Foreign
Government Short-term
Investments
(In millions)
Six Months Ended June 30, 2022
Balance, beginning of period $ 14,935 $ 4,600 $ 12 $ 2
Total realized/unrealized gains (losses) included in net income (loss) (1), (2) (26) 23 (42) —
Total realized/unrealized gains (losses) included in
AOCI
(2,613) (305) 7 —
Purchases (3) 1,347 429 — 100
Sales (3) (575) (563) (2) (2)
Issuances (3) — — — —
Settlements (3) — — — —
Transfers into Level 3 (4) 223 148 46 —
Transfers out of Level 3 (4) (287) (242) — —
Balance, end of period $ 13,004 $ 4,090 $ 21 $ 100
Six Months Ended June 30, 2021
Balance, beginning of period $ 14,873 $ 4,465 $ 5 $ 1
Total realized/unrealized gains (losses) included in net income (loss) (1), (2) (8) 23 — —
Total realized/unrealized gains (losses) included in
AOCI
(425) (3) (1) —
Purchases (3) 648 932 8 75
Sales (3) (404) (637) (1) —
Issuances (3) — — — —
Settlements (3) — — — —
Transfers into Level 3 (4) 82 269 — 1
Transfers out of Level 3 (4) (661) (218) — —
Balance, end of period $ 14,105 $ 4,831 $ 11 $ 77
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held
at June 30, 2022 (5)
$ (26) $ 23 $ (42) $ —
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held
at June 30, 2021 (5)
$ (9) $ 21 $ — $ —
Changes in unrealized gains (losses) included in AOCI for the instruments still held
at June 30, 2022 (5)
$ (2,618) $ (300) $ 7 $ —
Changes in unrealized gains (losses) included in AOCI for the instruments still held
at June 30, 2021 (5)
$ (423) $ (2) $ (1) $ —

~~Table of Contents~~

~~Metropolitan Life Insurance Company~~

~~(A Wholly-Owned Subsidiary of MetLife, Inc.)~~

~~Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~7. Fair Value (continued)~~


		Fair Value Measurements Using Significant Unobservable Inputs (Level 3)												Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
		Residential Mortgage Loans - FVO		Other Investments		Net Derivatives (7)		Net Embedded Derivatives (8)		Separate Accounts (9)				Residential Mortgage Loans - FVO		Other Investments		Net Derivatives (7)		Net Embedded Derivatives (8)		Separate Accounts (9)
		(In millions)										(In millions)
Six Months Ended June 30, 2022
Three Months Ended March 31, 2023													Three Months Ended March 31, 2023
Balance, beginning of period	Balance, beginning of period	$	127	$	894	$	86	$	(1,499)	$	1,958		Balance, beginning of period	$	—	$	1,022	$	(331)	$	458	$	995
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	(9)		(19)		(22)		1,174		17			Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	—		28		—		(280)		(9)
Total realized/unrealized gains (losses) included in AOCI	Total realized/unrealized gains (losses) included in AOCI	—		—		(418)		—		—			Total realized/unrealized gains (losses) included in AOCI	—		—		66		—		—
Purchases (3)	Purchases (3)	—		195		233		—		104			Purchases (3)	—		2		—		—		101
Sales (3)	Sales (3)	—		(10)		—		—		(1,046)			Sales (3)	—		—		—		—		(93)
Issuances (3)	Issuances (3)	—		—		(2)		—		(5)			Issuances (3)	—		—		—		—		—
Settlements (3)	Settlements (3)	(9)		—		20		(16)		4			Settlements (3)	—		—		55		(10)		1
Transfers into Level 3 (4)	Transfers into Level 3 (4)	—		3		—		—		1			Transfers into Level 3 (4)	—		—		—		—		5
Transfers out of Level 3 (4)	Transfers out of Level 3 (4)	—		(102)		—		—		(4)			Transfers out of Level 3 (4)	—		—		(61)		—		—
Balance, end of period	Balance, end of period	$	109	$	961	$	(103)	$	(341)	$	1,029		Balance, end of period	$	—	$	1,052	$	(271)	$	168	$	1,000
Six Months Ended June 30, 2021
Three Months Ended March 31, 2022													Three Months Ended March 31, 2022
Balance, beginning of period	Balance, beginning of period	$	165	$	565	$	452	$	(2,061)	$	939		Balance, beginning of period	$	127	$	894	$	86	$	(1,236)	$	1,958
Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	(3)		76		(120)		634		(1)			Total realized/unrealized gains (losses) included in net income (loss) (1), (2)	(3)		44		67		478		5
Total realized/unrealized gains (losses) included in AOCI	Total realized/unrealized gains (losses) included in AOCI	—		—		(409)		—		—			Total realized/unrealized gains (losses) included in AOCI	—		—		(212)		—		—
Purchases (3)	Purchases (3)	—		27		3		—		187			Purchases (3)	—		188		88		—		288
Sales (3)	Sales (3)	(11)		(14)		—		—		(32)			Sales (3)	—		(1)		—		—		(316)
Issuances (3)	Issuances (3)	—		—		(6)		—		—			Issuances (3)	—		—		(2)		—		1
Settlements (3)	Settlements (3)	(11)		—		117		(84)		5			Settlements (3)	(5)		—		2		36		(2)
Transfers into Level 3 (4)	Transfers into Level 3 (4)	—		74		1		—		10			Transfers into Level 3 (4)	—		—		—		—		1
Transfers out of Level 3 (4)	Transfers out of Level 3 (4)	—		(4)		1		—		(3)			Transfers out of Level 3 (4)	—		(2)		—		—		(4)
Balance, end of period	Balance, end of period	$	140	$	724	$	39	$	(1,511)	$	1,105		Balance, end of period	$	119	$	1,123	$	29	$	(722)	$	1,931
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2022 (5)		$	(9)	$	(22)	$	(21)	$	1,176	$	—
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at June 30, 2021 (5)		$	(7)	$	72	$	(34)	$	636	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at June 30, 2022 (5)		$	—	$	—	$	(394)	$	—	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at June 30, 2021 (5)		$	—	$	—	$	(274)	$	—	$	—
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2023 (5)													Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2023 (5)	$	—	$	29	$	1	$	(280)	$	—
Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2022 (5)													Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at March 31, 2022 (5)	$	(4)	$	45	$	66	$	478	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at March 31, 2023 (5)													Changes in unrealized gains (losses) included in AOCI for the instruments still held at March 31, 2023 (5)	$	—	$	—	$	62	$	—	$	—
Changes in unrealized gains (losses) included in AOCI for the instruments still held at March 31, 2022 (5)													Changes in unrealized gains (losses) included in AOCI for the instruments still held at March 31, 2022 (5)	$	—	$	—	$	(207)	$	—	$	—

__________________

(1)Amortization of premium/accretion of discount is included within net investment income. Impairments and changes in ACL charged to net income (loss) on certain securities are included in net investment gains (losses), while changes in estimated fair value of residential mortgage loans — FVO are included in net investment income. Lapses associated with net embedded derivatives are included in net derivative gains (losses). Substantially all realized/unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses).

(2)Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward.

(3)Items purchased/issued and then sold/settled in the same period are excluded from the rollforward. Fees attributed to embedded derivatives are included in settlements.

(4)Items transferred into and then out of Level 3 in the same period are excluded from the rollforward.

6290

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7.11. Fair Value (continued)

(5)Changes in unrealized gains (losses) included in net income (loss) and included in AOCI relate to assets and liabilities still held at the end of the respective periods. Substantially all changes in unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses).

(6)Comprised of U.S. and foreign corporate securities.

(7)Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.

(8)Embedded derivative assets and liabilities are presented net for purposes of the rollforward.

(9)Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders within separate account liabilities. Therefore, such changes in estimated fair value are not recorded in net income (loss). For the purpose of this disclosure, these changes are presented within net income (loss). Separate account assets and liabilities are presented net for the purposes of the rollforward.

Nonrecurring Fair Value ~~Option~~Measurements

~~The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis.~~ The following table presents information for ~~residential~~assets measured at estimated fair value on a nonrecurring basis during the periods and still held at the reporting dates (for example, when there is evidence of impairment), using significant unobservable inputs (Level 3).


	March 31, 2023		December 31, 2022
	(in millions)
Carrying value after measurement
Mortgage loans (1)	$	266	$	222


	Three Months Ended March 31,
	2023		2022
	(in millions)
Realized gains (losses) net:
Mortgage loans (1)	$	(66)	$	8

__________________

(1)Estimated fair values for impaired mortgage loans ~~which~~ are ~~accounted for under~~based on estimated fair value of the ~~FVO and were initially measured at fair value.~~

June 30, 2022 December 31, 2021
(In millions)
Unpaid principal balance $ 115 $ 130
Difference between estimated fair value and unpaid principal balance (6) (3)
Carrying value at estimated fair value $ 109 $ 127
Loans in nonaccrual status $ 24 $ 32
Loans more than 90 days past due $ 10 $ 14
Loans in nonaccrual status or more than 90 days past due, or both — difference between aggregate estimated fair value and unpaid principal balance $ (2) $ (7)
underlying collateral.

Fair Value of Financial Instruments Carried at Other Than Fair Value

The following tables provide fair value information for financial instruments that are carried on the balance sheet at amounts other than fair value. These tables exclude the following financial instruments: cash and cash equivalents, accrued investment income, payables for collateral under securities loaned and other transactions, short-term debt and those short-term investments that are not securities, such as time deposits, and therefore are not included in the three-level hierarchy table disclosed in the “— Recurring Fair Value Measurements” section. The Company believes that due to the short-term nature of these excluded assets, which are primarily classified in Level 2, the estimated fair value approximates carrying value. All remaining balance sheet amounts excluded from the tables below are not considered financial instruments subject to this disclosure.

6391

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

7.11. Fair Value (continued)

The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows at:


		June 30, 2022											March 31, 2023
				Fair Value Hierarchy											Fair Value Hierarchy
		Carrying Value		Level 1		Level 2		Level 3		Total Estimated Fair Value			Carrying Value		Level 1		Level 2		Level 3		Total Estimated Fair Value
		(In millions)											(In millions)
Assets	Assets											Assets
Mortgage loans (1)	Mortgage loans (1)	$	61,283	$	—	$	—	$	60,076	$	60,076	Mortgage loans (1)	$	64,053	$	—	$	—	$	61,025	$	61,025
Policy loans	Policy loans	$	5,746	$	—	$	—	$	6,321	$	6,321	Policy loans	$	5,701	$	—	$	—	$	6,177	$	6,177

Other invested assets	Other invested assets	$	2,051	$	—	$	2,087	$	—	$	2,087	Other invested assets	$	1,977	$	—	$	1,997	$	—	$	1,997
Premiums, reinsurance and other receivables	Premiums, reinsurance and other receivables	$	12,074	$	—	$	284	$	12,085	$	12,369	Premiums, reinsurance and other receivables	$	12,126	$	—	$	549	$	11,837	$	12,386
Other assets	Other assets	$	184	$	—	$	184	$	—	$	184	Other assets	$	821	$	—	$	791	$	29	$	820
Liabilities	Liabilities											Liabilities
Policyholder account balances	Policyholder account balances	$	78,286	$	—	$	—	$	77,035	$	77,035	Policyholder account balances	$	87,664	$	—	$	—	$	85,569	$	85,569
Long-term debt	Long-term debt	$	1,661	$	—	$	1,762	$	—	$	1,762	Long-term debt	$	1,886	$	—	$	1,942	$	—	$	1,942
Other liabilities	Other liabilities	$	12,540	$	—	$	484	$	12,066	$	12,550	Other liabilities	$	12,278	$	—	$	545	$	11,706	$	12,251
Separate account liabilities	Separate account liabilities	$	41,092	$	—	$	41,092	$	—	$	41,092	Separate account liabilities	$	36,167	$	—	$	36,167	$	—	$	36,167


		December 31, 2021											December 31, 2022
				Fair Value Hierarchy											Fair Value Hierarchy
		Carrying Value		Level 1		Level 2		Level 3		Total Estimated Fair Value			Carrying Value		Level 1		Level 2		Level 3		Total Estimated Fair Value
		(In millions)											(In millions)
Assets	Assets											Assets
Mortgage loans (1)	Mortgage loans (1)	$	60,092	$	—	$	—	$	63,094	$	63,094	Mortgage loans (1)	$	62,570	$	—	$	—	$	58,858	$	58,858
Policy loans	Policy loans	$	5,816	$	—	$	—	$	6,710	$	6,710	Policy loans	$	5,729	$	—	$	—	$	6,143	$	6,143

Other invested assets	Other invested assets	$	2,230	$	—	$	1,932	$	356	$	2,288	Other invested assets	$	1,978	$	—	$	1,979	$	—	$	1,979
Premiums, reinsurance and other receivables	Premiums, reinsurance and other receivables	$	12,101	$	—	$	156	$	12,375	$	12,531	Premiums, reinsurance and other receivables	$	12,036	$	—	$	454	$	11,826	$	12,280
Other assets	Other assets	$	—	$	—	$	—	$	—	$	—	Other assets	$	—	$	—	$	—	$	—	$	—
Liabilities	Liabilities											Liabilities
Policyholder account balances	Policyholder account balances	$	76,387	$	—	$	—	$	79,182	$	79,182	Policyholder account balances	$	85,957	$	—	$	—	$	83,594	$	83,594
Long-term debt	Long-term debt	$	1,659	$	—	$	2,000	$	—	$	2,000	Long-term debt	$	1,676	$	—	$	1,758	$	—	$	1,758
Other liabilities	Other liabilities	$	12,357	$	—	$	159	$	12,412	$	12,571	Other liabilities	$	12,546	$	—	$	671	$	11,842	$	12,513
Separate account liabilities	Separate account liabilities	$	54,254	$	—	$	54,254	$	—	$	54,254	Separate account liabilities	$	38,391	$	—	$	38,391	$	—	$	38,391

_________________

(1)Includes mortgage loans measured at estimated fair value on a nonrecurring ~~basis and excludes mortgage loans measured at estimated fair value on a recurring~~ basis.

6492

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

8.12. Long-term Debt

Other Notes

In March 2023, Missouri Reinsurance, Inc., a wholly-owned subsidiary of the Company, borrowed funds from MetLife, Inc. under a term loan agreement, interest on which is payable semi-annually. The terms of the promissory notes are as follows:

•$80 million 5.34% fixed rate due March 2028;

•$80 million 5.68% fixed rate due March 2033; and

•$50 million 6.05% fixed rate due March 2038.

Credit Facility

See Note 18 for information on the $3.0 billion unsecured revolving credit facility (the “Credit Facility”) maintained by MetLife, Inc. and MetLife Funding, Inc., a wholly-owned subsidiary of Metropolitan Life Insurance Company (“MetLife Funding”).

13. Equity

Accumulated Other Comprehensive Income (Loss)

Information regarding changes in the balances of each component of AOCI attributable to Metropolitan Life Insurance Company was as follows:

Three Months
Ended
June 30, 2022
Unrealized Investment Gains (Losses), Net of Related Offsets (1)
Unrealized
Gains (Losses) on Derivatives
Foreign Currency Translation Adjustments
Defined Benefit
Plans Adjustment
Total
(In millions)
Balance, beginning of period $ 3,528 $ 1,597 $ (58) $ (387) $ 4,680
OCI before reclassifications (11,474) (96) (35) — (11,605)
Deferred income tax benefit (expense) 2,414 20 4 — 2,438
AOCI before reclassifications, net of income tax (5,532) 1,521 (89) (387) (4,487)
Amounts reclassified from AOCI 403 486 — 10 899
Deferred income tax benefit (expense) (85) (102) — (2) (189)
Amounts reclassified from AOCI, net of income tax 318 384 — 8 710
Balance, end of period $ (5,214) $ 1,905 $ (89) $ (379) $ (3,777)

Three Months
Ended
June 30, 2021
Unrealized Investment Gains (Losses), Net of Related Offsets (1)
Unrealized
Gains (Losses) on Derivatives
Foreign Currency Translation Adjustments
Defined
Benefit
Plans Adjustment
Total
(In millions)
Balance, beginning of period $ 8,305 $ 854 $ (29) $ (451) $ 8,679
OCI before reclassifications 759 859 (6) (2) 1,610
Deferred income tax benefit (expense) (153) (181) 2 — (332)
AOCI before reclassifications, net of income tax 8,911 1,532 (33) (453) 9,957
Amounts reclassified from AOCI 35 (142) — 10 (97)
Deferred income tax benefit (expense) (8) 29 — (2) 19
Amounts reclassified from AOCI, net of income tax 27 (113) — 8 (78)
Balance, end of period $ 8,938 $ 1,419 $ (33) $ (445) $ 9,879

6593

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

8.13. Equity (continued)


		Six Months Ended June 30, 2022											Three Months Ended March 31, 2023
		Unrealized Investment Gains (Losses), Net of Related Offsets (1)		Unrealized Gains (Losses) on Derivatives		Foreign Currency Translation Adjustments		Defined Benefit Plans Adjustment		Total			Unrealized Investment Gains (Losses), Net of Related Offsets		Unrealized Gains (Losses) on Derivatives		Future Policy Benefits Discount Rate Remeasurement Gains (Losses)		Market Risk Benefits Instrument-Specific Credit Risk Remeasurement Gains (Losses)		Foreign Currency Translation Adjustments		Defined Benefit Plans Adjustment		Total
		(In millions)											(In millions)
Balance, beginning of period	Balance, beginning of period	$	8,485	$	1,872	$	(45)	$	(395)	$	9,917	Balance, beginning of period	$	(11,161)	$	1,557	$	1,529	$	80	$	(187)	$	(138)	$	(8,320)
OCI before reclassifications	OCI before reclassifications	(17,959)		(486)		(52)		—		(18,497)		OCI before reclassifications	3,812		159		(2,068)		88		60		(1)		2,050
Deferred income tax benefit (expense)	Deferred income tax benefit (expense)	3,771		102		8		—		3,881		Deferred income tax benefit (expense)	(798)		(33)		433		(19)		(12)		—		(429)
AOCI before reclassifications, net of income tax	AOCI before reclassifications, net of income tax	(5,703)		1,488		(89)		(395)		(4,699)		AOCI before reclassifications, net of income tax	(8,147)		1,683		(106)		149		(139)		(139)		(6,699)
Amounts reclassified from AOCI	Amounts reclassified from AOCI	619		528		—		20		1,167		Amounts reclassified from AOCI	(25)		(146)		—		—		—		2		(169)
Deferred income tax benefit (expense)	Deferred income tax benefit (expense)	(130)		(111)		—		(4)		(245)		Deferred income tax benefit (expense)	5		31		—		—		—		—		36
Amounts reclassified from AOCI, net of income tax	Amounts reclassified from AOCI, net of income tax	489		417		—		16		922		Amounts reclassified from AOCI, net of income tax	(20)		(115)		—		—		—		2		(133)

Balance, end of period	Balance, end of period	$	(5,214)	$	1,905	$	(89)	$	(379)	$	(3,777)	Balance, end of period	$	(8,167)	$	1,568	$	(106)	$	149	$	(139)	$	(137)	$	(6,832)


		Six Months Ended June 30, 2021											Three Months Ended March 31, 2022
		Unrealized Investment Gains (Losses), Net of Related Offsets (1)		Unrealized Gains (Losses) on Derivatives		Foreign Currency Translation Adjustments		Defined Benefit Plans Adjustment		Total			Unrealized Investment Gains (Losses), Net of Related Offsets (1)		Unrealized Gains (Losses) on Derivatives		Future Policy Benefits Discount Rate Remeasurement Gains (Losses)		Market Risk Benefits Instrument-Specific Credit Risk Remeasurement Gains (Losses)		Foreign Currency Translation Adjustments		Defined Benefit Plans Adjustment		Total
		(In millions)											(In millions)
Balance, beginning of period	Balance, beginning of period	$	10,384	$	1,791	$	(53)	$	(460)	$	11,662	Balance, beginning of period	$	12,799	$	1,872	$	(15,553)	$	267	$	(45)	$	(395)	$	(1,055)
OCI before reclassifications	OCI before reclassifications	(1,900)		(401)		24		(2)		(2,279)		OCI before reclassifications	(11,131)		(390)		8,787		(107)		(16)		—		(2,857)
Deferred income tax benefit (expense)	Deferred income tax benefit (expense)	408		84		(4)		—		488		Deferred income tax benefit (expense)	2,333		82		(1,845)		22		4		—		596
AOCI before reclassifications, net of income tax	AOCI before reclassifications, net of income tax	8,892		1,474		(33)		(462)		9,871		AOCI before reclassifications, net of income tax	4,001		1,564		(8,611)		182		(57)		(395)		(3,316)
Amounts reclassified from AOCI	Amounts reclassified from AOCI	59		(69)		—		21		11		Amounts reclassified from AOCI	216		42		—		—		—		10		268
Deferred income tax benefit (expense)	Deferred income tax benefit (expense)	(13)		14		—		(4)		(3)		Deferred income tax benefit (expense)	(45)		(9)		—		—		—		(2)		(56)
Amounts reclassified from AOCI, net of income tax	Amounts reclassified from AOCI, net of income tax	46		(55)		—		17		8		Amounts reclassified from AOCI, net of income tax	171		33		—		—		—		8		212

Balance, end of period	Balance, end of period	$	8,938	$	1,419	$	(33)	$	(445)	$	9,879	Balance, end of period	$	4,172	$	1,597	$	(8,611)	$	182	$	(57)	$	(387)	$	(3,104)

~~__________________~~

~~(1)See Note 5 for~~For information on offsets to investments related to policyholder liabilities, ~~DAC, VOBA and DSI.~~

see “— Net Unrealized Investment Gains (Losses).”

6694

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

8.13. Equity (continued)

Information regarding amounts reclassified out of each component of AOCI was as follows:


		Three Months Ended June 30,				Six Months Ended June 30,						Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
AOCI Components	AOCI Components	Amounts Reclassified from AOCI								Consolidated Statements of Operations and Comprehensive Income (Loss) Locations	AOCI Components	Amounts Reclassified from AOCI				Consolidated Statements of Operations and Comprehensive Income (Loss) Locations
		(In millions)										(In millions)
Net unrealized investment gains (losses):	Net unrealized investment gains (losses):										Net unrealized investment gains (losses):
Net unrealized investment gains (losses)	Net unrealized investment gains (losses)	$	(388)	$	(19)	$	(601)	$	(34)	Net investment gains (losses)	Net unrealized investment gains (losses)	$	41	$	(213)	Net investment gains (losses)
Net unrealized investment gains (losses)	Net unrealized investment gains (losses)	1		(4)		3		(7)		Net investment income	Net unrealized investment gains (losses)	2		2		Net investment income
Net unrealized investment gains (losses)	Net unrealized investment gains (losses)	(16)		(12)		(21)		(18)		Net derivative gains (losses)	Net unrealized investment gains (losses)	(18)		(5)		Net derivative gains (losses)
Net unrealized investment gains (losses), before income tax	Net unrealized investment gains (losses), before income tax	(403)		(35)		(619)		(59)			Net unrealized investment gains (losses), before income tax	25		(216)
Income tax (expense) benefit	Income tax (expense) benefit	85		8		130		13			Income tax (expense) benefit	(5)		45
Net unrealized investment gains (losses), net of income tax	Net unrealized investment gains (losses), net of income tax	(318)		(27)		(489)		(46)			Net unrealized investment gains (losses), net of income tax	20		(171)
Unrealized gains (losses) on derivatives - cash flow hedges:	Unrealized gains (losses) on derivatives - cash flow hedges:										Unrealized gains (losses) on derivatives - cash flow hedges:
Interest rate derivatives	Interest rate derivatives	16		14		31		27		Net investment income	Interest rate derivatives	14		15		Net investment income
Interest rate derivatives	Interest rate derivatives	53		19		71		48		Net investment gains (losses)	Interest rate derivatives	2		18		Net investment gains (losses)
Foreign currency exchange rate derivatives	Foreign currency exchange rate derivatives	—		1		2		2		Net investment income	Foreign currency exchange rate derivatives	1		2		Net investment income
Foreign currency exchange rate derivatives	Foreign currency exchange rate derivatives	(555)		108		(632)		(8)		Net investment gains (losses)	Foreign currency exchange rate derivatives	129		(77)		Net investment gains (losses)
Gains (losses) on cash flow hedges, before income tax	Gains (losses) on cash flow hedges, before income tax	(486)		142		(528)		69			Gains (losses) on cash flow hedges, before income tax	146		(42)
Income tax (expense) benefit	Income tax (expense) benefit	102		(29)		111		(14)			Income tax (expense) benefit	(31)		9
Gains (losses) on cash flow hedges, net of income tax	Gains (losses) on cash flow hedges, net of income tax	(384)		113		(417)		55			Gains (losses) on cash flow hedges, net of income tax	115		(33)
Defined benefit plans adjustment: (1)	Defined benefit plans adjustment: (1)										Defined benefit plans adjustment: (1)
Amortization of net actuarial gains (losses)	Amortization of net actuarial gains (losses)	(11)		(11)		(21)		(23)			Amortization of net actuarial gains (losses)	(3)		(10)
Amortization of prior service (costs) credit	Amortization of prior service (costs) credit	1		1		1		2			Amortization of prior service (costs) credit	1		—
Amortization of defined benefit plan items, before income tax	Amortization of defined benefit plan items, before income tax	(10)		(10)		(20)		(21)			Amortization of defined benefit plan items, before income tax	(2)		(10)
Income tax (expense) benefit	Income tax (expense) benefit	2		2		4		4			Income tax (expense) benefit	—		2
Amortization of defined benefit plan items, net of income tax	Amortization of defined benefit plan items, net of income tax	(8)		(8)		(16)		(17)			Amortization of defined benefit plan items, net of income tax	(2)		(8)
Total reclassifications, net of income tax	Total reclassifications, net of income tax	$	(710)	$	78	$	(922)	$	(8)		Total reclassifications, net of income tax	$	133	$	(212)

__________________

(1)These AOCI components are included in the computation of net periodic benefit costs.

6795

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

13. Equity (continued)

9.Net Unrealized Investment Gains (Losses)

Unrealized investment gains (losses) on fixed maturity securities AFS, derivatives and other investments and the effect on policyholder liabilities that would result from the realization of the unrealized gains (losses) are included in net unrealized investment gains (losses) in AOCI.

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


	March 31, 2023		December 31, 2022
	(In millions)
Fixed maturity securities AFS	$	(10,961)	$	(14,741)



Derivatives	1,984		1,971
Other	475		455
Subtotal	(8,502)		(12,315)
Amounts allocated from:
Policyholder liabilities	42		55




Deferred income tax benefit (expense)	1,861		2,656
Net unrealized investment gains (losses)	$	(6,599)	$	(9,604)

14. Other Revenues and Other Expenses

Other Revenues

Information on other revenues, which primarily includes fees related to service contracts from customers, was as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
		(In millions)										(In millions)
Prepaid legal plans	Prepaid legal plans	$	106	$	99	$	214	$	199	Prepaid legal plans		$	115	$	108
Recordkeeping and administrative services (1)	Recordkeeping and administrative services (1)	42		53		89		105		Recordkeeping and administrative services (1)		37		47
Administrative services-only contracts	Administrative services-only contracts	57		54		112		112		Administrative services-only contracts		61		55
Other revenue from service contracts from customers	Other revenue from service contracts from customers	7		11		14		20		Other revenue from service contracts from customers		10		7
Total revenues from service contracts from customers	Total revenues from service contracts from customers	212		217		429		436		Total revenues from service contracts from customers		223		217
Other (2)	Other (2)	161		215		356		421		Other (2)		192		194
Total other revenues	Total other revenues	$	373	$	432	$	785	$	857	Total other revenues		$	415	$	411

__________________

(1)Related to products and businesses no longer actively marketed by the Company.

(2)Primarily includes reinsurance ceded. See Note ~~12.~~17.

~~Other Expenses~~

~~Information on other expenses was as follows:~~

Three Months
Ended
June 30, Six Months
Ended
June 30,
2022 2021 2022 2021
(In millions)
General and administrative expenses (1) $ 725 $ 547 $ 1,364 $ 1,094
Pension, postretirement and postemployment benefit costs 29 25 59 58
Premium taxes, other taxes, and licenses & fees 81 93 161 166
Commissions and other variable expenses 491 494 973 982
Capitalization of DAC (35) (10) (62) (29)
Amortization of DAC and VOBA 103 32 174 72
Interest expense on debt 25 24 49 48
Total other expenses $ 1,419 $ 1,205 $ 2,718 $ 2,391

~~__________________~~

~~(1)~~Includes $52 million and $74 million for the three months and six months ended June 30, 2022, respectively, and ($44) million and ($57) million for the three months and six months ended June 30, 2021, respectively, for the net change in cash surrender value of investments in certain life insurance policies, net of premiums paid.

~~Affiliated Expenses~~

~~See Note 12 for a discussion of affiliated expenses included in the table above.~~

6896

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

14. Other Revenues and Other Expenses (continued)

~~10.~~Other Expenses

Information on other expenses was as follows:


	Three Months Ended March 31,
			2023		2022
		(In millions)
General and administrative expenses (1)			$	661	$	639
Pension, postretirement and postemployment benefit costs			50		30
Premium taxes, other taxes, and licenses & fees			93		80
Commissions and other variable expenses			714		482
Capitalization of DAC			(77)		(27)
Amortization of DAC and VOBA			77		80
Interest expense on debt			30		24
Total other expenses			$	1,548	$	1,308

__________________

(1)Includes ($30) million and $22 million for the three months ended March 31, 2023 and 2022, respectively, for the net change in cash surrender value of investments in certain life insurance policies, net of premiums paid.

Affiliated Expenses

See Note 17 for a discussion of affiliated expenses included in the table above.

15. Income Tax

For the three months ~~and six months~~ ended ~~June 30,~~March 31, 2023 and 2022, the effective tax rate on income (loss) before provision for income tax was ~~17%~~53% and ~~16%~~18%, respectively. The Company’s effective tax rate for both the three months ended ~~June 30, 2022 differed from the U.S. statutory rate primarily due to tax benefits from tax credits~~March 31, 2023 and ~~non-taxable investment income. The Company’s effective tax rate for the six months ended June 30,~~ 2022, differed from the U.S. statutory rate primarily due to tax benefits from tax credits, the corporate tax deduction for stock compensation and non-taxable investment income.

For the three months and six months ended June 30, 2021, the effective tax rate on income (loss) before provision for income tax was 18% and 15%, respectively. The Company’s effective tax rate for the three months ended June 30, 2021 differed from the U.S. statutory rate primarily due to tax benefits related to non-taxable investment income and tax credits. The Company’s effective tax rate for the six months ended June 30, 2021 differed from the U.S. statutory rate primarily due to tax benefits related to non-taxable investment income, tax credits and the corporate tax deduction for stock compensation.

~~11.~~16. Contingencies, Commitments and Guarantees

Contingencies

Litigation

The Company is a defendant in a large number of litigation matters. Putative or certified class action litigation and other litigation and claims and assessments against the Company, in addition to those discussed below and those otherwise provided for in the Company’s interim condensed 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, mortgage lending bank, employer, investor, investment advisor, broker-dealer, and taxpayer.

The Company also receives and responds to subpoenas or other inquiries seeking a broad range of information from state regulators, including state insurance commissioners; state attorneys general or other state governmental authorities; federal regulators, including the U.S. Securities and Exchange Commission; federal governmental authorities, including congressional committees; and the Financial Industry Regulatory Authority, as well as from local and national regulators and government authorities in jurisdictions outside the United States where the Company conducts business. The issues involved in information requests and regulatory matters vary widely, but can include inquiries or investigations concerning the Company’s compliance with applicable insurance and other laws and regulations. The Company cooperates in these inquiries.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

16. Contingencies, Commitments and Guarantees (continued)

It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. The Company establishes liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. ~~Liabilities have been established for a number of the matters noted below.~~ In certain circumstances where liabilities have been established there may be coverage under one or more corporate insurance policies, pursuant to which there may be an insurance recovery. Insurance recoveries are recognized as gains when any contingencies relating to the insurance claim have been resolved, which is the earlier of when the gains are realized or realizable. 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 reasonably estimated at ~~June 30, 2022.~~March 31, 2023. While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known to management, management does not believe any such charges are likely to have a material effect on the Company’s financial position. Given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material effect on the Company’s consolidated net income or cash flows in particular quarterly or annual periods.

Matters as to Which an Estimate Can Be Made

For some ~~of the~~ matters, ~~disclosed below,~~ the Company is able to estimate a reasonably possible range of loss. For matters where a loss is believed to be reasonably possible, but not probable, the Company has not made an accrual. As of ~~June 30, 2022,~~March 31, 2023, the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued for these matters to be $0 to ~~$100~~$125 million.

~~Table of Contents~~

~~Metropolitan Life Insurance Company~~

~~(A Wholly-Owned Subsidiary of MetLife, Inc.)~~

~~Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~11. Contingencies, Commitments and Guarantees (continued)~~

Matters as to Which an Estimate Cannot Be Made

For other matters, ~~disclosed below,~~ the Company is not currently able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews.

Asbestos-Related Claims

Metropolitan Life Insurance Company is and has been a defendant in a large number of asbestos-related suits filed primarily in state courts. These suits principally allege that the plaintiff or plaintiffs suffered personal injury resulting from exposure to asbestos and seek both actual and punitive damages. Metropolitan Life Insurance Company has never engaged in the business of manufacturing or selling asbestos-containing products, nor has Metropolitan Life Insurance Company issued liability or workers’ compensation insurance to companies in the business of manufacturing or selling asbestos-containing products. The lawsuits principally have focused on allegations with respect to certain research, publication and other activities of one or more of Metropolitan Life Insurance Company’s employees during the period from the 1920s through approximately the 1950s and allege that Metropolitan Life Insurance Company 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 Insurance Company believes that it should not have legal liability in these cases. The outcome of most asbestos litigation matters, however, is uncertain and can be impacted by numerous variables, including differences in legal rulings in various jurisdictions, the nature of the alleged injury and factors unrelated to the ultimate legal merit of the claims asserted against Metropolitan Life Insurance Company.

Metropolitan Life Insurance Company’s defenses include that: (i) Metropolitan Life Insurance Company owed no duty to the plaintiffs; (ii) plaintiffs did not rely on any actions of Metropolitan Life Insurance Company; (iii) Metropolitan Life Insurance Company’s conduct was not the cause of the plaintiffs’ injuries; and (iv) plaintiffs’ exposure occurred after the dangers of asbestos were known. During the course of the litigation, certain trial courts have granted motions dismissing claims against Metropolitan Life Insurance Company, while other trial courts have denied Metropolitan Life Insurance Company’s motions. There can be no assurance that Metropolitan Life Insurance Company will receive favorable decisions on motions in the future. While most cases brought to date have settled, Metropolitan Life Insurance Company intends to continue to defend aggressively against claims based on asbestos exposure, including defending claims at trials.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

16. Contingencies, Commitments and Guarantees (continued)

As reported in the ~~2021~~2022 Annual Report, Metropolitan Life Insurance Company received approximately ~~2,824~~2,610 asbestos-related claims in ~~2021.~~2022. For the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ Metropolitan Life Insurance Company received approximately ~~1,319~~587 and ~~1,304~~721 new asbestos-related claims, respectively. See Note 16 of the Notes to the Consolidated Financial Statements included in the ~~2021~~2022 Annual Report for historical information concerning asbestos claims and Metropolitan Life Insurance Company’s update in its recorded liability at December 31, ~~2021.~~2022. The number of asbestos cases that may be brought, the aggregate amount of any liability that Metropolitan Life Insurance Company may incur, and the total amount paid in settlements in any given year are uncertain and may vary significantly from year to year.

The ability of Metropolitan Life Insurance Company to estimate its ultimate asbestos exposure is subject to considerable uncertainty, and the conditions impacting its liability can be dynamic and subject to change. The availability of reliable data is limited and it is difficult to predict the 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 in pending and future claims, the willingness of courts to allow plaintiffs to pursue claims against Metropolitan Life Insurance Company when exposure to asbestos took place after the dangers of asbestos exposure were well known, and the impact of any possible future adverse verdicts and their amounts.

The ability to make estimates regarding ultimate asbestos exposure declines significantly as the estimates relate to years further in the future. In the Company’s judgment, there is a future point after which losses cease to be probable and reasonably estimable. It is reasonably possible that the Company’s total exposure to asbestos claims may be materially greater than the asbestos liability currently accrued and that future charges to income may be necessary, but management does not believe any such charges are likely to have a material effect on the Company’s financial position.

~~Table of Contents~~

~~Metropolitan Life Insurance Company~~

~~(A Wholly-Owned Subsidiary of MetLife, Inc.)~~

~~Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)~~

~~11. Contingencies, Commitments and Guarantees (continued)~~

The Company believes adequate provision has been made in its interim condensed consolidated financial statements for all probable and reasonably estimable losses for asbestos-related claims. Metropolitan Life Insurance Company’s recorded asbestos liability covers pending claims, claims not yet asserted, and legal defense costs and is based on estimates and includes significant assumptions underlying its analysis.

Metropolitan Life Insurance Company reevaluates on a quarterly and annual basis its exposure from asbestos litigation, including studying its claims experience, reviewing external literature regarding asbestos claims experience in the United States, assessing relevant trends impacting asbestos liability and considering numerous variables that can affect its asbestos liability exposure on an overall or per claim basis. Based upon its regular reevaluation of its exposure from asbestos litigation, Metropolitan Life Insurance Company has updated its liability analysis for asbestos-related claims through ~~June 30, 2022.~~

~~Julian & McKinney v. Metropolitan Life Insurance Company (S.D.N.Y., filed February 9, 2017)~~

Plaintiffs filed this putative class and collective action on behalf of themselves and all current and former long-term disability (“LTD”) claims specialists between February 2011 and the present for alleged wage and hour violations under the Fair Labor Standards Act (“FLSA”), the New York Labor Law, and the Connecticut Minimum Wage Act. The suit alleges that Metropolitan Life Insurance Company improperly reclassified the plaintiffs and similarly situated LTD claims specialists from non-exempt to exempt from overtime pay in November 2013. As a result, they and members of the putative class were no longer eligible for overtime pay even though they allege they continued to work more than 40 hours per week. Plaintiffs seek unspecified compensatory and punitive damages, as well as other relief. On June 29, 2022, the United States District Court for the Southern District of New York entered an offer of judgment disposing of the FLSA claims in exchange for a $3,000 payment to plaintiffs by Metropolitan Life Insurance Company. The parties entered into an agreement to settle the remaining state law claims, and on July 15, 2022, the court entered a stipulation of dismissal with prejudice disposing of those claims. Metropolitan Life Insurance Company has accrued the full amount of the settlement payments in prior periods.March 31, 2023.

Total Asset Recovery Services, LLC. v. MetLife, Inc., et al. (Supreme Court of the State of New York, County of New York, filed December 27, 2017)

Total Asset Recovery Services (the “Relator”) brought an action under the qui tam provision of the New York False Claims Act (the “Act”) on behalf of itself and the State of New York. The Relator originally filed this action under seal in 2010, and the complaint was unsealed on December 19, 2017. The Relator alleges that MetLife, Inc., Metropolitan Life Insurance Company and several other insurance companies violated the Act by filing false unclaimed property reports with the State of New York from 1986 to 2017, to avoid having to escheat the proceeds of more than 25,000 life insurance policies, including policies for which the defendants escheated funds as part of their demutualizations in the late 1990s. The Relator seeks treble damages and other relief. The Appellate Division of the New York State Supreme Court, First Department, reversed the court’s order granting MetLife, Inc. and Metropolitan Life Insurance Company’s motion to dismiss and remanded the case to the trial court where the Relator has filed an amended complaint. The Company intends to defend the action vigorously.

Matters Related to Group Annuity Benefits

In 2018, the Company announced that it identified a material weakness in its internal control over financial reporting related to the practices and procedures for estimating reserves for certain group annuity benefits. Several regulators have made inquiries into this issue and it is possible that other jurisdictions may pursue similar investigations or inquiries. The Company ~~is also~~could be exposed to lawsuits, and ~~could be exposed to~~ additional legal actions relating to this issue. These may result in payments, including damages, fines, penalties, interest and other amounts assessed or awarded by courts or regulatory authorities under applicable escheat, tax, securities, Employee Retirement Income Security Act of 1974, or other laws or regulations. The Company could incur significant costs in connection with these actions.

~~Commitments~~

~~Mortgage Loan Commitments~~

The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $3.5 billion and $3.1 billion at June 30, 2022 and December 31, 2021, respectively.

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

~~11.~~16. Contingencies, Commitments and Guarantees (continued)

Commitments

Mortgage Loan Commitments

The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $2.4 billion and $2.7 billion at March 31, 2023 and December 31, 2022, respectively.

Commitments to Fund Partnership Investments, Bank Credit Facilities ~~Bridge Loans~~ and Private Corporate Bond Investments

The Company commits to fund partnership investments and to lend funds under bank credit facilities ~~bridge loans~~ and private corporate bond investments. The amounts of these unfunded commitments were ~~$4.6~~$4.5 billion and ~~$4.5~~$4.8 billion at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

Guarantees

In the normal course of its business, the Company has provided certain indemnities ~~guarantees~~ and ~~commitments~~guarantees to third parties such that it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third-party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation ranging from less than $1 million to ~~$274~~$239 million, with a cumulative maximum of ~~$378~~$340 million, while in other cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these guarantees in the future. Management believes that it is unlikely the Company will have to make any material payments under these indemnities ~~guarantees,~~ or ~~commitments.~~guarantees.

In addition, the Company indemnifies its directors and officers as provided in its charters and by-laws. Also, the Company indemnifies its agents for liabilities incurred as a result of their representation of the Company’s interests. Since these indemnities are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount that could become due under these indemnities in the future.

The Company’s recorded liabilities were $2 million at both ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, for indemnities ~~guarantees~~ and ~~commitments.~~guarantees.

~~12.~~17. Related Party Transactions

Service Agreements

The Company has entered into various agreements with affiliates for services necessary to conduct its activities. Typical services provided under these agreements include personnel, policy administrative functions and distribution services. The bases for such charges are modified and adjusted by management when necessary or appropriate to reflect fairly and equitably the actual cost incurred by the Company and/or its affiliates. Expenses and fees incurred with affiliates related to these agreements, recorded in other expenses, were ~~$649~~$715 million and ~~$1.3 billion~~$636 million for the three months ended March 31, 2023 and ~~six months ended June 30,~~ 2022, ~~respectively, and $593 million and $1.2 billion for the three months and six months ended June 30, 2021,~~ respectively. Total revenues received from affiliates related to these agreements were ~~$11~~$14 million and ~~$23~~$12 million for the three months ended March 31, 2023 and ~~six months ended June 30,~~ 2022, ~~respectively, and $9 million and $21 million for the three months and six months ended June 30, 2021,~~ respectively.

The Company had net payables to affiliates, related to the items discussed above, of ~~$69~~$92 million and ~~$143~~$188 million at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

See ~~Note 5~~Notes 9 and 12 for additional information on related party transactions.

72100

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

~~12.~~17. Related Party Transactions (continued)

Related Party Reinsurance Transactions

The Company has reinsurance agreements with certain of MetLife, Inc.’s subsidiaries, including MetLife Reinsurance Company of Charleston (“MRC”), MetLife Reinsurance Company of Vermont, Metropolitan Tower Life Insurance Company (“MTL”), and MetLife Insurance K.K., all of which are related parties.

Information regarding the significant effects of affiliated reinsurance on the interim condensed consolidated statements of operations and comprehensive income (loss) was as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021					2023		2022
		(In millions)										(In millions)
Premiums	Premiums									Premiums
Reinsurance assumed	Reinsurance assumed	$	2	$	840	$	3	$	842	Reinsurance assumed			$	(27)	$	1
Reinsurance ceded	Reinsurance ceded	(37)		(29)		(68)		(60)		Reinsurance ceded			(84)		(31)
Net premiums	Net premiums	$	(35)	$	811	$	(65)	$	782	Net premiums			$	(111)	$	(30)
Universal life and investment-type product policy fees	Universal life and investment-type product policy fees									Universal life and investment-type product policy fees
Reinsurance assumed	Reinsurance assumed	$	—	$	—	$	—	$	—	Reinsurance assumed			$	—	$	—
Reinsurance ceded	Reinsurance ceded	(3)		(3)		(7)		(1)		Reinsurance ceded			(2)		(1)
Net universal life and investment-type product policy fees	Net universal life and investment-type product policy fees	$	(3)	$	(3)	$	(7)	$	(1)	Net universal life and investment-type product policy fees			$	(2)	$	(1)
Other revenues	Other revenues									Other revenues
Reinsurance assumed	Reinsurance assumed	$	5	$	5	$	29	$	2	Reinsurance assumed			$	22	$	24
Reinsurance ceded	Reinsurance ceded	124		142		247		283		Reinsurance ceded			115		123
Net other revenues	Net other revenues	$	129	$	147	$	276	$	285	Net other revenues			$	137	$	147
Policyholder benefits and claims	Policyholder benefits and claims									Policyholder benefits and claims
Reinsurance assumed	Reinsurance assumed	$	6	$	831	$	34	$	832	Reinsurance assumed			$	(169)	$	11
Reinsurance ceded	Reinsurance ceded	(42)		(37)		(81)		(72)		Reinsurance ceded			(77)		(32)
Net policyholder benefits and claims	Net policyholder benefits and claims	$	(36)	$	794	$	(47)	$	760	Net policyholder benefits and claims			$	(246)	$	(21)
Policyholder liability remeasurement (gains) losses										Policyholder liability remeasurement (gains) losses
Reinsurance assumed										Reinsurance assumed			$	(39)	$	(18)
Reinsurance ceded										Reinsurance ceded			(5)		(3)
Net policyholder liability remeasurement (gains) losses										Net policyholder liability remeasurement (gains) losses			$	(44)	$	(21)
Interest credited to policyholder account balances	Interest credited to policyholder account balances									Interest credited to policyholder account balances
Reinsurance assumed	Reinsurance assumed	$	12	$	7	$	21	$	14	Reinsurance assumed			$	73	$	9
Reinsurance ceded	Reinsurance ceded	(3)		(3)		(6)		(6)		Reinsurance ceded			(3)		(3)
Net interest credited to policyholder account balances	Net interest credited to policyholder account balances	$	9	$	4	$	15	$	8	Net interest credited to policyholder account balances			$	70	$	6
Other expenses	Other expenses									Other expenses
Reinsurance assumed	Reinsurance assumed	$	1	$	19	$	10	$	19	Reinsurance assumed			$	204	$	9
Reinsurance ceded	Reinsurance ceded	106		132		190		234		Reinsurance ceded			63		86
Net other expenses	Net other expenses	$	107	$	151	$	200	$	253	Net other expenses			$	267	$	95

73101

Table of Contents

Metropolitan Life Insurance Company

(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (continued)

~~12.~~17. Related Party Transactions (continued)

Information regarding the significant effects of affiliated reinsurance on the interim condensed consolidated balance sheets was as follows at:


		June 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
		Assumed		Ceded		Assumed		Ceded			Assumed		Ceded		Assumed		Ceded
		(In millions)									(In millions)
Assets	Assets									Assets
Premiums, reinsurance and other receivables	Premiums, reinsurance and other receivables	$	472	$	11,637	$	25	$	11,710	Premiums, reinsurance and other receivables	$	743	$	11,294	$	723	$	11,303
Deferred policy acquisition costs and value of business acquired	Deferred policy acquisition costs and value of business acquired	32		(157)		6		(139)		Deferred policy acquisition costs and value of business acquired	168		(163)		120		(164)
Total assets	Total assets	$	504	$	11,480	$	31	$	11,571	Total assets	$	911	$	11,131	$	843	$	11,139
Liabilities	Liabilities									Liabilities
Future policy benefits	Future policy benefits	$	3,053	$	5	$	3,139	$	(10)	Future policy benefits	$	2,322	$	—	$	2,484	$	—
Policyholder account balances	Policyholder account balances	1,640		—		366		—		Policyholder account balances	8,817		—		6,216		—
Other policy-related balances	Other policy-related balances	61		(2)		14		—		Other policy-related balances	63		(26)		61		(23)
Other liabilities	Other liabilities	910		10,868		894		12,190		Other liabilities	926		10,466		910		10,380
Total liabilities	Total liabilities	$	5,664	$	10,871	$	4,413	$	12,180	Total liabilities	$	12,128	$	10,440	$	9,671	$	10,357

Effective April 1, 2021, the Company, through its wholly-owned subsidiary, Missouri Reinsurance, Inc., entered into an agreement to assume certain group annuity contracts issued in connection with a qualifying pension risk transfer on a modified coinsurance basis from MTL. The significant reinsurance effects to the Company were primarily increases in future policy benefits of $2.3 billion and $2.4 billion at March 31, 2023 and December 31, 2022, respectively, as well as policyholder benefits and claims of ($171) million and $11 million and other expenses of $194 million and $8 million for the three months ended March 31, 2023 and 2022, respectively. Also, as a result of this agreement, other invested assets increased by $3.0 billion at both March 31, 2023 and December 31, 2022.

The Company ceded two blocks of business to an affiliate on a 75% coinsurance with funds withheld basis. Certain contractual features of these agreements qualify as embedded derivatives, which are separately accounted for at estimated fair value on the Company’s interim condensed consolidated balance sheets. The embedded derivatives ~~related~~related to the funds withheld associated with these reinsurance agreements are included within other liabilities and were ($~~16)~~22) million and ~~$31~~($28) million at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. Net derivative gains (losses) associated with these embedded derivatives were ~~$22~~($6) million and ~~$47~~$25 million for the three months ended March 31, 2023, and ~~six months ended June 30,~~ 2022, ~~respectively, and ($10) million and $13 million for the three months and six months ended June 30, 2021, respectively.~~respectively.

Certain contractual features of the closed block agreement with MRC ~~create an~~qualify as embedded ~~derivative,~~derivatives, which isare separately ~~accounted~~accounted for at estimated fair value on the Company’s interim condensed consolidated balance sheets. The embedded derivative related to the funds withheld associated with this reinsurance agreement was included within other liabilities and was ($~~76)~~258) million and ~~$1.0 billion~~($423) million at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. Net derivative gains (losses) associated with the embedded derivative were ~~$504~~($165) million and ~~$1.1 billion for the three months and six months ended June 30, 2022, respectively, and ($190) million and $229~~$613 million for the three months ended March 31, 2023 and ~~six months ended June 30, 2021,~~2022, respectively.

18. Subsequent Events

On May 8, 2023, the Credit Facility maintained by MetLife, Inc. and MetLife Funding was amended and restated to, among other things, extend the maturity date to May 2028. All borrowings under the amended and restated Credit Facility must be repaid by May 8, 2028 except that letters of credit outstanding upon termination may remain outstanding until no later than May 8, 2029.

74102

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations


			Page
Forward-Looking Statements and Other Financial Information			76104
Business			76104
Summary of Critical Accounting Estimates			77105


Results of Operations			78111
Adopted Accounting Pronouncements			82114
Future Adoption of Accounting Pronouncements			83114
Non-GAAP and Other Financial Disclosures			83114
Risk Management			83115
Subsequent Events			115

75103

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Forward-Looking Statements and Other Financial Information

For purposes of this discussion, “MLIC,” the “Company,” “we,” “our” and “us” refer to Metropolitan Life Insurance Company, a New York corporation incorporated in 1868, and its subsidiaries. Metropolitan Life Insurance Company is a wholly-owned subsidiary of MetLife, Inc. (MetLife, Inc., together with its subsidiaries and affiliates, “MetLife”). Management’s narrative analysis of the Company’s results of operations is presented pursuant to General Instruction H(2)(a) of Form 10-Q. This narrative analysis should be read in conjunction with Metropolitan Life Insurance Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 (the ~~“2021~~“2022 Annual Report”), the cautionary language regarding forward-looking statements included below, the “Risk Factors” set forth in Part II, Item 1A, and the additional risk factors referred to therein, “Quantitative and Qualitative Disclosures About Market Risk” and the Company’s interim condensed consolidated financial statements included elsewhere herein.

This narrative analysis may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. See “Note Regarding Forward-Looking Statements” for cautionary language regarding forward-looking statements.

This narrative analysis includes references to our performance measure, adjusted earnings, that is not based on accounting principles generally accepted in the United States of America (“GAAP”). See “— Non-GAAP and Other Financial Disclosures” for definitions and a discussion of this and other financial measures, and “— Results of Operations” for reconciliations of historical non-GAAP financial measures to the most directly comparable GAAP measures.

Business

~~Overview~~

MLIC is a provider of insurance, annuities, employee benefits and asset management. MLIC is organized into two segments: U.S. and MetLife Holdings. In addition, the Company reports certain of its results of operations in Corporate & Other. See Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements for further information on the Company’s segments and Corporate & Other.

~~COVID-19 Pandemic and~~ Current Market Conditions

We continue to closely monitor developments relating to the COVID-19 pandemic and assess its impact on our business. We have implemented risk management and business continuity plans and taken preventive measures and other precautions, such as employee business travel restrictions and remote work arrangements which, to date, have enabled us to maintain our critical business processes, customer service levels, relationships with key vendors, financial reporting systems, internal control over financial reporting and disclosure controls and procedures.

The COVID-19 pandemic continues to impact the global economy and financial markets and has caused volatility in the global equity, credit and real estate markets. Governments and central banks around the world responded to the COVID-19 pandemic with unprecedented fiscal and monetary policies, but many of these stimulus programs have concluded due to global economic recovery and rising inflation. In the United States (“U.S.”), the Board of Governors of the Federal Reserve System ~~(“Federal Reserve Board”) ended its asset purchase program in March 2022~~ and ~~began to reduce its holdings on June 1, 2022. The~~the Federal Open Market Committee ~~has raised~~took various actions in 2022 and in the beginning of 2023 to promote economic stability and combat inflation, including raising interest rates, ~~four times in 2022; further increases~~although a heightened level of concern about an economic downturn in the ~~target range for~~U.S. remains, exacerbated by the ~~federal funds rate are expected throughout 2022 to combat inflation.~~recent banking turmoil. During inflationary periods with rising interest rates, the value of fixed income investments falls which could increase realized and unrealized losses, resulting in additional deferred tax assets that may not be realizable.

~~See “— Results of Operations” for further information regarding the effect of the COVID-19 pandemic on our businesses.~~

Regulatory Developments

The following discussion on regulatory developments should be read in conjunction with “Business — Regulation” in the ~~2021~~2022 Annual Report, as amended or supplemented here.

~~Environmental Laws~~Insurance Regulation

U.S. Federal Initiatives

On April 21, 2023, the Financial Stability Oversight Council (“FSOC”) proposed certain changes to how FSOC would designate non-bank financial companies as systemically important financial institutions (“non-bank SIFIs”). The proposed changes include a revised approach to non-bank SIFI designation based on risk factors contained in a proposed analytic framework, including leverage, liquidity risk and ~~Regulations~~

~~In furtherance~~maturity mismatch, interconnections, operational risks, complexity, or opacity, inadequate risk management, concentration, and destabilizing activities, regardless of ~~President Biden’s Executive Order on Climate-Related Financial Risk, dated May 20, 2021,~~whether those risks arise from activities, firms, or otherwise. The proposed changes also include eliminating any requirement that FSOC conduct a cost-benefit analysis and an assessment of the ~~Federal Insurance Office (“FIO”) sought public comment on climate-related~~likelihood of a non-bank financial ~~risks in~~company’s material financial distress before designating the ~~insurance industry through November 2021.~~non-bank financial company as a non-bank SIFI. The ~~FIO’s request~~FSOC’s proposed changes, if adopted, could have the effect of simplifying and shortening FSOC’s procedures for ~~information noted that it will work on assessing how~~designating non-bank financial companies as non-bank SIFIs and thus subject a non-bank financial company so designated to additional supervision, examination, and regulation. Any such designation would create uncertainties for the ~~insurance sector may mitigate climate~~non-bank financial company regarding the likelihood, frequency or impact of any formal or informal regulatory or supervisory actions or inquiries; the scope of applicable regulatory or supervisory requirements or restrictions and the related compliance measures and internal controls; and the permissibility of certain activities or transactions. It is difficult to predict whether or the extent to which FSOC’s proposed changes would be adopted as proposed or if any further change ~~impacts~~would be made and help achieve national climate-related goals. The FIO intends to publish a report by year-end that addresses climate-related issues in the regulation of insurers and climate related disclosures by insurers.any potential impact thereof.

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~~On March 21, 2022,~~Surplus and Capital

Risk-Based Capital

In light of the ~~U.S.~~rising interest rate environment, the National Association of Insurance Commissioners (“NAIC”) is focused on identifying a solution for 2023 with regard to the treatment of an insurer’s negative interest maintenance reserve (“IMR”) balance, since this can impact how accurately the insurer’s surplus and financial strength are captured in its statutory financial statements due to lower surplus and risk-based capital (“RBC”) ratios. The NAIC has proposed new statutory accounting guidance that would permit an insurer with an RBC ratio greater than 300% to admit negative IMR of up to 5% of its general account capital and surplus, subject to certain restrictions and reporting obligations. Comments on the proposal are due in June 2023. The NAIC also intends to develop a long-term solution for this issue even if interest rates shift.

The NAIC has been evaluating the risks associated with certain insurers’ investments in leveraged loans and collateralized loan obligations (“CLOs”). The NAIC is considering a proposal to assign risk weights to CLOs based on its own modeling as opposed to credit ratings. Under this proposal, the NAIC Structured Securities Group would model CLO investments and ~~Exchange Commission proposed rules requiring registrants~~evaluate tranche level losses across all debt and equity tranches under a series of calibrated and weighted collateral stress scenarios to ~~provide additional climate-related information~~assign NAIC designations that minimize RBC arbitrage. The NAIC’s goal is to ensure that the aggregate RBC factor for owning all tranches of a CLO is similar to that required for owning all of the underlying loan collateral, in ~~their registration statements and annual reports, including~~order to reduce RBC arbitrage. This change would be implemented at year-end 2024 at the earliest. It is currently unclear whether this will apply to all CLOs or only in their financial statements. The proposal sets forth proposed rules for disclosure of climate-related risks, material impacts, governance, risk management, financial statement metrics, greenhouse gas emissions, attestation of emissions disclosures, and targets and goals.specified cases. It is possible that the NAIC may propose new regulations or changes to statutory accounting principles regarding CLOs.

London Interbank Offered Rate

~~In March 2022, federal legislation was enacted to address~~The Financial Conduct Authority (“FCA”), the ~~transition from U.S. Dollar~~United Kingdom regulator of the London Interbank Offered Rate (“LIBOR”) ~~to alternative reference rates~~, and the Intercontinental Exchange (“ICE”) Benchmark Administration, the administrator of LIBOR, have announced the cessation dates for the publication of all U.S. ~~law governed contracts with non-existent or inadequate~~Dollar and non-U.S. Dollar LIBOR settings. The cessation dates of many of these settings have occurred and the cessation date of the remaining U.S. Dollar LIBOR ~~fallback provisions. Except with respect to~~settings (overnight and one-, three-, six- and 12-month U.S. Dollar LIBOR) will occur on June 30, 2023. The FCA has announced that the ~~one-week~~ICE Benchmark Administration will continue publication of one-, three- and ~~two-month~~six-month U.S. Dollar LIBOR ~~tenors,~~settings on a “synthetic,” or non-representative, basis through the ~~federal legislation supersedes all state law addressing the U.S. Dollar LIBOR transition, including legislation enacted in New York in 2021. The implementation~~end of the federal legislation is subject to regulations to be promulgated by the Federal Reserve Board. We continue to assess current and alternative reference rates’ merits, limitations, risks and suitability for our investment and insurance processes.September 2024.

Summary of Critical Accounting Estimates

The preparation of financial statements in conformity with GAAP requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the interim condensed consolidated financial statements. Effective January 1, 2023, the Company adopted a new accounting pronouncement related to targeted improvements to the accounting for long-duration contracts (“LDTI”) with a January 1, 2021 transition date (the “Transition Date”). The effects of adoption were therefore applied for years ended December 31, 2022 and 2021, as described in Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements. This summary of critical accounting estimates reflects this adoption. For a discussion of our significant accounting policies, see Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements. The most critical estimates include those used in determining:

(i) ~~liabilities for~~ future policy benefit liabilities (“FPBs”), market risk benefits (“MRBs”) and the accounting for reinsurance;

(ii) ~~capitalization and amortization of deferred policy acquisition costs (“DAC”) and the establishment and amortization of value of business acquired (“VOBA”);~~

~~(iii)~~ estimated fair values of investments in the absence of quoted market values;

~~(iv)~~ (iii)investment allowance for credit loss (“ACL”) and impairments;

~~(v)~~ (iv)estimated fair values of freestanding ~~derivatives and the recognition and estimated fair value of embedded derivatives requiring bifurcation;~~derivatives;

~~(vi)~~ (v)measurement of employee benefit plan liabilities;

~~(vii)~~(vi)measurement of income taxes and the valuation of deferred tax assets; and

~~(viii)~~(vii)liabilities for litigation and regulatory matters.

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Due to the adoption of LDTI, the measurement model for deferred policy acquisition costs (“DAC”) and value of business acquired (“VOBA”) changed and the majority of the embedded derivatives met the criteria to be accounted for as MRBs; therefore, we no longer believe that DAC, VOBA and embedded derivatives are critical accounting estimates. LDTI impacted the recognition and measurement of FPBs, MRBs and reinsurance, along with the resulting impacts to deferred income taxes which are described in further detail below. The other critical accounting estimates above were not impacted by the adoption of LDTI and are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Summary of Critical Accounting Estimates” and Note 1 of the Notes to the Consolidated Financial Statements included in the 2022 Annual Report.

In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to our business and operations. Actual results could differ from these estimates.

Future Policy Benefit Liabilities

Generally, FPBs are payable over an extended period of time and calculated as the present value of future expected benefits and claim settlement expenses to be paid, reduced by the present value of future expected net premiums. Such liabilities are established based on methods and underlying assumptions in accordance with GAAP and applicable actuarial standards. Principal assumptions used in the establishment of FPBs for traditional long-duration non-participating products are expectations related to mortality, morbidity, termination, claim settlement expense, policy lapse, renewal, retirement, disability incidence, disability terminations, inflation, and other contingent events as appropriate to the respective product type and geographical area. These assumptions are updated at least annually to reflect our expected experience for future periods. If net premiums exceed gross premiums (i.e., expected benefits exceed expected gross premiums), the FPBs are increased, and a corresponding adjustment is recognized in net income.

Liabilities for unpaid claims are estimated based upon our historical experience and other actuarial assumptions that consider the effects of current developments, anticipated trends and risk management programs.

Traditional non-participating long-duration and limited-payment contracts comprise the majority of MLIC’s FPBs, inclusive of deferred profit liabilities, as described in Note 3 of the Notes to the Interim Condensed Consolidated Financial Statements. For such contracts, cash flow assumptions are incorporated into the calculation of the FPBs, and are used to project the amount and timing of expected future benefits and claim settlement expenses to be paid and the expected future premiums to be collected for a cohort. Beginning on the Transition Date, the liabilities for these products are updated retrospectively on a quarterly basis for actual experience and at least once a year for any changes in cash flow assumptions. The change in FPBs reflected in the statement of operations is calculated using a locked-in discount rate. For products issued prior to the Transition Date, the Company developed a cohort level locked-in discount rate that reflects the interest accretion rates that were locked in at inception of the underlying contracts (unless there was a historical premium deficiency event that resulted in updating the interest accretion rate prior to the Transition Date), or the acquisition date for contracts acquired through an assumed in-force reinsurance transaction or a business combination. As described in Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements, the upper-medium grade discount rate, which the Company generally interprets as a rate comparable to that of a U.S. corporate single A discount rate which reflects the duration characteristics of the liability, is used to discount the estimated cash flows and that discount rate is updated at each reporting period through other comprehensive income (loss) (“OCI”).

We measure market risk related to our market sensitive traditional long-duration non-participating and limited-payment contracts based on changes in interest rates utilizing a sensitivity analysis. The results of this sensitivity analysis are included in “Quantitative and Qualitative Disclosures About Market Risk — Management of Market Risk Exposures.” We have also assessed the sensitivities of hypothetical changes in significant assumptions to reported amounts related to our traditional long-duration non-participating and limited-payment contracts, for products including, but not limited to, those within the disaggregated rollforwards included in Note 3 of the Notes to the Interim Condensed Consolidated Financial Statements, as reflected in the following tables:

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Traditional long-duration non-participating and limited-payment contracts


	December 31, 2022
	FPBs (1)		Pre-tax Net Income		OCI
	Increase / (Decrease) (In millions)
Assumptions:
Mortality
Effect of an increase by 1%	$	(55)	$	68	$	(13)
Effect of a decrease by 1%	$	57	$	(70)	$	13
Morbidity (2)
Effect of an increase by 5%	$	359	$	(394)	$	35
Effect of a decrease by 5%	$	(144)	$	177	$	(33)
Lapse (3)
Effect of an increase by 10%	$	(99)	$	164	$	(65)
Effect of a decrease by 10%	$	340	$	(418)	$	78

__________________

(1)FPBs are inclusive of deferred profit liabilities where applicable to the sensitivity.

(2)For products which are subject to morbidity risk, MLIC applied sensitivities to the incidence rate assumptions only.

(3)For MetLife Holdings long-term care products, the lapse impacts include mortality as both mortality and lapse result in termination of these contractswithout any additional benefit payment.

See Note 3 of the Notes to the Interim Condensed Consolidated Financial Statements for additional information, including the significant inputs, judgments, valuation methods and assumptions used in the establishment of FPBs, as well as the effect of changes in such factors on the measurement of our FPBs during the year.

Traditional participating contracts comprise a significant portion of MLIC’s FPBs, as described in Note 3 of the Notes to the Interim Condensed Consolidated Financial Statements. For such contracts, original assumptions developed at the time of issue are locked-in and used in all future liability calculations provided the resulting liabilities are adequate to provide for future benefits and expenses (i.e., there is no premium deficiency). Therefore, liabilities for these products would not be impacted by changes in assumptions unless such change would result in an adverse impact that would trigger an establishment of a premium deficiency reserve. For these contracts, MLIC’s risk of adverse experience may be mitigated through adjustments to the dividend scales.

Liabilities for universal and variable universal life secondary and paid-up guarantees are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the accumulation period based on total expected assessments. The assumptions used in estimating the secondary and paid-up guarantee liabilities are mortality, lapse, and premium payment pattern and persistency. In addition, the projected account balance and assessments used in this calculation are impacted by the earned rate on investments and the interest crediting rates, which are typically subject to guaranteed minimums. The assumptions of investment performance and volatility for variable products’ separate account funds are consistent with historical experience of the appropriate underlying equity index, such as the S&P Global Ratings (“S&P”) 500 Index. These assumptions are monitored and updated periodically based on market conditions and historical experience. For further information on additional insurance liabilities and the amounts included in the disaggregated rollforwards, see Note 3 of the Notes to the Interim Condensed Consolidated Financial Statements.

For all insurance assets and liabilities, MLIC holds capital and surplus to mitigate potential adverse experience development. The Company’s ~~critical accounting estimates~~approaches for managing liquidity and capital are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” included in the 2022 Annual Report.

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Market Risk Benefits

MRBs are contracts or contract features that guarantee benefits, such as guaranteed minimum benefits (referred to as “GMXBs”), in addition to an account balance which expose insurance companies to other than nominal capital market risk (equity price, interest rate, and/or foreign currency exchange risk) and protect the contractholder from the same risk. Certain contracts may have multiple contract features or guarantees that meet the definition of an MRB. Those benefits are aggregated and measured as a single compound MRB.

All identified MRBs are required to be measured at estimated fair value, which is determined based on the present value of projected future benefits minus the present value of projected future fees attributable to those benefit features. The projections of future benefits and future fees require capital market and actuarial assumptions, including expectations concerning policyholder behavior. A risk neutral valuation methodology is used under which the cash flows from the guarantees are projected under multiple capital market scenarios using observable risk-free rates. The valuation of these MRBs also includes an adjustment for our nonperformance risk and risk margins for non-capital market inputs. The nonperformance risk adjustment, which is captured as a spread over the risk-free rate in determining the discount rate to discount the cash flows of the liability, is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.’s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries compared to MetLife, Inc. Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties in certain actuarial assumptions. The establishment of risk margins requires the use of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees.

Changes in the estimated fair value of MRBs are recognized in net income, except for fair value changes attributable to a change in nonperformance risk of the Company which is recorded within OCI.

The cost of MRBs may rise in volatile or declining equity markets or in a low interest rate environment. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates, variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs, may result in significant fluctuations in the estimated fair value of the guarantees that could materially affect net income, and changes in our nonperformance risk could materially affect OCI.

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We measure market risk related to our MRBs based on changes in interest rates, foreign currency exchange rates and equity market prices utilizing a sensitivity analysis. The results of this sensitivity analysis are included in “Quantitative and Qualitative Disclosures About Market Risk — Management of Market Risk Exposures.” We have also assessed the sensitivities of hypothetical changes in significant assumptions to reported amounts related to our MRBs for products included within the disaggregated rollforwards in Note 5 of the Notes to the Interim Condensed Consolidated Financial Statements, as reflected in the following table:


	December 31, 2022
	MRBs (Liabilities net of Assets)		Pre-tax Net Income		OCI
	Increase / (Decrease) (In millions)
Assumptions:
Mortality
Effect of an increase by 1%	$	2	$	(1)	$	(1)
Effect of a decrease by 1%	$	(2)	$	1	$	1
Lapse
Effect of an increase by 10%	$	(29)	$	34	$	(5)
Effect of a decrease by 10%	$	26	$	(30)	$	4
Nonperformance risk (1)
Effect of an increase by 50 bps	$	(265)	N/A		$	265
Effect of a decrease by 50 bps	$	291	N/A		$	(291)

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(1)In the valuation of MRBs, the Company applies a nonperformance risk adjustment, which is captured as a spread over the risk-free rate in determining the discount rate to discount the cash flows of the liability, determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.’s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries compared to MetLife, Inc.

See Note 5 of the Notes to the Interim Condensed Consolidated Financial Statements for additional information, including the significant inputs, judgments, valuation methods and assumptions used in the establishment of the MRBs, as well as the effect of changes in such factors on the measurement of our MRBs during the year. Also, see Note 11 of the Notes to the Interim Condensed Consolidated Financial Statements for additional information on the fair value measurement of MRBs.

Reinsurance

Accounting for reinsurance generally presents the income statement effect of direct policies on a net-of-reinsurance basis by using assumptions and methodologies consistent with those used to project the future performance of the underlying direct business. Further, the potential impact of counterparty credit risks are considered when measuring the reinsurance recoverable. We periodically review actual and anticipated experience compared to the aforementioned assumptions used to establish assets and liabilities relating to ceded and assumed reinsurance and evaluate the financial strength of counterparties to our reinsurance agreements using criteria similar to that evaluated in our security impairment process. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Summary of Critical Accounting ~~Estimates”~~Estimates — Investment Allowance for Credit Loss and Impairments” included in the 2022 Annual Report. Additionally, for each of our reinsurance agreements, we determine whether the agreement provides indemnification against loss or liability relating to insurance risk, in accordance with applicable accounting standards. We review all contractual features, including those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. If we determine that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, we record the agreement using the deposit method of accounting. The reinsurance recoverables associated with the FPBs are not included in the sensitivities presented above as they are not considered significant in relation to the associated liabilities.

See Note 15 of the Notes to the Consolidated Financial Statements included in the ~~2021~~2022 Annual ~~Report.~~Report for additional information on our reinsurance programs.

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Income Taxes and Valuation of Deferred Tax Assets

Our accounting for income taxes represents our best estimate of various events and transactions. Tax laws are often complex and may be subject to differing interpretations by the taxpayer and the relevant governmental taxing authorities. In establishing a provision for income tax expense, we must make judgments and interpretations about the application of inherently complex tax laws. We must also make estimates about when in the future certain items will affect taxable income in the various tax jurisdictions in which we conduct business.

The Company considers all available factors, both positive and negative, to determine whether, based on the weight of these factors, a partial or full valuation allowance for categories of deferred tax assets is required. The weight given to these factors is commensurate with the extent to which it can be objectively verified. Examples of factors considered in determining deferred tax asset realizability include past earnings history, projections of taxable income and tax planning strategies. Changes in tax laws and/or statutory tax rates in countries in which we operate could have an impact on our valuation of net deferred tax assets. Following the adoption of LDTI, if there were a 1% increase in the global effective income tax rate, the change would have resulted in an approximate $139 million increase in the net deferred income tax asset balance at December 31, 2022.

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Results of Operations

Overview

Key Financial Highlights

•Net loss attributable to MLIC of $89 million for the three months ended March 31, 2023, compared to net income attributable to MLIC of $1.9 billion for the three months ended March 31, 2022.

•Adjusted earnings of $795 million for the three months ended March 31, 2023, compared to adjusted earnings of $984 million for the three months ended March 31, 2022.

Consolidated Results


		Six Months Ended June 30,						Three Months Ended March 31,
			2022		2021				2023		2022
			(In millions)						(In millions)
Revenues	Revenues						Revenues
Premiums	Premiums		$	11,578	$	12,256	Premiums		$	5,849	$	5,906
Universal life and investment-type product policy fees	Universal life and investment-type product policy fees		1,039		1,049		Universal life and investment-type product policy fees		430		479
Net investment income	Net investment income		5,268		6,221		Net investment income		2,685		2,826
Other revenues	Other revenues		785		857		Other revenues		415		411
Net investment gains (losses)	Net investment gains (losses)		(309)		502		Net investment gains (losses)		(102)		(226)
Net derivative gains (losses)	Net derivative gains (losses)		526		(990)		Net derivative gains (losses)		(560)		121
Total revenues	Total revenues		18,887		19,895		Total revenues		8,717		9,517
Expenses	Expenses						Expenses
Policyholder benefits and claims and policyholder dividends	Policyholder benefits and claims and policyholder dividends		12,810		14,113		Policyholder benefits and claims and policyholder dividends		6,346		6,812
Policyholder liability remeasurement (gains) losses							Policyholder liability remeasurement (gains) losses		(57)		(29)
Market risk benefits remeasurement (gains) losses							Market risk benefits remeasurement (gains) losses		244		(1,361)
Interest credited to policyholder account balances	Interest credited to policyholder account balances		1,021		1,023		Interest credited to policyholder account balances		831		502
Capitalization of DAC			(62)		(29)
Amortization of DAC and VOBA	Amortization of DAC and VOBA		174		72		Amortization of DAC and VOBA		77		80
Interest expense on debt	Interest expense on debt		49		48		Interest expense on debt		30		24
Other expenses			2,557		2,300
Other expenses, net of capitalization of DAC							Other expenses, net of capitalization of DAC		1,441		1,204
Total expenses	Total expenses		16,549		17,527		Total expenses		8,912		7,232
Income (loss) before provision for income tax	Income (loss) before provision for income tax		2,338		2,368		Income (loss) before provision for income tax		(195)		2,285
Provision for income tax expense (benefit)	Provision for income tax expense (benefit)		365		357		Provision for income tax expense (benefit)		(104)		403

Net income (loss)	Net income (loss)		1,973		2,011		Net income (loss)		(91)		1,882
Less: Net income (loss) attributable to noncontrolling interests	Less: Net income (loss) attributable to noncontrolling interests		2		4		Less: Net income (loss) attributable to noncontrolling interests		(2)		—
Net income (loss) attributable to Metropolitan Life Insurance Company	Net income (loss) attributable to Metropolitan Life Insurance Company		$	1,971	$	2,007	Net income (loss) attributable to Metropolitan Life Insurance Company		$	(89)	$	1,882

~~Six~~Three Months Ended ~~June 30, 2022~~March 31, 2023 Compared with the ~~Six~~Three Months Ended ~~June 30, 2021~~March 31, 2022

~~During the six months ended June 30, 2022, net~~Net income (loss) ~~decreased $38~~attributable to MLIC- Decreased $2.0 billion primarily due to the following:

Net Investment Gains (Losses)- Favorable change of $124 million ~~from the prior period, primarily driven by unfavorable changes in adjusted earnings and net investment gains (losses), largely offset by a favorable change in net derivative gains (losses),~~($98 million, net of ~~investment hedge adjustments.~~income tax):

~~Management~~•Lower losses on sales of ~~Investment Portfolio and Hedging Market Risks with Derivatives.~~ We manage our investment portfolio using disciplined asset/liability management principles, focusing on cash flow and duration to support our current and future liabilities. Our intent is to match the timing and amount of liability cash outflows with invested assets that have cash inflows of comparable timing and amount, while optimizing risk-adjusted investment income and risk-adjusted total return. Our investment portfolio is heavily weighted toward fixed income investments, with over 80% of our portfolio invested in fixed maturity securities available-for-sale and mortgage loans. These securities and loans have varying maturities and other characteristics which cause them to be generally well suited for matching the cash flow and duration of insurance liabilities.

We purchase investments to support our insurance liabilities and not to generate net investment gains and losses. However, net investment gains and losses are incurred and can change significantly from period to period due to changes in external influences, including changes in market factors such as interest rates, foreign currency exchange rates, credit spreads and equity markets; counterparty specific factors such as financial performance, credit rating and collateral valuation; and internal factors such as portfolio rebalancing. Changes in these factors from period to period can significantly impact the levels of provision•Lower provisions for credit loss ~~and impairments~~ on ~~our investment portfolio, as well as realized~~fixed maturity securities

Partially offset by:

•Higher provisions for credit loss on mortgage loans

•Foreign currency transaction losses in the current period versus gains ~~and losses on investments sold.~~in the prior period

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We also use derivatives as an integral part of our management of the investment portfolio and insurance liabilities to hedge certain risks, including changes in interest rates, foreign currency exchange rates, credit spreads and equity market levels. We use freestanding interest rate, equity, credit and currency derivatives to hedge certain invested assets and insurance liabilities. A portion of these hedges are designated and qualify as accounting hedges, which reduce volatility in earnings. For those hedges not designated as accounting hedges, changes in market factors lead to the recognition of fair value changes in net derivative gains (losses) generally without an offsetting gain or loss recognized in earnings for the item being hedged, which creates volatility in earnings. We actively evaluate market risk hedging needs and strategies to ensure our liquidity objectives are met under a range of market conditions.

Certain direct or assumed variable annuity products with guaranteed minimum benefits contain embedded derivatives that are measured at estimated fair value separately from the host variable annuity contract, with changes in estimated fair value recorded in net derivative gains (losses). We use freestanding derivatives to hedge the market risks inherent in these variable annuity guarantees. The valuation of these embedded derivatives includes a nonperformance risk adjustment, which is unhedged, and can be a significant driver of net derivative gains (losses) and volatility in earnings, but does not have an economic impact on us.

We continuously review and refine our hedging strategy in light of changing economic and market conditions, evolving National Association of Insurance Commissioners and New York State Department of Financial Services statutory requirements, and accounting rule changes. As a part of our current hedging strategy, we maintain portfolio level derivatives in our macro hedge program. These macro hedge program derivatives, which are included in the non-VA program derivatives section of the table below, mitigate the potential deterioration in our capital positions from significant adverse economic conditions.

Net Derivative Gains (Losses). Direct and assumed variable annuity embedded derivatives and associated freestanding derivative hedges are collectively referred to as “VA program derivatives.” All other derivatives that are economic hedges- Unfavorable change of certain invested assets and insurance liabilities are referred to as “non-VA program derivatives.” The table below presents the impact on net derivative gains (losses) from non-VA program derivatives and VA program derivatives:

Six Months
Ended
June 30,
2022 2021
(In millions)
Non-VA program derivatives:
Interest rate $ (964) $ (702)
Foreign currency exchange rate 293 51
Credit (105) 38
Equity 253 (601)
Non-VA embedded derivatives 1,093 221
Total non-VA program derivatives 570 (993)
VA program derivatives:
Embedded derivatives-direct and assumed guarantees:
Market risks 174 488
Nonperformance risk adjustment (1) (15)
Other risks (92) (60)
Total 81 413
Freestanding derivatives hedging direct and assumed embedded derivatives (125) (410)
Total VA program derivatives (44) 3
Net derivative gains (losses) $ 526 $ (990)

~~Table of Contents~~

~~The favorable change in net derivative gains (losses) on non-VA program derivatives was $1.6 billion~~$681 million ($~~1.2 billion,~~538 million, net of income tax)~~. This was primarily due to a change~~(1):

•Change in the value of the underlying assets ~~favorably impacting non-VA~~- unfavorable impact to embedded derivatives related to funds withheld on a certain reinsurance ~~agreement. In addition, key~~agreement

•Key equity indexes increased in the current period versus decreased in the prior period - unfavorable impact to equity options and total rate of return swaps (“TRRs”)

Partially offset by:

•Long-term interest rates decreased in the current period versus increased in the prior period favorably impacting equity options and total rate of return swaps acquired primarily as part of our macro hedge program. Because certain of these hedging strategies are not designated or do not qualify as accounting hedges, the changes in- favorable impact to the estimated fair value of ~~these freestanding derivatives are recognized in net derivative gains (losses) without an offsetting gain or loss recognized in earnings for the items being hedged.~~receive fixed interest rate swaps

~~The unfavorable~~Market Risk Benefits Remeasurement Gains (Losses)(2) - Unfavorable change ~~in net derivative gains (losses) on VA program derivatives was $47 million~~of $1.6 billion ($~~37 million,~~1.3 billion, net of income tax). This was due to (i) an unfavorable change of $32 million ($25 million, net of income tax) in other risks in embedded derivatives, and (ii) an unfavorable change of $29 million ($23 million, net of income tax) in market risks in embedded derivatives, partially offset by freestanding derivatives hedging market risks in embedded derivatives. These unfavorable variances were partially offset by a favorable change of $14 million ($11 million, net of income tax) in the nonperformance risk adjustment on the direct and assumed variable annuity embedded derivatives.

The aforementioned $32 million ($25 million, net of income tax) unfavorable change in other risks in embedded derivatives reflects actuarial assumption updates and a combination of factors, such as fees deducted from accounts, changes in the benefit base, premiums, lapses, withdrawals and deaths, in addition to changes to cross-effect, basis mismatch, risk margin and fund allocation.

The aforementioned $29 million ($23 million, net of income tax) unfavorable change reflects a $314 million ($248 million, net of income tax) unfavorable change in market risks in embedded derivatives, partially offset by a $285 million ($225 million, net of income tax) favorable change in freestanding derivatives hedging market risks in embedded derivatives.

~~The primary changes in market factors affecting the valuation of VA program derivatives are summarized as follows:~~:

•~~Key equity index levels~~Long-term interest rates decreased in the current period versus increased in the prior period ~~contributing to an unfavorable change in our embedded derivatives and a favorable change in our freestanding derivatives. For example, the S&P Global Ratings 500 index decreased 21%~~

Partially offset by:

•Key equity indexes increased in the current period ~~and increased 14%~~versus decreased in the prior ~~period.~~period

Adjusted Earnings(3)- Unfavorable change of $189 million. See “— Consolidated Results — Adjusted Earnings.”

Taxes- Unfavorable change in effective tax rate - 53% current period versus 18% prior period

•~~Long-term interest rates increased more significantly in the current~~Current period compared to the prior period, contributing to an unfavorable change in our freestanding derivatives and a favorable change in our embedded derivatives. For example, the 30-year U.S. swap rate increased 122 basis points in the current period and increased 37 basis points in the prior period.

The aforementioned $14 million ($11 million, net of income tax) favorable change in the nonperformance risk adjustment on the direct and assumed variable annuity embedded derivatives resulted from a favorable change of $16 million ($13 million, net of income tax) related to changes in our own credit spread, partially offset by a slight unfavorable change related to model changes and changes in capital market inputs, such as long-term interest rates and key equity index levels, on variable annuity guarantees.

When equity index levels decrease in isolation, the direct and assumed variable annuity guarantees become more valuable to policyholders, which results in an increase in the undiscounted embedded derivative liability. Discounting this unfavorable change by the risk adjusted rate results in a smaller loss than by discounting at the risk-free rate, thus creating a gain from including an adjustment for nonperformance risk on the direct and assumed variable annuity embedded derivatives.

When the risk-free interest rate decreases in isolation, discounting the embedded derivative liability produces a higher valuation of the liability than if the risk-free interest rate had remained constant. Discounting this unfavorable change by the risk adjusted rate results in a smaller loss than by discounting at the risk-free interest rate, thus creating a gain from including an adjustment for nonperformance risk on the direct and assumed variable annuity embedded derivatives.

When our own credit spread increases in isolation, discounting the embedded derivative liability produces a lower valuation of the liability than if our own credit spread had remained constant. As a result, a gain is created from including an adjustment for nonperformance risk on the direct and assumed variable annuity embedded derivatives. For each of these primary market drivers, the opposite effect occurs when the driver moves in the opposite direction.

~~Table of Contents~~

~~Net Investment Gains (Losses).~~ The unfavorable change in net investment gains (losses) of $811 million ($641 million, net of income tax) primarily reflects: (i) higher losses on sales on fixed maturity securities, (ii) lower gains on sales of real estate investments, and (iii) higher provisions for credit loss on fixed maturity securities, partially offset by (iv) net foreign currency transaction gains in the current period.

~~Taxes.~~ ~~For the six months ended June 30, 2022, our~~ effective tax rate on ~~income (loss)~~loss before provision for income tax was ~~16%, which differed from the U.S.~~53% versus statutory rate of 21% ~~primarily due to tax~~:

•Tax benefits from tax credits ~~the corporate~~

•Corporate tax deduction for stock compensation ~~and non-taxable~~

•Non-taxable investment ~~income. For the six months ended June 30, 2021, our~~income

•Prior period effective tax rate on income ~~(loss)~~ before provision for income tax was ~~15%, which differed from the U.S.~~18% versus statutory rate of 21% ~~primarily due to tax~~:

•Tax benefits from ~~non-taxable investment income,~~ tax credits ~~and the corporate~~

•Corporate tax deduction for stock ~~compensation.~~compensation

•Non-taxable investment income

__________________

(1) Includes amounts relating to investment hedge adjustments, which are also included in adjusted earnings.

(2) See Note 5 of the Notes to the Interim Condensed Consolidated Financial Statements for further information on the Company’s MRBs.

(3) As used in “— Consolidated Results — Adjusted ~~Earnings.~~ AsEarnings” and as more fully described in “— Non-GAAP and Other Financial Disclosures,” we ~~use~~refer to adjusted earnings, which does not equate to net income (loss), as determined in accordance with GAAP, to analyze our performance, evaluate segment performance, and allocate resources. We believe that the presentation of adjusted earnings, as we measure it for management purposes, enhances the understanding of our performance by highlighting the results of operations and the underlying profitability drivers of the business. Adjusted earnings allows analysis of our performance and facilitates comparisons to industry results. Adjusted earnings should not be viewed as a substitute for net income (loss). ~~Adjusted earnings decreased $911 million, net~~

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Table of ~~income tax, to $1.8 billion, net of income tax, for the six months ended June 30, 2022 from $2.7 billion, net of income tax, for the six months ended June 30, 2021.~~Contents

Reconciliation of net income (loss) to adjusted earnings and premiums, fees and other revenues to adjusted premiums, fees and other revenues


			Six Months Ended June 30,						Three Months Ended March 31,
			2022		2021				2023		2022
			(In millions)						(In millions)
Net income (loss)	Net income (loss)		$	1,973	$	2,011	Net income (loss)		$	(91)	$	1,882
Less: adjustments from net income (loss) to adjusted earnings:	Less: adjustments from net income (loss) to adjusted earnings:						Less: adjustments from net income (loss) to adjusted earnings:
Revenues:	Revenues:						Revenues:
		Net investment gains (losses)	(309)		502			Net investment gains (losses)	(102)		(226)
		Net derivative gains (losses)	526		(990)			Net derivative gains (losses)	(560)		121
		Premiums	—		—			Premiums	—		—
		Universal life and investment-type product policy fees	38		39			Universal life and investment-type product policy fees	—		—
		Net investment income	(250)		(292)			Net investment income	(201)		(131)
		Other revenues	—		—			Other revenues	(5)		—
Expenses:	Expenses:						Expenses:
		Policyholder benefits and claims and policyholder dividends	243		(162)			Policyholder benefits and claims and policyholder dividends	(3)		(9)
		Interest credited to policyholder account balances	—		2			Policyholder liability remeasurement (gains) losses	—		—
		Capitalization of DAC	—		—			Market risk benefits remeasurement (gains) losses	(244)		1,361
		Amortization of DAC and VOBA	(28)		19			Interest credited to policyholder account balances	(1)		22
		Interest expense on debt	—		—			Capitalization of DAC	—		—
		Other expenses	(2)		8			Amortization of DAC and VOBA	—		—
								Interest expense on debt	—		—
								Other expenses	(5)		—
Provision for income tax (expense) benefit	Provision for income tax (expense) benefit		(47)		172		Provision for income tax (expense) benefit		235		(240)
Adjusted earnings	Adjusted earnings		$	1,802	$	2,713	Adjusted earnings		$	795	$	984

Premiums, fees and other revenues	Premiums, fees and other revenues		$	13,402	$	14,162	Premiums, fees and other revenues		$	6,694	$	6,796
Less: adjustments to premiums, fees and other revenues	Less: adjustments to premiums, fees and other revenues		38		39		Less: adjustments to premiums, fees and other revenues		(5)		—
Adjusted premiums, fees and other revenues	Adjusted premiums, fees and other revenues		$	13,364	$	14,123	Adjusted premiums, fees and other revenues		$	6,699	$	6,796

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Consolidated Results — Adjusted Earnings

Business ~~Overview.~~Overview. Adjusted premiums, fees and other revenues for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 decreased ~~$759~~$97 million, or 5%1%, compared to the prior period primarily due to a decrease in our ~~pension risk transfer business in the Retirement and Income Solutions (“RIS”) business within our U.S.~~MetLife Holdings segment. Changes in RIS premiums are mostly offset by a corresponding change in policyholder benefits. The decrease in RIS was partially offset by an increase in our Group Benefits business, primarily due to growth from our term life, group disability, voluntary products and dental businesses. In our MetLife Holdings segment, we anticipate an annual decline in adjusted premiums, fees and other revenues from expected business run-off. In addition, lower premiums in our Retirement and Income Solutions (“RIS”) business were partially offset by growth in our Group Benefits business, both in our U.S. segment. The decrease in premiums in RIS was mainly driven by our pension risk transfer business. Changes in RIS premiums are generally offset by a corresponding change in policyholder benefits. The increase in our Group Benefits business was primarily due to growth from our voluntary products and group term life, group disability and dental businesses, substantially offset by a decrease in premiums related to our participating life contracts, which can fluctuate with claims experience.

~~Six~~Three Months Ended ~~June 30, 2022~~March 31, 2023 Compared with the ~~Six~~Three Months Ended ~~June 30, 2021~~March 31, 2022

Unless otherwise stated, all amounts discussed below are net of income tax.

~~Overview.~~ ~~The primary driver of the decrease in adjusted earnings was lower investment yields. In addition, higher expenses were partially offset by favorable underwriting experience.~~

~~Business Growth.~~Adjusted Earnings - We benefited from positive net flows from many of our businesses, which increased our average invested asset base. Growth in the investment portfolios of all of our segments, as well as Corporate & Other contributed to improved net investment income. However, consistent with the growth in average invested assets, interest credited expenses on long-duration insurance products increased. In our MetLife Holdings segment, negative net flows from our deferred annuity business resulted in lower asset-based fee income. In addition, premiums declinedDecreased $189 million primarily due to the following business run-off and the impact of dividend scale reductions in both periods, which decreased adjusted earnings. Also, in our U.S. segment, higher direct expenses, including certain employee-related costs, coupled with an increase in variable expenses, were largely offset by a corresponding increase in premiums, fees and other revenues. The combined impact of the items affecting our business growth, as well as lower DAC amortization, resulted in a $131 million increase in adjusted earnings.drivers:

Market ~~Factors.~~Factors Market factors, including interest rate levels, variability in equity market returns, and foreign currency exchange rate fluctuations, continued to impact our results; however, certain impacts were mitigated- Decreased adjusted earnings by ~~derivatives used to hedge these risks. Investment yields~~$431 million

•Variable investment income decreased ~~driven by the unfavorable impact of~~- lower ~~equity market~~ returns on our private equity ~~funds, hedge funds~~ and ~~fair value option securities, as well as lower~~real estate funds

•Higher average interest crediting rates on investment-type products in our U.S. segment

Partially offset by:

•Recurring investment income increased - higher yields on ~~mortgage loans and~~ fixed income ~~securities. These decreases were partially offset~~securities and mortgage loans

Volume Growth - Increased adjusted earnings by ~~the favorable impact of higher real estate market returns on our real estate investments, primarily real estate funds. In addition,~~$57 million:

•Positive flows from pension risk transfer transactions and funding agreement issuances in ~~our deferred annuity business within our MetLife Holdings segment, higher costs associated with our variable annuity guaranteed minimum death benefits resulted in a decrease in adjusted earnings. In~~ our U.S. segment ~~the impact of interest rate fluctuations resulted~~and higher average invested assets in ~~a decline in our average interest credited rates on our long-duration insurance products, which drove a decrease~~Corporate & Other

Partially offset by:

•Increase in interest credited ~~expenses. The changes~~expenses on long duration insurance products in ~~market factors discussed above, as well as higher DAC amortization, resulted in a $973 million decrease in adjusted earnings.~~our U.S. segment

Underwriting and Other Insurance Adjustments~~. Underwriting results increased~~- Increased adjusted earnings by ~~$63 million primarily due to favorable~~$269 million:

•Favorable mortality ~~in our~~- U.S. segment partially offset by unfavorable claims experience in our MetLife Holdings segment. Favorable mortality in our U.S. segment was primarily driven by our Group Benefits business, partially offset by less favorable mortality in our RIS business. The favorable Group Benefits mortality was the result of- decreases in both incidence and severity of COVID-19 ~~and non-COVID-19 claims. Less favorable mortality~~claims in our ~~RIS~~Group Benefits business ~~was driven by our pension risk transfer business. In~~

•Favorable mortality - life business in our MetLife Holdings segment ~~claims experience, mainly~~

•Lower dividend expense in our ~~long-term care business, was less favorable reflecting a smaller impact from the COVID-19 pandemic in the current period. Dividend~~MetLife Holdings segment due to dividend scale reductions, as well as run-off in ~~Metropolitan Life Insurance Company’s~~our closed block ~~contributed to lower dividend expense, net of DAC amortization, and resulted in a $39 million increase in adjusted earnings.~~

Expenses~~. Adjusted~~- Decreased adjusted earnings ~~decreased $144 million mainly due to an~~by $65 million:

•Higher corporate-related expenses primarily in Corporate & Other

•Higher direct expenses, including certain employee-related costs, exceeded the corresponding increase in ~~corporate-related expenses~~premiums, fees and ~~higher interest expense on tax positions due to audit settlements~~other revenues in ~~the prior period.~~

~~Taxes.~~ ~~For the six months ended June 30, 2022,~~ our ~~effective tax rate on adjusted earnings was 15%, which differed from the~~ U.S. statutory rate of 21% primarily due to tax benefits from tax credits, the corporate tax deduction for stock compensation and non-taxable investment income. For the six months ended June 30, 2021, our effective tax rate on adjusted earnings was 16%, which differed from the U.S. statutory rate of 21% primarily due to tax benefits from non-taxable investment income, tax credits and the corporate tax deduction for stock compensation.segment

Adopted Accounting Pronouncements

See Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements.

~~Table of Contents~~

Future Adoption of Accounting Pronouncements

See Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements.

Non-GAAP and Other Financial Disclosures

In this report, the Company presents certain measures of its performance that are not calculated in accordance with GAAP. We believe that these non-GAAP financial measures enhance the understanding for the Company and our investors of our performance by highlighting the results of operations and the underlying profitability drivers of our business.

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The following non-GAAP financial measures should not be viewed as substitutes for the most directly comparable financial measures calculated in accordance with GAAP:


Non-GAAP financial measures:		Comparable GAAP financial measures:
(i)	adjusted premiums, fees and other revenues	(i)	premiums, fees and other revenues
(ii)	adjusted earnings	(ii)	net income (loss)

Reconciliations of these non-GAAP financial measures to the most directly comparable historical GAAP financial measures are included in “— Results of Operations.” Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are not accessible on a forward-looking basis because we believe it is not possible without unreasonable effort to provide other than a range of net investment gains and losses and net derivative gains and losses, which can fluctuate significantly within or outside the range and from period to period and may have a material impact on net income.

Our definitions of non-GAAP and other financial measures discussed in this report may differ from those used by other companies.

Adjusted earnings

This measure is used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, adjusted earnings is also our GAAP measure of segment performance. Adjusted earnings allows analysis of our performance and facilitates comparisons to industry results.

Adjusted earnings is defined as adjusted revenues less adjusted expenses, net of income tax. Adjusted loss is defined as negative adjusted earnings. For information relating to adjusted revenues and adjusted expenses, see “~~Financial~~“Financial Measures and Segment Accounting Policies” in Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements.

The following additional information is relevant to an understanding of our performance results:

•We sometimes refer to sales activity for various products. These sales statistics do not correspond to revenues under GAAP, but are used as relevant measures of business activity.

•Near-term represents one to three years.

Risk Management

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management” in the ~~2021~~2022 Annual Report for information on our risk management.

Subsequent Events

See Note 18 of the Notes to the Interim Condensed Consolidated Financial Statements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

The following discussion on market risk should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management.”

Market Risk Exposures

We regularly analyze our exposure to interest rate, foreign currency exchange rate and equity market price risk. As a result of that analysis, we have determined that the estimated fair values of certain assets and liabilities are materially exposed to changes in interest rates, foreign currency exchange rates and equity markets. We have exposure to market risk through our insurance operations and investment activities. For purposes of this disclosure, “market risk” is defined as the risk of loss due to potential changes in the value of assets and liabilities arising from fluctuation in the financial markets and other economic factors.

Interest Rates

Our exposure to interest rate changes results most significantly from our holdings of fixed maturity securities available-for-sale (“AFS”), mortgage loans, derivatives, and our interest rate sensitive liabilities. The fixed maturity securities AFS include U.S. and foreign government bonds, securities issued by government agencies, corporate bonds, mortgage-backed securities and asset-backed securities and collateralized loan obligations, all of which are mainly exposed to changes in medium- and long-term interest rates. The interest rate sensitive liabilities for purposes of this disclosure include FPBs, policyholder account balances related to certain investment type contracts, debt, and MRBs primarily consisting of variable annuities with guaranteed minimum benefits which have the same type of interest rate exposure (medium- and long-term interest rates) as fixed maturity securities AFS. See “Risk Factors — Economic Environment and Capital Markets Risks — We May Face Difficult Economic Conditions” included in the 2022 Annual Report.

Foreign Currency Exchange Rates

Our exposure to fluctuations in foreign currency exchange rates against the U.S. dollar results most significantly from our holdings in non-U.S. dollar denominated fixed maturity and equity securities, mortgage loans, and insurance liabilities. The principal currencies that create foreign currency exchange rate risk in our investment portfolios and insurance liabilities are the Japanese yen, the Euro and the British pound. We hedge foreign currency exchange rate risk with foreign currency swaps, forwards and options.

Equity Market

Along with investments in equity and fair value option securities (“FVO Securities”), we have exposure to equity market risk through certain liabilities that involve long-term guarantees on equity performance, such as MRBs for variable annuities with guaranteed minimum benefits and certain policyholder account balances. Equity exposures associated with real estate and limited partnership interests are excluded from this discussion as they are not considered financial instruments under GAAP.

Management of Market Risk Exposures

We use a variety of strategies to manage interest rate, foreign currency exchange rate and equity market risk, including the use of derivatives.

Interest Rate Risk Management

To manage interest rate risk, we analyze interest rate risk using various models, including multi-scenario cash flow projection models that forecast cash flows of the liabilities and their supporting investments, including derivatives. These projections involve evaluating the potential gain or loss on most of our in-force business under various increasing and decreasing interest rate environments. The New York State Department of Financial Services regulations require that we perform some of these analyses annually as part of our review of the sufficiency of our regulatory reserves. We maintain segmented operating and surplus asset portfolios for the purpose of asset/liability management (“ALM”) and the allocation of investment income to product lines. In the U.S., for each segment, invested assets greater than or equal to the GAAP liabilities net of certain non-invested assets allocated to the segment are maintained, with any excess allocated to Corporate & Other. The business segments may reflect differences in legal entity, statutory line of business and any product market characteristic which may drive a distinct investment strategy with respect to duration, liquidity or credit quality of the invested assets.

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We measure relative sensitivities of the value of our assets and liabilities to changes in key assumptions utilizing internal models. These models reflect specific product characteristics and include assumptions based on current and anticipated experience regarding lapse, mortality, morbidity and interest crediting rates. In addition, these models include asset cash flow projections reflecting interest payments, sinking fund payments, principal payments, bond calls, mortgage loan prepayments and defaults.

We employ product design, pricing and ALM strategies to reduce the potential effects of interest rate movements. Product design and pricing strategies include the use of surrender charges or restrictions on withdrawals in some products and the ability to reset crediting rates for certain products. ALM strategies include the use of derivatives. We also use reinsurance to mitigate interest rate risk.

We also use common industry metrics, such as duration and convexity, to measure the relative sensitivity of assets and liability values to changes in interest rates. In computing the duration of liabilities, we consider policyholder guarantees and how we intend to set indeterminate policy elements such as interest credits or dividends. Each asset portfolio or portfolio group has a duration target based on the liability duration and the investment objectives of that portfolio. Where a liability cash flow may exceed the maturity of available assets, we may support such liabilities with equity investments, derivatives or interest rate curve mismatch strategies.

Foreign Currency Exchange Rate Risk Management

MetLife has a well-established policy to manage foreign currency exchange rate exposures within its risk tolerance. In general, investments backing specific liabilities are currency matched. This is achieved through direct investments in matching currency or through the use of foreign currency exchange rate derivatives. Enterprise foreign currency exchange rate risk limits are established by the Enterprise Risk Committee. Management of each of the Company’s segments, with oversight from MetLife’s FX Working Group and the ALM committee for the respective segment, is responsible for managing any foreign currency exchange rate exposure. The general authorizations of the Investment Committee of the MLIC Board of Directors also set limits on unhedged foreign currency investment exposure.

We use foreign currency swaps, forwards and options to mitigate the liability exposure, risk of loss and financial statement volatility associated with foreign currency denominated fixed income investments and foreign currency insurance liabilities.

Equity Market Risk Management

We manage equity market risk on an integrated basis with other risks through our ALM strategies, including the dynamic hedging with derivatives of certain variable annuity guarantee benefits accounted for as MRBs, as well as reinsurance, in order to limit losses, minimize exposure to large risks, and provide additional capacity for future growth. We also manage equity market risk exposure in our investment portfolio through the use of derivatives. These derivatives include exchange-traded equity futures, equity index options contracts, TRRs and equity variance swaps.

Hedging Activities

We use derivative contracts primarily to hedge a wide range of risks including interest rate risk, foreign currency exchange rate risk, and equity market risk. Derivative hedges are designed to reduce risk on an economic basis while considering their impact on financial results under different accounting regimes, including GAAP and local statutory accounting. Our derivative hedge programs vary depending on the type of risk being hedged. Some hedge programs are asset or liability specific while others are portfolio hedges that reduce risk related to a group of liabilities or assets. Our use of derivatives by major hedge programs is as follows:

•Risks Related to Guarantee Benefits — We use a wide range of derivative contracts to mitigate the risk associated with living guarantee benefits accounted for as MRBs. These derivatives include equity and interest rate futures, interest rate swaps, currency futures/forwards, equity indexed options, TRRs, interest rate option contracts and equity variance swaps.

•Minimum Interest Rate Guarantees — For certain liability contracts, we provide the contractholder a guaranteed minimum interest rate. These contracts include certain fixed annuities and other insurance liabilities. We purchase interest rate caps and floors to reduce risk associated with these liability guarantees.

•Reinvestment Risk in Long-Duration Liability Contracts — Derivatives are used to hedge interest rate risk related to certain long-duration liability contracts. Hedges include interest rate swaps, swaptions and Treasury bond forwards.

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•Foreign Currency Exchange Rate Risk — We use foreign currency swaps, futures, forwards and options to hedge foreign currency exchange rate risk. These hedges are generally used to swap foreign currency denominated bonds or equity market exposures to U.S. dollars.

•General ALM Hedging Strategies — In the ordinary course of managing our asset/liability risks, we use interest rate futures, interest rate swaps, interest rate caps, interest rate floors, and inflation swaps. These hedges are designed to reduce interest rate risk or inflation risk related to the existing assets or liabilities or related to expected future cash flows.

•Macro Hedge Program — We use equity options, equity TRRs, interest rate swaptions, interest rate swaps and Treasury locks to mitigate the potential loss of legal entity statutory capital under stress scenarios.

Risk Measurement: Sensitivity Analysis

We measure market risk related to our market sensitive assets and liabilities based on changes in interest rates, foreign currency exchange rates and equity market prices utilizing a sensitivity analysis. This analysis estimates the potential changes in estimated fair value based on a hypothetical 100 basis point change (increase or decrease) in interest rates, as well as a 10% change (increase or decrease) in foreign currency exchange rates and equity market prices. We believe these changes in market rates and prices are reasonably possible in the near term. In performing the analysis summarized below, we used market rates at March 31, 2023. The sensitivity analysis separately calculates each of our market risk exposures (interest rate, foreign currency exchange rate and equity market) relating to our assets and liabilities. We modeled the impact of changes (increases and decreases) in market rates and prices on the estimated fair values of our market sensitive assets and liabilities and present the results with the most adverse level of market risk impact to the Company for each of these market risk exposures as follows:

•the net present values of our interest rate sensitive exposures resulting from a 100 basis point change (increase or decrease) in interest rates;

•estimated fair values of our foreign currency exchange rate sensitive exposures due to a 10% change (appreciation or depreciation) in the value of the U.S. dollar compared to all other currencies; and

•the estimated fair value of our equity market sensitive exposures due to a 10% change (increase or decrease) in equity market prices.

The sensitivity analysis is an estimate and should not be viewed as predictive of our future financial performance. We cannot ensure that our actual losses in any particular period will not exceed the amounts indicated in the table below. Limitations related to this sensitivity analysis include:

•liabilities do not include $8.2 billion of other policy-related balances largely consisting of claims, unearned revenue liabilities and policyholder dividends;

•the analysis excludes real estate holdings, private equity and hedge fund holdings;

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

•sensitivities do not include the impact on asset or liability valuation of changes in market liquidity or changes in market credit spreads;

•foreign currency exchange rate risk is not isolated for certain MRBs for variable annuities with guaranteed minimum benefits, as the risk on these instruments is reflected as equity;

•the impact on reported earnings may be materially different from the change in market values, most notably for fixed maturity securities AFS, mortgage loans, FPBs, and derivatives that qualify for hedge accounting; and

•the model assumes that the composition of assets and liabilities remains unchanged throughout the period.

Accordingly, we use such models as tools and not as substitutes for the experience and judgment of our management. Based on our analysis of the impact of a 100 basis point change (increase or decrease) in interest rates, as well as a 10% change (increase or decrease) in foreign currency exchange rates and equity market prices, we have determined that such a change could have a material adverse effect on the estimated fair value of certain assets and liabilities from interest rate, foreign currency exchange rate and equity market exposures.

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The table below illustrates the potential loss in estimated fair value for each market risk exposure based on market sensitive assets and liabilities at:


	March 31, 2023
	(In millions)
Interest rate risk	$	3,697
Foreign currency exchange rate risk	$	181
Equity market risk	$	73

The risk sensitivities derived used a 100 basis point increase to interest rates, a 10% weakening of the U.S. dollar against foreign currencies, and a 10% decrease in equity prices. The potential losses in estimated fair value presented are for non-trading securities.

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The table below provides additional detail regarding the potential loss in estimated fair value of our interest sensitive financial instruments due to a 100 basis point increase in interest rates at:


	March 31, 2023
	Notional Amount		Estimated Fair Value (1)		Assuming a 100 bps Increase in Interest Rates
	(In millions)
Assets
Fixed maturity securities AFS			$	150,960	$	(9,795)

FVO Securities			$	892	$	(9)
Mortgage loans			$	61,025	$	(1,870)
Policy loans			$	6,177	$	(163)
Short-term investments			$	2,046	$	(51)
Other invested assets			$	2,320	$	4
Cash and cash equivalents			$	5,225	$	(2)
Accrued investment income			$	2,080	$	—
Premiums, reinsurance and other receivables			$	12,386	$	(689)
Market risk benefits			$	124	$	—

Other assets			$	820	$	—

Total assets					$	(12,575)
Liabilities
Future policy benefits			$	128,198	$	6,470
Policyholder account balances			$	85,569	$	2,184
Market risk benefits			$	3,432	$	1,068

Payables for collateral under securities loaned and other transactions			$	13,443	$	—
Short-term debt			$	99	$	—
Long-term debt			$	1,942	$	72


Other liabilities			$	12,251	$	752

Total liabilities					$	10,546
Derivative Instruments
Interest rate swaps	$	22,377	$	1,896	$	(1,242)
Interest rate floors	$	21,495	$	128	$	(66)
Interest rate caps	$	41,290	$	698	$	235
Interest rate futures	$	265	$	1	$	(24)
Interest rate options	$	39,806	$	393	$	(207)
Interest rate forwards	$	1,932	$	(284)	$	(165)

Synthetic GICs	$	10,525	$	—	$	—
Foreign currency swaps	$	34,579	$	2,032	$	(149)
Foreign currency forwards	$	1,398	$	(2)	$	—


Credit default swaps	$	11,139	$	104	$	(1)
Equity futures	$	1,110	$	(14)	$	(2)
Equity index options	$	15,756	$	322	$	(40)
Equity variance swaps	$	90	$	4	$	—
Equity total return swaps	$	1,980	$	2	$	(7)
Total derivative instruments					$	(1,668)
Net Change					$	(3,697)

__________________

(1)Separate account assets and liabilities, which are interest rate sensitive, are not included herein as any interest rate risk is borne by the contractholder.

Sensitivity to interest rates increased $0.6 billion to $3.7 billion at March 31, 2023 from $3.1 billion at December 31, 2022.

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The table below provides additional detail regarding the potential loss in estimated fair value of our portfolio due to a 10% depreciation in the U.S. dollar compared to all other currencies at:


	March 31, 2023
	Notional Amount		Estimated Fair Value (1)		Assuming a 10% Depreciation in the U.S. Dollar
	(In millions)
Assets
Fixed maturity securities AFS			$	150,960	$	1,475

FVO Securities			$	892	$	—
Mortgage loans			$	61,025	$	268
Policy loans			$	6,177	$	—
Short-term investments			$	2,046	$	84
Other invested assets			$	2,320	$	122
Cash and cash equivalents			$	5,225	$	8
Accrued investment income			$	2,080	$	17
Premiums, reinsurance and other receivables			$	12,386	$	—
Market risk benefits			$	124	$	—

Other assets			$	820	$	—

Total assets					$	1,974
Liabilities
Future policy benefits			$	128,198	$	—
Policyholder account balances			$	85,569	$	(1,193)
Market risk benefits			$	3,432	$	—

Payables for collateral under securities loaned and other transactions			$	13,443	$	—
Long-term debt			$	1,942	$	—
Other liabilities			$	12,251	$	—

Total liabilities					$	(1,193)
Derivative Instruments
Interest rate swaps	$	22,377	$	1,896	$	—
Interest rate floors	$	21,495	$	128	$	—
Interest rate caps	$	41,290	$	698	$	—
Interest rate futures	$	265	$	1	$	—
Interest rate options	$	39,806	$	393	$	—
Interest rate forwards	$	1,932	$	(284)	$	—

Synthetic GICs	$	10,525	$	—	$	—
Foreign currency swaps	$	34,579	$	2,032	$	(862)
Foreign currency forwards	$	1,398	$	(2)	$	(101)


Credit default swaps	$	11,139	$	104	$	1
Equity futures	$	1,110	$	(14)	$	—
Equity index options	$	15,756	$	322	$	—
Equity variance swaps	$	90	$	4	$	—
Equity total return swaps	$	1,980	$	2	$	—
Total derivative instruments					$	(962)
Net Change					$	(181)

__________________

(1)Does not necessarily represent those financial instruments solely subject to foreign currency exchange rate risk. Separate account assets and liabilities, which are foreign currency exchange rate sensitive, are not included herein as any foreign currency exchange rate risk is borne by the contractholder.

Sensitivity to foreign currency exchange rates decreased $80 million to $181 million at March 31, 2023 from $261 million at December 31, 2022.

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The table below provides additional detail regarding the potential loss in estimated fair value of our portfolio due to a 10% decrease in equity prices at:


	March 31, 2023
	Notional Amount		Estimated Fair Value (1)		Assuming a 10% Decrease in Equity Prices
	(In millions)
Assets
FVO Securities			$	892	$	(64)
Other invested assets			$	2,320	$	(46)
Total assets					$	(110)
Liabilities
Policyholder account balances			$	85,569	$	—
Market risk benefits			$	3,432	$	(375)

Total liabilities					$	(375)
Derivative Instruments
Interest rate swaps	$	22,377	$	1,896	$	—
Interest rate floors	$	21,495	$	128	$	—
Interest rate caps	$	41,290	$	698	$	—
Interest rate futures	$	265	$	1	$	—
Interest rate options	$	39,806	$	393	$	—
Interest rate forwards	$	1,932	$	(284)	$	—

Synthetic GICs	$	10,525	$	—	$	—
Foreign currency swaps	$	34,579	$	2,032	$	—
Foreign currency forwards	$	1,398	$	(2)	$	—


Credit default swaps	$	11,139	$	104	$	—
Equity futures	$	1,110	$	(14)	$	92
Equity index options	$	15,756	$	322	$	113
Equity variance swaps	$	90	$	4	$	—
Equity total return swaps	$	1,980	$	2	$	207
Total derivative instruments					$	412
Net Change					$	(73)

__________________

(1)Does not necessarily represent those financial instruments solely subject to equity price risk. Additionally, separate account assets and liabilities, which are equity market sensitive, are not included herein as any equity market risk is borne by the contractholder.

Sensitivity to equity market prices increased $53 million to $73 million at March 31, 2023 from $20 million at December 31, 2022.

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Item 4. Controls and Procedures

Management, with the participation of the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of the end of the period covered by this report. Based on that evaluation, the CEO and CFO have concluded that these disclosure controls and procedures are effective.

~~There~~During the first quarter of 2023, the Company adopted LDTI resulting in material changes to certain measurement models and disclosures for periodic results and balances related to long-duration insurance contracts. To address the additional requirements under LDTI, the Company implemented changes to policies and processes for the estimation and disclosure of these periodic results and balances.

Except for the changes related to the adoption of LDTI, there were no other material changes to the Company’s internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) during the quarter ended ~~June 30, 2022~~March 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~Table of Contents~~

Part II — Other Information

Item 1. Legal Proceedings

See Note 1116 of the Notes to the Interim Condensed Consolidated Financial Statements.

Item 1A. Risk Factors

Certain factors that may affect the Company’s business or operations are described under “Risk Factors” in Part I, Item 1A, of the ~~2021~~2022 Annual Report. There have been no material changes to our risk factors from the risk factors previously disclosed in the ~~2021~~2022 Annual Report.

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Item 6. Exhibits

(Note Regarding Reliance on Statements in Our Contracts: In reviewing the agreements included as exhibits to this Quarterly Report on Form 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about Metropolitan Life Insurance Company, its subsidiaries or affiliates, or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and (i) should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; (iii) may apply standards of materiality in a way that is different from what may be viewed as material to investors; and (iv) were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about Metropolitan Life Insurance Company, its subsidiaries and affiliates may be found elsewhere in this Quarterly Report on Form 10-Q and Metropolitan Life Insurance Company’s other public filings, which are available without charge through the U.S. Securities and Exchange Commission website at www.sec.gov.)

Incorporated by Reference

Exhibit No.

Description

Form

File Number

Exhibit

Filing Date

Filed or Furnished Herewith

31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101).

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


METROPOLITAN LIFE INSURANCE COMPANY

By:						/s/ Tamara L. Schock
						Name: Tamara L. Schock Title: Executive Vice President and Chief Accounting Officer (Authorized Signatory and Principal Accounting Officer)

Date: ~~August~~May 9, ~~2022~~2023

86125


	June 30, 2022						December 31, 2021
	In the Event of Death			At Annuitization			In the Event of Death			At Annuitization
	(Dollars in millions)
Annuity Contracts:
Variable Annuity Guarantees:
Total account value (1), (2)	$	38,733		$	15,503		$	48,868		$	20,140
Separate account value (1)	$	29,933		$	14,726		$	39,882		$	19,347
Net amount at risk	$	4,055	(3)	$	569	(4)	$	1,160	(3)	$	461	(4)
Average attained age of contractholders	69 years			69 years			69 years			66 years
Other Annuity Guarantees:
Total account value (1), (2)	N/A			$	135		N/A			$	135
Net amount at risk	N/A			$	67	(5)	N/A			$	70	(5)
Average attained age of contractholders	N/A			56 years			N/A			55 years


	June 30, 2022				December 31, 2021
	Secondary Guarantees		Paid-Up Guarantees		Secondary Guarantees		Paid-Up Guarantees
	(Dollars in millions)
Universal and Variable Life Contracts:
Total account value (1), (2)	$	4,793	$	807	$	5,935	$	826
Net amount at risk (6)	$	37,736	$	5,010	$	37,482	$	5,181
Average attained age of policyholders	59 years		66 years		59 years		65 years


	Six Months Ended June 30, 2022		Year Ended December 31, 2021
	(In millions)
Balance, beginning of period	$	1,682	$	2,969
Change in unrealized investment and derivative gains (losses)	(1,682)		(1,287)
Balance, end of period	$	—	$	1,682


	Six Months Ended June 30,
	2022								2021
	Commercial		Agricultural		Residential		Total		Commercial		Agricultural		Residential		Total
	(In millions)
Balance, beginning of period	$	260	$	79	$	197	$	536	$	199	$	97	$	221	$	517
Provision (release)	(13)		36		(38)		(15)		17		(7)		(20)		(10)
Initial credit losses on PCD loans (1)	—		—		—		—		—		—		2		2
Charge-offs, net of recoveries	(82)		(22)		(1)		(105)		—		(13)		(1)		(14)
Balance, end of period	$	165	$	93	$	158	$	416	$	216	$	77	$	202	$	495


	Three Months Ended June 30, 2022
	Unrealized Investment Gains (Losses), Net of Related Offsets (1)		Unrealized Gains (Losses) on Derivatives		Foreign Currency Translation Adjustments		Defined Benefit Plans Adjustment		Total
	(In millions)
Balance, beginning of period	$	3,528	$	1,597	$	(58)	$	(387)	$	4,680
OCI before reclassifications	(11,474)		(96)		(35)		—		(11,605)
Deferred income tax benefit (expense)	2,414		20		4		—		2,438
AOCI before reclassifications, net of income tax	(5,532)		1,521		(89)		(387)		(4,487)
Amounts reclassified from AOCI	403		486		—		10		899
Deferred income tax benefit (expense)	(85)		(102)		—		(2)		(189)
Amounts reclassified from AOCI, net of income tax	318		384		—		8		710



Balance, end of period	$	(5,214)	$	1,905	$	(89)	$	(379)	$	(3,777)


	Three Months Ended June 30, 2021
	Unrealized Investment Gains (Losses), Net of Related Offsets (1)		Unrealized Gains (Losses) on Derivatives		Foreign Currency Translation Adjustments		Defined Benefit Plans Adjustment		Total
	(In millions)
Balance, beginning of period	$	8,305	$	854	$	(29)	$	(451)	$	8,679
OCI before reclassifications	759		859		(6)		(2)		1,610
Deferred income tax benefit (expense)	(153)		(181)		2		—		(332)
AOCI before reclassifications, net of income tax	8,911		1,532		(33)		(453)		9,957
Amounts reclassified from AOCI	35		(142)		—		10		(97)
Deferred income tax benefit (expense)	(8)		29		—		(2)		19
Amounts reclassified from AOCI, net of income tax	27		(113)		—		8		(78)



Balance, end of period	$	8,938	$	1,419	$	(33)	$	(445)	$	9,879