BRIGHTHOUSE LIFE INSURANCE 10-Q 2007 Q3 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007
OR
o	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:33-03094

MetLife Insurance Company of Connecticut

(Exact name of registrant as specified in its charter)

Connecticut	06-0566090
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
One Cityplace, Hartford, Connecticut	06103-3415
(Address of principal executive offices)	(Zip Code)

(860) 308-1000

(Registrant’s telephone number, including area code)

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 þ     No o

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

       Large accelerated filer o     Accelerated filer o     Non-accelerated filer þ     

Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act).  Yes o     No þ

At November 9, 2007, 34,595,317 shares of the registrant’s common stock, $2.50 par value per share, were outstanding, of which 30,000,000 shares are owned directly by MetLife, Inc. and the remaining 4,595,317 shares are owned by MetLife Investors Group, Inc., a wholly-owned subsidiary of MetLife, Inc.

REDUCED DISCLOSURE FORMAT

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

Table of Contents

	Page
Part I — Financial Information		4
Item 1.  Financial Statements		4
Interim Condensed Consolidated Balance Sheets at September 30, 2007 (Unaudited) and December 31, 2006		4
Interim Condensed Consolidated Statements of Income for the Three Months and Nine Months Ended September 30, 2007 and 2006 (Unaudited)		5
Interim Condensed Consolidated Statement of Stockholders’ Equity for the Nine Months Ended September 30, 2007 (Unaudited)		6
Interim Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2007 and 2006 (Unaudited)		7
Notes to Interim Condensed Consolidated Financial Statements (Unaudited)		8
Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations		32
Item 4.  Controls and Procedures		40
Part II — Other Information		40
Item 1.  Legal Proceedings		40
Item 1A.  Risk Factors		41
Item 6.  Exhibits		42
Signatures		43
Exhibit Index		E-1
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32.1: CERTIFICATION
EX-32.2: CERTIFICATION

2

Note Regarding Forward-Looking Statements

This Quarterly Report onForm 10-Q, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains statements which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to trends in the operations and financial results and the business and the products of MetLife Insurance Company of Connecticut and its subsidiaries, as well as other statements including words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend” and other similar expressions. Forward-looking statements are made based upon management’s current expectations and beliefs concerning future developments and their potential effects on MetLife Insurance Company of Connecticut and its subsidiaries. Such forward-looking statements are not guarantees of future performance. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

3

Part I — Financial Information

Item 1.   Financial Statements

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

Interim Condensed Consolidated Balance Sheets
September 30, 2007 (Unaudited) and December 31, 2006

(In millions, except share and per share data)

	September 30,			December 31,
	2007			2006
Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $48,977 and $48,406, respectively)	$	48,099		$	47,846
Equity securities available-for-sale, at estimated fair value (cost: $958 and $777, respectively)		950			795
Mortgage and consumer loans		4,588			3,595
Policy loans		916			918
Real estate and real estate joint ventures held-for-investment		463			173
Real estate held-for-sale		—			7
Other limited partnership interests		973			1,082
Short-term investments		671			777
Other invested assets		1,315			1,241
Total investments		57,975			56,434
Cash and cash equivalents		1,694			649
Accrued investment income		721			597
Premiums and other receivables		7,478			8,410
Deferred policy acquisition costs and value of business acquired		5,153			5,111
Current income tax recoverable		148			94
Deferred income tax assets		1,050			1,007
Goodwill		953			953
Other assets		858			765
Separate account assets		54,898			50,067
Total assets	$	130,928		$	124,087
Liabilities and Stockholders’ Equity
Liabilities:
Future policy benefits	$	19,627		$	19,654
Policyholder account balances		34,233			35,099
Other policyholder funds		1,736			1,513
Short-term debt — affiliated		52			—
Long-term debt — affiliated		435			435
Payables for collateral under securities loaned and other transactions		11,332			9,155
Other liabilities		1,638			749
Separate account liabilities		54,898			50,067
Total liabilities		123,951			116,672
Contingencies, Commitments and Guarantees (Note 5)
Stockholders’ Equity:
Common stock, par value $2.50 per share; 40,000,000 shares authorized; 34,595,317 shares issued and outstanding at September 30, 2007 and December 31, 2006		86			86
Additional paid-in capital		6,719			7,123
Retained earnings		645			520
Accumulated other comprehensive loss		(473	)		(314	)
Total stockholders’ equity		6,977			7,415
Total liabilities and stockholders’ equity	$	130,928		$	124,087

See accompanying notes to interim condensed consolidated financial statements.

4

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

Interim Condensed Consolidated Statements of Income
For the Three Months and Nine Months Ended September 30, 2007 and 2006 (Unaudited)

(In millions)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2007			2006			2007			2006
Revenues
Premiums	$	92		$	65		$	263		$	220
Universal life and investment-type product policy fees		351			327			1,033			1,011
Net investment income		719			662			2,183			2,128
Other revenues		64			50			188			150
Net investment gains (losses)		(90	)		(47	)		(291	)		(378	)
Total revenues		1,136			1,057			3,376			3,131
Expenses
Policyholder benefits and claims		256			157			722			579
Interest credited to policyholder account balances		327			343			969			985
Other expenses		327			270			1,007			832
Total expenses		910			770			2,698			2,396
Income from continuing operations before provision for income tax		226			287			678			735
Provision for income tax		72			80			185			210
Income from continuing operations		154			207			493			525
Income from discontinued operations, net of income tax		—			—			4			—
Net income	$	154		$	207		$	497		$	525

See accompanying notes to interim condensed consolidated financial statements.

5

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

Interim Condensed Consolidated Statement of Stockholders’ Equity
For the Nine Months Ended September 30, 2007 (Unaudited)

(In millions)

									Accumulated Other
									Comprehensive Loss
									Net			Foreign
			Additional						Unrealized			Currency
	Common		Paid-in			Retained			Investment			Translation
	Stock		Capital			Earnings			Gains (Losses)			Adjustments		Total
Balance at December 31, 2006	$	86	$	7,123		$	520		$	(314	)	$	—	$	7,415
Cumulative effect of a change in accounting principle, net of income tax (Note 1)							(86	)							(86	)
Balance at January 1, 2007		86		7,123			434			(314	)		—		7,329
Dividends declared on common stock (Note 6)				(404	)		(286	)							(690	)
Comprehensive income:
Net income							497								497
Other comprehensive loss:
Unrealized gains (losses) on derivative instruments, net of income tax										(2	)				(2	)
Unrealized investment gains (losses), net of related offsets and income tax										(179	)				(179	)
Foreign currency translation adjustments, net of income tax													22		22
Other comprehensive loss															(159	)
Comprehensive income															338
Balance at September 30, 2007	$	86	$	6,719		$	645		$	(495	)	$	22	$	6,977

See accompanying notes to interim condensed consolidated financial statements.

6

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

Interim Condensed Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2007 and 2006 (Unaudited)

(In millions)

	Nine Months Ended
	September 30,
	2007			2006
Net cash provided by operating activities	$	1,881		$	842
Cash flows from investing activities
Sales, maturities and repayments of:
Fixed maturity securities		17,241			21,011
Equity securities		143			140
Mortgage and consumer loans		815			588
Real estate and real estate joint ventures		146			115
Other limited partnership interests		435			680
Purchases of:
Fixed maturity securities		(17,593	)		(17,697	)
Equity securities		(315	)		(55	)
Mortgage and consumer loans		(1,815	)		(1,054	)
Real estate and real estate joint ventures		(378	)		(43	)
Other limited partnership interests		(354	)		(276	)
Net change in policy loans		2			(3	)
Net change in short-term investments		106			(281	)
Net change in other invested assets		(145	)		(177	)
Other, net		13			2
Net cash (used in) provided by investing activities		(1,699	)		2,950
Cash flows from financing activities
Policyholder account balances:
Deposits		8,425			6,219
Withdrawals		(9,843	)		(8,909	)
Net change in payables for collateral under securities loaned and other transactions		2,177			285
Net change in short-term debt — affiliated		52			—
Dividends on common stock		—			(917	)
Financing element of certain derivative instruments		52			(35	)
Net cash provided by (used in) financing activities		863			(3,357	)
Change in cash and cash equivalents		1,045			435
Cash and cash equivalents, beginning of period		649			571
Cash and cash equivalents, end of period	$	1,694		$	1,006
Supplemental disclosures of cash flow information:
Net cash paid during the period for:
Interest	$	25		$	23
Income tax	$	81		$	78

See Note 10 for disclosure regarding the receipt of $901 million under an affiliated reinsurance agreement during the nine months ended September 30, 2007, which is included in net cash provided by operating activities.

See accompanying notes to interim condensed consolidated financial statements.

7

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited)

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

Business

“MICC” or the “Company” refers to MetLife Insurance Company of Connecticut, a Connecticut corporation incorporated in 1863 (“MetLife Connecticut”), and its subsidiaries, including MetLife Life and Annuity Company of Connecticut (“MLAC”) and MetLife Investors USA Insurance Company(“MLI-USA”). The Company is a subsidiary of MetLife, Inc. (“MetLife”). The Company offers individual annuities, individual life insurance and institutional protection and asset accumulation products.

As disclosed in Note 3 of Notes to Consolidated Financial Statements included in the Company’s Annual Report onForm 10-K for the year ended December 31, 2006 (“2006 Annual Report”) filed with the U.S. Securities and Exchange Commission (“SEC”), MetLife Connecticut and MetLife Investors Group, Inc. (“MLIG”), both subsidiaries of MetLife, entered into a Transfer Agreement (“Transfer Agreement”), pursuant to which MetLife Connecticut agreed to acquire all of the outstanding stock of MLI-USA from MLIG in exchange for shares of MetLife Connecticut’s common stock. In connection with the Transfer Agreement, on October 11, 2006, MLIG transferred to MetLife Connecticut certain assets and liabilities, including goodwill, value of business acquired (“VOBA”) and deferred income tax liabilities, which remain outstanding from MetLife’s acquisition of MLIG on October 30, 1997. The assets and liabilities have been included in the financial data of the Company for all periods presented.

The transfer of MLI-USA to MetLife Connecticut was a transaction between entities under common control. Accordingly, for periods subsequent to July 1, 2005, the Company has been combined withMLI-USA in a manner similar to a pooling of interests.

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.

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 in the unaudited interim condensed consolidated financial statements. The most critical estimates include those used in determining:

(i)	the fair value of investments in the absence of quoted market values;
(ii)	investment impairments;
(iii)	the recognition of income on certain investments;
(iv)	application of the consolidation rules to certain investments;
(v)	the fair value of and accounting for derivatives;
(vi)	the capitalization and amortization of deferred policy acquisition costs (“DAC”) and the establishment and amortization of VOBA;
(vii)	the measurement of goodwill and related impairment, if any;
(viii)	the liability for future policyholder benefits;
(ix)	accounting for income taxes and the valuation of deferred income tax assets;
(x)	accounting for reinsurance transactions; and
(xi)	the liability for litigation and regulatory matters.

8

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

In applying the Company’s accounting policies, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s businesses and operations. Actual results could differ from these estimates.

The accompanying unaudited interim condensed consolidated financial statements include the accounts of (i) the Company; and (ii) partnerships and joint ventures in which the Company has control. Intercompany accounts and transactions have been eliminated.

The Company uses the equity method of accounting for investments in equity securities in which it has more than a 20% interest and for real estate joint ventures and other limited partnership interests in which it has more than a minor equity interest or more than a minor influence over the joint ventures’ and partnerships’ operations, but does not have a controlling interest and is not the primary beneficiary. The Company uses the cost method of accounting for real estate joint ventures and other limited partnership interests in which it has a minor equity investment and virtually no influence over the joint ventures’ and partnerships’ operations.

During the second quarter of 2007, the nature of the Company’s partnership interest in Greenwich Street Investments, LP (“Greenwich”) changed such that Greenwich is no longer consolidated and is now accounted for under the equity method of accounting. As such, there was no minority interest liability at September 30, 2007. Minority interest related to Greenwich included in other liabilities was $43 million at December 31, 2006.

In addition to the combination of entities under common control described above, certain amounts in the prior year period’s unaudited interim condensed consolidated financial statements have been reclassified to conform with the 2007 presentation. See Note 9 for reclassifications related to discontinued operations.

The accompanying unaudited interim condensed consolidated financial statements reflect all adjustments (including normal recurring adjustments) necessary to present fairly the consolidated financial position of the Company at September 30, 2007, its consolidated results of operations for the three months and nine months ended September 30, 2007 and 2006, its consolidated cash flows for the nine months ended September 30, 2007 and 2006, and its consolidated statement of stockholders’ equity for the nine months ended September 30, 2007, in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2006 consolidated balance sheet data was derived from audited consolidated financial statements included in the 2006 Annual Report, which includes all disclosures required by GAAP. Therefore, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2006 Annual Report.

Adoption of New Accounting Pronouncements

Income Taxes

Effective January 1, 2007, the Company adopted Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 48,Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income tax recognized in a company’s financial statements. FIN 48 requires companies to determine whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. It also provides guidance on the recognition, measurement, and classification of income tax uncertainties, along with any related interest and penalties. Previously recorded income tax benefits that no longer meet this standard are required to be charged to earnings in the period that such determination is made.

As a result of the implementation of FIN 48, the Company did not recognize a cumulative effect adjustment to the balance of retained earnings as of January 1, 2007. The Company’s total amount of unrecognized tax benefits

9

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

upon adoption of FIN 48 was $64 million. The Company reclassified, at adoption, $64 million of deferred income tax liabilities, for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility, to the liability for unrecognized tax benefits included within other liabilities. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. The total amount of unrecognized tax benefits as of January 1, 2007 that would affect the effective tax rate, if recognized, was $5 million. The Company had less than $1 million of accrued interest, included within other liabilities, as of January 1, 2007. The Company classifies interest accrued related to unrecognized tax benefits in interest expense, while penalties are included within income tax expense.

The Company files income tax returns with the U.S. federal government and various state and local jurisdictions, as well as certain foreign jurisdictions. With a few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2003 and is no longer subject to foreign income tax examinations for years prior to 2006. The Company does not anticipate any material change in the total amount of unrecognized tax benefits over the ensuing 12 month period.

As of September 30, 2007, the Company’s total amount of unrecognized tax benefits was $57 million, a net decrease of $7 million from the amount recorded as of the date of adoption. As of September 30, 2007, there were no amounts of unrecognized tax benefits that would affect the effective tax rate if recognized, a net decrease of $5 million from the amount recorded as of the date of adoption. The net decrease was primarily due to a settlement reached with the Internal Revenue Service (“IRS”) with respect to a post-sale purchase price adjustment. As a result of the settlement an item within the liability for unrecognized tax benefits in the amount of $6 million was reclassified to deferred income taxes. The Company does not anticipate that its liability for unrecognized tax benefits will change significantly in the next 12 months.

A reconciliation of the beginning and ending amount of unrecognized tax benefits and unrecognized tax benefits that, if recognized, would affect the effective tax rate, for the nine months ended September 30, 2007, is as follows:

				Unrecognized Tax Benefits
	Total Unrecognized			That, If Recognized Would
	Tax Benefits			Affect The Effective Tax Rate
	(In millions)
Balance at January 1, 2007 (date of adoption)	$	64		$	5
Reductions for tax positions of prior years		(5	)		(5	)
Additions for tax positions of current year		4			1
Reductions for tax positions of current year		(6	)		(1	)
Balance at September 30, 2007	$	57		$	—

During the three months and nine months ended September 30, 2007, the Company recognized $0 million and $1 million, respectively, in interest expense. As of September 30, 2007, the Company had $2 million of accrued interest related to unrecognized tax benefits, a net increase of $1 million from the amount recorded as of the date of adoption.

On September 25, 2007, the IRS issued Revenue Ruling2007-61, which announced its intention to issue regulations with respect to certain computational aspects of the Dividends Received Deduction (“DRD”) on separate account assets held in connection with variable annuity contracts. Revenue Ruling2007-61 suspended a revenue ruling issued in August 2007 that would have changed accepted industry and IRS interpretations of the statutes governing these computational questions. Any regulations that the IRS ultimately proposes for issuance in this area will be subject to public notice and comment, at which time insurance companies and other interested parties will have the opportunity to raise legal and practical questions about the content, scope and application of

10

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

such regulations. As a result, the ultimate timing and substance of any such regulations are unknown at this time. For the three months and nine months ended September 30, 2007, the Company recognized an income tax benefit of $22 million and $65 million, respectively, related to the separate account DRD.

Insurance Contracts

Effective January 1, 2007, the Company adopted Statement of Position (“SOP”)05-1,Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts(“SOP 05-1”).SOP 05-1 provides guidance on accounting by insurance enterprises for DAC on internal replacements of insurance and investment contracts other than those specifically described in Statement of Financial Accounting Standards (“SFAS”) No. 97,Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments.SOP 05-1 defines an internal replacement as a modification in product benefits, features, rights, or coverages that occurs by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage within a contract.SOP 05-1 is effective for internal replacements occurring in fiscal years beginning after December 15, 2006. In addition, in February 2007, the American Institute of Certified Public Accountants (“AICPA”) issued related Technical Practice Aids (“TPAs”) to provide further clarification ofSOP 05-1. The TPAs became effective concurrently with the adoption ofSOP 05-1.

As a result of the adoption ofSOP 05-1 and the related TPAs, the Company assesses internal replacements to determine whether such modifications significantly change the contract terms based on the criteria noted in the guidance. If the modification substantially changes the contract, then the DAC is written off immediately through income and any new deferrable expenses associated with the new replacement are deferred. If the contract modifications do not substantially change the contract, the DAC amortization on the original policy will continue and any acquisition costs associated with the related modification are immediately expensed.

The adoption ofSOP 05-1 and the related TPAs resulted in a reduction to DAC and VOBA on January 1, 2007 and an acceleration of the amortization period relating primarily to the Company’s group life and health insurance contracts that contain certain rate reset provisions. Prior to the adoption ofSOP 05-1, DAC on such contracts was amortized over the expected renewable life of the contract. Upon adoption ofSOP 05-1, DAC on such contracts is to be amortized over the rate reset period. The impact as of January 1, 2007 was a cumulative effect adjustment of $86 million, net of income tax of $46 million, which was recorded as a reduction to retained earnings.

Other

Effective January 1, 2007, the Company adopted SFAS No. 156,Accounting for Servicing of Financial Assets — an amendment of FASB Statement No. 140 (“SFAS 156”). Among other requirements, SFAS 156 requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in certain situations. The adoption of SFAS 156 did not have an impact on the Company’s unaudited interim condensed consolidated financial statements.

Future Adoption of New Accounting Pronouncements

In June 2007, the AICPA issuedSOP 07-1,Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies(“SOP 07-1”). Upon adoption ofSOP 07-1, the Company must also adopt the provisions of FASB Staff Position No. FSPFIN 46(r)-7,Application of FASB Interpretation No. 46 to Investment Companies(“FSPFIN 46(r)-7”), which permanently exempts investment companies from applying the provisions of FIN No. 46(r),Consolidation of Variable Interest Entities — An Interpretation of Accounting Research Bulletin No. 51,and its December 2003 revision (“FIN 46(r)”) to investments carried at fair value.SOP 07-1 provides guidance for determining whether an entity falls within the scope of the AICPA Audit and Accounting Guide

11

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Investment Companiesand whether investment company accounting should be retained by a parent company upon consolidation of an investment company subsidiary or by an equity method investor in an investment company. In certain circumstances,SOP 07-1 precludes retention of specialized accounting for investment companies (i.e., fair value accounting), when similar direct investments exist in the consolidated group and are measured on a basis inconsistent with that applied to investment companies. Additionally,SOP 07-1 precludes retention of specialized accounting for investment companies if the reporting entity does not distinguish through documented policies the nature and type of investments to be held in the investment companies from those made in the consolidated group where other accounting guidance is being applied. As issued,SOP 07-1 and FSPFIN 46(r)-7 are effective for fiscal years beginning on or after December 15, 2007. The FASB recently added a project to its agenda to indefinitely defer the effective date ofSOP 07-1. The Company is currently evaluating the impact ofSOP 07-1 and FSPFIN 46(r)-7 on the Company’s consolidated financial statements.

In May 2007, the FASB issued FSPNo. FIN 39-1,Amendment of FASB Interpretation No. 39(“FSP 39-1”).FSP 39-1 amends FIN No. 39,Offsetting of Amounts Related to Certain Contracts(“FIN 39”),to permit a reporting entity to offset fair value amounts recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) against fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting arrangement that have been offset in accordance with FIN 39.FSP 39-1 also amends FIN 39 for certain terminology modifications.FSP 39-1 applies to fiscal years beginning after November 15, 2007.FSP 39-1 will be applied retrospectively, unless it is impracticable to do so. Upon adoption ofFSP 39-1, the Company is permitted to change its accounting policy to offset or not offset fair value amounts recognized for derivative instruments under master netting arrangements. The Company is currently evaluating the impact ofFSP 39-1 on the Company’s consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial Assets and Financial Liabilities(“SFAS 159”). SFAS 159 permits all entities the option to measure most financial instruments and certain other items at fair value at specified election dates and to report related unrealized gains and losses in earnings. The fair value option will generally be applied on aninstrument-by-instrument basis and is generally an irrevocable election. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating which eligible financial instruments, if any, it will elect to account for at fair value under SFAS 159 and the related impact on the Company’s consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157,Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value under GAAP and requires enhanced disclosures about fair value measurements. SFAS 157 does not require additional fair value measurements. The pronouncement is effective for fiscal years beginning after November 15, 2007. Recently, the FASB decided not to add a project to its agenda to defer the effective date of SFAS 157 in its entirety. However, the FASB directed the FASB staff to evaluate other potential deferral alternatives including a deferral for: (i) all assets and liabilities except financial assets and liabilities and derivatives subject to the scope of SFAS No. 133,Accounting for Derivative Instruments and Hedging Activities(“SFAS 133”), (ii) private entities,and/or (iii) “small” entities. The FASB will discuss those alternative deferral options at a future FASB meeting. The guidance in SFAS 157 will be applied prospectively with certain exceptions. The Company is currently evaluating the impact that adoption of SFAS 157 will have on the Company’s consolidated financial statements. Implementation of SFAS 157 will require additional disclosures regarding measurement of fair value in the Company’s consolidated financial statements.

12

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

2.   Investments

Fixed Maturity and Equity Securities Available-for-Sale

The following tables present the cost or amortized cost, gross unrealized gain and loss, and estimated fair value of the Company’s fixed maturity and equity securities, the percentage that each sector represents by the total fixed maturity securities holdings and by the total equity securities holdings at:

	September 30, 2007
	Cost or
	Amortized		Gross Unrealized				Estimated		% of
	Cost		Gain		Loss		Fair Value		Total
	(In millions)
U.S. corporate securities	$	17,913	$	82	$	626	$	17,369		36.1	%
Residential mortgage-backed securities		12,674		39		98		12,615		26.2
Foreign corporate securities		6,618		69		191		6,496		13.5
U.S. Treasury/agency securities		4,519		24		70		4,473		9.3
Commercial mortgage-backed securities		3,717		18		69		3,666		7.6
Asset-backed securities		2,265		4		58		2,211		4.6
State and political subdivision securities		608		4		43		569		1.2
Foreign government securities		663		43		6		700		1.5
Total fixed maturity securities	$	48,977	$	283	$	1,161	$	48,099		100.0	%
Non-redeemable preferred stock	$	769	$	16	$	41	$	744		78.3	%
Common stock		189		19		2		206		21.7
Total equity securities	$	958	$	35	$	43	$	950		100.0	%

	December 31, 2006
	Cost or		Gross
	Amortized		Unrealized				Estimated		% of
	Cost		Gain		Loss		Fair Value		Total
	(In millions)
U.S. corporate securities	$	17,331	$	101	$	424	$	17,008		35.5	%
Residential mortgage-backed securities		11,951		40		78		11,913		24.9
Foreign corporate securities		5,563		64		128		5,499		11.5
U.S. Treasury/agency securities		5,455		7		126		5,336		11.2
Commercial mortgage-backed securities		3,353		19		47		3,325		6.9
Asset-backed securities		3,158		14		10		3,162		6.6
State and political subdivision securities		1,062		6		38		1,030		2.2
Foreign government securities		533		45		5		573		1.2
Total fixed maturity securities	$	48,406	$	296	$	856	$	47,846		100.0	%
Non-redeemable preferred stock	$	671	$	22	$	9	$	684		86.0	%
Common stock		106		6		1		111		14.0
Total equity securities	$	777	$	28	$	10	$	795		100.0	%

13

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Unrealized Loss for Fixed Maturity and Equity Securities Available-for-Sale

The following tables present the estimated fair value and gross unrealized loss of the Company’s fixed maturity (aggregated by sector) and equity securities in an unrealized loss position, aggregated by length of time that the securities have been in a continuous unrealized loss position at:

	September 30, 2007
					Equal to or Greater
	Less than 12 months				than 12 months				Total
			Gross				Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Loss		Fair Value		Loss		Fair Value		Loss
	(In millions, except number of securities)
U.S. corporate securities	$	7,650	$	307	$	5,919	$	319	$	13,569	$	626
Residential mortgage-backed securities		6,102		60		1,616		38		7,718		98
Foreign corporate securities		2,412		88		2,507		103		4,919		191
U.S. Treasury/agency securities		1,581		31		555		39		2,136		70
Commercial mortgage-backed securities		1,320		33		1,077		36		2,397		69
Asset-backed securities		1,326		49		296		9		1,622		58
State and political subdivision securities		64		3		374		40		438		43
Foreign government securities		136		3		82		3		218		6
Total fixed maturity securities	$	20,591	$	574	$	12,426	$	587	$	33,017	$	1,161
Equity securities	$	301	$	23	$	177	$	20	$	478	$	43
Total number of securities in an unrealized loss position		2,446				1,912				4,358

	December 31, 2006
					Equal to or Greater
	Less than 12 months				than 12 months				Total
			Gross				Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Loss		Fair Value		Loss		Fair Value		Loss
	(In millions, except number of securities)
U.S. corporate securities	$	4,895	$	104	$	7,543	$	320	$	12,438	$	424
Residential mortgage-backed securities		4,113		20		3,381		58		7,494		78
Foreign corporate securities		1,381		29		2,547		99		3,928		128
U.S. Treasury/agency securities		2,995		48		1,005		78		4,000		126
Commercial mortgage-backed securities		852		6		1,394		41		2,246		47
Asset-backed securities		965		3		327		7		1,292		10
State and political subdivision securities		29		2		414		36		443		38
Foreign government securities		51		1		92		4		143		5
Total fixed maturity securities	$	15,281	$	213	$	16,703	$	643	$	31,984	$	856
Equity securities	$	149	$	3	$	188	$	7	$	337	$	10
Total number of securities in an unrealized loss position		1,955				2,318				4,273

14

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Aging of Gross Unrealized Loss for Fixed Maturity and Equity Securities Available-for-Sale

The following tables present the cost or amortized cost, gross unrealized loss and number of securities for fixed maturity and equity securities, where the estimated fair value had declined and remained below cost or amortized cost by less than 20%, or 20% or more at:

	September 30, 2007
	Cost or				Gross				Number of
	Amortized Cost				Unrealized Loss				Securities
	Less than		20% or		Less than		20% or		Less than		20% or
	20%		more		20%		more		20%		more
	(In millions, except number of securities)
Less than six months	$	16,225	$	96	$	368	$	25		1,965		21
Six months or greater but less than nine months		3,409		22		130		6		339		2
Nine months or greater but less than twelve months		1,737		—		68		—		119		—
Twelve months or greater		13,204		6		605		2		1,911		1
Total	$	34,575	$	124	$	1,171	$	33		4,334		24

	December 31, 2006
	Cost or				Gross				Number of
	Amortized Cost				Unrealized Loss				Securities
	Less than		20% or		Less than		20% or		Less than		20% or
	20%		more		20%		more		20%		more
	(In millions, except number of securities)
Less than six months	$	12,922	$	9	$	150	$	4		1,537		15
Six months or greater but less than nine months		568		—		6		—		78		1
Nine months or greater but less than twelve months		2,134		14		52		4		323		1
Twelve months or greater		17,540		—		650		—		2,318		—
Total	$	33,164	$	23	$	858	$	8		4,256		17

At September 30, 2007 and December 31, 2006, $1,171 million and $858 million, respectively, of unrealized losses related to securities with an unrealized loss position of less than 20% of cost or amortized cost, which each represented 3% of the cost or amortized cost of such securities.

At September 30, 2007, $33 million of unrealized losses related to securities with an unrealized loss position of 20% or more of cost or amortized cost, which represented 27% of the cost or amortized cost of such securities. Of such unrealized losses of $33 million, $25 million related to securities that were in an unrealized loss position for a period of less than six months. At December 31, 2006, $8 million of unrealized losses related to securities with an unrealized loss position of 20% or more of cost or amortized cost, which represented 35% of the cost or amortized cost of such securities. Of such unrealized losses of $8 million, $4 million related to securities that were in an unrealized loss position for a period of less than six months.

The Company held two fixed maturity and equity securities, each with a gross unrealized loss at September 30, 2007 of greater than $10 million. These securities represented 2%, or $23 million in the aggregate, of the gross unrealized loss on fixed maturity and equity securities. The Company held two fixed maturity and equity securities, each with a gross unrealized loss at December 31, 2006 of greater than $10 million. These securities represented 3%, or $25 million in the aggregate, of the gross unrealized loss on fixed maturity and equity securities.

15

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

At September 30, 2007 and December 31, 2006, the Company had $1,204 million and $866 million, respectively, of gross unrealized losses related to its fixed maturity and equity securities. These securities are concentrated, calculated as a percentage of gross unrealized loss, as follows:

	September 30,			December 31,
	2007			2006
Sector:
U.S. corporate securities		52	%		49	%
Residential mortgage-backed securities		8			9
Foreign corporate securities		16			15
U.S. Treasury/agency securities		6			15
Commercial mortgage-backed securities		6			5
Asset-backed securities		5			1
State and political subdivision securities		4			4
Other		3			2
Total		100	%		100	%
Industry:
Industrial		26	%		26	%
Finance		27			18
Government		6			15
Mortgage-backed		14			14
Utility		10			10
Other		17			17
Total		100	%		100	%

As of September 30, 2007 and December 31, 2006, the Company had $600 million and $819 million, respectively, of sub-prime securities with an unrealized loss of $27 million and $2 million, respectively.

As disclosed in Note 1 of Notes to Consolidated Financial Statements included in the 2006 Annual Report, the Company performs a regular evaluation, on asecurity-by-security basis, of its investment holdings in accordance with its impairment policy in order to evaluate whether such securities are other-than-temporarily impaired. One of the criteria which the Company considers in its other-than-temporary impairment analysis is its intent and ability to hold securities for a period of time sufficient to allow for the recovery of their value to an amount equal to or greater than cost or amortized cost. The Company’s intent and ability to hold securities considers broad portfolio management objectives such as asset/liability duration management, issuer and industry segment exposures, interest rate views and the overall total return focus. In following these portfolio management objectives, changes in facts and circumstances that were present in past reporting periods may trigger a decision to sell securities that were held in prior reporting periods. Decisions to sell are based on current conditions or the Company’s need to shift the portfolio to maintain its portfolio management objectives including liquidity needs or duration targets on asset/liability managed portfolios. The Company attempts to anticipate these types of changes and if a sale decision has been made on an impaired security and that security is not expected to recover prior to the expected time of sale, the security will be deemed other-than-temporarily impaired in the period that the sale decision was made and an other-than-temporary impairment loss will be recognized.

Based upon the Company’s current evaluation of the securities in accordance with its impairment policy, the cause of the decline being principally attributable to the general rise in interest rates during the holding period, and

16

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

the Company’s current intent and ability to hold the fixed maturity and equity securities with unrealized losses for a period of time sufficient for them to recover, the Company has concluded that the aforementioned securities are not other-than-temporarily impaired.

Securities Lending

The Company participates in a securities lending program whereby blocks of securities, which are included in fixed maturity and equity securities, are loaned to third parties, primarily major brokerage firms. The Company requires a minimum of 102% of the fair value of the loaned securities to be separately maintained as collateral for the loans. Securities with a cost or amortized cost of $11.0 billion and $8.8 billion and an estimated fair value of $10.7 billion and $8.6 billion were on loan under the program at September 30, 2007 and December 31, 2006, respectively. Securities loaned under such transactions may be sold or repledged by the transferee. The Company was liable for cash collateral under its control of $11.0 billion and $8.9 billion at September 30, 2007 and December 31, 2006, respectively. Security collateral of $51 million and $83 million, on deposit from customers in connection with the securities lending transactions at September 30, 2007 and December 31, 2006, respectively, may not be sold or repledged and is not reflected in the consolidated financial statements.

Net Investment Income

The components of net investment income are as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2007		2006		2007		2006
	(In millions)
Fixed maturity securities	$	729	$	677	$	2,110	$	2,055
Equity securities		9		3		27		12
Mortgage and consumer loans		69		45		194		131
Policy loans		13		13		39		39
Real estate and real estate joint ventures		18		2		69		6
Other limited partnership interests		20		45		140		189
Cash, cash equivalents and short-term investments		27		38		72		101
Other invested assets		1		1		7		2
Total investment income		886		824		2,658		2,535
Less: Investment expenses		167		162		475		407
Net investment income	$	719	$	662	$	2,183	$	2,128

Affiliated net investment income related to short-term investments, included in the table above, was $4 million and $17 million for the three months and nine months ended September 30, 2007, respectively, and $6 million and $18 million for the three months and nine months ended September 30, 2006, respectively.

17

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Net Investment Gains (Losses)

The components of net investment gains (losses) are as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2007			2006			2007			2006
	(In millions)
Fixed maturity securities	$	(82	)	$	(80	)	$	(245	)	$	(389	)
Equity securities		8			1			6			9
Mortgage and consumer loans		1			(9	)		1			(2	)
Real estate and real estate joint ventures		—			5			1			65
Other limited partnership interests		(4	)		(1	)		(17	)		(2	)
Derivatives		115			62			149			111
Other		(128	)		(25	)		(186	)		(170	)
Net investment gains (losses)	$	(90	)	$	(47	)	$	(291	)	$	(378	)

The Company periodically disposes of fixed maturity and equity securities at a loss. Generally, such losses are insignificant in amount or in relation to the cost basis of the investment, are attributable to declines in fair value occurring in the period of the disposition or are as a result of management’s decision to sell securities based on current conditions or the Company’s need to shift the portfolio to maintain its portfolio management objectives.

Losses from fixed maturity and equity securities deemed other-than-temporarily impaired, included within net investment gains (losses), were $9 million and $25 million for the three months and nine months ended September 30, 2007, respectively, and $13 million and $25 million for the three months and nine months ended September 30, 2006, respectively.

Variable Interest Entities

The following table presents the total assets of and maximum exposure to loss relating to variable interest entities (“VIEs”) for which the Company has concluded that it holds significant variable interests but it is not the primary beneficiary and which have not been consolidated:

	September 30, 2007
	Not Primary Beneficiary
			Maximum
	Total		Exposure to
	Assets(1)		Loss(2)
	(In millions)
Asset-backed securitizations	$	986	$	93
Real estate joint ventures(3)		851		44
Other limited partnership interests(4)		1,425		251
Trust preferred securities(5)		19,860		510
Other investments(6)		1,600		79
Total	$	24,722	$	977

(1) The assets of the asset-backed securitizations are reflected at fair value at September 30, 2007. The assets of the real estate joint ventures, other limited partnership interests, trust preferred securities and other investments are reflected at the carrying amounts at which such assets would have been reflected on the Company’s

18

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

	consolidated balance sheet had the Company consolidated the VIE from the date of its initial investment in the entity.
(2)	The maximum exposure to loss relating to the asset-backed securitizations is equal to the carrying amounts of participation. The maximum exposure to loss relating to real estate joint ventures, other limited partnership interests, trust preferred securities and other investments is equal to the carrying amounts plus any unfunded commitments, reduced by amounts guaranteed by other partners.
(3)	Real estate joint ventures include partnerships and other ventures which engage in the acquisition, development, management and disposal of real estate investments.
(4)	Other limited partnership interests include partnerships established for the purpose of investing in public and private debt and equity securities.
(5)	Trust preferred securities are complex, uniquely structured investments which contain features of both equity and debt, may have an extended or no stated maturity, and may be callable at the issuer’s option after a defined period of time.
(6)	Other investments include securities that are not trust preferred securities or asset-backed securitizations.

3.   Derivative Financial Instruments

Types of Derivative Financial Instruments

The following table presents the notional amount and current market or fair value of derivative financial instruments held at:

	September 30, 2007						December 31, 2006
			Current Market						Current Market
	Notional		or Fair Value				Notional		or Fair Value
	Amount		Assets		Liabilities		Amount		Assets		Liabilities
	(In millions)
Interest rate swaps	$	11,351	$	331	$	66	$	8,841	$	431	$	70
Interest rate floors		12,071		113		—		9,021		71		—
Interest rate caps		8,715		1		—		6,715		6		—
Financial futures		1,121		4		3		602		6		1
Foreign currency swaps		3,714		763		89		2,723		580		66
Foreign currency forwards		161		—		4		124		1		—
Options		—		62		3		—		80		7
Financial forwards		900		11		5		900		—		15
Credit default swaps		1,023		1		3		1,231		1		5
Total	$	39,056	$	1,286	$	173	$	30,157	$	1,176	$	164

The above table does not include notional amounts for equity futures, equity variance swaps and equity options. At September 30, 2007 and December 31, 2006, the Company owned 344 and 290 equity futures, respectively. Fair values of equity futures are included in financial futures in the preceding table. At September 30, 2007 and December 31, 2006, the Company owned 94,387 and 85,500 equity variance swaps, respectively. Fair values of equity variance swaps are included in financial forwards in the preceding table. At September 30, 2007 and December 31, 2006, the Company owned 862,900 and 1,022,900 equity options, respectively. Fair values of equity options are included in options in the preceding table.

This information should be read in conjunction with Note 5 of Notes to Consolidated Financial Statements included in the 2006 Annual Report.

19

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Hedging

The following table presents the notional amount and fair value of derivatives by type of hedge designation at:

	September 30, 2007						December 31, 2006
	Notional		Fair Value				Notional		Fair Value
	Amount		Assets		Liabilities		Amount		Assets		Liabilities
	(In millions)
Fair value	$	651	$	22	$	1	$	69	$	—	$	1
Cash flow		486		72		4		455		42		—
Non-qualifying		37,919		1,192		168		29,633		1,134		163
Total	$	39,056	$	1,286	$	173	$	30,157	$	1,176	$	164

The following table presents the settlement payments recorded in income for the:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2007			2006			2007			2006
	(In millions)
Qualifying hedges:
Interest credited to policyholder account balances	$	(2	)	$	(2	)	$	(5	)	$	(7	)
Non-qualifying hedges:
Net investment gains (losses)		23			21			58			49
Total	$	21		$	19		$	53		$	42

Fair Value Hedges

The Company designates and accounts for the following as fair value hedges when they have met the requirements of SFAS 133: (i) interest rate swaps to convert fixed rate investments to floating rate investments; and (ii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated investments and liabilities.

The Company recognized net investment gains (losses) representing the ineffective portion of all fair value hedges as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
	(In millions)
Changes in the fair value of derivatives	$	22		$	(2	)	$	22		$	(1	)
Changes in the fair value of the items hedged		(19	)		—			(24	)		1
Net ineffectiveness of fair value hedging activities	$	3		$	(2	)	$	(2	)	$	—

All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness. There were no instances in which the Company discontinued fair value hedge accounting due to a hedged firm commitment no longer qualifying as a fair value hedge.

Cash Flow Hedges

The Company designates and accounts for the following as cash flow hedges when they have met the requirements of SFAS 133: (i) interest rate swaps to convert floating rate investments to fixed rate investments;

20

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

(ii) interest rate swaps to convert floating rate liabilities to fixed rate liabilities; and (iii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated investments and liabilities.

For the three months and nine months ended September 30, 2007 and 2006, the Company did not recognize any net investment gains (losses) which represented the ineffective portion of all cash flow hedges. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness. In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions did not occur on the anticipated date or in the additional time period permitted by SFAS 133. The net amounts reclassified into net investment gains (losses) for the three months and nine months ended September 30, 2007 and 2006 related to such discontinued cash flow hedges were insignificant. There were no hedged forecasted transactions, other than the receipt or payment of variable interest payments, for the three months and nine months ended September 30, 2007 and 2006.

The following table presents the components of other comprehensive income (loss), before income tax, related to cash flow hedges:

	Three Months Ended			Nine Months Ended			Three Months Ended			Nine Months Ended
	September 30, 2007			September 30, 2007			September 30, 2006			September 30, 2006
	(In millions)
Other comprehensive income (loss) balance at the beginning of the period	$	(11	)	$	(9	)	$	(3	)	$	(2	)
Gains (losses) deferred in other comprehensive income (loss) on the effective portion of cash flow hedges		—			(3	)		(5	)		(6	)
Amounts reclassified to net investment gains (losses)		(1	)		—			—			—
Other comprehensive income (loss) balance at the end of the period	$	(12	)	$	(12	)	$	(8	)	$	(8	)

Non-qualifying Derivatives and Derivatives for Purposes Other Than Hedging

The Company enters into the following derivatives that do not qualify for hedge accounting under SFAS 133 or for purposes other than hedging: (i) interest rate swaps, purchased caps and floors, and interest rate futures to economically hedge its exposure to interest rate volatility; (ii) foreign currency forwards, swaps and option contracts to economically hedge its exposure to adverse movements in exchange rates; (iii) credit default swaps to economically hedge exposure to adverse movements in credit; (iv) equity futures, equity index options and equity variance swaps to economically hedge liabilities embedded in certain variable annuity products; (v) credit default swaps to synthetically create investments; (vi) financial forwards to buy and sell securities; and (vii) basis swaps to better match the cash flows of assets and related liabilities.

The following table presents changes in fair value related to derivatives that do not qualify for hedge accounting:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2007		2006			2007		2006
Net investment gains (losses), excluding embedded derivatives	$	109	$	(4	)	$	88	$	5

21

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Embedded Derivatives

The Company has certain embedded derivatives that are required to be separated from their host contracts and accounted for as derivatives. These host contracts include guaranteed minimum withdrawal contracts and guaranteed minimum accumulation contracts.

The following table presents the fair value of the Company’s embedded derivatives at:

	September 30,		December 31,
	2007		2006
Embedded derivative assets	$	3	$	15
Embedded derivative liabilities	$	—	$	3

The following table presents the amounts recorded and included in net investment gains (losses) for:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2007			2006		2007		2006
Net investment gains (losses)	$	(16	)	$	22	$	10	$	52

Credit Risk

The Company may be exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instruments. Generally, the current credit exposure of the Company’s derivative contracts is limited to the fair value at the reporting date. The credit exposure of the Company’s derivative transactions is represented by the fair value of contracts with a net positive fair value at the reporting date.

The Company manages its credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties, maintaining collateral arrangements and through the use of master agreements that provide for a single net payment to be made by one counterparty to another at each due date and upon termination. Because exchange traded futures are effected through regulated exchanges, and positions are marked to market on a daily basis, the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties to such derivative instruments.

The Company enters into various collateral arrangements, which require both the pledging and accepting of collateral in connection with its derivative instruments. As of September 30, 2007 and December 31, 2006, the Company was obligated to return cash collateral under its control of $283 million and $273 million, respectively. This unrestricted cash collateral is included in cash and cash equivalents and the obligation to return it is included in payables for collateral under securities loaned and other transactions in the consolidated balance sheets. As of September 30, 2007 and December 31, 2006, the Company had also accepted collateral consisting of various securities with a fair market value of $486 million and $410 million, respectively, which are held in separate custodial accounts. The Company is permitted by contract to sell or repledge this collateral, but as of September 30, 2007 and December 31, 2006, none of the collateral had been sold or repledged.

In addition, the Company has exchange traded futures, which require the pledging of collateral. At both September 30, 2007 and December 31, 2006, the Company pledged collateral of $25 million, which is included in fixed maturity securities. The counterparties are permitted by contract to sell or repledge this collateral.

4.   Short-term Debt — Affiliated

During the third quarter of 2007, the Company borrowed $52 million from MetLife Credit Corp., an affiliate, at a LIBOR-based rate. The Company used the net proceeds of the loan, $17 million of which was repaid in October 2007, for general corporate purposes.

22

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

5.   Contingencies, Commitments and Guarantees

Contingencies

Litigation

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

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

On a quarterly and annual basis, the Company reviews relevant information with respect to liabilities for litigation and contingencies to be reflected in the Company’s consolidated financial statements. The review includes senior legal and financial personnel. Unless stated below, estimates of possible additional losses or ranges of loss for particular matters cannot in the ordinary course be made with a reasonable degree of certainty. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been established for a number of the matters noted below. It is possible that some of the matters could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be estimated as of September 30, 2007.

Macomber, et al. v. Travelers Property Casualty Corp., et al. (Conn. Super. Ct., Hartford, filed April 7, 1999).An amended putative class action complaint was filed against The Travelers Life and Annuity Company (now known as MLAC), Travelers Equity Sales, Inc. and certain former affiliates. The amended complaint alleged Travelers Property Casualty Corporation, a former MLAC affiliate, purchased structured settlement annuities from MLAC and spent less on the purchase of those structured settlement annuities than agreed with claimants, and that commissions paid to brokers for the structured settlement annuities, including an affiliate of MLAC, were paid in part to Travelers Property Casualty Corporation. On May 26, 2004, the Connecticut Superior Court certified a nationwide class action. In March 2006, the Connecticut Supreme Court reversed the trial court’s certification of a class. In June 2007, the matter was settled as to all defendants.

A former registered representative of Tower Square Securities, Inc. (“Tower Square”), a broker-dealer subsidiary of MetLife Connecticut, is alleged to have defrauded individuals by diverting funds for his personal use. In June 2005, the SEC issued a formal order of investigation with respect to Tower Square and served Tower Square with a subpoena. On April 18, 2006, the Securities and Business Investments Division of the Connecticut Department of Banking issued a notice to Tower Square asking it to demonstrate its prior compliance with applicable Connecticut securities laws and regulations. In July 2007, Tower Square entered into a consent order with the Connecticut Department of Banking. The terms of the consent order included payment of a penalty to the Connecticut Department of Banking and offers of restitution to affected investors. In the context of the above, a

23

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

number of NASD arbitration and litigation matters were commenced in 2005 and 2006 against Tower Square. The remaining pending arbitration and litigation matters were settled in August 2007.

Regulatory bodies have contacted the Company and have requested information relating to various regulatory issues regarding mutual funds and variable insurance products, including the marketing of such products. The Company believes that many of these inquiries are similar to those made to many financial services companies as part of industry-wide investigations by various regulatory agencies. The Company is fully cooperating with regard to these information requests and investigations. The Company at the present time is not aware of any systemic problems with respect to such matters that may have a material adverse effect on the Company’s consolidated financial position.

In addition, the Company is a defendant or co-defendant in various other litigation matters in the normal course of business. These may include civil actions, arbitration proceedings and other matters arising in the normal course of business out of activities as an insurance company, a broker and dealer in securities or otherwise. Further, state insurance regulatory authorities and other federal and state authorities may make inquiries and conduct investigations concerning the Company’s compliance with applicable insurance and other laws and regulations.

In the opinion of the Company’s management, the ultimate resolution of these legal and regulatory proceedings would not be likely to have a material adverse effect on the Company’s consolidated financial position or liquidity, but, if involving monetary liability, may be material to the Company’s operating results for any particular period.

During the nine months ended September 30, 2007, the Company reduced legal liabilities by $7 million.

Commitments

Commitments to Fund Partnership Investments

The Company makes commitments to fund partnership investments in the normal course of business. The amounts of these unfunded commitments were $1.3 billion and $616 million at September 30, 2007 and December 31, 2006, respectively. The Company anticipates that these amounts will be invested in partnerships over the next five years.

Mortgage Loan Commitments

The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $967 million and $665 million at September 30, 2007 and December 31, 2006, respectively.

Commitments to Fund Bank Credit Facilities and Private Corporate Bond Investments

The Company commits to lend funds under bank credit facilities and private corporate bond investments. The amounts of these unfunded commitments were $505 million and $173 million at September 30, 2007 and December 31, 2006, respectively.

Other Commitments

The Company has entered into collateral arrangements with affiliates, which require the transfer of collateral in connection with secured demand notes. At September 30, 2007, the Company had agreed to fund up to $80 million of cash upon the request of an affiliate and had transferred collateral consisting of various securities with a fair market value of $94 million to custody accounts to secure the notes. The counterparties are permitted by contract to sell or repledge this collateral.

24

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Guarantees

In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties pursuant to which it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities, and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation, such as in the case of MetLife International Insurance Company, Ltd. (“MLII”), a former affiliate, discussed below, 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.

The Company has provided a guarantee to MLII that is triggered if MLII cannot pay claims because of insolvency, liquidation or rehabilitation. During the second quarter of 2007, MetLife sold MLII to a third party. Life insurance coverage in-force, representing the maximum potential obligation under this guarantee, was $434 million and $444 million at September 30, 2007 and December 31, 2006, respectively. The Company recorded a liability of $1 million that was based on the total account value of the guaranteed policies plus the amounts retained per policy at September 30, 2007. The remainder of the risk was ceded to external reinsurers. The Company did not have a recorded liability at December 31, 2006.

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.

In connection with synthetically created investment transactions, the Company writes credit default swap obligations requiring payment of principal due in exchange for the referenced credit obligation, depending on the nature or occurrence of specified credit events for the referenced entities. In the event of a specified credit event, the Company’s maximum amount at risk, assuming the value of the referenced credits becomes worthless, was $334 million at September 30, 2007. The credit default swaps expire at various times during the next ten years.

6.   Equity

Dividend Restrictions

Under Connecticut State Insurance Law, MetLife Connecticut is permitted, without prior insurance regulatory clearance, to pay stockholder dividends to its parent as long as the amount of such dividends, when aggregated with all other dividends in the preceding 12 months, does not exceed the greater of (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year; or (ii) its statutory net gain from operations for the immediately preceding calendar year. MetLife Connecticut will be permitted to pay a cash dividend in excess of the greater of such two amounts only if it files notice of its declaration of such a dividend and the amount thereof with the Connecticut Commissioner of Insurance (“Connecticut Commissioner”) and the Connecticut Commissioner does not disapprove the payment within 30 days after notice. In addition, any dividend that exceeds earned surplus (unassigned funds, reduced by 25% of unrealized appreciation in value or revaluation of assets or unrealized profits on investments) as of the last filed annual statutory statement requires insurance regulatory approval. Under

25

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Connecticut State Insurance Law, the Connecticut Commissioner has broad discretion in determining whether the financial condition of a stock life insurance company would support the payment of such dividends to its stockholders. The Connecticut State Insurance Law requires prior approval for any dividends for a period of two years following a change in control. As a result of the acquisition of Metlife Connecticut, together with substantially all of Citigroup Inc.’s (“Citigroup”) international insurance business, by Metlife from Citigroup, on July 1, 2005, under Connecticut State Insurance Law, all dividend payments by MetLife Connecticut through June 30, 2007 required prior approval of the Connecticut Commissioner. In the third quarter of 2006, after receiving regulatory approval from the Connecticut Commissioner, MetLife Connecticut paid a $917 million dividend to MetLife. Of that amount, $259 million was a return of capital. On September 28, 2007, the Board of Directors declared a dividend of up to $690 million and paid $690 million on October 22, 2007. A portion of the dividend, $404 million, was a return of capital as approved by the insurance regulator.

Comprehensive Income

The components of comprehensive income are as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2007			2006			2007			2006
	(In millions)
Net income	$	154		$	207		$	497		$	525
Other comprehensive income (loss):
Unrealized gains (losses) on derivative instruments, net of income tax		(1	)		(3	)		(2	)		(4	)
Unrealized investment gains (losses), net of related offsets and income tax		175			781			(179	)		11
Foreign currency translation adjustment, net of income tax		16			(6	)		22			(4	)
Other comprehensive income (loss)		190			772			(159	)		3
Comprehensive income	$	344		$	979		$	338		$	528

7.   Other Expenses

Information on other expenses is as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2007			2006			2007			2006
	(In millions)
Compensation	$	14		$	26		$	45		$	87
Commissions		203			156			570			547
Interest and debt issue cost		8			8			25			23
Amortization of DAC and VOBA		149			143			481			337
Capitalization of DAC		(216	)		(156	)		(587	)		(552	)
Rent, net of sublease income		2			2			4			8
Minority interest		—			(2	)		—			28
Insurance tax		12			9			34			31
Other		155			84			435			323
Total other expenses	$	327		$	270		$	1,007		$	832

26

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

8.   Business Segment Information

The Company’s business is divided into two operating segments: Individual and Institutional, as well as Corporate & Other. These segments are managed separately because they either provide different products and services, require different strategies or have different technology requirements.

Individual offers a wide variety of protection and asset accumulation products, including life insurance, annuities and mutual funds. Institutional offers a broad range of group insurance and retirement & savings products and services, including group life insurance and other insurance products and services. Corporate & Other contains the excess capital not allocated to the business segments, variousstart-up entities and run-off business, the Company’s ancillary international operations, interest expense related to the majority of the Company’s outstanding debt, expenses associated with certain legal proceedings and the elimination of intersegment transactions.

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

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 nine months ended September 30, 2007 and 2006. The accounting policies of the segments are the same as those of the Company, except for the method of capital allocation and the accounting for gains (losses) from intercompany sales, which are eliminated in consolidation. The Company allocates equity to each segment based upon the economic capital model that allows MetLife and the Company to effectively manage its capital. The Company evaluates the performance of each segment based upon net income, excluding net investment gains (losses), net of income tax, and adjustments related to net investment gains (losses), net of income tax.

						Corporate &
For the Three Months Ended September 30, 2007	Individual		Institutional			Other			Total
	(In millions)
Statement of Income:
Premiums	$	74	$	12		$	6		$	92
Universal life and investment-type product policy fees		338		12			1			351
Net investment income		266		391			62			719
Other revenues		61		3			—			64
Net investment gains (losses)		24		(106	)		(8	)		(90	)
Policyholder benefits and claims		116		135			5			256
Interest credited to policyholder account balances		165		162			—			327
Other expenses		287		16			24			327
Income (loss) from continuing operations before provision for income tax		195		(1	)		32			226
Provision (benefit) for income tax		70		—			2			72
Income (loss) from continuing operations		125		(1	)		30			154
Income from discontinued operations, net of income tax		—		—			—			—
Net income (loss)	$	125	$	(1	)	$	30		$	154

27

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

						Corporate &
For the Three Months Ended September 30, 2006	Individual		Institutional			Other			Total
	(In millions)
Statement of Income:
Premiums	$	49	$	10		$	6		$	65
Universal life and investment-type product policy fees		322		5			—			327
Net investment income		237		344			81			662
Other revenues		48		2			—			50
Net investment gains (losses)		18		(41	)		(24	)		(47	)
Policyholder benefits and claims		51		102			4			157
Interest credited to policyholder account balances		180		163			—			343
Other expenses		262		3			5			270
Income (loss) from continuing operations before provision for income tax		181		52			54			287
Provision (benefit) for income tax		65		18			(3	)		80
Income (loss) from continuing operations		116		34			57			207
Income from discontinued operations, net of income tax		—		—			—			—
Net income (loss)	$	116	$	34		$	57		$	207

							Corporate &
For the Nine Months Ended September 30, 2007	Individual			Institutional			Other			Total
	(In millions)
Statement of Income:
Premiums	$	221		$	24		$	18		$	263
Universal life and investment-type product policy fees		1,001			31			1			1,033
Net investment income		813			1,130			240			2,183
Other revenues		178			10			—			188
Net investment gains (losses)		(43	)		(233	)		(15	)		(291	)
Policyholder benefits and claims		330			370			22			722
Interest credited to policyholder account balances		484			484			1			969
Other expenses		921			38			48			1,007
Income (loss) from continuing operations before provision for income tax		435			70			173			678
Provision (benefit) for income tax		154			25			6			185
Income (loss) from continuing operations		281			45			167			493
Income from discontinued operations, net of income tax		—			4			—			4
Net income (loss)	$	281		$	49		$	167		$	497

28

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

							Corporate &
For the Nine Months Ended September 30, 2006	Individual			Institutional			Other			Total
	(In millions)
Statement of Income:
Premiums	$	151		$	51		$	18		$	220
Universal life and investment-type product policy fees		994			17			—			1,011
Net investment income		739			1,085			304			2,128
Other revenues		143			6			1			150
Net investment gains (losses)		(140	)		(201	)		(37	)		(378	)
Policyholder benefits and claims		234			326			19			579
Interest credited to policyholder account balances		502			483			—			985
Other expenses		758			10			64			832
Income (loss) from continuing operations before provision for income tax		393			139			203			735
Provision (benefit) for income tax		139			48			23			210
Income (loss) from continuing operations		254			91			180			525
Income from discontinued operations, net of income tax		—			—			—			—
Net income (loss)	$	254		$	91		$	180		$	525

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

	September 30,		December 31,
	2007		2006
	(In millions)
Individual	$	82,769	$	76,897
Institutional		36,499		35,982
Corporate & Other		11,660		11,208
Total	$	130,928	$	124,087

Net investment income and net investment gains (losses) are based upon the actual results of each segment’s specifically identifiable asset portfolio adjusted for allocated equity. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such costs; (ii) time studies analyzing the amount of employee compensation costs incurred by each segment; and (iii) cost estimates included in the Company’s product pricing.

Revenues derived from any customer did not exceed 10% of consolidated revenues for the three months and nine months ended September 30, 2007 and 2006. Substantially all of the Company’s revenues originated in the United States.

9.   Discontinued Operations

Real Estate

The Company actively manages its real estate portfolio with the objective of maximizing earnings through selective acquisitions and dispositions. Income related to real estate classified as held-for-sale or sold is presented in discontinued operations. These assets are carried at the lower of depreciated cost or fair value less expected disposition costs.

29

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

In the Institutional segment, the Company had net investment income of $1 million, net investment gains of $5 million and income tax of $2 million related to discontinued operations resulting in income from discontinued operations of $4 million, net of income tax, for the nine months ended September 30, 2007. The Company did not have investment income or expense related to discontinued operations for the three months ended September 30, 2007. The Company had $1 million of investment income and $1 million of investment expense resulting in no change to net investment income for both the three months and nine months ended September 30, 2006.

There was no carrying value of real estate related to discontinued operations at September 30, 2007. The carrying value of real estate related to discontinued operations was $7 million at December 31, 2006.

10.   Related Party Transactions

The Company has entered into various agreements with affiliates for services necessary to conduct its activities. Typical services provided under these agreements include management, policy administrative functions, personnel, investment advice and distribution services. Expenses and fees incurred with affiliates related to these agreements, recorded in other expenses, were $128 million and $349 million for the three months and nine months ended September 30, 2007, respectively, and $110 million and $339 million for the three months and nine months ended September 30, 2006, respectively.

At September 30, 2007, the Company had net receivables from affiliates of $39 million and, at December 31, 2006, the Company had net payables to affiliates of $34 million, excluding affiliated reinsurance balances discussed below.

As disclosed in Note 19 of Notes to Consolidated Financial Statements included in the 2006 Annual Report, on December 1, 2006, the Company acquired a block of structured settlement business from Texas Life Insurance Company (“Texas Life”), a wholly-owned subsidiary of MetLife, through an assumptive reinsurance agreement. This transaction increased future policyholder benefits of the Company by $1.3 billion and decreased deferred income tax liabilities by $142 million at December 31, 2006. During the nine months ended September 30, 2007, the receivable from Texas Life related to premiums and other considerations of $1.2 billion held at December 31, 2006 was settled with $901 million of cash and $304 million of fixed maturity securities.

The Company has reinsurance agreements with certain of MetLife’s subsidiaries, including Metropolitan Life Insurance Company, Reinsurance Group of America, Incorporated, MetLife Reinsurance Company of South Carolina (“MRSC”), Exeter Reassurance Company, Ltd., General American Life Insurance Company and Mitsui Sumitomo MetLife Insurance Co., Ltd. At September 30, 2007, the Company had reinsurance-related assets and liabilities from these agreements totaling $2.8 billion and $1.3 billion, respectively. At December 31, 2006, comparable assets and liabilities were $2.8 billion and $1.2 billion, respectively.

Previously, MRSC’s credit standing was enhanced by a letter of credit facility obtained from a third-party which was supported by the guarantee of its parent, MetLife, and which providedRegulation A-XXX statutory reserve support for MRSC to be used to collateralize reinsurance obligations under a reinsurance agreement with the Company. During May 2007, MRSC replaced the letter of credit facility with a collateral financing arrangement with a third-party.

30

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

Notes to Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The following table reflects related party reinsurance information recorded in income for the:

					��
	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2007		2006			2007		2006
	(In millions)
Assumed premiums	$	3	$	5		$	12	$	16
Assumed fees, included in universal life and investment-type product policy fees	$	27	$	45		$	90	$	137
Assumed benefits, included in policyholder benefits and claims	$	4	$	7		$	13	$	24
Assumed benefits, included in interest credited to policyholder account balances	$	13	$	12		$	40	$	36
Assumed acquisition costs, included in other expenses	$	5	$	14		$	30	$	45
Ceded premiums	$	9	$	5		$	23	$	15
Ceded fees, included in universal life and investment-type product policy fees	$	57	$	45		$	158	$	110
Interest earned on ceded reinsurance, included in other revenues	$	22	$	17		$	65	$	50
Ceded benefits, included in policyholder benefits and claims	$	34	$	25		$	83	$	66
Interest costs on ceded reinsurance, included in other expenses	$	15	$	27		$	43	$	42

The Company has assumed risks related to guaranteed minimum benefit riders from an affiliated joint venture under a reinsurance contract. Such guaranteed minimum benefit riders are embedded derivatives and are included within net investment gains (losses). The assumed amounts were ($92) million and ($6) million for the three months and nine months ended September 30, 2007, respectively, and $15 million and $35 million for the three months and nine months ended September 30, 2006, respectively. These risks have been retroceded in full to another affiliate under a retrocessional agreement resulting in no net impact on net investment gains (losses).

The Company has also ceded risks related to guaranteed minimum benefit riders written by the Company to another affiliate. The guaranteed minimum benefit riders directly written by the Company are embedded derivatives and are included within net investment gains (losses). Accordingly the ceded amounts are also embedded derivatives and included within net investment gains (losses). The ceded amounts were ($56) million and ($40) million for the three months and nine months ended September 30, 2007, respectively, and ($1) million and $18 million for the three months and nine months ended September 30, 2006, respectively.

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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

For purposes of this discussion, “MICC” or the “Company” refers to MetLife Insurance Company of Connecticut, a Connecticut corporation incorporated in 1863 (“MetLife Connecticut”), and its subsidiaries, including MetLife Life and Annuity Company of Connecticut (“MLAC”) and MetLife Investors USA Insurance Company (“MLI-USA”). The Company is a subsidiary of MetLife, Inc. (“MetLife”). Management’s narrative analysis of the results of operations of MICC is presented pursuant to General Instruction H(2)(a) ofForm 10-Q. This narrative analysis should be read in conjunction with the Company’s Annual Report onForm 10-K for the year ended December 31, 2006 (“2006 Annual Report”) filed with the U.S. Securities and Exchange Commission (“SEC”), the forward-looking statement information included below and the Company’s unaudited interim condensed consolidated financial statements included elsewhere herein.

This narrative analysis contains statements which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to trends in the operations and financial results and the business and the products of the Company, as well as other statements including words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend” and other similar expressions. Forward-looking statements are made based upon management’s current expectations and beliefs concerning future developments and their potential effects on the Company. Such forward-looking statements are not guarantees of future performance.

Actual results may differ materially from those included in the forward-looking statements as a result of risks and uncertainties including, but not limited to, the following: (i) changes in general economic conditions, including the performance of financial markets and interest rates; (ii) heightened competition, including with respect to pricing, entry of new competitors, the development of new products by new and existing competitors and for personnel; (iii) investment losses and defaults; (iv) unanticipated changes in industry trends; (v) ineffectiveness of risk management policies and procedures; (vi) changes in accounting standards, practicesand/or policies; (vii) changes in assumptions related to deferred policy acquisition costs (“DAC”), value of business acquired (“VOBA”) or goodwill; (viii) discrepancies between actual claims experience and assumptions used in setting prices for the Company’s products and establishing the liabilities for the Company’s obligations for future policy benefits and claims; (ix) discrepancies between actual experience and assumptions used in establishing liabilities related to other contingencies or obligations; (x) adverse results or other consequences from litigation, arbitration or regulatory investigations; (xi) downgrades in the Company’s and its affiliates’ claims paying ability or financial strength ratings; (xii) regulatory, legislative or tax changes that may affect the cost of, or demand for, the Company’s products or services; (xiii) the Company’s reliance on dividends from its subsidiaries and the applicable regulatory restrictions on the ability of the subsidiaries to pay such dividends; (xiv) the effects of business disruption or economic contraction due to terrorism or other hostilities; (xv) the Company’s ability to identify and consummate on successful terms any future acquisitions, and to successfully integrate acquired businesses with minimal disruption; and (xvi) other risks and uncertainties described from time to time in the Company’s filings with the SEC.

The Company specifically disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

Business

The Company offers individual annuities, individual life insurance, and institutional protection and asset accumulation products. The Company’s Individual segment offers a wide variety of individual insurance, as well as annuities and investment-type products, aimed at serving the financial needs of its customers throughout their entire life cycle. Products offered by Individual include insurance products, such as variable, universal and traditional life insurance, and variable and fixed annuities. In addition, Individual sales representatives distribute investment products, such as mutual funds and other products offered by the Company’s other businesses. The Company’s Institutional segment offers a broad range of group insurance and retirement & savings products and services to corporations and other institutions and their respective employees. Group insurance products and services include specialized life insurance products offered through corporate-owned life insurance (“COLI”). Retirement & savings products and services include an array of annuity and investment products, guaranteed interest contracts,

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funding agreements and similar products, as well as fixed annuity products, generally in connection with defined contribution plans, the termination of pension plans and the funding of structured settlements.

Summary of Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the unaudited interim condensed consolidated financial statements. The most critical estimates include those used in determining:

(i)	the fair value of investments in the absence of quoted market values;
(ii)	investment impairments;
(iii)	the recognition of income on certain investments;
(iv)	application of the consolidation rules to certain investments;
(v)	the fair value of and accounting for derivatives;
(vi)	the capitalization and amortization of DAC and the establishment and amortization of VOBA;
(vii)	the measurement of goodwill and related impairment, if any;
(viii)	the liability for future policyholder benefits;
(ix)	accounting for income taxes and the valuation of deferred income tax assets;
(x)	accounting for reinsurance transactions; and
(xi)	the liability for litigation and regulatory matters.

In applying the Company’s accounting policies, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s businesses and operations. Actual results could differ from these estimates.

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Results of Operations

Discussion of Results

The following table presents consolidated financial information for the Company for the periods indicated:

	Nine Months Ended
	September 30,
	2007			2006
	(In millions)
Revenues
Premiums	$	263		$	220
Universal life and investment-type product policy fees		1,033			1,011
Net investment income		2,183			2,128
Other revenues		188			150
Net investment gains (losses)		(291	)		(378	)
Total revenues		3,376			3,131
Expenses
Policyholder benefits and claims		722			579
Interest credited to policyholder account balances		969			985
Other expenses		1,007			832
Total expenses		2,698			2,396
Income from continuing operations before provision for income tax		678			735
Provision for income tax		185			210
Income from continuing operations		493			525
Income from discontinued operations, net of income tax		4			—
Net income	$	497		$	525

Income from Continuing Operations

Income from continuing operations decreased by $32 million, or 6%, to $493 million for the nine months ended September 30, 2007 from $525 million for the comparable 2006 period.

Included in this decrease were lower net investment losses of $57 million, net of income tax, primarily attributable to decreased losses on fixed maturity securities resulting principally from the 2006 portfolio repositioning in a rising interest rate environment and increased gains from the mark-to-market on derivatives, partially offset by reduced gains on real estate and real estate joint ventures and increased losses from foreign currency transactions due to a decline in the U.S. dollar against several major currencies. Excluding the impact of net investment losses, income from continuing operations decreased by $89 million from the comparable 2006 period.

The comparable decrease in income from continuing operations was primarily driven by the following items:

•  Higher DAC amortization of $94 million, net of income tax, primarily resulting from growth in the business, lower net investment losses in the current year and revisions to management’s assumptions used to determine estimated gross profits and margins.

•  Higher expenses of $38 million, net of income tax. Higher general expenses, including thestart-up of the Company’s operations in Ireland and the impact of revisions to certain liabilities in both periods, contributed to the increase in other expenses.

•  An increase in affiliated reinsurance activity primarily from universal life treaties of $30 million, net of income tax.

•  Higher policyholder benefits due to growth in deferred annuities of $16 million, net of income tax.

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•  Unfavorable underwriting results of $16 million, net of income tax. Management attributed the unfavorable underwriting results primarily to the retirement & savings business and life products of $13 million and $8 million, both net of income tax, respectively, partially offset by favorable underwriting results of $4 million, net of income tax, in the non-medical health & other business. Underwriting results are generally the difference between the portion of premium and fee income intended to cover mortality, morbidity, or other insurance costs, less claims incurred, and the change in insurance-related liabilities. Underwriting results are significantly influenced by mortality, morbidity, or other insurance-related experience trends, as well as the reinsurance activity related to certain blocks of business. Consequently, results can fluctuate from period to period.

•  A decline in interest margins of $13 million, net of income tax. Management attributed this decrease primarily to decreases in the deferred annuity and group life businesses of $23 million and $8 million, both net of income tax, respectively, partially offset by increases in other investment-type products and the retirement & savings business of $12 million and $5 million, both net of income tax, respectively. Interest margin is the difference between interest earned and interest credited to policyholder account balances. Interest earned approximates net investment income on investable assets with minor adjustments related to the consolidation of certain separate accounts and other minor non-policyholder elements. Interest credited is the amount attributed to insurance products, recorded in policyholder benefits and claims, and the amount credited to policyholder account balances for investment-type products, recorded in interest credited to policyholder account balances. Interest credited on insurance products reflects the current year impact of the interest rate assumptions established at issuance or acquisition. Interest credited to policyholder account balances is subject to contractual terms, including some minimum guarantees. This tends to move gradually over time to reflect market interest rate movements and may reflect actions by management to respond to competitive pressures and, therefore, generally does not introduce volatility in expense.

•  An increase in interest credited to policyholder account balances of $3 million, net of income tax, due primarily to lower amortization of the excess interest liabilities on acquired annuity and universal life blocks of business primarily driven by lower lapses in the current year.

The aforementioned decreases in income from continuing operations were partially offset by the following items:

•  Higher universal life and investment-type product policy fees of $63 million, net of income tax, primarily related to fees being earned on higher average account balances.

•  Higher net investment income on blocks of business not driven by interest margins of $47 million, net of income tax.

Income tax expense for the nine months ended September 30, 2007 was $185 million, or 27% of income from continuing operations before provision for income tax, compared with $210 million, or 29% of such income, for the comparable 2006 period. The 2007 and 2006 effective tax rates differ from the corporate tax rate of 35% primarily due to the impact of non-taxable investment income. Also, the 2007 period included a charge and the 2006 period included a benefit for “provision-to-be-filed return” adjustments regarding non-taxable investment income.

Revenues

Total revenues, excluding net investment gains (losses), increased by $158 million to $3,667 million for the nine months ended September 30, 2007 from $3,509 million for the comparable 2006 period.

Premiums increased by $43 million due to an increase of $70 million from business growth in income annuities and life products. Partially offsetting these increases was a decline in retirement & savings premiums of $25 million, resulting primarily from declines of $14 million in pension closeouts and $9 million in structured settlement premiums, and a decline in non-medical health & other premiums of $2 million. Premiums from retirement & savings products are significantly influenced by large transactions and, as a result, can fluctuate from period to period.

Universal life and investment-type product policy fees combined with other revenues increased by $60 million. This increase was primarily due to a $98 million increase resulting from growth in separate accounts and improved market performance, $15 million due to increased revenue from COLI products, $13 million of higher interest earned on ceded reinsurance agreements that are accounted for as deposit-type contracts and a $4 million increase in

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other revenues across various products. Partially offsetting these increases was a reduction of $70 million related to assumed cost of insurance on an affiliated universal life reinsurance treaty.

Net investment income increased by $55 million. Management attributes $108 million of this increase to an increase in yields, primarily due to higher returns on fixed maturity securities, real estate and real estate joint ventures, and improved securities lending results, partially offset by a decline in yields on other limited partnership interests. This increase in yields was partially offset by $53 million due to a decline in the average asset base primarily within fixed maturity securities, other limited partnership interests, and cash, cash equivalents and short-term investments.

Expenses

Total expenses increased by $302 million to $2,698 million for the nine months ended September 30, 2007 from $2,396 million for the comparable 2006 period.

Policyholder benefits and claims increased by $143 million. The increase was primarily due to the impact of the assumption of certain structured settlement contracts from an affiliated entity in the fourth quarter of 2006 of $53 million, increases in policyholder benefits and claims commensurate with the increases of $43 million of premiums discussed above, favorable liability refinements in the prior year which contributed $38 million and unfavorable mortality in the life products of $27 million. In addition, there were increases in expenses of $25 million due to growth in deferred annuities, and increases in policyholder benefits and claims associated with the $15 million increase in universal life and investment-type product policy fees related to COLI policies discussed above. These increases were partially offset by a prior year net increase of $15 million for an excess mortality liability on specific blocks of life insurance policies. Also offsetting these increases were favorable underwriting in individual disability income products and pension closeouts of $11 million and $9 million, respectively. In addition, a favorable liability refinement of $12 million in structured settlements and a decrease of $11 million related to an affiliated universal life reinsurance treaty partially offset the increase in policyholder benefits and claims.

Interest credited to policyholder account balances decreased by $16 million. Interest credited to policyholder account balances decreased due to the impact of lower policyholder account balances primarily related to the general account portion of investment-type products, guaranteed interest contracts and other businesses, resulting in decreases of $20 million, $4 million and $4 million, respectively. These decreases were partially offset by an increase in rates on floating-rate products of $9 million, primarily LIBOR-based funding agreements, which are tied to short-term interest rates, and lower amortization of the excess interest liabilities on acquired annuity and universal life blocks of business of $4 million.

Other expenses increased by $175 million primarily due to higher DAC amortization of $144 million resulting from business growth, lower net investment losses, and revisions to management’s assumptions used to determine estimated gross profits and margins, which includes amortization associated with the ongoing implementation of Statement of Position (“SOP”)05-1,Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts(“SOP 05-1”) in the current year. The remaining increase in other expenses was driven by $23 million related to higher commissions, $40 million due to the impact of revisions to certain liabilities in both periods, $33 million related to thestart-up of the Company’s operations in Ireland and $19 million related to other items. Partially offsetting these increases were lower expenses of $42 million related to compensation, $28 million related to minority interest associated with certain limited partnership interests in the prior year which were previously consolidated and are now accounted for under the equity method, a $7 million reduction in the current year of previously established legal liabilities and a $7 million reduction in other general expenses. All other non-deferrable expenses were relatively flat compared to the prior year.

Insurance Regulations

Risk-based capital (“RBC”) requirements are used as minimum capital requirements by the National Association of Insurance Commissioners and the state insurance departments to identify companies that merit further regulatory action. RBC is based on a formula calculated by applying factors to various asset, premium and statutory reserve items. The formula takes into account the risk characteristics of the insurer, including asset risk,

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insurance risk, interest rate risk and business risk and is calculated on an annual basis. The formula is used as an early warning regulatory tool to identify possible inadequately capitalized insurers for purposes of initiating regulatory action, and not as a means to rank insurers generally. State insurance laws provide insurance regulators the authority to require various actions by, or take various actions against, insurers whose total adjusted capital does not exceed certain RBC levels. As of the date of the most recent annual statutory financial statements filed with insurance regulators, the total adjusted capital of MetLife Connecticut and its domestic insurance subsidiaries was in excess of each of those RBC levels calculated at December 31, 2006.

Under Connecticut State Insurance Law, MetLife Connecticut is permitted, without prior insurance regulatory clearance, to pay stockholder dividends to its parent as long as the amount of such dividends, when aggregated with all other dividends in the preceding 12 months, does not exceed the greater of (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year; or (ii) its statutory net gain from operations for the immediately preceding calendar year. MetLife Connecticut will be permitted to pay a cash dividend in excess of the greater of such two amounts only if it files notice of its declaration of such a dividend and the amount thereof with the Connecticut Commissioner of Insurance (“Connecticut Commissioner”) and the Connecticut Commissioner does not disapprove the payment within 30 days after notice. In addition, any dividend that exceeds earned surplus (unassigned funds, reduced by 25% of unrealized appreciation in value or revaluation of assets or unrealized profits on investments) as of the last filed annual statutory statement requires insurance regulatory approval. Under Connecticut State Insurance Law, the Connecticut Commissioner has broad discretion in determining whether the financial condition of a stock life insurance company would support the payment of such dividends to its stockholders. The Connecticut State Insurance Law requires prior approval for any dividends for a period of two years following a change in control. As a result of the acquisition of MetLife Connecticut, together with substantially all of Citigroup Inc.’s (“Citigroup”) international insurance business, by MetLife from Citigroup, on July 1, 2005, under Connecticut State Insurance Law, all dividend payments by MetLife Connecticut through June 30, 2007 required prior approval of the Connecticut Commissioner. In the third quarter of 2006, after receiving regulatory approval from the Connecticut Commissioner, MetLife Connecticut paid a $917 million dividend to MetLife. Of that amount, $259 million was a return of capital. On September 28, 2007, the Board of Directors declared a dividend of up to $690 million and paid $690 million on October 22, 2007. A portion of the dividend, $404 million, was a return of capital as approved by the insurance regulator. MetLife Connecticut’s domestic insurance subsidiaries, consisting of MLAC and MLI-USA, each had negative statutory unassigned surplus at December 31, 2006, and therefore cannot pay dividends to MetLife Connecticut without prior regulatory approval from their respective state insurance commissioners.

Adoption of New Accounting Pronouncements

Income Taxes

Effective January 1, 2007, the Company adopted Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 48,Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income tax recognized in a company’s financial statements. FIN 48 requires companies to determine whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. It also provides guidance on the recognition, measurement, and classification of income tax uncertainties, along with any related interest and penalties. Previously recorded income tax benefits that no longer meet this standard are required to be charged to earnings in the period that such determination is made.

As a result of the implementation of FIN 48, the Company did not recognize a cumulative effect adjustment to the balance of retained earnings as of January 1, 2007. The Company’s total amount of unrecognized tax benefits upon adoption of FIN 48 was $64 million. The Company reclassified, at adoption, $64 million of deferred income tax liabilities, for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility, to the liability for unrecognized tax benefits included within other liabilities. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. The total amount of unrecognized tax benefits as of January 1, 2007 that would

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affect the effective tax rate, if recognized, was $5 million. The Company had less than $1 million of accrued interest, included within other liabilities, as of January 1, 2007. The Company classifies interest accrued related to unrecognized tax benefits in interest expense, while penalties are included within income tax expense.

The Company files income tax returns with the U.S. federal government and various state and local jurisdictions, as well as certain foreign jurisdictions. With a few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2003 and is no longer subject to foreign income tax examinations for years prior to 2006. The Company does not anticipate any material change in the total amount of unrecognized tax benefits over the ensuing 12 month period.

As of September 30, 2007, the Company’s total amount of unrecognized tax benefits was $57 million, a net decrease of $7 million from the amount recorded as of the date of adoption. As of September 30, 2007, there were no amounts of unrecognized tax benefits that would affect the effective tax rate if recognized, a net decrease of $5 million from the amount recorded as of the date of adoption. The net decrease was primarily due to a settlement reached with the Internal Revenue Service (“IRS”) with respect to a post-sale purchase price adjustment. As a result of the settlement an item within the liability for unrecognized tax benefits in the amount of $6 million was reclassified to deferred income taxes. The Company does not anticipate that its liability for unrecognized tax benefits will change significantly in the next 12 months.

A reconciliation of the beginning and ending amount of unrecognized tax benefits and unrecognized tax benefits that, if recognized, would affect the effective tax rate, for the nine months ended September 30, 2007, is as follows:

				Unrecognized Tax Benefits
	Total Unrecognized			That, If Recognized Would
	Tax Benefits			Affect The Effective Tax Rate
	(In millions)
Balance at January 1, 2007 (date of adoption)	$	64		$	5
Reductions for tax positions of prior years		(5	)		(5	)
Additions for tax positions of current year		4			1
Reductions for tax positions of current year		(6	)		(1	)
Balance at September 30, 2007	$	57		$	—

During the three months and nine months ended September 30, 2007, the Company recognized $0 million and $1 million, respectively, in interest expense. As of September 30, 2007, the Company had $2 million of accrued interest related to unrecognized tax benefits, a net increase of $1 million from the amount recorded as of the date of adoption.

On September 25, 2007, the IRS issued Revenue Ruling2007-61, which announced its intention to issue regulations with respect to certain computational aspects of the Dividends Received Deduction (“DRD”) on separate account assets held in connection with variable annuity contracts. Revenue Ruling2007-61 suspended a revenue ruling issued in August 2007 that would have changed accepted industry and IRS interpretations of the statutes governing these computational questions. Any regulations that the IRS ultimately proposes for issuance in this area will be subject to public notice and comment, at which time insurance companies and other interested parties will have the opportunity to raise legal and practical questions about the content, scope and application of such regulations. As a result, the ultimate timing and substance of any such regulations are unknown at this time. For the three months and nine months ended September 30, 2007, the Company recognized an income tax benefit of $22 million and $65 million, respectively, related to the separate account DRD.

Insurance Contracts

Effective January 1, 2007, the Company adoptedSOP 05-1.SOP 05-1 provides guidance on accounting by insurance enterprises for DAC on internal replacements of insurance and investment contracts other than those specifically described in Statement of Financial Accounting Standards (“SFAS”) No. 97,Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments.SOP 05-1 defines an internal replacement as a modification in product benefits, features, rights, or coverages that occurs by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to a

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contract, or by the election of a feature or coverage within a contract.SOP 05-1 is effective for internal replacements occurring in fiscal years beginning after December 15, 2006. In addition, in February 2007, the American Institute of Certified Public Accountants (“AICPA”) issued related Technical Practice Aids (“TPAs”) to provide further clarification ofSOP 05-1. The TPAs became effective concurrently with the adoption ofSOP 05-1.

As a result of the adoption ofSOP 05-1 and the related TPAs, the Company assesses internal replacements to determine whether such modifications significantly change the contract terms based on the criteria noted in the guidance. If the modification substantially changes the contract, then the DAC is written off immediately through income and any new deferrable expenses associated with the new replacement are deferred. If the contract modifications do not substantially change the contract, the DAC amortization on the original policy will continue and any acquisition costs associated with the related modification are immediately expensed.

The adoption ofSOP 05-1 and the related TPAs resulted in a reduction to DAC and VOBA on January 1, 2007 and an acceleration of the amortization period relating primarily to the Company’s group life and health insurance contracts that contain certain rate reset provisions. Prior to the adoption ofSOP 05-1, DAC on such contracts was amortized over the expected renewable life of the contract. Upon adoption ofSOP 05-1, DAC on such contracts is to be amortized over the rate reset period. The impact as of January 1, 2007 was a cumulative effect adjustment of $86 million, net of income tax of $46 million, which was recorded as a reduction to retained earnings.

Other

Effective January 1, 2007, the Company adopted SFAS No. 156,Accounting for Servicing of Financial Assets — an amendment of FASB Statement No. 140 (“SFAS 156”). Among other requirements, SFAS 156 requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in certain situations. The adoption of SFAS 156 did not have an impact on the Company’s unaudited interim condensed consolidated financial statements.

Future Adoption of New Accounting Pronouncements

In June 2007, the AICPA issuedSOP 07-1,Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies(“SOP 07-1”). Upon adoption ofSOP 07-1, the Company must also adopt the provisions of FASB Staff Position No. FSPFIN 46(r)-7,Application of FASB Interpretation No. 46 to Investment Companies(“FSPFIN 46(r)-7”), which permanently exempts investment companies from applying the provisions of FIN No. 46(r),Consolidation of Variable Interest Entities — An Interpretation of Accounting Research Bulletin No. 51,and its December 2003 revision (“FIN 46(r)”) to investments carried at fair value.SOP 07-1 provides guidance for determining whether an entity falls within the scope of the AICPA Audit and Accounting GuideInvestment Companiesand whether investment company accounting should be retained by a parent company upon consolidation of an investment company subsidiary or by an equity method investor in an investment company. In certain circumstances,SOP 07-1 precludes retention of specialized accounting for investment companies (i.e., fair value accounting), when similar direct investments exist in the consolidated group and are measured on a basis inconsistent with that applied to investment companies. Additionally,SOP 07-1 precludes retention of specialized accounting for investment companies if the reporting entity does not distinguish through documented policies the nature and type of investments to be held in the investment companies from those made in the consolidated group where other accounting guidance is being applied. As issued,SOP 07-1 and FSPFIN 46(r)-7 are effective for fiscal years beginning on or after December 15, 2007. The FASB recently added a project to its agenda to indefinitely defer the effective date ofSOP 07-1. The Company is currently evaluating the impact ofSOP 07-1 and FSPFIN 46(r)-7 on the Company’s consolidated financial statements.

In May 2007, the FASB issued FSPNo. FIN 39-1,Amendment of FASB Interpretation No. 39(“FSP 39-1”).FSP 39-1 amends FIN No. 39,Offsetting of Amounts Related to Certain Contracts(“FIN 39”),to permit a reporting entity to offset fair value amounts recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) against fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting arrangement that have been offset in accordance with FIN 39.FSP 39-1 also amends FIN 39 for certain terminology modifications.FSP 39-1 applies to fiscal years beginning after November 15, 2007.FSP 39-1 will be applied retrospectively, unless it is impracticable to do so. Upon

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adoption ofFSP 39-1, the Company is permitted to change its accounting policy to offset or not offset fair value amounts recognized for derivative instruments under master netting arrangements. The Company is currently evaluating the impact ofFSP 39-1 on the Company’s consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial Assets and Financial Liabilities(“SFAS 159”). SFAS 159 permits all entities the option to measure most financial instruments and certain other items at fair value at specified election dates and to report related unrealized gains and losses in earnings. The fair value option will generally be applied on aninstrument-by-instrument basis and is generally an irrevocable election. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating which eligible financial instruments, if any, it will elect to account for at fair value under SFAS 159 and the related impact on the Company’s consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157,Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value under GAAP and requires enhanced disclosures about fair value measurements. SFAS 157 does not require additional fair value measurements. The pronouncement is effective for fiscal years beginning after November 15, 2007. Recently, the FASB decided not to add a project to its agenda to defer the effective date of SFAS 157 in its entirety. However, the FASB directed the FASB staff to evaluate other potential deferral alternatives including a deferral for: (i) all assets and liabilities except financial assets and liabilities and derivatives subject to the scope of SFAS No. 133,Accounting for Derivative Instruments and Hedging Activities(“SFAS 133”), (ii) private entities,and/or (iii) “small” entities. The FASB will discuss those alternative deferral options at a future FASB meeting. The guidance in SFAS 157 will be applied prospectively with certain exceptions. The Company is currently evaluating the impact that adoption of SFAS 157 will have on the Company’s consolidated financial statements. Implementation of SFAS 157 will require additional disclosures regarding measurement of fair value in the Company’s consolidated financial statements.

Item 4.   Controls and Procedures

Management, with the participation of the President and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Exchange ActRule 15d-15(e) as of the end of the period covered by this report. Based on that evaluation, the President and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.

There were no changes to the Company’s internal control over financial reporting as defined in Exchange ActRule 13a-15(f) during the quarter ended September 30, 2007 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II — Other Information

Item 1.   Legal Proceedings

The following should be read in conjunction with (i) Part I, Item 3, of the 2006 Annual Report; (ii) Part II, Item 1, of MetLife Connecticut’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2007; (iii) Part II, Item 1, of MetLife Connecticut’s Quarterly Report onForm 10-Q for the quarter ended June 30, 2007; and (iv) Note 5 to the unaudited interim condensed consolidated financial statements in Part I of this report.

A former registered representative of Tower Square Securities, Inc. (“Tower Square”), a broker-dealer subsidiary of MetLife Connecticut, is alleged to have defrauded individuals by diverting funds for his personal use. In June 2005, the SEC issued a formal order of investigation with respect to Tower Square and served Tower Square with a subpoena. On April 18, 2006, the Securities and Business Investments Division of the Connecticut Department of Banking issued a notice to Tower Square asking it to demonstrate its prior compliance with applicable Connecticut securities laws and regulations. In July 2007, Tower Square entered into a consent order with the Connecticut Department of Banking. The terms of the consent order included payment of a penalty to the Connecticut Department of Banking and offers of restitution to affected investors. In the context of the above, a number of NASD arbitration and litigation matters were commenced in 2005 and 2006 against Tower Square. The remaining pending arbitration and litigation matters were settled in August 2007.

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The Company is a defendant or co-defendant in various other litigation matters in the normal course of business. These may include civil actions, arbitration proceedings and other matters arising in the normal course of business out of activities as an insurance company, a broker and dealer in securities or otherwise. Further, state insurance regulatory authorities and other federal and state authorities may make inquiries and conduct investigations concerning the Company’s compliance with applicable insurance and other laws and regulations.

In the opinion of the Company’s management, the ultimate resolution of these legal and regulatory proceedings would not be likely to have a material adverse effect on the Company’s consolidated financial position or liquidity, but, if involving monetary liability, may be material to the Company’s operating results for any particular period.

Item 1A.   Risk Factors

The following should be read in conjunction with and supplements and amends the factors that may affect the Company’s business or operations described under “Risk Factors” in Part I, Item 1A, of the 2006 Annual Report.

Litigation and Regulatory Investigations Are Increasingly Common in Our Businesses and May Result in Significant Financial Losses and Harm to Our Reputation

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

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

On a quarterly and annual basis, we review relevant information with respect to liabilities for litigation and contingencies to be reflected in our consolidated financial statements. The review includes senior legal and financial personnel. Unless stated elsewhere herein, estimates of possible additional losses or ranges of loss for particular matters cannot in the ordinary course be made with a reasonable degree of certainty. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. It is possible that some of the matters could require us to pay damages or make other expenditures or establish accruals in amounts that could not be estimated as of September 30, 2007.

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

The insurance industry has become the focus of increased scrutiny by regulatory and law enforcement authorities. Industry-wide inquiries include those regarding market timing and late trading in mutual funds and variable insurance products and, generally, the marketing of products. This scrutiny also includes the commencement of investigations and other proceedings by governmental authorities relating to allegations of improper

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conduct in connection with the payment of, and disclosure with respect to, contingent commissions paid by insurance companies to intermediaries, the solicitation and provision of fictitious or inflated quotes, and the use of inducements in the sale of insurance products.

A former registered representative of Tower Square, a broker-dealer subsidiary of MetLife Connecticut, is alleged to have defrauded individuals by diverting funds for his personal use. In June 2005, the SEC issued a formal order of investigation with respect to Tower Square and served Tower Square with a subpoena. On April 18, 2006, the Securities and Business Investments Division of the Connecticut Department of Banking issued a notice to Tower Square asking it to demonstrate its prior compliance with applicable Connecticut securities laws and regulations. In July 2007, Tower Square entered into a consent order with the Connecticut Department of Banking. The terms of the consent order included payment of a penalty to the Connecticut Department of Banking and offers of restitution to affected investors. In the context of the above, a number of NASD arbitration and litigation matters were commenced in 2005 and 2006 against Tower Square. The remaining pending arbitration and litigation matters were settled in August 2007.

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

Item 6.   Exhibits

31.1	Certification of President 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 President 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

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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.

METLIFE INSURANCE COMPANY OF CONNECTICUT

By:  /s/  Joseph J. Prochaska, Jr.

Name: Joseph J. Prochaska, Jr.

Title:  Executive Vice-President and Chief Accounting Officer

(Authorized Signatory and Chief Accounting Officer)

Date: November 13, 2007

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Exhibit Index

Exhibit
Number			Exhibit Name
	31	.1	Certification of President 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 President 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

E-1