Item 7.01 Regulation FD Disclosure.
On May 25, 2023, MetLife, Inc., a Delaware corporation (the “Company”) issued a news release announcing that two of its subsidiaries, Metropolitan Life Insurance Company, a New York-domiciled insurance company (“MLIC”), and Metropolitan Tower Life Insurance Company, a Nebraska-domiciled insurance company (“MTL” and, together with MLIC, the “Ceding Companies”), entered into a Master Transaction Agreement (the “Master Agreement”) with Commonwealth Annuity and Life Insurance Company, a Massachusetts-domiciled corporation (“CwA”), and First Allmerica Financial Life Insurance Company, a Massachusetts-domiciled insurance company (“FAFLIC” and, together with CwA, the “Reinsurers”), and the transactions contemplated thereby. Additional details about this transaction can be found in such news release, which is furnished as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
In addition, the slide presentation attached as Exhibit 99.2 to this Form 8-K and incorporated herein by reference, will be presented at MetLife, Inc.’s investor conference related to this transaction on May 25, 2023.
As provided in General Instruction B.2 of Form 8-K, the information and exhibits provided pursuant to this Item 7.01 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 8.01 Other Events.
On May 25, 2023, MLIC and MTL entered into the Master Agreement, pursuant to which, among other things, at the closing of the transactions contemplated thereby, (i) MLIC and FAFLIC will enter into a coinsurance and modified coinsurance agreement (the “MLIC Reinsurance Agreement”) and (ii) MTL and CwA will enter into a coinsurance and modified coinsurance agreement (the “MTL Reinsurance Agreement” and, together with the MLIC Reinsurance Agreement, the “Reinsurance Agreements”), pursuant to which, upon the terms and subject to the conditions set forth therein, the applicable Ceding Company will cede to the applicable Reinsurer, and the applicable Reinsurer will reinsure, on a combined coinsurance and modified coinsurance basis, (x) solely in the case of MLIC, 25% of the reinsured liabilities (as described in the Master Agreement) with respect to certain retail universal life insurance policies with secondary guarantees described therein, the remaining portion of which are reinsured to MetLife Reinsurance Company of Vermont, and (y) in the case of both MLIC and MTL, 100% of the reinsured liabilities with respect to other retail universal life, universal life with supplemental guarantees and variable universal life insurance policies and retail fixed deferred annuities and fixed and variable immediate annuity contracts described therein (the “Reinsured Contracts”).
In connection therewith, at the closing of such transactions, MLIC and FAFLIC will enter into a trust agreement with U.S. Bank National Association (the “Trustee”) (the “MLIC Trust Agreement”) and MTL and CwA will enter into a trust agreement with the Trustee (the “MTL Trust Agreement” and, together with the MLIC Trust Agreement, the “Trust Agreements”), pursuant to which, upon the terms and subject to the conditions set forth therein, the applicable Reinsurer will establish with the Trustee a trust account for the benefit of such applicable Ceding Company to collateralize its obligations under the applicable Reinsurance Agreement (each a “Trust Account” and, together, the “Trust Accounts”), and assets supporting the general account liabilities relating to the applicable Reinsured Contracts will be deposited into the applicable Trust Account. Each Ceding Company will reinsure the separate accounts relating to the Reinsured Contracts on a modified coinsurance basis. CwA will provide a guarantee of FAFLIC’s payment obligations to MLIC and trust funding obligations under the MLIC Reinsurance Agreement. In addition, the investment of assets in the Trust Accounts will be subject to investment guidelines and certain capital adequacy related triggers will require enhanced funding. The Reinsurance Agreements will also contain additional counterparty risk management and mitigation provisions.
In consideration of MLIC and MTL entering into the applicable Reinsurance Agreement and the transactions contemplated thereby, MLIC and MTL will each receive an aggregate ceding commission of $1,770 million, in the case of MLIC, and $480 million, in the case of MTL, in each case subject to adjustments as contemplated by the Master Agreement, based primarily on changes in the equity markets between a valuation date and the closing of the transactions.
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