BRIGHTHOUSE LIFE INSURANCE 10-Q 2010 Q2 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 JUNE 30, 2010
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 (State or other jurisdiction of incorporation or organization)	06-0566090 (I.R.S. Employer Identification No.)
1300 Hall Boulevard, Bloomfield, Connecticut (Address of principal executive offices)	06002 (Zip Code)

(860) 656-3000

(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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 ofRegulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o     No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” inRule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o
Non-accelerated filer þ (Do not check if a smaller reporting company)	Smaller reporting company o

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 August 12, 2010, 34,595,317 shares of the registrant’s common stock, $2.50 par value per share, were outstanding, of which 30,000,000 shares were owned directly by MetLife, Inc. and the remaining 4,595,317 shares were 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
Item 1. Financial Statements(at June 30, 2010 (Unaudited) and December 31, 2009 and for the Three Months and Six Months Ended June 30, 2010 and 2009 (Unaudited))		5
Interim Condensed Consolidated Balance Sheets		5
Interim Condensed Consolidated Statements of Operations		6
Interim Condensed Consolidated Statements of Stockholders’ Equity		7
Interim Condensed Consolidated Statements of Cash Flows		9
Notes to the Interim Condensed Consolidated Financial Statements		10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		98
Item 4(T). Controls and Procedures		105
Part II — Other Information		105
Item 1. Legal Proceedings		105
Item 1A. Risk Factors		106
Item 6. Exhibits		116
Signatures		117
Exhibit Index		E-1
EX-31.1
EX-31.2
EX-32.1
EX-32.2

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As used in thisForm 10-Q, “MICC,” the “Company,” “we,” “our” and “us” refer to MetLife Insurance Company of Connecticut, a Connecticut corporation incorporated in 1863, and its subsidiaries, including MetLife Investors USA Insurance Company (“MLI-USA”). MetLife Insurance Company of Connecticut is a wholly-owned subsidiary of MetLife, Inc. (“MetLife”).

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, may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operations and financial results. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining MICC’s actual future results. These statements are based on current expectations and the current economic environment. They involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance. Actual results could differ materially from those expressed or implied in the forward-looking statements. Risks, uncertainties, and other factors that might cause such differences include the risks, uncertainties and other factors identified in MetLife Insurance Company of Connecticut’s filings with the U.S. Securities and Exchange Commission (the “SEC”). These factors include: (1) difficult conditions in the global capital markets; (2) increased volatility and disruption of the capital and credit markets, which may affect the Company’s ability to seek financing or access MetLife’s credit facilities; (3) uncertainty about the effectiveness of the U.S. government’s programs to stabilize the financial system, the imposition of fees relating thereto, or the promulgation of additional regulations; (4) impact of comprehensive financial services regulation reform on the Company; (5) exposure to financial and capital market risk; (6) changes in general economic conditions, including the performance of financial markets and interest rates, which may affect the Company’s ability to raise capital, generate fee income and market-related revenue and finance statutory reserve requirements and may require the Company to pledge collateral or make payments related to declines in value of specified assets; (7) potential liquidity and other risks resulting from MICC’s participation in a securities lending program and other transactions; (8) investment losses and defaults, and changes to investment valuations; (9) impairments of goodwill and realized losses or market value impairments to illiquid assets; (10) defaults on the Company’s mortgage loans; (11) the impairment of other financial institutions; (12) MICC’s ability to address unforeseen liabilities, asset impairments or rating actions arising from any future acquisitions, and to successfully integrate acquired businesses with minimal disruption; (13) economic, political, currency and other risks relating to the Company’s international operations; (14) downgrades in MetLife Insurance Company of Connecticut’s and its affiliates’ claims paying ability, financial strength or credit ratings; (15) ineffectiveness of risk management policies and procedures; (16) availability and effectiveness of reinsurance or indemnification arrangements, as well as default or failure of counterparties to perform; (17) 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; (18) catastrophe losses; (19) heightened competition, including with respect to pricing, entry of new competitors, consolidation of distributors, the development of new products by new and existing competitors, distribution of amounts available under U.S. government programs, and for personnel; (20) unanticipated changes in industry trends; (21) changes in accounting standards, practicesand/or policies; (22) changes in assumptions related to deferred policy acquisition costs (“DAC”), deferred sales inducements (“DSI”), value of business acquired (“VOBA”) or goodwill; (23) exposure to losses related to variable annuity guarantee benefits, including from significant and sustained downturns or extreme volatility in equity markets, reduced interest rates, unanticipated policyholder behavior, mortality or longevity, and the adjustment for nonperformance risk; (24) adverse results or other consequences from litigation, arbitration or regulatory investigations;

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(25) discrepancies between actual experience and assumptions used in establishing liabilities related to other contingencies or obligations; (26) regulatory, legislative or tax changes that may affect the cost of, or demand for, the Company’s products or services, impair the ability of MetLife and its affiliates to attract and retain talented and experienced management and other employees, or increase the cost or administrative burdens of providing benefits to the employees who conduct our business; (27) the effects of business disruption or economic contraction due to terrorism, other hostilities, or natural catastrophes; (28) the effectiveness of the Company’s programs and practices in avoiding giving its associates incentives to take excessive risks; and (29) other risks and uncertainties described from time to time in MetLife Insurance Company of Connecticut’s filings with the SEC.

MetLife Insurance Company of Connecticut does not undertake any obligation to publicly correct or update any forward-looking statement if MetLife Insurance Company of Connecticut later becomes aware that such statement is not likely to be achieved. Please consult any further disclosures MetLife Insurance Company of Connecticut makes on related subjects in reports to the SEC.

Note Regarding Reliance on Statements in Our Contracts

In reviewing the agreements included as exhibits to this Quarterly Report onForm 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about MetLife Insurance Company of Connecticut, its subsidiaries or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:

•  should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

•  have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

•  may apply standards of materiality in a way that is different from what may be viewed as material to investors; and

•  were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about MetLife Insurance Company of Connecticut and its subsidiaries may be found elsewhere in this Quarterly Report onForm 10-Q and MetLife Insurance Company of Connecticut’s other public filings, which are available without charge through the SEC website at www.sec.gov.

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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
June 30, 2010 (Unaudited) and December 31, 2009

(In millions, except share and per share data)

	June 30, 2010		December 31, 2009
Assets
Investments:
Fixed maturity securitiesavailable-for-sale, at estimated fair value (amortized cost: $43,028 and $42,435, respectively)	$	43,848	$	41,275
Equity securitiesavailable-for-sale, at estimated fair value (cost: $448 and $494, respectively)		407		459
Trading securities, at estimated fair value (cost: $1,375 and $868, respectively)		1,379		938
Mortgage loans (net of valuation allowances of $93 and $77, respectively; includes $7,107 and $0, respectively, at estimated fair value relating to variable interest entities)		12,111		4,748
Policy loans		1,190		1,189
Real estate and real estate joint ventures		443		445
Other limited partnership interests		1,377		1,236
Short-term investments		1,974		1,775
Other invested assets		1,635		1,498
Total investments		64,364		53,563
Cash and cash equivalents		2,198		2,574
Accrued investment income (includes $34 and $0, respectively, relating to variable interest entities)		501		516
Premiums, reinsurance and other receivables		16,029		13,444
Deferred policy acquisition costs and value of business acquired		4,920		5,244
Deferred income tax assets		460		1,147
Goodwill		953		953
Other assets		810		799
Separate account assets		49,806		49,449
Total assets	$	140,041	$	127,689
Liabilities and Stockholders’ Equity
Liabilities
Future policy benefits	$	22,352	$	21,621
Policyholder account balances		38,281		37,442
Other policyholder funds		2,426		2,297
Payables for collateral under securities loaned and other transactions		7,660		7,169
Long-term debt (includes $7,052 and $0, respectively, at estimated fair value relating to variable interest entities)		8,002		950
Current income tax payable		21		23
Other liabilities (includes $33 and $0, respectively, relating to variable interest entities)		3,544		2,177
Separate account liabilities		49,806		49,449
Total liabilities		132,092		121,128
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 June 30, 2010 and December 31, 2009		86		86
Additional paid-in capital		6,719		6,719
Retained earnings		881		541
Accumulated other comprehensive income (loss)		263		(785	)
Total stockholders’ equity		7,949		6,561
Total liabilities and stockholders’ equity	$	140,041	$	127,689

See accompanying notes to the interim condensed consolidated financial statements.

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

Interim Condensed Consolidated Statements of Operations
For the Three Months and Six Months Ended June 30, 2010 and 2009 (Unaudited)

(In millions)

	Three Months						Six Months
	Ended						Ended
	June 30,						June 30,
	2010			2009			2010			2009
Revenues
Premiums	$	256		$	500		$	711		$	684
Universal life and investment-type product policy fees		407			299			776			583
Net investment income		725			621			1,515			1,061
Other revenues		103			306			213			375
Net investment gains (losses):
Other-than-temporary impairments on fixed maturity securities		(19	)		(195	)		(53	)		(316	)
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income (loss)		7			77			23			77
Other net investment gains (losses), net		625			(610	)		372			(1,089	)
Total net investment gains (losses)		613			(728	)		342			(1,328	)
Total revenues		2,104			998			3,557			1,375
Expenses
Policyholder benefits and claims		504			674			1,198			1,101
Interest credited to policyholder account balances		257			310			573			610
Other expenses		839			178			1,258			436
Total expenses		1,600			1,162			3,029			2,147
Income (loss) before provision for income tax		504			(164	)		528			(772	)
Provision for income tax expense (benefit)		162			(68	)		154			(294	)
Net income (loss)	$	342		$	(96	)	$	374		$	(478	)

See accompanying notes to the interim condensed consolidated financial statements.

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

Interim Condensed Consolidated Statements of Stockholders’ Equity
For the Six Months Ended June 30, 2010 (Unaudited)

(In millions)

								Accumulated Other
								Comprehensive Income (Loss)
								Net						Foreign
			Additional					Unrealized			Other-Than-			Currency
	Common		Paid-in		Retained			Investment			Temporary			Translation			Total
	Stock		Capital		Earnings			Gains (Losses)			Impairments			Adjustments			Equity
Balance at December 31, 2009	$	86	$	6,719	$	541		$	(593	)	$	(83	)	$	(109	)	$	6,561
Cumulative effect of change in accounting principle, net of income tax (Note 1)		—		—		(34	)		23			11			—			—
Balance at January 1, 2010		86		6,719		507			(570	)		(72	)		(109	)		6,561
Comprehensive income (loss):
Net income						374												374
Other comprehensive income (loss):
Unrealized gains (losses) on derivative instruments, net of income tax									16									16
Unrealized investment gains (losses), net of related offsets and income tax									1,041			9						1,050
Foreign currency translation adjustments, net of income tax															(52	)		(52	)
Other comprehensive income (loss)																		1,014
Comprehensive income (loss)																		1,388
Balance at June 30, 2010	$	86	$	6,719	$	881		$	487		$	(63	)	$	(161	)	$	7,949

See accompanying notes to the interim condensed consolidated financial statements.

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

Interim Condensed Consolidated Statements of Stockholders’ Equity — (Continued)
For the Six Months Ended June 30, 2009 (Unaudited)

(In millions)

								Accumulated Other
								Comprehensive Income (Loss)
								Net						Foreign
			Additional					Unrealized			Other-Than-			Currency
	Common		Paid-in		Retained			Investment			Temporary			Translation			Total
	Stock		Capital		Earnings			Gains (Losses)			Impairments			Adjustments			Equity
Balance at December 31, 2008	$	86	$	6,719	$	965		$	(2,682	)	$	—		$	(154	)	$	4,934
Cumulative effect of change in accounting principle, net of income tax						22						(22	)					—
Comprehensive income (loss):
Net loss						(478	)											(478	)
Other comprehensive income (loss):
Unrealized gains (losses) on derivative instruments, net of income tax									(5	)								(5	)
Unrealized investment gains (losses), net of related offsets and income tax									773			(33	)					740
Foreign currency translation adjustments, net of income tax															50			50
Other comprehensive income (loss)																		785
Comprehensive income (loss)																		307
Balance at June 30, 2009	$	86	$	6,719	$	509		$	(1,914	)	$	(55	)	$	(104	)	$	5,241

See accompanying notes to the interim condensed consolidated financial statements.

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

Interim Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2010 and 2009 (Unaudited)

(In millions)

	Six Months
	Ended
	June 30,
	2010			2009
Net cash provided by (used in) operating activities	$	519		$	(774	)
Cash flows from investing activities
Sales, maturities and repayments of:
Fixed maturity securities		8,500			6,425
Equity securities		109			31
Mortgage loans		437			233
Real estate and real estate joint ventures		9			2
Other limited partnership interests		56			96
Purchases of:
Fixed maturity securities		(9,145	)		(8,525	)
Equity securities		(46	)		(26	)
Mortgage loans		(395	)		(74	)
Real estate and real estate joint ventures		(57	)		(23	)
Other limited partnership interests		(163	)		(75	)
Cash received in connection with freestanding derivatives		48			229
Cash paid in connection with freestanding derivatives		(108	)		(271	)
Net change in policy loans		(1	)		9
Net change in short-term investments		(202	)		1,851
Net change in other invested assets		(39	)		(169	)
Net cash used in investing activities		(997	)		(287	)
Cash flows from financing activities
Policyholder account balances:
Deposits		12,565			11,388
Withdrawals		(12,604	)		(10,861	)
Net change in payables for collateral under securities loaned and other transactions		491			(1,556	)
Net change in short-term debt		—			(300	)
Long-term debt repaid		(311	)		—
Financing element on certain derivative instruments		(15	)		(16	)
Net cash provided by (used in) financing activities		126			(1,345	)
Effect of change in foreign currency exchange rates on cash balances		(24	)		45
Change in cash and cash equivalents		(376	)		(2,361	)
Cash and cash equivalents, beginning of period		2,574			5,656
Cash and cash equivalents, end of period	$	2,198		$	3,295
Supplemental disclosures of cash flow information:
Net cash paid (received) during the period for:
Interest	$	245		$	39
Income tax	$	42		$	(53	)

See accompanying notes to the interim condensed consolidated financial statements.

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

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)

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

Business

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

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 interim condensed consolidated financial statements.

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 interim condensed consolidated financial statements include the accounts of MetLife Insurance Company of Connecticut and its subsidiaries, as well as partnerships and joint ventures in which the Company has control and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. See “— Adoption of New Accounting Pronouncements.” Intercompany accounts and transactions have been eliminated.

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

Certain amounts in the prior year periods’ interim condensed consolidated financial statements have been reclassified to conform with the 2010 presentation. Such reclassifications include $229 million and ($271) million reclassified from net change in other invested assets to cash received in connection with freestanding derivatives and cash paid in connection with freestanding derivatives, respectively, within cash flows from investing activities in the interim condensed consolidated statement of cash flows for the six months ended June 30, 2009.

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.

The accompanying interim condensed consolidated financial statements reflect all adjustments (including normal recurring adjustments) necessary to present fairly the consolidated financial position of the Company at June 30, 2010, its consolidated results of operations for the three months and six months ended June 30, 2010 and 2009, its consolidated cash flows for the six months ended June 30, 2010 and 2009, and its consolidated statements of stockholders’ equity for the six months ended June 30, 2010 and 2009, in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2009 consolidated balance sheet data was derived from audited consolidated financial statements included in MetLife Insurance Company of Connecticut’s Annual Report onForm 10-K for the year ended December 31, 2009 (the “2009 Annual Report”) filed with the U.S. Securities and Exchange Commission, which includes all disclosures required by GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2009 Annual Report.

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

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

Adoption of New Accounting Pronouncements

Financial Instruments

Effective January 1, 2010, the Company adopted new guidance related to financial instrument transfers and consolidation of VIEs. The financial instrument transfer guidance eliminates the concept of a qualified special purpose entity (“QSPE”), eliminates the guaranteed mortgage securitization exception, changes the criteria for achieving sale accounting when transferring a financial asset and changes the initial recognition of retained beneficial interests. The new consolidation guidance changes the definition of the primary beneficiary, as well as the method of determining whether an entity is a primary beneficiary of a VIE from a quantitative model to a qualitative model. Under the new qualitative model, the entity that has both the ability to direct the most significant activities of the VIE and the obligation to absorb losses or receive benefits that could be significant to the VIE is considered to be the primary beneficiary of the VIE. The guidance requires reassessment on a quarterly basis, as well as enhanced disclosures, including the effects of a company’s involvement with VIEs on its financial statements.

As a result of the adoption of this guidance, the Company consolidated certain former QSPEs that were previously accounted for as fixed maturity commercial mortgage-backed securities. The Company also elected the fair value option for all of the consolidated assets and liabilities of these entities. Upon consolidation, the Company recorded $6,769 million of commercial mortgage loans and $6,717 million of long-term debt based on estimated fair values at January 1, 2010 and de-recognized $52 million in fixed maturity securities. The consolidation also resulted in a decrease in retained earnings of $34 million, net of income tax, and an increase in accumulated other comprehensive income (loss) of $34 million, net of income tax, at January 1, 2010. For the three months and six months ended June 30, 2010, the Company recorded $105 million and $210 million, respectively, of net investment income on the consolidated assets, $101 million and $204 million, respectively, of interest expense in other expenses on the related long-term debt, and $10 million and $6 million, respectively, in net investment gains (losses) to remeasure the assets and liabilities at their estimated fair values at June 30, 2010.

Also effective January 1, 2010, the Company adopted new guidance that indefinitely defers the above changes relating to the Company’s interests in entities that have all the attributes of an investment company or for which it is industry practice to apply measurement principles for financial reporting that are consistent with those applied by an investment company. As a result of the deferral, the above guidance did not apply to certain real estate joint ventures and other limited partnership interests held by the Company.

Fair Value

Effective January 1, 2010, the Company adopted new guidance that requires new disclosures about significant transfers inand/or out of Levels 1 and 2 of the fair value hierarchy and activity in Level 3 (Accounting Standards Update (“ASU”)2010-06,Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements). In addition, this guidance provides clarification of existing disclosure requirements about level of disaggregation and inputs and valuation techniques. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Future Adoption of New Accounting Pronouncements

In July 2010, Financial Accounting Standards Board (“FASB”) issued new guidance regarding disclosures about the credit quality of financing receivables and the allowance for credit losses (ASU2010-20,Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses). This guidance requires additional disclosures about the credit quality of financing receivables, such as aging information and credit quality indicators. In addition, disclosures must be disaggregated by portfolio segment or class based on how a company develops its allowance for credit losses and how it manages its credit exposure. Most of the requirements are

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

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

effective for the fourth quarter of 2010 with certain additional disclosures required for the first quarter of 2011. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In April 2010, the FASB issued new guidance regarding accounting for investment funds determined to be VIEs (ASU2010-15,How Investments Held through Separate Accounts Affect an Insurer’s Consolidation Analysis of Those Investments). Under this guidance, an insurance entity would not be required to consolidate a voting-interest investment fund when it holds the majority of the voting interests of the fund through its separate accounts. In addition, an insurance entity would not consider the interests held through separate accounts for the benefit of policyholders in the insurer’s evaluation of its economics in a VIE, unless the separate account contract holder is a related party. The guidance is effective for the first quarter of 2011. The Company does not expect the adoption of this new guidance to have a material impact on its consolidated financial statements.

In March 2010, the FASB issued new guidance regarding accounting for embedded credit derivatives within structured securities (ASU2010-11,Scope Exception Related to Embedded Credit Derivatives). This guidance clarifies the type of embedded credit derivative that is exempt from embedded derivative bifurcation requirements. Specifically, embedded credit derivatives resulting only from subordination of one financial instrument to another continue to qualify for the scope exception. Embedded credit derivative features other than subordination must be analyzed to determine if they require bifurcation and separate accounting. The guidance is effective for the third quarter of 2010. The Company does not expect the adoption of this new guidance to have a material impact on its consolidated financial statements.

2.   Investments

Fixed Maturity and Equity SecuritiesAvailable-for-Sale

The following tables present the cost or amortized cost, gross unrealized gain and loss, estimated fair value of the Company’s fixed maturity and equity securities and the percentage that each sector represents by the respective total holdings for the periods shown. The unrealized loss amounts presented below include the noncredit loss component ofother-than-temporary impairment (“OTTI”) loss:

	June 30, 2010
	Cost or		Gross Unrealized							Estimated
	Amortized				Temporary		OTTI			Fair		% of
	Cost		Gain		Loss		Loss			Value		Total
	(In millions)
Fixed Maturity Securities:
U.S. corporate securities	$	15,229	$	806	$	372	$	—		$	15,663		35.7	%
U.S. Treasury and agency securities		7,947		346		31		—			8,262		18.8
Foreign corporate securities		7,452		414		210		—			7,656		17.5
Residential mortgage-backed securities (“RMBS”)		5,514		253		275		82			5,410		12.3
Commercial mortgage-backed securities (“CMBS”) (1)		2,504		97		63		(2	)		2,540		5.8
Asset-backed securities (“ABS”)		2,151		51		132		30			2,040		4.7
State and political subdivision securities		1,519		54		83		—			1,490		3.4
Foreign government securities		712		79		4		—			787		1.8
Total fixed maturity securities (2), (3)	$	43,028	$	2,100	$	1,170	$	110		$	43,848		100.0	%
Equity Securities:
Non-redeemable preferred stock (2)	$	294	$	7	$	61	$	—		$	240		59.0	%
Common stock		154		15		2		—			167		41.0
Total equity securities (4)	$	448	$	22	$	63	$	—		$	407		100.0	%

12

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

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

	December 31, 2009
	Cost or		Gross Unrealized						Estimated
	Amortized				Temporary		OTTI		Fair		% of
	Cost		Gain		Loss		Loss		Value		Total
	(In millions)
Fixed Maturity Securities:
U.S. corporate securities	$	15,598	$	441	$	639	$	2	$	15,398		37.3	%
U.S. Treasury and agency securities		6,503		35		281		—		6,257		15.2
Foreign corporate securities		7,292		307		255		6		7,338		17.8
RMBS		6,183		153		402		82		5,852		14.2
CMBS		2,808		43		216		18		2,617		6.3
ABS		2,152		33		163		33		1,989		4.8
State and political subdivision securities		1,291		12		124		—		1,179		2.8
Foreign government securities		608		46		9		—		645		1.6
Total fixed maturity securities (2) ,(3)	$	42,435	$	1,070	$	2,089	$	141	$	41,275		100.0	%
Equity Securities:
Non-redeemable preferred stock (2)	$	351	$	10	$	55	$	—	$	306		66.7	%
Common stock		143		11		1		—		153		33.3
Total equity securities (4)	$	494	$	21	$	56	$	—	$	459		100.0	%

(1)

OTTI loss, as presented above, represents the noncredit portion of OTTI loss that is included in accumulated other comprehensive income (loss). OTTI loss includes both the initial recognition of noncredit losses, and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities that were previously noncredit loss impaired. The noncredit loss component of OTTI loss for CMBS was in an unrealized gain position of $2 million at June 30, 2010 due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. See also “Net Unrealized Investment Gains (Losses).”

(2)

Upon acquisition, the Company classifies perpetual securities that have attributes of both debt and equity as fixed maturity securities if the security has an interest ratestep-up feature which, when combined with other qualitative factors, indicates that the security has more debt-like characteristics. The Company classifies perpetual securities with an interest ratestep-up feature which, when combined with other qualitative factors, indicates that the security has more equity-like characteristics, as equity securities within non-redeemable preferred stock. Many of such securities have been issued bynon-U.S. financial institutions that are accorded Tier 1 and Upper Tier 2 capital treatment by their respective regulatory bodies and are commonly referred to as “perpetual hybrid securities.” The following table presents the perpetual hybrid securities held by the Company at:

Classification			June 30, 2010		December 31, 2009
			Estimated		Estimated
			Fair		Fair
Consolidated Balance Sheets	Sector Table	Primary Issuers	Value		Value
			(In millions)
Equity securities	Non-redeemable preferred stock	Non-U.S. financial institutions	$	201	$	237
Equity securities	Non-redeemable preferred stock	U.S. financial institutions	$	34	$	43
Fixed maturity securities	Foreign corporate securities	Non-U.S. financial institutions	$	575	$	580
Fixed maturity securities	U.S. corporate securities	U.S. financial institutions	$	14	$	17

(3) Redeemable preferred stock with stated maturity dates are included in the U.S. corporate securities sector within fixed maturity securities. These securities, commonly referred to as “capital securities,” are primarily

13

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

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

	issued by U.S. financial institutions and have cumulative interest deferral features. The Company held $525 million and $513 million at estimated fair value of such securities at June 30, 2010 and December 31, 2009, respectively.
(4)	Equity securities primarily consist of investments in common and preferred stocks, including certain perpetual hybrid securities and mutual fund interests. Privately-held equity securities were $106 million and $82 million at estimated fair value at June 30, 2010 and December 31, 2009, respectively.

The below investment grade and non-income producing amounts presented below are based on rating agency designations and equivalent designations of the National Association of Insurance Commissioners (“NAIC”), with the exception of non-agency RMBS held by the Company’s domestic insurance subsidiary. Non-agency RMBS, including RMBS backed bysub-prime mortgage loans reported within ABS, held by the Company’s domestic insurance subsidiary are presented based on final ratings from the revised NAIC rating methodology (i.e., NAIC 1 – 6) which became effective December 31, 2009 (which may not correspond to rating agency designations). All NAIC designation amounts and percentages presented herein are based on the revised NAIC methodology described above. All rating agency designation (i.e., Aaa/AAA) amounts and percentages presented herein are based on rating agency designations without adjustment for the revised NAIC methodology described above. Rating agency designations (i.e., Aaa/AAA) are based on availability of applicable ratings from rating agencies on the NAIC acceptable rating organization list, including Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (S&P) and Fitch Ratings (“Fitch”).

The following table presents selected information about certain fixed maturity securities held by the Company at:

	June 30, 2010			December 31, 2009
	(In millions)
Below investment grade or non-rated fixed maturity securities:
Estimated fair value	$	3,773		$	3,866
Net unrealized loss	$	345		$	467
Non-income producing fixed maturity securities:
Estimated fair value	$	32		$	67
Net unrealized gain (loss)	$	(3	)	$	2
Fixed maturity securities credit enhanced by financial guarantor insurers — by sector — at estimated fair value:
State and political subdivision securities	$	506		$	493
U.S. corporate securities		494			458
ABS		95			107
RMBS		9			7
CMBS		3			3
Total fixed maturity securities credit enhanced by financial guarantor insurers	$	1,107		$	1,068
Ratings of the financial guarantor insurers providing the credit enhancement:
Portion rated Aa/AA		26	%		25	%
Portion rated Baa/BBB		40	%		39	%

Concentrations of Credit Risk (Fixed Maturity Securities) —Summary.  The following section contains a summary of the concentrations of credit risk related to fixed maturity securities holdings.

14

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

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

The Company was not exposed to any concentrations of credit risk of any single issuer greater than 10% of the Company’s stockholders’ equity, other than securities of the U.S. government and certain U.S. government agencies. The Company’s holdings in U.S. Treasury and agency fixed maturity securities at estimated fair value were $8.3 billion and $6.3 billion at June 30, 2010 and December 31, 2009, respectively.

Concentrations of Credit Risk(Fixed Maturity Securities) —U.S. and Foreign Corporate Securities.  The Company maintains a diversified portfolio of corporate fixed maturity securities across industries and issuers. This portfolio does not have exposure to any single issuer in excess of 1% of total investments. The tables below present the major industry types that comprise the corporate fixed maturity securities holdings, the largest exposure to a single issuer and the combined holdings in the ten issuers to which it had the largest exposure at:

	June 30, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
	(In millions)
Corporate fixed maturity securities — by industry type:
Foreign (1)	$	7,656		32.8	%	$	7,338		32.3	%
Consumer		3,882		16.6			3,507		15.4
Utility		3,449		14.8			3,328		14.6
Industrial		3,215		13.8			3,047		13.4
Finance		2,857		12.3			3,145		13.8
Communications		1,491		6.4			1,669		7.4
Other		769		3.3			702		3.1
Total	$	23,319		100.0	%	$	22,736		100.0	%

(1) Includes U.S. dollar-denominated debt obligations of foreign obligors and other foreign fixed maturity security investments.

	June 30, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of Total			Fair		% of Total
	Value		Investments			Value		Investments
	(In millions)
Concentrations within corporate fixed maturity securities:
Largest exposure to a single issuer	$	197		0.3	%	$	204		0.4	%
Holdings in ten issuers with the largest exposures	$	1,599		2.5	%	$	1,695		3.2	%

15

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

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

Concentrations of Credit Risk (Fixed Maturity Securities) — RMBS.  The table below presents the Company’s RMBS holdings and portion rated Aaa/AAA and portion rated NAIC 1 at:

	June 30, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
	(In millions)
By security type:
Collateralized mortgage obligations	$	3,492		64.5	%	$	3,646		62.3	%
Pass-through securities		1,918		35.5			2,206		37.7
Total RMBS	$	5,410		100.0	%	$	5,852		100.0	%
By risk profile:
Agency	$	3,741		69.2	%	$	4,095		70.0	%
Prime		1,067		19.7			1,118		19.1
Alternative residential mortgage loans		602		11.1			639		10.9
Total RMBS	$	5,410		100.0	%	$	5,852		100.0	%
Portion rated Aaa/AAA	$	3,937		72.8	%	$	4,347		74.3	%
Portion rated NAIC 1	$	4,437		82.0	%	$	4,835		82.6	%

Collateralized mortgage obligations are a type of mortgage-backed security structured by dividing the cash flows of mortgages into separate pools or tranches of risk that create multiple classes of bonds with varying maturities and priority of payments. Pass-through mortgage-backed securities are a type of asset-backed security that is secured by a mortgage or collection of mortgages. The monthly mortgage payments from homeowners pass from the originating bank through an intermediary, such as a government agency or investment bank, which collects the payments, and for a fee, remits or passes these payments through to the holders of the pass-through securities.

Prime residential mortgage lending includes the origination of residential mortgage loans to the most creditworthy borrowers with high quality credit profiles. Alternative residential mortgage loans (“Alt-A”) are a classification of mortgage loans where the risk profile of the borrower falls between prime andsub-prime.Sub-prime mortgage lending is the origination of residential mortgage loans to borrowers with weak credit profiles.

16

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

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

The following tables present the Company’s investment in Alt-A RMBS by vintage year (vintage year refers to the year of origination and not to the year of purchase) and certain other selected data:

	June 30, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
	(In millions)
Vintage Year:
2004 & Prior	$	10		1.7	%	$	15		2.3	%
2005		313		52.0			336		52.6
2006		80		13.3			83		13.0
2007		199		33.0			205		32.1
2008		—		—			—		—
2009		—		—			—		—
2010		—		—			—		—
Total	$	602		100.0	%	$	639		100.0	%

	June 30, 2010					December 31, 2009
			% of					% of
	Amount		Total			Amount		Total
	(In millions)
Net unrealized loss	$	191				$	235
Rated Aa/AA or better				1.7	%				2.3	%
Rated NAIC 1				14.7	%				16.6	%
By collateral type:
Fixed rate mortgage loans collateral				95.6	%				95.6	%
Hybrid adjustable rate mortgage loans collateral				4.4					4.4
Total Alt-A RMBS				100.0	%				100.0	%

Concentrations of Credit Risk (Fixed Maturity Securities) — CMBS.  The Company’s holdings in CMBS were $2.5 billion and $2.6 billion at estimated fair value at June 30, 2010 and December 31, 2009, respectively. The Company had no exposure to CMBS index securities at both June 30, 2010 and December 31, 2009. The Company held commercial real estate collateralized debt obligations securities of $77 million and $70 million at estimated fair value at June 30, 2010 and December 31, 2009, respectively.

17

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

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

The following tables present the Company’s holdings of CMBS by rating agency designation and by vintage year at:

	June 30, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
	(In millions)
2003 & Prior	$	1,203		47.4	%	$	1,202		45.9	%
2004		450		17.7			512		19.6
2005		444		17.5			472		18.0
2006		426		16.8			407		15.6
2007		17		0.6			24		0.9
2008		—		—			—		—
2009		—		—			—		—
2010		—		—			—		—
Total	$	2,540		100.0	%	$	2,617		100.0	%

	June 30, 2010					December 31, 2009
			% of						% of
	Amount		Total			Amount			Total
			(In millions)
Net unrealized gain (loss)	$	36				$	(191	)
Rated Aaa/AAA				91	%					83	%

The June 30, 2010 table reflects ratings assigned by nationally recognized rating agencies including Moody’s, S&P, Fitch and Realpoint, LLC and the December 31, 2009 table reflects ratings assigned by nationally recognized rating agencies including Moody’s, S&P and Fitch.

Concentrations of Credit Risk (Fixed Maturity Securities) — ABS.  The Company’s holdings in ABS were $2.0 billion at estimated fair value at both June 30, 2010 and December 31, 2009. The Company’s ABS are diversified both by collateral type and by issuer.

18

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

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

The following table presents the collateral type and certain other information about ABS held by the Company at:

	June 30, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
	(In millions)
By collateral type:
Credit card loans	$	895		43.9	%	$	920		46.3	%
RMBS backed bysub-prime mortgage loans		245		12.0			247		12.4
Student loans		218		10.7			158		7.9
Automobile loans		147		7.2			205		10.3
Other loans		535		26.2			459		23.1
Total	$	2,040		100.0	%	$	1,989		100.0	%
Portion rated Aaa/AAA	$	1,374		67.4	%	$	1,292		65.0	%
Portion rated NAIC 1	$	1,848		90.6	%	$	1,767		88.8	%
RMBS backed bysub-prime mortgage loans — portion credit enhanced by financial guarantor insurers				19.8	%				20.6	%
Of the 19.8% and 20.6% credit enhanced, the financial guarantor insurers were rated as follows:
By financial guarantor insurers rated Aa/AA				0.9	%				0.7	%
By financial guarantor insurers rated A				0.3	%				0.2	%

Concentrations of Credit Risk (Equity Securities).  The Company was not exposed to any concentrations of credit risk in its equity securities holdings of any single issuer greater than 10% of the Company’s stockholders’ equity at June 30, 2010 and December 31, 2009.

Maturities of Fixed Maturity Securities.  The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date (excluding scheduled sinking funds), were as follows at:

	June 30, 2010				December 31, 2009
			Estimated				Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
			(In millions)
Due in one year or less	$	1,679	$	1,693	$	1,023	$	1,029
Due after one year through five years		9,610		9,861		9,048		9,202
Due after five years through ten years		8,033		8,439		7,882		7,980
Due after ten years		13,537		13,865		13,339		12,606
Subtotal		32,859		33,858		31,292		30,817
RMBS, CMBS and ABS		10,169		9,990		11,143		10,458
Total fixed maturity securities	$	43,028	$	43,848	$	42,435	$	41,275

Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities not due at a single maturity date have been included in the above table in the year of final contractual maturity. RMBS, CMBS and ABS are shown separately in the table, as they are not due at a single maturity.

19

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

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

EvaluatingAvailable-for-Sale Securities forOther-Than-Temporary Impairment

As described more fully in Note 1 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report, the Company performs a regular evaluation, on asecurity-by-security basis, of itsavailable-for-sale securities holdings in accordance with its impairment policy in order to evaluate whether such investments areother-than-temporarily impaired. As described more fully in Note 1 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report, effective April 1, 2009, the Company adopted new OTTI guidance that amends the methodology for determining for fixed maturity securities whether an OTTI exists, and for certain fixed maturity securities, changes how the amount of the OTTI loss that is charged to earnings is determined. There was no change in the OTTI methodology for equity securities.

With respect to fixed maturity securities, the Company considers, among other impairment criteria, whether it has the intent to sell a particular impaired fixed maturity security. The Company’s intent to sell a particular impaired fixed maturity security 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, the security will be deemedother-than-temporarily impaired in the period that the sale decision was made and an OTTI loss will be recorded in earnings. In certain circumstances, the Company may determine that it does not intend to sell a particular security but that it is more likely than not that it will be required to sell that security before recovery of the decline in estimated fair value below amortized cost. In such instances, the fixed maturity security will be deemedother-than-temporarily impaired in the period during which it was determined more likely than not that the security will be required to be sold and an OTTI loss will be recorded in earnings. If the Company does not have the intent to sell (i.e., has not made the decision to sell) and it does not believe that it is more likely than not that it will be required to sell the security before recovery of its amortized cost, an impairment assessment is made, as described in Note 1 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report. Prior to April 1, 2009, the Company’s assessment of OTTI for fixed maturity securities was performed in the same manner as described below for equity securities.

With respect to equity securities, the Company considers in its OTTI analysis its intent and ability to hold a particular equity security for a period of time sufficient to allow for the recovery of its value to an amount equal to or greater than cost. Decisions to sell equity securities are based on current conditions in relation to the same broad portfolio management considerations in a manner consistent with that described above for fixed maturity securities.

With respect to perpetual hybrid securities, some of which are classified as fixed maturity securities and some of which are classified as equity securities, within non-redeemable preferred stock, the Company considers in its OTTI analysis whether there has been any deterioration in credit of the issuer and the likelihood of recovery in value of the securities that are in a severe and extended unrealized loss position. The Company also considers whether any perpetual hybrid securities with an unrealized loss, regardless of credit rating, have deferred any dividend payments.

20

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

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

Net Unrealized Investment Gains (Losses)

The components of net unrealized investment gains (losses), included in accumulated other comprehensive income (loss), were as follows at:

	June 30, 2010			December 31, 2009
	(In millions)
Fixed maturity securities	$	930		$	(1,019	)
Fixed maturity securities with noncredit OTTI losses in other comprehensive income (loss)		(110	)		(141	)
Total fixed maturity securities		820			(1,160	)
Equity securities		(41	)		(35	)
Derivatives		25			(4	)
Short-term investments		(14	)		(10	)
Other		(6	)		(3	)
Subtotal		784			(1,212	)
Amounts allocated from:
Insurance liability loss recognition		(19	)		—
DAC and VOBA related to noncredit OTTI losses recognized in other comprehensive income (loss)		11			12
DAC and VOBA		(138	)		151
Subtotal		(146	)		163
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in other comprehensive income (loss)		36			46
Deferred income tax benefit (expense)		(250	)		327
Net unrealized investment gains (losses)	$	424		$	(676	)

Fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive income (loss), as presented above, of ($110) million at June 30, 2010, includes ($141) million recognized prior to January 1, 2010, ($7) million and ($23) million ($11 million and ($20) million, net of DAC) of noncredit losses recognized in the three months and six months ended June 30, 2010, respectively, and $16 million transferred to retained earnings in connection with the adoption of new guidance related to the consolidation of VIEs (see Note 1) for the six months ended June 30, 2010, $16 million and $19 million, related to securities sold during the three months and six months ended June 30, 2010 respectively, for which a noncredit loss was previously recognized in accumulated other comprehensive income (loss) and ($8) million and $19 million of subsequent increases (decreases) in estimated fair value during the three months and six months ended June 30, 2010, respectively, on such securities for which a noncredit loss was previously recognized in accumulated other comprehensive income (loss).

Fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive income (loss), as presented above, of ($141) million at December 31, 2009, includes ($36) million related to the transition adjustment recorded in 2009 upon the adoption of new guidance on the recognition and presentation of OTTI, ($165) million (($148) million, net of DAC) of noncredit losses recognized in the year ended December 31, 2009 (as more fully described in Note 1 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report), $6 million related to securities sold during the year ended December 31, 2009 for which a noncredit loss was previously recognized in accumulated comprehensive income (loss) and $54 million of subsequent increases in

21

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

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

estimated fair value during the year ended December 31, 2009 on such securities for which a noncredit loss was previously recognized in accumulated other comprehensive income (loss).

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

	Six Months
	Ended
	June 30, 2010
	(In millions)
Balance, beginning of period	$	(676	)
Cumulative effect of change in accounting principle, net of income tax		34
Fixed maturity securities on which noncredit OTTI losses have been recognized		15
Unrealized investment gains (losses) during the period		1,929
Unrealized investment gains (losses) relating to:
Insurance liability gain (loss) recognition		(19	)
DAC and VOBA related to noncredit OTTI losses recognized in other comprehensive income (loss)		(1	)
DAC and VOBA		(289	)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in other comprehensive income (loss)		(5	)
Deferred income tax benefit (expense)		(564	)
Balance, end of period	$	424
Change in net unrealized investment gains (losses)	$	1,100

22

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

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

Continuous Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity SecuritiesAvailable-for-Sale by Sector

The following tables present the estimated fair value and gross unrealized loss of the Company’s fixed maturity and equity securities in an unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous unrealized loss position. The unrealized loss amounts presented below include the noncredit component of OTTI loss. Fixed maturity securities on which a noncredit OTTI loss has been recognized in accumulated other comprehensive income (loss) are categorized by length of time as being “less than 12 months” or “equal to or greater than 12 months” in a continuous unrealized loss position based on the point in time that the estimated fair value initially declined to below the amortized cost basis and not the period of time since the unrealized loss was deemed a noncredit OTTI loss.

	June 30, 2010
					Equal to or Greater
	Less than 12 Months				than 12 Months				Total
	Estimated		Gross		Estimated		Gross		Estimated		Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
	(In millions, except number of securities)
Fixed Maturity Securities:
U.S. corporate securities	$	1,077	$	48	$	2,890	$	324	$	3,967	$	372
U.S. Treasury and agency securities		774		—		624		31		1,398		31
Foreign corporate securities		690		28		983		182		1,673		210
RMBS		39		10		1,584		347		1,623		357
CMBS		111		—		301		61		412		61
ABS		228		6		687		156		915		162
State and political subdivision securities		111		6		438		77		549		83
Foreign government securities		15		1		13		3		28		4
Total fixed maturity securities	$	3,045	$	99	$	7,520	$	1,181	$	10,565	$	1,280
Equity Securities:
Non-redeemable preferred stock	$	1	$	—	$	206	$	61	$	207	$	61
Common stock		31		2		—		—		31		2
Total equity securities	$	32	$	2	$	206	$	61	$	238	$	63
Total number of securities in an unrealized loss position		471				837

23

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

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

	December 31, 2009
					Equal to or Greater
	Less than 12 Months				than 12 Months				Total
	Estimated		Gross		Estimated		Gross		Estimated		Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
			(In millions, except number of securities)
Fixed Maturity Securities:
U.S. corporate securities	$	2,164	$	87	$	4,314	$	554	$	6,478	$	641
U.S. Treasury and agency securities		5,265		271		26		10		5,291		281
Foreign corporate securities		759		27		1,488		234		2,247		261
RMBS		703		12		1,910		472		2,613		484
CMBS		334		3		1,054		231		1,388		234
ABS		125		11		821		185		946		196
State and political subdivision securities		413		16		433		108		846		124
Foreign government securities		132		4		25		5		157		9
Total fixed maturity securities	$	9,895	$	431	$	10,071	$	1,799	$	19,966	$	2,230
Equity Securities:
Non-redeemable preferred stock	$	21	$	9	$	198	$	46	$	219	$	55
Common stock		3		1		3		—		6		1
Total equity securities	$	24	$	10	$	201	$	46	$	225	$	56
Total number of securities in an unrealized loss position		708				1,236

24

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

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

Aging of Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity SecuritiesAvailable-for-Sale

The following tables present the cost or amortized cost, gross unrealized loss, including the portion of OTTI loss on fixed maturity securities recognized in accumulated other comprehensive income (loss), gross unrealized loss as a percentage of cost or amortized cost 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:

	June 30, 2010
	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)
Fixed Maturity Securities:
Less than six months	$	2,621	$	596	$	52		$	154			372		65
Six months or greater but less than nine months		421		137		17			41			54		13
Nine months or greater but less than twelve months		59		24		7			7			7		5
Twelve months or greater		6,533		1,454		550			452			601		154
Total	$	9,634	$	2,211	$	626		$	654
Percentage of amortized cost						6	%		30	%
Equity Securities:
Less than six months	$	31	$	88	$	1		$	24			15		8
Six months or greater but less than nine months		1		—		—			—			3		—
Nine months or greater but less than twelve months		—		—		—			—			—		—
Twelve months or greater		111		70		15			23			12		7
Total	$	143	$	158	$	16		$	47
Percentage of cost						11	%		30	%

25

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

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

	December 31, 2009
	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)
Fixed Maturity Securities:
Less than six months	$	8,310	$	790	$	173		$	199			609		74
Six months or greater but less than nine months		1,084		132		114			37			33		24
Nine months or greater but less than twelve months		694		362		74			102			30		29
Twelve months or greater		8,478		2,346		737			794			867		260
Total	$	18,566	$	3,630	$	1,098		$	1,132
Percentage of amortized cost						6	%		31	%
Equity Securities:
Less than six months	$	3	$	9	$	—		$	3			7		3
Six months or greater but less than nine months		—		—		—			—			—		—
Nine months or greater but less than twelve months		10		20		1			8			2		3
Twelve months or greater		161		78		21			23			17		6
Total	$	174	$	107	$	22		$	34
Percentage of cost						13	%		32	%

Equity securities with a gross unrealized loss of 20% or more for twelve months or greater remained constant at $23 million at both June 30, 2010 and December 31, 2009. As shown in the section “Evaluating Temporarily ImpairedAvailable-for-Sale Securities” below, all $23 million of equity securities with a gross unrealized loss of 20% or more for twelve months or greater at June 30, 2010 were financial services industry investment grade non-redeemable preferred stock, of which 70% were rated A or better.

26

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

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

Concentration of Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity SecuritiesAvailable-for-Sale

The Company’s gross unrealized losses related to its fixed maturity and equity securities, including the portion of OTTI loss on fixed maturity securities recognized in accumulated other comprehensive income (loss) of $1.3 billion and $2.3 billion at June 30, 2010 and December 31, 2009, respectively, were concentrated, calculated as a percentage of gross unrealized loss and OTTI loss, by sector and industry as follows:

	June 30, 2010			December 31, 2009
Sector:
U.S. corporate securities		28	%		28	%
RMBS		26			21
Foreign corporate securities		16			11
ABS		12			9
State and political subdivision securities		6			5
CMBS		5			10
U.S. Treasury and agency securities		3			12
Other		4			4
Total		100	%		100	%
Industry:
Mortgage-backed		31	%		31	%
Finance		26			22
Asset-backed		12			9
State and political subdivision securities		6			5
Consumer		6			6
Utility		3			4
Communications		3			3
U.S. Treasury and agency securities		3			12
Industrial		2			2
Other		8			6
Total		100	%		100	%

Evaluating Temporarily ImpairedAvailable-for-Sale Securities

The following table presents the Company’s fixed maturity and equity securities, each with a gross unrealized loss of greater than $10 million, the number of securities, total gross unrealized loss and percentage of total gross unrealized loss at:

	June 30, 2010						December 31, 2009
	Fixed Maturity			Equity			Fixed Maturity			Equity
	Securities			Securities			Securities			Securities
	(In millions, except number of securities)
Number of securities		20			—			33			—
Total gross unrealized loss	$	279		$	—		$	510		$	—
Percentage of total gross unrealized loss		22	%		—	%		23	%		—	%

27

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

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

Fixed maturity and equity securities, each with a gross unrealized loss greater than $10 million, decreased $231 million during the six months ended June 30, 2010. The cause of the decline in, or improvement in, gross unrealized losses for the six months ended June 30, 2010, was primarily attributable to a decrease in interest rates. These securities were included in the Company’s OTTI review process. Based upon the Company’s current evaluation of these securities and otheravailable-for-sale securities in an unrealized loss position in accordance with its impairment policy, and the Company’s current intentions and assessments (as applicable to the type of security) about holding, selling and any requirements to sell these securities, the Company has concluded that these securities are notother-than-temporarily impaired.

In the Company’s impairment review process, the duration and severity of an unrealized loss position for equity securities is given greater weight and consideration than for fixed maturity securities. An extended and severe unrealized loss position on a fixed maturity security may not have any impact on the ability of the issuer to service all scheduled interest and principal payments and the Company’s evaluation of recoverability of all contractual cash flows or the ability to recover an amount at least equal to its amortized cost based on the present value of the expected future cash flows to be collected. In contrast, for an equity security, greater weight and consideration is given by the Company to a decline in market value and the likelihood such market value decline will recover.

The following table presents certain information about the Company’s equity securitiesavailable-for-sale with a gross unrealized loss of 20% or more at June 30, 2010:

			Non-Redeemable Preferred Stock
			All Types of
	All Equity		Non-Redeemable					Investment Grade
	Securities		Preferred Stock					All Industries					Financial Services Industry
	Gross		Gross		% of All			Gross		% of All			Gross
	Unrealized		Unrealized		Equity			Unrealized		Non-Redeemable			Unrealized		% of All			% A Rated
	Loss		Loss		Securities			Loss		Preferred Stock			Loss		Industries			or Better
								(In millions)
Less than six months	$	24	$	23		96	%	$	23		100	%	$	23		100	%		75	%
Six months or greater but less than twelve months		—		—		—	%		—		—	%		—		—	%		—	%
Twelve months or greater		23		23		100	%		23		100	%		23		100	%		70	%
All equity securities with a gross unrealized loss of 20% or more	$	47	$	46		98	%	$	46		100	%	$	46		100	%		72	%

In connection with the equity securities impairment review process, the Company evaluated its holdings in non-redeemable preferred stock, particularly those companies in the financial services industry. The Company considered several factors including whether there has been any deterioration in credit of the issuer and the likelihood of recovery in value of non-redeemable preferred stock with a severe or an extended unrealized loss. The Company also considered whether any issuers of non-redeemable preferred stock with an unrealized loss held by the Company, regardless of credit rating, have deferred any dividend payments. No such dividend payments were deferred.

With respect to common stock holdings, the Company considered the duration and severity of the unrealized losses for securities in an unrealized loss position of 20% or more; and the duration of unrealized losses for securities in an unrealized loss position of less than 20% in an extended unrealized loss position (i.e., 12 months or greater).

Future OTTIs will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), changes in credit rating, changes in collateral valuation,

28

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

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

changes in interest rates and changes in credit spreads. If economic fundamentals and any of the above factors deteriorate, additional OTTIs may be incurred in upcoming quarters.

Net Investment Gains (Losses)

As described more fully in Note 1 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report, effective April 1, 2009, the Company adopted new guidance on the recognition and presentation of OTTI that amends the methodology to determine for fixed maturity securities whether an OTTI exists, and for certain fixed maturity securities, changes how OTTI losses that are charged to earnings are measured. There was no change in the methodology for identification and measurement of OTTI losses charged to earnings for impaired equity securities.

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

	Three Months						Six Months
	Ended						Ended
	June 30,						June 30,
	2010			2009			2010			2009
				(In millions)
Total losses on fixed maturity securities:
Total OTTI losses recognized	$	(19	)	$	(195	)	$	(53	)	$	(316	)
Less: Noncredit portion of OTTI losses transferred to and recognized in other comprehensive income (loss)		7			77			23			77
Net OTTI losses on fixed maturity securities recognized in earnings		(12	)		(118	)		(30	)		(239	)
Fixed maturity securities — net gains (losses) on sales and disposals		58			(20	)		62			(60	)
Total losses on fixed maturity securities		46			(138	)		32			(299	)
Other net investment gains (losses):
Equity securities		20			(20	)		19			(78	)
Mortgage loans		(7	)		(6	)		(15	)		(20	)
Commercial mortgage loans held by consolidated securitization entities — fair value option		172			—			653			—
Real estate and real estate joint ventures		(3	)		(44	)		(19	)		(55	)
Other limited partnership interests		(8	)		(16	)		(10	)		(66	)
Freestanding derivatives		231			(303	)		134			(481	)
Embedded derivatives		332			(94	)		121			(278	)
Long-term debt of consolidated securitization entities — related to mortgage loans — fair value option		(162	)		—			(647	)		—
Other		(8	)		(107	)		74			(51	)
Total net investment gains (losses)	$	613		$	(728	)	$	342		$	(1,328	)

See “— Variable Interest Entities” for discussion of consolidated securitization entities included in the table above.

See Note 8 for discussion of affiliated net investment gains (losses) included in embedded derivatives in the table above.

29

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

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

Proceeds from sales or disposals of fixed maturity and equity securities and the components of fixed maturity and equity securities net investment gains (losses) were as shown below. Investment gains and losses on sales of securities are determined on a specific identification basis.

	Fixed Maturity Securities						Equity Securities					Total
	Three Months Ended June 30,
	2010			2009			2010		2009			2010			2009
	(In millions)
Proceeds	$	3,076		$	1,516		$	74	$	4		$	3,150		$	1,520
Gross investment gains	$	87		$	24		$	20	$	—		$	107		$	24
Gross investment losses		(29	)		(44	)		—		(3	)		(29	)		(47	)
Total OTTI losses recognized in earnings:
Credit-related		(12	)		(108	)		—		—			(12	)		(108	)
Other (1)		—			(10	)		—		(17	)		—			(27	)
Total OTTI losses recognized in earnings		(12	)		(118	)		—		(17	)		(12	)		(135	)
Net investment gains (losses)	$	46		$	(138	)	$	20	$	(20	)	$	66		$	(158	)

	Fixed Maturity Securities						Equity Securities						Total
	Six Months Ended June 30,
	2010			2009			2010			2009			2010			2009
	(In millions)
Proceeds	$	5,264		$	4,774		$	79		$	12		$	5,343		$	4,786
Gross investment gains	$	131		$	71		$	20		$	1		$	151		$	72
Gross investment losses		(69	)		(131	)		(1	)		(4	)		(70	)		(135	)
Total OTTI losses recognized in earnings:
Credit-related		(29	)		(222	)		—			—			(29	)		(222	)
Other (1)		(1	)		(17	)		—			(75	)		(1	)		(92	)
Total OTTI losses recognized in earnings		(30	)		(239	)		—			(75	)		(30	)		(314	)
Net investment gains (losses)	$	32		$	(299	)	$	19		$	(78	)	$	51		$	(377	)

(1) Other OTTI losses recognized in earnings include impairments on equity securities, impairments on perpetual hybrid securities classified within fixed maturity securities where the primary reason for the impairment was the severity and/or the duration of an unrealized loss position and fixed maturity securities where there is an intent to sell or it is more likely than not that the Company will be required to sell the security before recovery of the decline in estimated fair value.

30

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

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

Fixed maturity security OTTI losses recognized in earnings related to the following sectors and industries:

	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2010		2009		2010		2009
	(In millions)
Sector:
U.S. and foreign corporate securities — by industry:
Consumer	$	—	$	20	$	9	$	34
Communications		—		30		3		70
Finance		1		16		2		36
Industrial		—		—		—		18
Utility		2		2		2		6
Total U.S. and foreign corporate securities		3		68		16		164
CMBS		6		33		7		35
RMBS		3		3		7		3
ABS		—		14		—		37
Total	$	12	$	118	$	30	$	239

Equity security OTTI losses recognized in earnings related to the following sectors and industries:

	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2010		2009		2010		2009
	(In millions)
Sector:
Non-redeemable preferred stock	$	—	$	15	$	—	$	71
Common stock		—		2		—		4
Total	$	—	$	17	$	—	$	75
Industry:
Financial services industry:
Perpetual hybrid securities	$	—	$	15	$	—	$	51
Common and remaining non-redeemable preferred stock		—		—		—		3
Total financial services industry		—		15		—		54
Other industries		—		2		—		21
Total	$	—	$	17	$	—	$	75

31

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

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

Credit Loss Rollforward — Rollforward of the Cumulative Credit Loss Component of OTTI Loss Recognized in Earnings on Fixed Maturity Securities Still Held for Which a Portion of the OTTI Loss Was Recognized in Other Comprehensive Income (Loss)

The table below presents a rollforward of the cumulative credit loss component of OTTI loss recognized in earnings on fixed maturity securities still held by the Company at June 30, 2010 for which a portion of the OTTI loss was recognized in other comprehensive income (loss):

	Three Months						Six Months
	Ended						Ended
	June 30,						June 30,
	2010			2009			2010			2009
	(In millions)
Balance, beginning of period	$	80		$	—		$	213		$	—
Credit loss component of OTTI loss not reclassified to other comprehensive income (loss) in the cumulative effect transition adjustment		—			92			—			92
Additions:
Initial impairments — credit loss OTTI recognized on securities not previously impaired		1			67			3			67
Additional impairments — credit loss OTTI recognized on securities previously impaired		4			5			6			5
Reductions:
Due to sales (maturities, pay downs or prepayments) during the period of securities previously credit loss OTTI impaired		(16	)		(5	)		(52	)		(5	)
Due to securities de-recognized in connection with the adoption of new guidance related to the consolidation of VIEs		—			—			(100	)		—
Due to increases in cash flows — accretion of previous credit loss OTTI		(1	)		—			(2	)		—
Balance, end of period	$	68		$	159		$	68		$	159

32

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

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

Net Investment Income

The components of net investment income were as follows:

	Three Months						Six Months
	Ended						Ended
	June 30,						June 30,
	2010			2009			2010			2009
	(In millions)
Fixed maturity securities	$	525		$	525		$	1,054		$	1,036
Equity securities		7			8			9			15
Trading securities		(22	)		16			26			7
Mortgage loans		72			58			140			117
Commercial mortgage loans held by consolidated securitization entities		105			—			210			—
Policy loans		17			20			33			41
Real estate and real estate joint ventures		1			(12	)		(25	)		(58	)
Other limited partnership interests		34			30			102			(51	)
Cash, cash equivalents and short-term investments		1			4			3			11
International joint ventures		(1	)		—			(2	)		(1	)
Other		9			—			11			(1	)
Total investment income		748			649			1,561			1,116
Less: Investment expenses		23			28			46			55
Net investment income	$	725		$	621		$	1,515		$	1,061

See “— Variable Interest Entities” for discussion of consolidated securitization entities included in the table above.

Affiliated investment expenses, included in the table above, were $14 million and $27 million for the three months and six months ended June 30, 2010, respectively, and $12 million and $23 million for the three months and six months ended June 30, 2009, respectively. See “— Related Party Investment Transactions” for discussion of affiliated net investment income related to short-term investments included in the table above.

Securities Lending

The Company participates in securities lending programs whereby blocks of securities, which are included in fixed maturity securities and short-term investments, are loaned to third parties, primarily brokerage firms and commercial banks. These transactions are treated as financing arrangements and the associated liability is recorded at the amount of the cash received. The Company generally obtains collateral in an amount equal to 102% of the estimated fair value of the securities loaned. Securities loaned under such transactions may be sold or repledged by the transferee. The Company is liable to return to its counterparties the cash collateral under its control, the amounts of which by aging category are presented below.

33

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

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

Elements of the securities lending programs are presented below at:

	June 30, 2010		December 31, 2009
	(In millions)
Securities on loan:
Cost or amortized cost	$	6,332	$	6,173
Estimated fair value	$	6,689	$	6,051
Aging of cash collateral liability:
Open (1)	$	1,342	$	1,325
Less than thirty days		3,044		3,342
Thirty days or greater but less than sixty days		1,151		1,323
Sixty days or greater but less than ninety days		120		—
Ninety days or greater		993		234
Total cash collateral liability	$	6,650	$	6,224
Security collateral on deposit from counterparties	$	171	$	—
Reinvestment portfolio — estimated fair value	$	6,265	$	5,686

(1) Open — meaning that the related loaned security could be returned to the Company on the next business day requiring the Company to immediately return the cash collateral.

The estimated fair value of the securities on loan related to the cash collateral on open at June 30, 2010 was $1,310, of which $1,214 million were U.S. Treasury and agency securities which, if put to the Company, can be immediately sold to satisfy the cash requirements. The remainder of the securities on loan was primarily U.S. Treasury and agency securities, and very liquid RMBS. The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including U.S. corporate, U.S. Treasury and agency, ABS and RMBS).

Security collateral on deposit from counterparties in connection with the securities lending transactions may not be sold or repledged, unless the counterparty is in default, and is not reflected in the consolidated financial statements.

Invested Assets on Deposit and Pledged as Collateral

The invested assets on deposit and invested assets pledged as collateral are presented in the table below. The amounts presented in the table below are at estimated fair value for cash and cash equivalents and fixed maturity securities.

	June 30, 2010		December 31, 2009
	(In millions)
Invested assets on deposit:
Regulatory agencies (1)	$	22	$	21
Invested assets pledged as collateral:
Funding agreements — FHLB of Boston (2)		408		419
Derivative transactions (3)		42		18
Total invested assets on deposit and pledged as collateral	$	472	$	458

34

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

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

(1)	The Company had investment assets on deposit with regulatory agencies consisting primarily of fixed maturity securities.
(2)	The Company has pledged fixed maturity securities in support of its funding agreements with the Federal Home Loan Bank of Boston (“FHLB of Boston”). The nature of these Federal Home Loan Bank arrangements is described in Note 7 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report.
(3)	Certain of the Company’s invested assets are pledged as collateral for various derivative transactions as described in Note 3.

See also the immediately preceding section “Securities Lending” for the amount of the Company’s cash and invested assets received from and due back to counterparties pursuant to the securities lending program. See “— Variable Interest Entities” for assets of certain consolidated securitization entities that can only be used to settle liabilities of such entities.

Trading Securities

The Company has trading securities portfolios to support investment strategies that involve the active and frequent purchase and sale of securities and asset and liability matching strategies for certain insurance products.

At June 30, 2010 and December 31, 2009, trading securities at estimated fair value were $1,379 million and $938 million, respectively.

Interest and dividends earned on trading securities, in addition to the net realized gains (losses) and changes in estimated fair value subsequent to purchase, recognized on the trading securities included within net investment income (loss) totaled ($22) million and $26 million for the three months and six months ended June 30, 2010, respectively, and $16 million and $7 million for the three months and six months ended June 30, 2009, respectively. Changes in estimated fair value subsequent to purchase of the trading securities included within net investment income (loss) were ($38) million and $3 million for the three months and six months ended June 30, 2010, respectively, and $51 million and $30 million for the three months and six months ended June 30, 2009, respectively.

Mortgage Loans

Mortgage loans, net of valuation allowances, are categorized as follows:

	June 30, 2010					December 31, 2009
	Carrying		% of			Carrying		% of
	Value		Total			Value		Total
	(In millions)
Mortgage loansheld-for-investment, net:
Commercial mortgage loans	$	3,769		31.1	%	$	3,546		74.7	%
Agricultural mortgage loans		1,233		10.2			1,201		25.3
Consumer loans		—		—			1		—
Subtotal mortgage loansheld-for-investment, net		5,002		41.3	%		4,748		100.0	%
Commercial mortgage loans held by consolidated securitization entities — fair value option		7,107		58.7			—		—
Total mortgage loansheld-for-investment, net		12,109		100.0	%		4,748		100.0	%
Mortgage loansheld-for-sale:
Commercial — lower of amortized cost or estimated fair value		2		—			—		—
Total mortgage loans, net	$	12,111		100.0	%	$	4,748		100.0	%

35

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

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

See “— Variable Interest Entities” for discussion of consolidated securitization entities included in the table above.

Additions to the mortgage valuation allowance charged to net investment gains (losses) were $7 million and $16 million for the three months and six months ended June 30, 2010, respectively, and $5 million and $18 million for the three months and six months ended June 30, 2009, respectively.

See Note 2 of the Notes to the Consolidated Financial Statements in the 2009 Annual Report for discussion of affiliated mortgage loans included in the table above. Such loans were $199 million and $200 million at June 30, 2010 and December 31, 2009, respectively.

Short-term Investments

The carrying value of short-term investments, which include investments with remaining maturities of one year or less, but greater than three months, at the time of acquisition was $2.0 billion and $1.8 billion at June 30, 2010 and December 31, 2009, respectively. The Company is exposed to concentrations of credit risk related to securities of the U.S. government and certain U.S. government agencies included within short-term investments, which were $1.4 billion and $1.5 billion at June 30, 2010 and December 31, 2009, respectively.

Cash Equivalents

The carrying value of cash equivalents, which include investments with an original or remaining maturity of three months or less, at the time of acquisition was $2.0 billion and $2.4 billion at June 30, 2010 and December 31, 2009, respectively. The Company is exposed to concentrations of credit risk related to securities of the U.S. government and certain U.S. government agencies included within cash equivalents, which were $1.2 billion and $1.5 billion at June 30, 2010 and December 31, 2009, respectively.

Variable Interest Entities

The Company holds investments in certain entities that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, consistent with the new guidance described in Note 1, is deemed to be the primary beneficiary or consolidator of the entity. The following table presents the total assets and total liabilities relating to VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated in the Company’s financial statements at June 30, 2010 and December 31, 2009. Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company, as the Company’s obligation to the VIEs is limited to the amount of its committed investment.

	June 30, 2010				December 31, 2009
	Total		Total		Total		Total
	Assets		Liabilities		Assets		Liabilities
	(In millions)
Consolidated securitization entities (1)	$	7,141	$	7,085	$	—	$	—

(1) As discussed in Note 1, upon the adoption of new guidance effective January 1, 2010, the Company consolidated former QSPEs that are structured as CMBS. At June 30, 2010, these entities held total assets of $7,141 million consisting of $7,107 million of commercial mortgage loans and $34 million of accrued investment income. These entities had total liabilities of $7,085 million, consisting of $7,052 million of long-term debt and $33 million of other liabilities. The assets of these entities can only be used to settle their respective liabilities, and under no circumstances is the Company or any of its subsidiaries or affiliates liable for any principal or interest shortfalls, should any arise. The Company’s exposure is limited to that of its remaining investment in the former QSPEs of $55 million at estimated fair value at June 30, 2010. The long-term debt

36

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

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

referred to above bears interest at primarily fixed rates ranging from 2.25% to 5.57%, payable primarily on a monthly basis and is expected to be repaid over the next 7 years. Interest expense related to these obligations, included in other expenses, was $101 million and $204 million for the three months and six months ended June 30, 2010, respectively.

The following table presents the carrying amount and maximum exposure to loss relating to VIEs for which the Company holds significant variable interests but is not the primary beneficiary and which have not been consolidated at:

	June 30, 2010				December 31, 2009
			Maximum				Maximum
	Carrying		Exposure		Carrying		Exposure
	Amount		to Loss (1)		Amount		to Loss (1)
	(In millions)
Fixed maturity securitiesavailable-for-sale:
RMBS (2)	$	5,410	$	5,410	$	—	$	—
CMBS (2)		2,540		2,540		—		—
ABS (2)		2,040		2,040		—		—
U.S. corporate securities		360		360		247		247
Foreign corporate securities		293		293		304		304
Other limited partnership interests		1,006		1,869		838		1,273
Real estate joint ventures		7		35		32		39
Total	$	11,656	$	12,547	$	1,421	$	1,863

(1)

The maximum exposure to loss relating to the fixed maturity securitiesavailable-for-sale is equal to the carrying amounts or carrying amounts of retained interests. The maximum exposure to loss relating to the real estate joint ventures and other limited partnership interests is equal to the carrying amounts plus any unfunded commitments. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee.

(2)

As discussed in Note 1, the Company adopted new guidance effective January 1, 2010 which eliminated the concept of a QSPE. As a result, the Company concluded it held variable interests in RMBS, CMBS and ABS. For these interests, the Company’s involvement is limited to that of a passive investor.

As described in Note 5, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs during the six months ended June 30, 2010.

Related Party Investment Transactions

At June 30, 2010 and December 31, 2009, the Company held $504 million and $285 million, respectively, in the Metropolitan Money Market Pool and the MetLife Intermediate Income Pool, which are affiliated partnerships. These amounts are included in short-term investments. Net investment income from these investments was less than $1 million for both the three months and six months ended June 30, 2010 and less than $1 million and $1 million for the three months and six months ended June 30, 2009, respectively.

37

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

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

In the normal course of business, the Company transfers invested assets, primarily consisting of fixed maturity securities, to and from affiliates. Assets transferred to and from affiliates, inclusive of amounts related to reinsurance agreements, were as follows:

	Six Months
	Ended
	June 30,
	2010		2009
	(In millions)
Estimated fair value of assets transferred to affiliates	$	445	$	—
Amortized cost of assets transferred to affiliates	$	406	$	—
Net investment gains (losses) recognized on transfers	$	39	$	—
Estimated fair value of assets transferred from affiliates	$	—	$	143

3.   Derivative Financial Instruments

Accounting for Derivative Financial Instruments

Derivatives are financial instruments whose values are derived from interest rates, foreign currency exchange rates, or other financial indices. Derivatives may be exchange-traded or contracted in theover-the-counter market. The Company uses a variety of derivatives, including swaps, forwards, futures and option contracts, to manage risks relating to its ongoing business. To a lesser extent, the Company uses credit derivatives, such as credit default swaps, to synthetically replicate investment risks and returns which are not readily available in the cash market. The Company also purchases certain securities, issues certain insurance policies and investment contracts and engages in certain reinsurance contracts that have embedded derivatives.

Freestanding derivatives are carried on the Company’s consolidated balance sheets either as assets within other invested assets or as liabilities within other liabilities at estimated fair value as determined through the use of quoted market prices for exchange-traded derivatives or through the use of pricing models forover-the-counter derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that are assumed to be consistent with what other market participants would use when pricing the instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk (including the counterparties to the contract), volatility, liquidity and changes in estimates and assumptions used in the pricing models.

The Company does not offset the fair value amounts recognized for derivatives executed with the same counterparty under the same master netting agreement.

If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are generally reported in net investment gains (losses) except for those in net investment income for economic hedges of equity method investments in joint ventures. The fluctuations in estimated fair value of derivatives which have not been designated for hedge accounting can result in significant volatility in net income.

To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge as either (i) a hedge of the estimated fair value of a recognized asset or liability (“fair value hedge”); or (ii) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”). In this documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the hedging instrument’s effectiveness and the method which will be used to measure ineffectiveness. A derivative designated as a hedging instrument must be assessed as being

38

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

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

highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and periodically throughout the life of the designated hedging relationship. Assessments of hedge effectiveness and measurements of ineffectiveness are also subject to interpretation and estimation and different interpretations or estimates may have a material effect on the amount reported in net income.

The accounting for derivatives is complex and interpretations of the primary accounting guidance continue to evolve in practice. Judgment is applied in determining the availability and application of hedge accounting designations and the appropriate accounting treatment under such accounting guidance. If it was determined that hedge accounting designations were not appropriately applied, reported net income could be materially affected. Differences in judgment as to the availability and application of hedge accounting designations and the appropriate accounting treatment may result in a differing impact in the consolidated financial statements of the Company from that previously reported.

Under a fair value hedge, changes in the estimated fair value of the hedging derivative, including amounts measured as ineffectiveness, and changes in the estimated fair value of the hedged item related to the designated risk being hedged, are reported within net investment gains (losses). The estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported in the consolidated statement of operations within interest income or interest expense to match the location of the hedged item. However, accruals that are not scheduled to settle until maturity are included in the estimated fair value of derivatives in the consolidated balance sheets.

Under a cash flow hedge, changes in the estimated fair value of the hedging derivative measured as effective are reported within other comprehensive income (loss), a separate component of stockholders’ equity and the deferred gains or losses on the derivative are reclassified into the consolidated statement of operations when the Company’s earnings are affected by the variability in cash flows of the hedged item. Changes in the estimated fair value of the hedging instrument measured as ineffectiveness are reported within net investment gains (losses). The estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported in the consolidated statement of operations within interest income or interest expense to match the location of the hedged item. However, accruals that are not scheduled to settle until maturity are included in the estimated fair value of derivatives in the consolidated balance sheets.

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

When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried in the consolidated balance sheets at its estimated fair value, with changes in estimated fair value recognized currently in net investment gains (losses). The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its estimated fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. Provided the hedged forecasted transaction is still probable of occurrence, the changes in estimated fair value of derivatives recorded in other comprehensive income (loss) related to discontinued cash flow hedges are released into the consolidated statement of operations when the Company’s earnings are affected by the variability in cash flows of the hedged item.

When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur on the anticipated date or within two months of that date, the derivative continues to be carried in the consolidated balance sheets at its estimated fair value, with changes in estimated fair value recognized currently in net investment gains (losses). Deferred gains and losses of a derivative recorded in other comprehensive income

39

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

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

(loss) pursuant to the discontinued cash flow hedge of a forecasted transaction that is no longer probable are recognized immediately in net investment gains (losses).

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

The Company is also a party to financial instruments that contain terms which are deemed to be embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated. If the instrument would not be accounted for in its entirety at estimated fair value and it is determined that the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract, and that a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative. Such embedded derivatives are carried in the consolidated balance sheets at estimated fair value with the host contract and changes in their estimated fair value are generally reported in net investment gains (losses). If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire contract is carried on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses). Additionally, the Company may elect to carry an entire contract on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) if that contract contains an embedded derivative that requires bifurcation. There is a risk that embedded derivatives requiring bifurcation may not be identified and reported at estimated fair value in the consolidated financial statements and that their related changes in estimated fair value could materially affect reported net income.

See Note 4 for information about the fair value hierarchy for derivatives.

Primary Risks Managed by Derivative Financial Instruments and Non-Derivative Financial Instruments

The Company is exposed to various risks relating to its ongoing business operations, including interest rate risk, foreign currency risk, credit risk and equity market risk. The Company uses a variety of strategies to manage these risks, including the use of derivative instruments. The following table presents the notional amount, estimated

40

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

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

fair value and primary underlying risk exposure of the Company’s derivative financial instruments, excluding embedded derivatives, held at:

		June 30, 2010						December 31, 2009
				Estimated						Estimated
Primary Underlying		Notional		Fair Value (1)				Notional		Fair Value (1)
Risk Exposure	Instrument Type	Amount		Assets		Liabilities		Amount		Assets		Liabilities
		(In millions)
Interest rate	Interest rate swaps	$	6,342	$	696	$	232	$	5,261	$	534	$	179
	Interest rate floors		7,986		164		72		7,986		78		34
	Interest rate caps		6,099		7		1		4,003		15		—
	Interest rate futures		971		—		—		835		2		1
Foreign currency	Foreign currency swaps		2,607		489		51		2,678		689		93
	Foreign currency forwards		154		3		1		79		3		—
Credit	Credit default swaps		1,351		14		22		966		12		31
	Credit forwards		110		8		2		90		—		3
Equity market	Equity futures		74		1		—		81		1		—
	Equity options		787		157		—		775		112		—
	Variance swaps		1,081		46		—		1,081		24		6
	Total	$	27,562	$	1,585	$	381	$	23,835	$	1,470	$	347

(1) The estimated fair value of all derivatives in an asset position is reported within other invested assets in the consolidated balance sheets and the estimated fair value of all derivatives in a liability position is reported within other liabilities in the consolidated balance sheets.

Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). In an interest rate swap, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts as calculated by reference to an agreed notional principal amount. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by the counterparty at each due date. The Company utilizes interest rate swaps in fair value, cash flow and non-qualifying hedging relationships.

The Company also enters into basis swaps to better match the cash flows from assets and related liabilities. In a basis swap, both legs of the swap are floating with each based on a different index. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by either party. A single net payment is usually made by one counterparty at each due date. Basis swaps are included in interest rate swaps in the preceding table. The Company utilizes basis swaps in non-qualifying hedging relationships.

Inflation swaps are used as an economic hedge to reduce inflation risk generated from inflation-indexed liabilities. Inflation swaps are included in interest rate swaps in the preceding table. The Company utilizes inflation swaps in non-qualifying hedging relationships.

Implied volatility swaps are used by the Company primarily as economic hedges of interest rate risk associated with the Company’s investments in mortgage-backed securities. In an implied volatility swap, the Company exchanges fixed payments for floating payments that are linked to certain market volatility measures. If implied volatility rises, the floating payments that the Company receives will increase, and if implied volatility falls, the floating payments that the Company receives will decrease. Implied volatility swaps are included in interest rate

41

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

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

swaps in the preceding table. The Company utilizes implied volatility swaps in non-qualifying hedging relationships.

The Company purchases interest rate caps and floors primarily to protect its floating rate liabilities against rises in interest rates above a specified level, and against interest rate exposure arising from mismatches between assets and liabilities (duration mismatches), as well as to protect its minimum rate guarantee liabilities against declines in interest rates below a specified level, respectively. In certain instances, the Company locks in the economic impact of existing purchased caps and floors by entering into offsetting written caps and floors. The Company utilizes interest rate caps and floors in non-qualifying hedging relationships.

In exchange-traded interest rate (Treasury and swap) futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of interest rate securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded interest rate (Treasury and swap) futures are used primarily to hedge mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, to hedge against changes in value of securities the Company owns or anticipates acquiring and to hedge against changes in interest rates on anticipated liability issuances by replicating Treasury or swap curve performance. The Company utilizes exchange-traded interest rate futures in non-qualifying hedging relationships.

The Company writes covered call options on its portfolio of U.S. Treasuries as an income generation strategy. In a covered call transaction, the Company receives a premium at the inception of the contract in exchange for giving the derivative counterparty the right to purchase the referenced security from the Company at a predetermined price. The call option is “covered” because the Company owns the referenced security over the term of the option. Covered call options are included in interest rate options. The Company utilizes covered call options in non-qualifying hedging relationships.

The Company enters into interest rate forwards to buy and sell securities. The price is agreed upon at the time of the contract and payment for such a contract is made at a specified future date. The Company utilizes interest rate forwards in cash flow and non-qualifying hedging relationships.

Foreign currency derivatives, including foreign currency swaps and foreign currency forwards, are used by the Company to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies.

In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another at a fixed exchange rate, generally set at inception, calculated by reference to an agreed upon principal amount. The principal amount of each currency is exchanged at the inception and termination of the currency swap by each party. The Company utilizes foreign currency swaps in fair value, cash flow, and non-qualifying hedging relationships.

In a foreign currency forward transaction, the Company agrees with another party to deliver a specified amount of an identified currency at a specified future date. The price is agreed upon at the time of the contract and payment for such a contract is made in a different currency at the specified future date. The Company utilizes foreign currency forwards in non-qualifying hedging relationships.

Swap spreadlocks are used by the Company to hedge invested assets on an economic basis against the risk of changes in credit spreads. Swap spreadlocks are forward transactions between two parties whose underlying reference index is a forward starting interest rate swap where the Company agrees to pay a coupon based on a predetermined reference swap spread in exchange for receiving a coupon based on a floating rate. The Company has the option to cash settle with the counterparty in lieu of maintaining the swap after the effective date. The Company utilizes swap spreadlocks in non-qualifying hedging relationships.

42

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

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

Certain credit default swaps are used by the Company to hedge against credit-related changes in the value of its investments and to diversify its credit risk exposure in certain portfolios. In a credit default swap transaction, the Company agrees with another party, at specified intervals, to pay a premium to hedge credit risk. If a credit event, as defined by the contract, occurs, generally the contract will require the swap to be settled gross by the delivery of par quantities of the referenced investment equal to the specified swap notional in exchange for the payment of cash amounts by the counterparty equal to the par value of the investment surrendered. The Company utilizes credit default swaps in non-qualifying hedging relationships.

Credit default swaps are also used to synthetically create investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and a cash instrument such as a U.S. Treasury or agency security. These credit default swaps are not designated as hedging instruments.

The Company enters into forwards to lock in the price to be paid for forward purchases of certain securities. The price is agreed upon at the time of the contract and payment for the contract is made at a specified future date. When the primary purpose of entering into these transactions is to hedge against the risk of changes in purchase price due to changes in credit spreads, the Company designates these as credit forwards. The Company utilizes credit forwards in cash flow hedging relationships.

In exchange-traded equity futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of equity securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded equity futures are used primarily to hedge liabilities embedded in certain variable annuity products offered by the Company. The Company utilizes exchange-traded equity futures in non-qualifying hedging relationships.

Equity index options are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. To hedge against adverse changes in equity indices, the Company enters into contracts to sell the equity index within a limited time at a contracted price. The contracts will be net settled in cash based on differentials in the indices at the time of exercise and the strike price. In certain instances, the Company may enter into a combination of transactions to hedge adverse changes in equity indices within a pre-determined range through the purchase and sale of options. Equity index options are included in equity options in the preceding table. The Company utilizes equity index options in non-qualifying hedging relationships.

Equity variance swaps are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. In an equity variance swap, the Company agrees with another party to exchange amounts in the future, based on changes in equity volatility over a defined period. Equity variance swaps are included in variance swaps in the preceding table. The Company utilizes equity variance swaps in non-qualifying hedging relationships.

43

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

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

Hedging

The following table presents the notional amount and estimated fair value of derivatives designated as hedging instruments by type of hedge designation at:

	June 30, 2010						December 31, 2009
			Estimated						Estimated
	Notional		Fair Value				Notional		Fair Value
Derivatives Designated as Hedging Instruments	Amount		Assets		Liabilities		Amount		Assets		Liabilities
	(In millions)
Fair Value Hedges:
Foreign currency swaps	$	850	$	265	$	27	$	850	$	370	$	15
Interest rate swaps		134		14		1		220		11		2
Subtotal		984		279		28		1,070		381		17
Cash Flow Hedges:
Foreign currency swaps		246		24		3		166		15		7
Interest rate swaps		10		2		—		—		—		—
Credit forwards		110		8		2		90		—		3
Subtotal		366		34		5		256		15		10
Total Qualifying Hedges	$	1,350	$	313	$	33	$	1,326	$	396	$	27

The following table presents the notional amount and estimated fair value of derivatives that were not designated or do not qualify as hedging instruments by derivative type at:

	June 30, 2010						December 31, 2009
			Estimated						Estimated
Derivatives Not Designated or	Notional		Fair Value				Notional		Fair Value
Not Qualifying as Hedging Instruments	Amount		Assets		Liabilities		Amount		Assets		Liabilities
	(In millions)
Interest rate swaps	$	6,198	$	680	$	231	$	5,041	$	523	$	177
Interest rate floors		7,986		164		72		7,986		78		34
Interest rate caps		6,099		7		1		4,003		15		—
Interest rate futures		971		—		—		835		2		1
Foreign currency swaps		1,511		200		21		1,662		304		71
Foreign currency forwards		154		3		1		79		3		—
Credit default swaps		1,351		14		22		966		12		31
Equity futures		74		1		—		81		1		—
Equity options		787		157		—		775		112		—
Variance swaps		1,081		46		—		1,081		24		6
Total non-designated or non-qualifying derivatives	$	26,212	$	1,272	$	348	$	22,509	$	1,074	$	320

44

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

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

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

	Three Months					Six Months
	Ended					Ended
	June 30,					June 30,
	2010			2009		2010			2009
	(In millions)
Qualifying hedges:
Net investment income	$	1		$	—	$	1		$	(1	)
Interest credited to policyholder account balances		6			9		16			17
Non-qualifying hedges:
Net investment gains (losses)		(1	)		—		(7	)		2
Total	$	6		$	9	$	10		$	18

Fair Value Hedges

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

45

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

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

The Company recognizes gains and losses on derivatives and the related hedged items in fair value hedges within net investment gains (losses). The following table represents the amount of such net investment gains (losses) recognized for the three months and six months ended June 30, 2010 and 2009:

								Ineffectiveness
		Net Investment Gains			Net Investment Gains			Recognized in Net
Derivatives in Fair Value	Hedged Items in Fair Value	(Losses) Recognized			(Losses) Recognized			Investment Gains
Hedging Relationships	Hedging Relationships	for Derivatives			for Hedged Items			(Losses)
		(In millions)
For the Three Months Ended June 30, 2010:
Interest rate swaps:	Fixed maturity securities	$	(1	)	$	1		$	—
	Policyholder account balances (1)		4			(1	)		3
Foreign currency swaps:	Foreign-denominated policyholder account balances (2)		(65	)		55			(10	)
Total		$	(62	)	$	55		$	(7	)
For the Three Months Ended June 30, 2009:
Interest rate swaps:	Fixed maturity securities	$	1		$	(1	)	$	—
	Policyholder account balances (1)		(4	)		4			—
Foreign currency swaps:	Foreign-denominated policyholder account balances (2)		94			(95	)		(1	)
Total		$	91		$	(92	)	$	(1	)
For the Six Months Ended June 30, 2010:
Interest rate swaps:	Fixed maturity securities	$	(1	)	$	1		$	—
	Policyholder account balances (1)		5			(5	)		—
Foreign currency swaps:	Foreign-denominated policyholder account balances (2)		(117	)		99			(18	)
Total		$	(113	)	$	95		$	(18	)
For the Six Months Ended June 30, 2009:
Interest rate swaps:	Fixed maturity securities	$	6		$	(6	)	$	—
	Policyholder account balances (1)		(7	)		6			(1	)
Foreign currency swaps:	Foreign-denominated policyholder account balances (2)		94			(94	)		—
Total		$	93		$	(94	)	$	(1	)

(1)	Fixed rate liabilities
(2)	Fixed rate or floating rate liabilities

All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

Cash Flow Hedges

The Company designates and accounts for the following as cash flow hedges when they have met the requirements of cash flow hedging: (i) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated investments and liabilities; (ii) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments; and (iii) interest rate swaps to convert floating rate investments to fixed rate investments.

46

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

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

For the three months and six months ended June 30, 2010, the Company recognized insignificant net investment losses which represented the ineffective portion of all cash flow hedges. For the three months and six months ended June 30, 2009, 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. For the three months and six months ended June 30, 2010 and 2009, there were no instances in which the Company discontinued cash flow hedge accounting because the forecasted transactions did not occur on the anticipated date or within two months of that date. At June 30, 2010 and December 31, 2009, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions did not exceed one year.

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

	Three Months					Six Months
	Ended					Ended
	June 30,					June 30,
	2010		2009			2010			2009
	(In millions)
Other comprehensive income (loss), balance at beginning of period	$	4	$	17		$	(1	)	$	20
Gains (losses) deferred in other comprehensive income (loss) on the effective portion of cash flow hedges		17		(3	)		20			(46	)
Amounts reclassified to net investment gains (losses)		2		(2	)		4			38
Other comprehensive income (loss), balance at end of period	$	23	$	12		$	23		$	12

At June 30, 2010, $2 million of deferred net gains on derivatives accumulated in other comprehensive income (loss) was expected to be reclassified to earnings within the next 12 months.

47

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

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

The following table presents the effects of derivatives in cash flow hedging relationships on the interim condensed consolidated statements of operations and the interim condensed consolidated statements of stockholders’ equity for the three months and six months ended June 30, 2010 and 2009:

				Amount and Location of
				Gains (Losses)
	Amount of Gains			Reclassified from
	(Losses) Deferred			Accumulated Other
	in Accumulated			Comprehensive Income
	Other Comprehensive			(Loss) into Income
	Income (Loss) on			Net Investment
Derivatives in Cash Flow Hedging Relationships	Derivatives			Gains (Losses)
	(In millions)
For the Three Months Ended June 30, 2010:
Interest rate swaps	$	1		$	—
Foreign currency swaps		10			(4	)
Interest rate forwards		—			2
Credit forwards		6			—
Total	$	17		$	(2	)
For the Three Months Ended June 30, 2009:
Foreign currency swaps	$	(11	)	$	2
Interest rate forwards		8			—
Total	$	(3	)	$	2
For the Six Months Ended June 30, 2010:
Interest rate swaps	$	1		$	—
Foreign currency swaps		10			(6	)
Interest rate forwards		—			2
Credit forwards		9			—
Total	$	20		$	(4	)
For the Six Months Ended June 30, 2009:
Foreign currency swaps	$	(54	)	$	(38	)
Interest rate forwards		8			—
Total	$	(46	)	$	(38	)

Non-Qualifying Derivatives and Derivatives for Purposes Other Than Hedging

The Company enters into the following derivatives that do not qualify for hedge accounting or for purposes other than hedging: (i) interest rate swaps, implied volatility swaps, caps and floors and interest rate futures to economically hedge its exposure to interest rates; (ii) foreign currency forwards and swaps 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, interest rate futures and equity variance swaps to economically hedge liabilities embedded in certain variable annuity products; (v) swap spreadlocks to economically hedge invested assets against the risk of changes in credit spreads; (vi) credit default swaps to synthetically create investments; (vii) interest rate forwards to buy and sell securities to economically hedge its exposure to interest rates; (viii) basis swaps to better match the cash flows of assets and related liabilities; (ix) inflation swaps to reduce risk generated from inflation-indexed liabilities; (x) covered call options for income

48

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

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

generation; and (xi) equity options to economically hedge certain invested assets against adverse changes in equity indices.

The following tables present the amount and location of gains (losses) recognized in income for derivatives that were not designated or qualifying as hedging instruments:

	Net Investment			Net Investment
	Gains (Losses)			Income (1)
	(In millions)
For the Three Months Ended June 30, 2010:
Interest rate swaps	$	45		$	—
Interest rate floors		54			—
Interest rate caps		(6	)		—
Interest rate futures		(23	)		—
Equity futures		4			—
Foreign currency swaps		(13	)		—
Foreign currency forwards		9			—
Equity options		66			5
Interest rate options		(3	)		—
Variance swaps		38			—
Credit default swaps		1			—
Total	$	172		$	5
For the Three Months Ended June 30, 2009:
Interest rate swaps	$	(95	)	$	—
Interest rate floors		(58	)		—
Interest rate caps		17			—
Interest rate futures		(35	)		—
Equity futures		(60	)		—
Foreign currency swaps		72			—
Foreign currency forwards		(6	)		—
Equity options		(81	)		—
Interest rate forwards		2			—
Variance swaps		(13	)		—
Swap spreadlocks		4			—
Credit default swaps		(47	)		—
Total	$	(300	)	$	—

49

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

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

	Net Investment			Net Investment
	Gains (Losses)			Income (1)
	(In millions)
For the Six Months Ended June 30, 2010:
Interest rate swaps	$	63		$	—
Interest rate floors		47			—
Interest rate caps		(14	)		—
Interest rate futures		(28	)		—
Equity futures		(1	)		—
Foreign currency swaps		(57	)		—
Foreign currency forwards		13			—
Equity options		43			4
Interest rate options		(3	)		—
Variance swaps		28			—
Credit default swaps		1			—
Total	$	92		$	4
For the Six Months Ended June 30, 2009:
Interest rate swaps	$	(134	)	$	—
Interest rate floors		(242	)		—
Interest rate caps		14			—
Interest rate futures		(34	)		—
Equity futures		(35	)		—
Foreign currency swaps		21			—
Foreign currency forwards		(2	)		—
Equity options		(49	)		—
Interest rate forwards		2			—
Variance swaps		(19	)		—
Swap spreadlocks		—			—
Credit default swaps		(27	)		—
Total	$	(505	)	$	—

(1) Changes in estimated fair value related to economic hedges of equity method investments in joint ventures.

Credit Derivatives

In connection with synthetically created investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk. Such credit derivatives are included within the non-qualifying derivatives and derivatives for purposes other than hedging table. If a credit event occurs, as defined by the contract, generally the contract will require the Company to pay the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The Company’s maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $887 million and $477 million at June 30, 2010 and December 31, 2009, respectively. The Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current fair value of the credit default swaps. At

50

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

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

June 30, 2010 and December 31, 2009, the Company would have received $2 million and $8 million, respectively, to terminate all of these contracts.

The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at June 30, 2010 and December 31, 2009:

	June 30, 2010							December 31, 2009
				Maximum						Maximum
	Estimated			Amount of				Estimated		Amount of
	Fair			Future		Weighted		Fair		Future		Weighted
	Value of			Payments under		Average		Value of		Payments under		Average
Rating Agency Designation of Referenced	Credit Default			Credit Default		Years to		Credit Default		Credit Default		Years to
Credit Obligations (1)	Swaps			Swaps (2)		Maturity (3)		Swaps		Swaps (2)		Maturity (3)
						(In millions)
Aaa/Aa/A
Single name credit default swaps (corporate)	$	1		$	45		4.1	$	1	$	25		4.0
Credit default swaps referencing indices		3			679		4.2		7		437		3.5
Subtotal		4			724		4.2		8		462		3.5
Baa
Single name credit default swaps (corporate)		—			5		3.5		—		5		4.0
Credit default swaps referencing indices		(2	)		158		5.0		—		10		5.0
Subtotal		(2	)		163		5.0		—		15		4.7
Total	$	2		$	887		4.4	$	8	$	477		3.5

(1)	The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s, S&P and Fitch. If no rating is available from a rating agency, then an internally developed rating is used.
(2)	Assumes the value of the referenced credit obligations is zero.
(3)	The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts.

Credit Risk on Freestanding Derivatives

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 net positive estimated fair value of derivative contracts at the reporting date after taking into consideration the existence of netting agreements and any collateral received pursuant to credit support annexes.

The Company manages its credit risk related toover-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. See Note 4 for a description of the impact of credit risk on the valuation of derivative instruments.

The Company enters into various collateral arrangements, which require both the pledging and accepting of collateral in connection with its derivative instruments. At June 30, 2010 and December 31, 2009, the Company was obligated to return cash collateral under its control of $1,009 million and $945 million, respectively. This unrestricted cash collateral is included in cash and cash equivalents or in short-term investments and the obligation to return it is included in payables for collateral under securities loaned and other transactions in the consolidated balance sheets. At June 30, 2010 and December 31, 2009, the Company had also accepted collateral consisting of various securities with a fair market value of $6 million and $88 million, respectively, which

51

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

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

were held in separate custodial accounts. The Company is permitted by contract to sell or repledge this collateral, but at June 30, 2010, none of the collateral had been sold or repledged.

The Company’s collateral arrangements for itsover-the-counter derivatives generally require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the fair value of that counterparty’s derivatives reaches a pre-determined threshold. Certain of these arrangements also include credit-contingent provisions that provide for a reduction of these thresholds (on a sliding scale that converges toward zero) in the event of downgrades in the credit ratings of the Companyand/or the counterparty. In addition, certain of the Company’s netting agreements for derivative instruments contain provisions that require the Company to maintain a specific investment grade credit rating from at least one of the major credit rating agencies. If the Company’s credit ratings were to fall below that specific investment grade credit rating, it would be in violation of these provisions, and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on derivative instruments that are in a net liability position after considering the effect of netting agreements.

The following table presents the estimated fair value of the Company’sover-the-counter derivatives that are in a net liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged. The table also presents the incremental collateral that the Company would be required to provide if there was a one notch downgrade in the Company’s credit rating at the reporting date or if the Company’s credit rating sustained a downgrade to a level that triggered full overnight collateralization or termination of the derivative position at the reporting date. Derivatives that are not subject to collateral agreements are not included in the scope of this table.

					Fair Value of Incremental Collateral
					Provided Upon:
							Downgrade in the
			Estimated		One Notch		Company’s Credit Rating
			Fair Value of		Downgrade		to a Level that Triggers
	Estimated		Collateral		in the		Full Overnight
	Fair Value (1) of		Provided		Company’s		Collateralization or
	Derivatives in Net		Fixed Maturity		Credit		Termination
	Liability Position		Securities (2)		Rating		of the Derivative Position
	(In millions)
At June 30, 2010	$	53	$	23	$	—	$	20
At December 31, 2009	$	42	$	—	$	8	$	42

(1)	After taking into consideration the existence of netting agreements.
(2)	Included in fixed maturity securities in the consolidated balance sheets. The counterparties are permitted by contract to sell or repledge this collateral. At both June 30, 2010 and December 31, 2009, the Company did not provide any cash collateral.

Without considering the effect of netting agreements, the estimated fair value of the Company’sover-the-counter derivatives with credit-contingent provisions that were in a gross liability position at June 30, 2010 was $119 million. At June 30, 2010, the Company provided securities collateral of $23 million in connection with these derivatives. In the unlikely event that both: (i) the Company’s credit rating was downgraded to a level that triggers full overnight collateralization or termination of all derivative positions; and (ii) the Company’s netting agreements were deemed to be legally unenforceable, then the additional collateral that the Company would be required to provide to its counterparties in connection with its derivatives in a gross liability position at June 30, 2010 would be $96 million. This amount does not consider gross derivative assets of $66 million for which the Company has the contractual right of offset.

The Company also has exchange-traded futures, which may require the pledging of collateral. At both June 30, 2010 and December 31, 2009, the Company did not pledge any securities collateral for exchange-traded futures. At

52

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

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

June 30, 2010 and December 31, 2009, the Company provided cash collateral for exchange-traded futures of $19 million and $18 million, respectively, which is included in premiums, reinsurance and other receivables.

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 principally include: variable annuities with guaranteed minimum benefits, including guaranteed minimum withdrawal benefits (“GMWBs”), guaranteed minimum accumulation benefits (“GMABs”) and certain guaranteed minimum income benefits (“GMIBs”); affiliated reinsurance contracts of guaranteed minimum benefits related to GMWBs, GMABs and certain GMIBs; and ceded reinsurance written on a funds withheld basis.

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

	June 30, 2010		December 31, 2009
	(In millions)
Net embedded derivatives within asset host contracts:
Ceded guaranteed minimum benefits	$	1,870	$	724
Call options in equity securities		4		(5	)
Net embedded derivatives within asset host contracts	$	1,874	$	719
Net embedded derivatives within liability host contracts:
Direct guaranteed minimum benefits	$	1,179	$	290
Other		79		(11	)
Net embedded derivatives within liability host contracts	$	1,258	$	279

The following table presents changes in estimated fair value related to embedded derivatives:

	Three Months					Six Months
	Ended					Ended
	June 30,					June 30,
	2010		2009			2010		2009
	(In millions)
Net investment gains (losses) (1), (2)	$	332	$	(94	)	$	121	$	(278	)

(1)

The valuation of direct guaranteed minimum benefits includes an adjustment for nonperformance risk. Included in net investment gains (losses), in connection with this adjustment, were gains (losses) of $125 million and $54 million, for the three months and six months ended June 30, 2010, respectively, and gains (losses) of ($539) million and ($310) million, for the three months and six months ended June 30, 2009, respectively. In addition, the valuation of ceded guaranteed minimum benefits includes an adjustment for nonperformance risk. Included in net investment gains (losses), in connection with this adjustment, were gains (losses) of ($65) million and ($21) million, for the three months and six months ended June 30, 2010, respectively, and gains (losses) of $723 million and $370 million, for the three months and six months ended June 30, 2009, respectively. The net investment gains (losses) for the three months and six months ended June 30, 2010 included a gain of $191 million relating to a refinement for estimating nonperformance risk in fair value measurements implemented at June 30, 2010. See Note 4.

(2)

See Note 8 for discussion of affiliated net investment gains (losses) included in the table above.

4.   Fair Value

Considerable judgment is often required in interpreting market data to develop estimates of fair value and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts.

53

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

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

Fair Value of Financial Instruments

Amounts related to the Company’s financial instruments were as follows:

					Estimated
	Notional		Carrying		Fair
June 30, 2010	Amount		Value		Value
	(In millions)
Assets
Fixed maturity securities			$	43,848	$	43,848
Equity securities			$	407	$	407
Trading securities			$	1,379	$	1,379
Mortgage loans:
Mortgage loans			$	5,004	$	5,118
Mortgage loans held by consolidated securitization entities				7,107		7,107
Mortgage loans, net			$	12,111	$	12,225
Policy loans			$	1,190	$	1,268
Real estate joint ventures (1)			$	52	$	62
Other limited partnership interests (1)			$	109	$	144
Short-term investments			$	1,974	$	1,974
Other invested assets: (1)
Derivative assets: (2)
Interest rate contracts	$	14,690	$	867	$	867
Foreign currency contracts		2,367		492		492
Credit contracts		993		22		22
Equity market contracts		1,935		204		204
Total derivative assets	$	19,985	$	1,585	$	1,585
Cash and cash equivalents			$	2,198	$	2,198
Accrued investment income			$	501	$	501
Premiums, reinsurance and other receivables (1)			$	4,666	$	4,749
Separate account assets			$	49,806	$	49,806
Net embedded derivatives within asset host contracts (3)			$	1,870	$	1,870
Liabilities
Policyholder account balances (1)			$	23,483	$	24,409
Payables for collateral under securities loaned and other transactions			$	7,660	$	7,660
Long-term debt: (1)
Long-term debt — affiliated			$	950	$	1,011
Long-term debt of consolidated securitization entities				7,052		7,052
Total long-term debt			$	8,002	$	8,063
Other liabilities: (1)
Derivative liabilities: (2)
Interest rate contracts	$	6,708	$	305	$	305
Foreign currency contracts		394		52		52
Credit contracts		468		24		24
Equity market contracts		7		—		—
Total derivative liabilities	$	7,577	$	381	$	381
Other			$	341	$	341
Separate account liabilities (1)			$	1,233	$	1,233
Net embedded derivatives within liability host contracts (3)			$	1,258	$	1,258
Commitments(4)
Mortgage loan commitments	$	241	$	—	$	(1	)
Commitments to fund bank credit facilities and private corporate bond investments	$	591	$	—	$	(9	)

See Note 2 for discussion of consolidated securitization entities included in the table above.

54

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

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

					Estimated
	Notional		Carrying		Fair
December 31, 2009	Amount		Value		Value
	(In millions)
Assets
Fixed maturity securities			$	41,275	$	41,275
Equity securities			$	459	$	459
Trading securities			$	938	$	938
Mortgage loans			$	4,748	$	4,345
Policy loans			$	1,189	$	1,243
Real estate joint ventures (1)			$	64	$	62
Other limited partnership interests (1)			$	128	$	151
Short-term investments			$	1,775	$	1,775
Other invested assets: (1)
Derivative assets (2)	$	16,580	$	1,470	$	1,470
Cash and cash equivalents			$	2,574	$	2,574
Accrued investment income			$	516	$	516
Premiums, reinsurance and other receivables (1)			$	4,582	$	4,032
Separate account assets			$	49,449	$	49,449
Net embedded derivatives within asset host contracts (3)			$	724	$	724
Liabilities
Policyholder account balances (1)			$	24,591	$	24,233
Payables for collateral under securities loaned and other transactions			$	7,169	$	7,169
Long-term debt			$	950	$	1,003
Other liabilities: (1)
Derivative liabilities (2)	$	7,255	$	347	$	347
Other			$	188	$	188
Separate account liabilities (1)			$	1,367	$	1,367
Net embedded derivatives within liability host contracts (3)			$	279	$	279
Commitments(4)
Mortgage loan commitments	$	131	$	—	$	(5	)
Commitments to fund bank credit facilities and private corporate bond investments	$	445	$	—	$	(29	)

(1)	Carrying values presented herein differ from those presented in the consolidated balance sheets because certain items within the respective financial statement caption are not considered financial instruments. Financial statement captions excluded from the table above are not considered financial instruments.
(2)	Derivative assets are presented within other invested assets and derivative liabilities are presented within other liabilities.
(3)	Net embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables. Net embedded derivatives within liability host contracts are presented within policyholder account balances and other liabilities. At June 30, 2010 and December 31, 2009, equity securities also included embedded derivatives of $4 million and ($5) million, respectively.

55

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

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

(4) Commitments are off-balance sheet obligations. Negative estimated fair values represent off-balance sheet liabilities.

The methods and assumptions used to estimate the fair value of financial instruments are summarized as follows:

Fixed Maturity Securities, Equity Securities and Trading Securities — When available, the estimated fair value of the Company’s fixed maturity, equity and trading securities are based on quoted prices in active markets that are readily and regularly obtainable. Generally, these are the most liquid of the Company’s securities holdings and valuation of these securities does not involve management judgment.

When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation methodologies. The market standard valuation methodologies utilized include: discounted cash flow methodologies, matrix pricing or other similar techniques. The inputs in applying these market standard valuation methodologies include, but are not limited to: interest rates, credit standing of the issuer or counterparty, industry sector of the issuer, coupon rate, call provisions, sinking fund requirements, maturity and management’s assumptions regarding estimated duration, liquidity and estimated future cash flows. Accordingly, the estimated fair values are based on available market information and management’s judgments about financial instruments.

The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price transparency are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Such observable inputs include benchmarking prices for similar assets in active markets, quoted prices in markets that are not active and observable yields and spreads in the market.

When observable inputs are not available, the market standard valuation methodologies for determining the estimated fair value of certain types of securities that trade infrequently, and therefore have little or no price transparency, rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. These unobservable inputs can be based in large part on management judgment or estimation and cannot be supported by reference to market activity. Even though unobservable, these inputs are assumed to be consistent with what other market participants would use when pricing such securities and are considered appropriate given the circumstances.

The use of different methodologies, assumptions and inputs may have a material effect on the estimated fair values of the Company’s securities holdings.

Mortgage Loans — The Company originates mortgage loans principally for investment purposes. These loans are primarily carried at amortized cost. In addition, as discussed in Note 1, the Company adopted new guidance effective January 1, 2010 and consolidated certain securitization entities that hold commercial mortgage loans. The estimated fair values of these mortgage loans are determined as follows:

Mortgage Loans.  For mortgage loans carried at amortized cost, estimated fair value was primarily determined by estimating expected future cash flows and discounting them using current interest rates for similar mortgage loans with similar credit risk.

Mortgage Loans Held by Consolidated Securitization Entities.  For commercial mortgage loans held by the Company’s consolidated securitization entities, the Company has determined that the principal market for these commercial loan portfolios is the securitization market. The Company uses the securitization market price of the obligations of the consolidated securitization entities to determine the estimated fair value of these commercial loan portfolios, which is provided primarily by independent pricing services using observable inputs.

56

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

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

Policy Loans — For policy loans with fixed interest rates, estimated fair values are determined using a discounted cash flow model applied to groups of similar policy loans determined by the nature of the underlying insurance liabilities. Cash flow estimates are developed applying a weighted-average interest rate to the outstanding principal balance of the respective group of policy loans and an estimated average maturity determined through experience studies of the past performance of policyholder repayment behavior for similar loans. These cash flows are discounted using current risk-free interest rates with no adjustment for borrower credit risk as these loans are fully collateralized by the cash surrender value of the underlying insurance policy. The estimated fair value for policy loans with variable interest rates approximates carrying value due to the absence of borrower credit risk and the short time period between interest rate resets, which presents minimal risk of a material change in estimated fair value due to changes in market interest rates.

Real Estate Joint Ventures and Other Limited Partnership Interests — Real estate joint ventures and other limited partnership interests included in the preceding tables consist of those investments accounted for using the cost method. The remaining carrying value recognized in the consolidated balance sheets represents investments in real estate or real estate joint ventures and other limited partnership interests accounted for using the equity method, which do not meet the definition of financial instruments for which fair value is required to be disclosed.

The estimated fair values for other limited partnership interests and real estate joint ventures accounted for under the cost method are generally based on the Company’s share of the net asset value (“NAV”) as provided in the financial statements of the investees. In certain circumstances, management may adjust the NAV by a premium or discount when it has sufficient evidence to support applying such adjustments.

Short-term Investments — Certain short-term investments do not qualify as securities and are recognized at amortized cost in the consolidated balance sheets. For these instruments, the Company believes that there is minimal risk of material changes in interest rates or credit of the issuer such that estimated fair value approximates carrying value. In light of recent market conditions, short-term investments have been monitored to ensure there is sufficient demand and maintenance of issuer credit quality and the Company has determined additional adjustment is not required. Short-term investments that meet the definition of a security are recognized at estimated fair value in the consolidated balance sheets in the same manner described above for similar instruments that are classified within captions of other major investment classes.

Other Invested Assets — Other invested assets in the consolidated balance sheets are principally comprised of freestanding derivatives with positive estimated fair values, investments in tax credit partnerships and joint venture investments. Investments in tax credit partnerships and joint venture investments, which are accounted for under the equity method or under the effective yield method, are not financial instruments subject to fair value disclosure. Accordingly, they have been excluded from the preceding table.

The estimated fair value of derivatives — with positive and negative estimated fair values — is described in the section labeled “Derivatives” which follows.

Cash and Cash Equivalents — Due to the short-term maturities of cash and cash equivalents, the Company believes there is minimal risk of material changes in interest rates or credit of the issuer such that estimated fair value generally approximates carrying value. In light of recent market conditions, cash and cash equivalent instruments have been monitored to ensure there is sufficient demand and maintenance of issuer credit quality, or sufficient solvency in the case of depository institutions, and the Company has determined additional adjustment is not required.

Accrued Investment Income — Due to the short term until settlement of accrued investment income, the Company believes there is minimal risk of material changes in interest rates or credit of the issuer such that estimated fair value approximates carrying value. In light of recent market conditions, the Company has monitored the credit quality of the issuers and has determined additional adjustment is not required.

57

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

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

Premiums, Reinsurance and Other Receivables — Premiums, reinsurance and other receivables in the consolidated balance sheets are principally comprised of premiums due and unpaid for insurance contracts, amounts recoverable under reinsurance contracts, amounts on deposit with financial institutions to facilitate daily settlements related to certain derivative positions, amounts receivable for securities sold but not yet settled, fees and general operating receivables and embedded derivatives related to the ceded reinsurance of certain variable annuity guarantees.

Premiums receivable and those amounts recoverable under reinsurance treaties determined to transfer sufficient risk are not financial instruments subject to disclosure and thus have been excluded from the amounts presented in the preceding table. Amounts recoverable under ceded reinsurance contracts, which the Company has determined do not transfer sufficient risk such that they are accounted for using the deposit method of accounting, have been included in the preceding table with the estimated fair value determined as the present value of expected future cash flows under the related contracts discounted using an interest rate determined to reflect the appropriate credit standing of the assuming counterparty.

The amounts on deposit for derivative settlements essentially represent the equivalent of demand deposit balances and amounts due for securities sold are generally received over short periods such that the estimated fair value approximates carrying value. In light of recent market conditions, the Company has monitored the solvency position of the financial institutions and has determined additional adjustments are not required.

Embedded derivatives recognized in connection with ceded reinsurance of certain variable annuity guarantees are included in this caption in the consolidated financial statements but excluded from this caption in the preceding table as they are separately presented. The estimated fair value of these embedded derivatives is described in the section labeled “Embedded Derivatives within Asset and Liability Host Contracts” which follows.

Separate Account Assets — Separate account assets are carried at estimated fair value and reported as a summarized total on the consolidated balance sheets. The estimated fair value of separate account assets are based on the estimated fair value of the underlying assets owned by the separate account. Assets within the Company’s separate accounts include: mutual funds, fixed maturity securities, equity securities, other limited partnership interests, short-term investments and cash and cash equivalents. The estimated fair value of mutual funds is based on NAVs provided by the fund manager. The estimated fair values of fixed maturity securities, equity securities, short-term investments and cash and cash equivalents held by separate accounts are determined on a basis consistent with the methodologies described herein for similar financial instruments held within the general account. Other limited partnership interests are valued giving consideration to the value of the underlying holdings of the partnerships and by applying a premium or discount, if appropriate, for factors such as liquidity, bid/ask spreads, the performance record of the fund manager or other relevant variables which may impact the exit value of the particular partnership interest.

Policyholder Account Balances — Policyholder account balances in the tables above include investment contracts. Embedded derivatives on investment contracts and certain variable annuity guarantees accounted for as embedded derivatives are included in this caption in the consolidated financial statements but excluded from this caption in the tables above as they are separately presented therein. The remaining difference between the amounts reflected as policyholder account balances in the preceding table and those recognized in the consolidated balance sheets represents those amounts due under contracts that satisfy the definition of insurance contracts and are not considered financial instruments.

The investment contracts primarily include certain funding agreements, fixed deferred annuities, modified guaranteed annuities, fixed term payout annuities and total control accounts. The fair values for these investment contracts are estimated by discounting best estimate future cash flows using current market risk-free interest rates and adding a spread to reflect the nonperformance risk in the liability.

58

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

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

Payables for Collateral Under Securities Loaned and Other Transactions — The estimated fair value for payables for collateral under securities loaned and other transactions approximates carrying value. The related agreements to loan securities are short-term in nature such that the Company believes there is limited risk of a material change in market interest rates. Additionally, because borrowers are cross-collateralized by the borrowed securities, the Company believes no additional consideration for changes in nonperformance risk are necessary.

Affiliated Long-term Debt — The estimated fair value of affiliated long-term debt is generally determined by discounting expected future cash flows using market rates currently available for debt with similar terms, remaining maturities and reflecting the credit risk of the Company including inputs, when available, from actively traded debt of other companies with similar types of borrowing arrangements.

Long-term Debt Obligations of Consolidated Securitization Entities — The estimated fair value of the long-term debt obligations of the Company’s consolidated securitization entities are based on their quoted prices when traded as assets in active markets, or if not available, based on market standard valuation methodologies, consistent with the Company’s methods and assumptions used to estimate the fair value of comparable fixed maturity securities.

Other Liabilities — Other liabilities in the consolidated balance sheets are principally comprised of freestanding derivatives with negative estimated fair values; taxes payable; obligations for employee-related benefits; interest due on the Company’s debt obligations; amounts due for securities purchased but not yet settled; funds withheld under ceded reinsurance contracts and, when applicable, their associated embedded derivatives; and general operating accruals and payables.

The estimated fair value of derivatives — with positive and negative estimated fair values — and embedded derivatives within asset and liability host contracts are described in the sections labeled “Derivatives” and “Embedded Derivatives within Asset and Liability Host Contracts” which follow.

The remaining other amounts included in the table above reflect those other liabilities that satisfy the definition of financial instruments subject to disclosure. These items consist primarily of interest payable; amounts due for securities purchased but not yet settled; and funds withheld under reinsurance contracts recognized using the deposit method of accounting. The Company evaluates the specific terms, facts and circumstances of each instrument to determine the appropriate estimated fair values, which were not materially different from the recognized carrying values.

Separate Account Liabilities — Separate account liabilities included in the table above represent those balances due to policyholders under contracts that are classified as investment contracts. The difference between the separate account liabilities reflected above and the amounts presented in the consolidated balance sheets represents those contracts classified as insurance contracts which do not satisfy the criteria of financial instruments for which estimated fair value is to be disclosed.

Separate account liabilities classified as investment contracts primarily represent variable annuities with no significant mortality risk to the Company such that the death benefit is equal to the account balance and certain contracts that provide for benefit funding.

Separate account liabilities, whether related to investment or insurance contracts, are recognized in the consolidated balance sheets at an equivalent summary total of the separate account assets. Separate account assets, which equal net deposits, net investment income and realized and unrealized capital gains and losses, are fully offset by corresponding amounts credited to the contractholders’ liability which is reflected in separate account liabilities. Since separate account liabilities are fully funded by cash flows from the separate account assets which are recognized at estimated fair value as described above, the Company believes the value of those assets approximates the estimated fair value of the related separate account liabilities.

59

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

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

Derivatives — The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives or through the use of pricing models forover-the-counter derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that are assumed to be consistent with what other market participants would use when pricing the instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk (including the counterparties to the contract), volatility, liquidity and changes in estimates and assumptions used in the pricing models.

The significant inputs to the pricing models for mostover-the-counter derivatives are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Significant inputs that are observable generally include: interest rates, foreign currency exchange rates, interest rate curves, credit curves and volatility. However, certainover-the-counter derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. Significant inputs that are unobservable generally include: independent broker quotes, credit correlation assumptions, references to emerging market currencies and inputs that are outside the observable portion of the interest rate curve, credit curve, volatility or other relevant market measure. These unobservable inputs may involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and are assumed to be consistent with what other market participants would use when pricing such instruments.

The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for allover-the-counter derivatives, and any potential credit adjustment is based on the net exposure by counterparty after taking into account the effects of netting agreements and collateral arrangements. The Company values its derivative positions using the standard swap curve which includes a spread over the risk free rate. This credit spread is appropriate for those parties that execute trades at pricing levels consistent with the standard swap curve. As the Company and its significant derivative counterparties consistently execute trades at such pricing levels, additional credit risk adjustments are not currently required in the valuation process. The Company’s ability to consistently execute at such pricing levels is in part due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. The evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period.

Most inputs forover-the-counter derivatives are mid market inputs but, in certain cases, bid level inputs are used when they are deemed more representative of exit value. Market liquidity, as well as the use of different methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company’s derivatives and could materially affect net income.

Embedded Derivatives within Asset and Liability Host Contracts — Embedded derivatives principally include certain direct, assumed and ceded variable annuity guarantees, and embedded derivatives related to funds withheld on ceded reinsurance. Embedded derivatives are recorded in the financial statements at estimated fair value with changes in estimated fair value reported in net income.

The Company issues certain variable annuity products with guaranteed minimum benefit guarantees. GMWBs, GMABs and certain GMIBs are embedded derivatives, which are measured at estimated fair value separately from the host variable annuity contract, with changes in estimated fair value reported in net investment gains (losses). These embedded derivatives are classified within policyholder account balances.

The fair value for these guarantees are estimated using the present value of future benefits minus the present value of future fees using actuarial and capital market assumptions related to the projected cash flows over the expected lives of the contracts. A risk neutral valuation methodology is used under which the cash flows from the

60

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

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

guarantees are projected under multiple capital market scenarios using observable risk free rates, currency exchange rates and observable and estimated implied volatilities.

The valuation of these guarantee liabilities includes adjustments for nonperformance risk and for a risk margin related to non-capital market inputs. Both of these adjustments are captured as components of the spread which, when combined with the risk free rate, is used to discount the cash flows of the liability for purposes of determining its fair value.

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

Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees. These guarantees may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; changes in nonperformance risk; and variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs may result in significant fluctuations in the estimated fair value of the guarantees that could materially affect net income.

The Company ceded the risk associated with certain of the GMIB, GMAB and GMWB guarantees described in the preceding paragraph to an affiliated reinsurance company that are also accounted for as embedded derivatives. In addition to ceding risks associated with guarantees that are accounted for as embedded derivatives, the Company also cedes, to the same affiliated reinsurance company, certain directly written GMIB guarantees that are accounted for as insurance (i.e. not as embedded derivatives) but where the reinsurance contract contains an embedded derivative. These embedded derivatives are included in premiums, reinsurance and other receivables with changes in estimated fair value reported in net investment gains (losses). The value of the embedded derivatives on these ceded risks is determined using a methodology consistent with that described previously for the guarantees directly written by the Company. Because the direct guarantee is not accounted for at fair value, significant fluctuations in net income may occur as the change in fair value of the embedded derivative on the ceded risk is being recorded in net income without a corresponding and offsetting change in fair value of the direct guarantee.

As part of its regular review of critical accounting estimates, the Company periodically assesses inputs for estimating nonperformance risk (commonly referred to as “own credit”) in fair value measurements. During the second quarter of 2010, the Company completed a study that aggregated and evaluated data, including historical recovery rates of insurance companies, as well as policyholder behavior observed over the past two years as the recent financial crisis evolved. As a result, at the end of the second quarter of 2010, the Company refined the way in which it incorporates expected recovery rates into the nonperformance risk adjustment for purposes of estimating the fair value of investment-type contracts and embedded derivatives within insurance contracts. For the three months ended June 30, 2010, the Company recognized income of $19 million, net of DAC and income tax, relating to the change in fair value associated with nonperformance risk for embedded derivatives within the above mentioned guaranteed minimum benefit guarantees and associated reinsurance. The impact included a gain of $60 million, net of DAC and income tax, relating to implementing the refinement at June 30, 2010.

The estimated fair value of the embedded derivatives within funds withheld related to certain ceded reinsurance is determined based on the change in estimated fair value of the underlying assets held by the Company in a reference portfolio backing the funds withheld liability. The estimated fair value of the underlying assets is determined as described above in “Fixed Maturity Securities, Equity Securities and Trading Securities” and

61

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

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

“Short-term Investments.” The estimated fair value of these embedded derivatives is included, along with their funds withheld hosts, in other liabilities with changes in estimated fair value recorded in net investment gains (losses). Changes in the credit spreads on the underlying assets, interest rates and market volatility may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially affect net income.

Mortgage Loan Commitments and Commitments to Fund Bank Credit Facilities and Private Corporate Bond Investments— The estimated fair values for mortgage loan commitments and commitments to fund bank credit facilities and private corporate bond investments reflected in the above tables represent the difference between the discounted expected future cash flows using interest rates that incorporate current credit risk for similar instruments on the reporting date and the principal amounts of the original commitments.

62

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

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

Assets and Liabilities Measured at Fair Value

Recurring Fair Value Measurements

The assets and liabilities measured at estimated fair value on a recurring basis, including those items for which the Company has elected the fair value option, are determined as described in the preceding section. These estimated fair values and their corresponding fair value hierarchy are summarized as follows:

	June 30, 2010
	Fair Value Measurements at Reporting Date Using
	Quoted Prices in
	Active Markets for				Significant		Total
	Identical Assets		Significant Other		Unobservable		Estimated
	and Liabilities		Observable Inputs		Inputs		Fair
	(Level 1)		(Level 2)		(Level 3)		Value
	(In millions)
Assets
Fixed maturity securities:
U.S. corporate securities	$	—	$	14,054	$	1,609	$	15,663
U.S. Treasury and agency securities		5,367		2,861		34		8,262
Foreign corporate securities		—		6,800		856		7,656
RMBS		—		5,343		67		5,410
CMBS		—		2,440		100		2,540
ABS		—		1,475		565		2,040
State and political subdivision securities		—		1,451		39		1,490
Foreign government securities		—		780		7		787
Total fixed maturity securities		5,367		35,204		3,277		43,848
Equity securities:
Non-redeemable preferred stock		—		51		189		240
Common stock		53		70		44		167
Total equity securities		53		121		233		407
Trading securities		1,373		6		—		1,379
Short-term investments (1)		549		1,409		13		1,971
Mortgage loans held by consolidated securitization entities		—		7,107		—		7,107
Derivative assets: (2)
Interest rate contracts		—		857		10		867
Foreign currency contracts		—		484		8		492
Credit contracts		—		7		15		22
Equity market contracts		1		157		46		204
Total derivative assets		1		1,505		79		1,585
Net embedded derivatives within asset host contracts (3)		—		—		1,870		1,870
Separate account assets (4)		77		49,589		140		49,806
Total assets	$	7,420	$	94,941	$	5,612	$	107,973
Liabilities
Derivative liabilities: (2)
Interest rate contracts	$	—	$	304	$	1	$	305
Foreign currency contracts		—		52		—		52
Credit contracts		—		19		5		24
Equity market contracts		—		—		—		—
Total derivative liabilities		—		375		6		381
Net embedded derivatives within liability host contracts (3)		—		—		1,258		1,258
Long-term debt of consolidated securitization entities		—		7,052		—		7,052
Total liabilities	$	—	$	7,427	$	1,264	$	8,691

63

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

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

	December 31, 2009
	Fair Value Measurements at Reporting Date Using
	Quoted Prices in
	Active Markets for				Significant		Total
	Identical Assets		Significant Other		Unobservable		Estimated
	and Liabilities		Observable Inputs		Inputs		Fair
	(Level 1)		(Level 2)		(Level 3)		Value
	(In millions)
Assets
Fixed maturity securities:
U.S. corporate securities	$	—	$	13,793	$	1,605	$	15,398
U.S. Treasury and agency securities		3,972		2,252		33		6,257
Foreign corporate securities		—		6,344		994		7,338
RMBS		—		5,827		25		5,852
CMBS		—		2,572		45		2,617
ABS		—		1,452		537		1,989
State and political subdivision securities		—		1,147		32		1,179
Foreign government securities		—		629		16		645
Total fixed maturity securities		3,972		34,016		3,287		41,275
Equity securities:
Non-redeemable preferred stock		—		48		258		306
Common stock		72		70		11		153
Total equity securities		72		118		269		459
Trading securities		931		7		—		938
Short-term investments (1)		1,057		703		8		1,768
Derivative assets (2)		3		1,410		57		1,470
Net embedded derivatives within asset host contracts (3)		—		—		724		724
Separate account assets (4)		69		49,227		153		49,449
Total assets	$	6,104	$	85,481	$	4,498	$	96,083
Liabilities
Derivative liabilities (2)	$	1	$	336	$	10	$	347
Net embedded derivatives within liability host contracts (3)		—		—		279		279
Total liabilities	$	1	$	336	$	289	$	626

(1)	Short-term investments as presented in the tables above differ from the amounts presented in the consolidated balance sheets because certain short-term investments are not measured at estimated fair value (e.g. time deposits, etc.).
(2)	Derivative assets are presented within other invested assets and derivative liabilities are presented within other liabilities. The amounts are presented gross in the tables above to reflect the presentation in the consolidated balance sheets, but are presented net for purposes of the rollforward in the following tables.

64

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

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

(3)	Net embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables. Net embedded derivatives within liability host contracts are presented within policyholder account balances and other liabilities. At June 30, 2010 and December 31, 2009, equity securities also included embedded derivatives of $4 million and ($5) million, respectively.
(4)	Separate account assets are measured at estimated fair value. Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities. Separate account liabilities are set equal to the estimated fair value of separate account assets.

The Company has categorized its assets and liabilities into the three-level fair value hierarchy based upon the priority of the inputs to the respective valuation technique. The following summarizes the types of assets and liabilities included within the three-level fair value hierarchy presented in the preceding table.

Level 1	This category includes most U.S. Treasury and agency fixed maturity securities; exchange-traded common stock; trading securities and certain short-term money market securities. As it relates to derivatives, this level includes exchange-traded equity and interest rate futures. Separate account assets classified within this level are similar in nature to those classified in this level for the general account.
Level 2	This category includes fixed maturity and equity securities priced principally by independent pricing services using observable inputs. Fixed maturity securities classified as Level 2 include certain U.S. Treasury and agency securities, as well as the majority of U.S. and foreign corporate securities, RMBS, CMBS, state and political subdivision securities, foreign government securities, and ABS. Equity securities classified as Level 2 securities consist principally of common stock and non-redeemable preferred stock where market quotes are available but are not considered actively traded. Short-term investments and trading securities included within Level 2 are of a similar nature to these fixed maturity and equity securities. Mortgage loans included in Level 2 include mortgage loans held by consolidated securitization entities. Mortgage loans held by consolidated securitization entities are priced using the securitization market price of the obligations of the consolidated securitization entities, which are priced principally by independent pricing services using observable inputs. As it relates to derivatives, this level includes all types of derivative instruments utilized by the Company with the exception of exchange-traded futures included within Level 1 and those derivative instruments with unobservable inputs as described in Level 3. Separate account assets classified within this level are generally similar to those classified within this level for the general account, with the exception of certain mutual funds without readily determinable fair values given prices are not published publicly. Long-term debt of consolidated securitization entities included in this level includes obligations priced principally by independent pricing services using observable inputs.
Level 3	This category includes fixed maturity securities priced principally through independent broker quotations or market standard valuation methodologies using inputs that are not market observable or cannot be derived principally from or corroborated by observable market data. This level primarily consists of less liquid fixed maturity securities with very limited trading activity or where less price transparency exists around the inputs to the valuation methodologies including: U.S. and foreign corporate securities — including below investment grade private placements; CMBS; and ABS — including all of those supported bysub-prime mortgage loans. Equity securities classified as Level 3 securities consist principally of non-redeemable preferred stock and common stock of companies that are privately held or of companies for which there has been very limited trading activity or where less price transparency exists around the inputs to the valuation. Short-term investments included within Level 3 are of a similar nature to these fixed maturity securities. As it relates to derivatives this category includes: swap spreadlocks with maturities which extend beyond

65

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

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

observable periods; equity variance swaps with unobservable volatility inputs or that are priced via independent broker quotations; foreign currency swaps priced through independent broker quotations; interest rate swaps with maturities which extend beyond the observable portion of the yield curve; credit default swaps based upon baskets of credits having unobservable credit correlations; equity options with unobservable volatility inputs; implied volatility swaps with unobservable volatility inputs; credit forwards having unobservable repurchase rates and interest rate caps referencing unobservable yield curvesand/or which include liquidity and volatility adjustments. Separate account assets classified within this level are generally similar to those classified within this level for the general account; however, they also include other limited partnership interests. Embedded derivatives classified within this level include embedded derivatives associated with certain variable annuity guarantees, as well as those on the cession of risks associated with those guarantees to affiliates and embedded derivatives related to funds withheld on ceded reinsurance.

Valuation Techniques and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and Liabilities

A description of the significant valuation techniques and inputs to the determination of estimated fair value for the more significant asset and liability classes measured at fair value on a recurring basis is as follows:

The Company determines the estimated fair value of its investments using primarily the market approach and the income approach. The use of quoted prices for identical assets and matrix pricing or other similar techniques are examples of market approaches, while the use of discounted cash flow methodologies is an example of the income approach. The Company attempts to maximize the use of observable inputs and minimize the use of unobservable inputs in selecting whether the market or income approach is used.

While certain investments have been classified as Level 1 from the use of unadjusted quoted prices for identical investments supported by high volumes of trading activity and narrow bid/ask spreads, most investments have been classified as Level 2 because the significant inputs used to measure the fair value on a recurring basis of the same or similar investment are market observable or can be corroborated using market observable information for the full term of the investment. Level 3 investments include those where estimated fair values are based on significant unobservable inputs that are supported by little or no market activity and may reflect our own assumptions about what factors market participants would use in pricing these investments.

Level 1 Measurements:

Fixed maturity securities —Comprised of U.S. Treasury securities. Valuation based on unadjusted quoted prices in active markets that are readily and regularly available.

Equity securities — common stock —Comprised of exchange-traded U.S. and international common stock. Valuation based on unadjusted quoted prices in active markets that are readily and regularly available.

Trading securities —Comprised of securities that are similar in nature to the fixed maturity and equity securities referred to above. Valuation based on unadjusted quoted prices in active markets that are readily and regularly available.

Short-term investments —Comprised of short-term money market securities, including U.S. Treasury bills. Valuation based on unadjusted quoted prices in active markets that are readily and regularly available.

Derivative assets and derivative liabilities —Comprised of exchange-traded equity and interest rate futures. Valuation based on unadjusted quoted prices in active markets that are readily and regularly available.

66

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

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

Separate account assets —Comprised of securities that are similar in nature to the fixed maturity securities, equity securities and short-term investments referred to above. Valuation based on unadjusted quoted prices in active markets that are readily and regularly available.

Level 2 Measurements:

U.S. corporate and foreign corporate fixed maturity securities —These securities are principally valued using the market and income approaches. Valuation based primarily on quoted prices in markets that are not active, or using matrix pricing or other similar techniques that use standard market observable inputs such as a benchmark yields, spreads off benchmark yields, new issuances, issuer rating, duration, and trades of identical or comparable securities. Investment grade privately placed securities are valued using a discounted cash flow methodologies using standard market observable inputs, and inputs derived from, or corroborated by, market observable data including market yield curve, duration, call provisions, observable prices and spreads for similar publicly traded or privately traded issues that incorporate the credit quality and industry sector of the issuer.

Structured securities comprised of RMBS, CMBS and ABS fixed maturity securities —These securities are principally valued using the market approach. Valuation based primarily on matrix pricing or other similar techniques using standard market inputs including spreads for actively traded securities, spreads off benchmark yields, expected prepayment speeds and volumes, current and forecasted loss severity, rating, weighted average coupon, weighted average maturity, average delinquency rates, geographic region, debt-service coverage ratios and issuance-specific information including: collateral type, payment terms of the underlying assets, payment priority within the tranche, structure of the security, deal performance and vintage of loans, etc.

U.S. Treasury and agency fixed maturity securities —These securities are principally valued using the market approach. Valuation based primarily on quoted prices in markets that are not active, or using matrix pricing or other similar techniques using standard market observable inputs such as benchmark U.S. Treasury yield curve, the spread off the U.S. Treasury curve for the identical security and comparable securities that are actively traded.

Foreign government and state and political subdivision fixed maturity securities —These securities are principally valued using the market approach. Valuation based primarily on matrix pricing or other similar techniques using standard market observable inputs including benchmark U.S. Treasury or other yields, issuer ratings, broker-dealer quotes, issuer spreads and reported trades of similar securities, including those within the samesub-sector or with a similar maturity or credit rating.

Equity securities — common and non-redeemable preferred stock —These securities are principally valued using the market approach. Valuation is based principally on observable inputs including quoted prices in markets that are not considered active.

Trading securities and short-term investments —Trading securities and short-term investments are of a similar nature to Level 2 fixed maturity and equity securities; accordingly the valuation techniques and significant market standard observable inputs used in their valuation are similar to those described above for fixed maturity and equity securities.

Mortgage loans of consolidated securitization entities —These loans are principally valued using the market approach. The principal market for these commercial loan portfolios is the securitization market. The Company uses the quoted securitization market price of the obligations of the consolidated securitization entities to determine the estimated fair value of these commercial loan portfolios.

Non-option based interest rate derivative assets and derivative liabilities —These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve, London Inter-Bank Offer Rate (“LIBOR”) basis curves, and repurchase rates.

67

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

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

Option based interest rate derivative assets and derivative liabilities —These derivatives are principally valued using an income approach. Valuations are based on option pricing models, which utilize significant inputs that may include the swap yield curve, LIBOR basis curves, and interest rate volatility.

Non-option based foreign currency derivative assets and derivative liabilities —These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve, LIBOR basis curves, currency spot rates, and cross currency basis curves.

Non-option based credit derivative assets and derivative liabilities —These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve, credit curves, and recovery rates.

Non-option based equity market derivative assets and derivative liabilities —These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve, spot equity index levels, and dividend yield curves.

Option based equity market derivative assets and derivative liabilities —These derivatives are principally valued using an income approach. Valuations are based on option pricing models, which utilize significant inputs that may include the swap yield curve, spot equity index levels, dividend yield curves, and equity volatility.

Separate account assets —These assets are comprised of securities that are similar in nature to the fixed maturity securities, equity securities and short-term investments referred to above. Also included are certain mutual funds with non-readily determinable fair values given prices are not published publicly. Valuation of the mutual funds is based upon quoted prices or reported NAVs provided by the fund managers.

Long-term debt obligations of consolidated securitization entities — The estimated fair value of the long-term debt obligations of the Company’s consolidated securitization entities are based on their quoted prices when traded as assets in active markets, or if not available, based on market standard valuation methodologies, consistent with the Company’s methods and assumptions used to estimate the fair value of comparable fixed maturity securities.

Level 3 Measurements:

In general, investments classified within Level 3 use many of the same valuation techniques and inputs as described above. However, if key inputs are unobservable, or if the investments are less liquid and there is very limited trading activity, the investments are generally classified as Level 3. The use of independent non-binding broker quotations to value investments generally indicates there is a lack of liquidity or the general lack of transparency in the process to develop the valuation estimates generally causing these investments to be classified in Level 3.

U.S. corporate and foreign corporate securities —These securities, including financial services industry hybrid securities classified within fixed maturity securities, are principally valued using the market and income approaches. Valuations are based primarily on matrix pricing or other similar techniques that utilize unobservable inputs or cannot be derived principally from, or corroborated by, observable market data, including illiquidity premiums and spread adjustments to reflect industry trends or specific credit-related issues. Valuations may be based on independent non-binding broker quotations. Generally, below investment grade privately placed or distressed securities included in this level are valued using discounted cash flow methodologies which rely upon significant, unobservable inputs and inputs that cannot be derived principally from, or corroborated by, observable market data.

Structured securities comprised of RMBS, CMBS and ABS fixed maturity securities —These securities are principally valued using the market approach. Valuation is based primarily on matrix pricing or other similar techniques that utilize inputs that are unobservable or cannot be derived principally from, or corroborated by,

68

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

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

observable market data, or are based on independent non-binding broker quotations. Below investment grade securities and ABS supported bysub-prime mortgage loans included in this level are valued based on inputs including quoted prices for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2, and certain of these securities are valued based on independent non-binding broker quotations.

Foreign government and state and political subdivision fixed maturity securities —These securities are principally valued using the market approach. Valuation is based primarily on matrix pricing or other similar techniques, however these securities are less liquid and certain of the inputs are based on very limited trading activity.

Equity securities — common and non-redeemable preferred stock —These securities, including privately held securities and financial services industry hybrid securities classified within equity securities, are principally valued using the market and income approaches. Valuations are based primarily on matrix pricing or other similar techniques using inputs such as comparable credit rating and issuance structure. Equity securities valuations determined with discounted cash flow methodologies use inputs such as earnings multiples based on comparable public companies, and industry-specific non-earnings based multiples. Certain of these securities are valued based on independent non-binding broker quotations.

Non-option based interest rate derivative assets and derivative liabilities —These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which generally utilize the same inputs as described in the section above for Level 2 measurements of non-option based interest rate derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve and LIBOR basis curves.

Option based interest rate derivative assets and derivative liabilities —These derivatives are principally valued using an income approach. Valuations are based on option pricing models, which generally utilize the same inputs as described in the section above for Level 2 measurements of option based interest rate derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve, LIBOR basis curves, and interest rate volatility.

Non-option based foreign currency derivative assets and derivative liabilities —These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which generally utilize the same inputs as described in the section above for Level 2 measurements of non-option based foreign currency derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve, LIBOR basis curves and cross currency basis curves. Certain of these derivatives are valued based on independent non-binding broker quotations.

Non-option based credit derivative assets and derivative liabilities —These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which generally utilize the same inputs as described in the section above for Level 2 measurements of non-option based credit derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs may include credit correlation, repurchase rates and the extrapolation beyond observable

69

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

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

limits of the swap yield curve and credit curves. Certain of these derivatives are valued based on independent non-binding broker quotations.

Non-option based equity market derivative assets and derivative liabilities —These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which generally utilize the same inputs as described in the section above for Level 2 measurements of non-option based equity market derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs may include the extrapolation beyond observable limits of dividend yield curves.

Option based equity market derivative assets and derivative liabilities —These derivatives are principally valued using an income approach. Valuations are based on option pricing models, which generally utilize the same inputs as described in the section above for Level 2 measurements of option based equity market derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs may include the extrapolation beyond observable limits of dividend yield curves and equity volatility.

Guaranteed minimum benefit guarantees —These embedded derivatives are principally valued using an income approach. Valuations are based on option pricing techniques, which utilize significant inputs that may include swap yield curve, currency exchange rates and implied volatilities. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include: the extrapolation beyond observable limits of the swap yield curve and implied volatilities, actuarial assumptions for policyholder behavior and mortality and the potential variability in policyholder behavior and mortality, nonperformance risk and cost of capital for purposes of calculating the risk margin.

Reinsurance ceded on certain guaranteed minimum benefit guarantees —These embedded derivatives are principally valued using an income approach. Valuations are based on option pricing techniques, which utilize significant inputs that may include swap yield curve, currency exchange rates and implied volatilities. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include: the extrapolation beyond observable limits of the swap yield curve and implied volatilities, actuarial assumptions for policyholder behavior and mortality and the potential variability in policyholder behavior and mortality, counterparty credit spreads and cost of capital for purposes of calculating the risk margin.

Embedded derivatives within funds withheld related to certain ceded reinsurance —These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve and the fair value of assets within the reference portfolio. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include: the fair value of certain assets within the reference portfolio which are not observable in the market and cannot be derived principally from, or corroborated by, observable market data.

Separate account assets —These securities consist of fixed maturity securities and equity securities referred to above. Separate account assets within this level also include other limited partnership interests. The estimated fair value of other limited partnership interests are valued giving consideration to the value of the underlying holdings of the partnerships and by applying a premium or discount, if appropriate, for factors such as liquidity, bid/ask spreads,

70

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

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

the performance record of the fund manager or other relevant variables which may impact the exit value of the particular partnership interest.

A rollforward of all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs for the three months ended June 30, 2010 and 2009 is as follows:

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Total Realized/Unrealized
			Gains (Losses) included in:						Purchases,
	Balance,					Other			Sales,
	Beginning of					Comprehensive			Issuances and			Transfer Into		Transfer Out			Balance,
	Period		Earnings (1), (2)			Income (Loss)			Settlements (3)			Level 3 (4)		of Level 3 (4)			End of Period
	(In millions)
For the Three Months Ended June 30, 2010:
Fixed maturity securities:
U.S. corporate securities	$	1,510	$	2		$	28		$	38		$	54	$	(23	)	$	1,609
U.S. Treasury and agency securities		32		—			2			—			—		—			34
Foreign corporate securities		953		4			(29	)		(100	)		66		(38	)		856
RMBS		28		—			1			17			21		—			67
CMBS		48		1			7			(5	)		73		(24	)		100
ABS		521		(1	)		14			27			10		(6	)		565
State and political subdivision securities		48		—			1			(2	)		—		(8	)		39
Foreign government securities		7		—			—			—			—		—			7
Total fixed maturity securities	$	3,147	$	6		$	24		$	(25	)	$	224	$	(99	)	$	3,277
Equity securities:
Non-redeemable preferred stock	$	242	$	14		$	(12	)	$	(55	)	$	—	$	—		$	189
Common stock		34		4			(6	)		12			—		—			44
Total equity securities	$	276	$	18		$	(18	)	$	(43	)	$	—	$	—		$	233
Short-term investments	$	1	$	—		$	—		$	12		$	—	$	—		$	13
Net derivatives: (5)
Interest rate contracts	$	6	$	5		$	—		$	(2	)	$	—	$	—		$	9
Foreign currency contracts		18		(10	)		—			—			—		—			8
Credit contracts		7		(4	)		7			—			—		—			10
Equity market contracts		7		39			—			—			—		—			46
Total net derivatives	$	38	$	30		$	7		$	(2	)	$	—	$	—		$	73
Separate account assets (6)	$	146	$	(3	)	$	—		$	(3	)	$	—	$	—		$	140
Net embedded derivatives (7)	$	258	$	333		$	—		$	21		$	—	$	—		$	612

71

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

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

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Total Realized/Unrealized
			Gains (Losses) included in:					Purchases,
	Balance,					Other		Sales,			Transfer In
	Beginning of					Comprehensive		Issuances and			and/or Out			Balance,
	Period		Earnings (1), (2)			Income (Loss)		Settlements (3)			of Level 3 (4)			End of Period
	(In millions)
For the Three Months Ended June 30, 2009:
Fixed maturity securities:
U.S. corporate securities	$	1,537	$	1		$	86	$	16		$	(89	)	$	1,551
U.S. Treasury and agency securities		33		—			—		—			—			33
Foreign corporate securities		759		(23	)		221		(16	)		(18	)		923
RMBS		48		—			1		—			(34	)		15
CMBS		99		(12	)		19		(1	)		—			105
ABS		473		2			35		(20	)		(4	)		486
State and political subdivision securities		27		—			5		—			—			32
Foreign government securities		15		5			—		—			—			20
Total fixed maturity securities	$	2,991	$	(27	)	$	367	$	(21	)	$	(145	)	$	3,165
Equity securities:
Non-redeemable preferred stock	$	216	$	(16	)	$	70	$	(16	)	$	—		$	254
Common stock		8		—			—		(1	)		—			7
Total equity securities	$	224	$	(16	)	$	70	$	(17	)	$	—		$	261
Trading securities	$	—	$	—		$	—	$	—		$	—		$	—
Short-term investments	$	1	$	—		$	—	$	1		$	—		$	2
Net derivatives (5)	$	328	$	(87	)	$	—	$	16		$	16		$	273
Separate account assets (6)	$	142	$	5		$	—	$	—		$	—		$	147
Net embedded derivatives (7)	$	484	$	(75	)	$	—	$	15		$	—		$	424

72

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

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

A rollforward of all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs for the six months ended June 30, 2010 and 2009 is as follows:

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
				Total Realized/Unrealized
				Gains (Losses) included in:						Purchases,
	Balance,						Other			Sales,
	Beginning of						Comprehensive			Issuances and			Transfer Into		Transfer Out			Balance,
	Period			Earnings (1), (2)			Income (Loss)			Settlements (3)			Level 3 (4)		of Level 3 (4)			End of Period
	(In millions)
For the Six Months Ended June 30, 2010:
Fixed maturity securities:
U.S. corporate securities	$	1,605		$	5		$	67		$	(62	)	$	76	$	(82	)	$	1,609
U.S. Treasury and agency securities		33			—			3			(2	)		—		—			34
Foreign corporate securities		994			(2	)		15			(158	)		77		(70	)		856
RMBS		25			—			3			17			22		—			67
CMBS		45			—			10			—			72		(27	)		100
ABS		537			—			25			45			9		(51	)		565
State and political subdivision securities		32	��		—			7			—			—		—			39
Foreign government securities		16			—			—			—			—		(9	)		7
Total fixed maturity securities	$	3,287		$	3		$	130		$	(160	)	$	256	$	(239	)	$	3,277
Equity securities:
Non-redeemable preferred stock	$	258		$	14		$	(6	)	$	(77	)	$	—	$	—		$	189
Common stock		11			4			1			30			—		(2	)		44
Total equity securities	$	269		$	18		$	(5	)	$	(47	)	$	—	$	(2	)	$	233
Short-term investments	$	8		$	—		$	—		$	5		$	—	$	—		$	13
Net derivatives: (5)
Interest rate contracts	$	2		$	9		$	—		$	(2	)	$	—	$	—		$	9
Foreign currency contracts		23			(15	)		—			—			—		—			8
Credit contracts		4			(4	)		9			1			—		—			10
Equity market contracts		18			28			—			—			—		—			46
Total net derivatives	$	47		$	18		$	9		$	(1	)	$	—	$	—		$	73
Separate account assets (6)	$	153		$	(3	)	$	—		$	(6	)	$	—	$	(4	)	$	140
Net embedded derivatives (7)	$	445		$	123		$	—		$	44		$	—	$	—		$	612

73

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

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

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Total Realized/Unrealized
			Gains (Losses) included in:						Purchases,
	Balance,					Other			Sales,			Transfer In
	Beginning of					Comprehensive			Issuances and			and/or Out			Balance,
	Period		Earnings (1), (2)			Income (Loss)			Settlements (3)			of Level 3 (4)			End of Period
	(In millions)
For the Six Months Ended June 30, 2009:
Fixed maturity securities:
U.S. corporate securities	$	1,401	$	(24	)	$	(57	)	$	(10	)	$	241		$	1,551
U.S. Treasury and agency securities		36		—			(2	)		(1	)		—			33
Foreign corporate securities		926		(66	)		194			(45	)		(86	)		923
RMBS		62		(4	)		4			(17	)		(30	)		15
CMBS		116		(12	)		16			(15	)		—			105
ABS		558		(20	)		(2	)		(65	)		15			486
State and political subdivision securities		24		—			5			3			—			32
Foreign government securities		10		—			—			4			6			20
Total fixed maturity securities	$	3,133	$	(126	)	$	158		$	(146	)	$	146		$	3,165
Equity securities:
Non-redeemable preferred stock	$	318	$	(68	)	$	20		$	(16	)	$	—		$	254
Common stock		8		—			—			(1	)		—			7
Total equity securities	$	326	$	(68	)	$	20		$	(17	)	$	—		$	261
Trading securities	$	50	$	—		$	—		$	(50	)	$	—		$	—
Short-term investments	$	—	$	—		$	—		$	2		$	—		$	2
Net derivatives (5)	$	309	$	(72	)	$	—		$	18		$	18		$	273
Separate account assets (6)	$	159	$	(10	)	$	—		$	(2	)	$	—		$	147
Net embedded derivatives (7)	$	657	$	(292	)	$	—		$	59		$	—		$	424

(1)	Amortization of premium/discount is included within net investment income which is reported within the earnings caption of total gains (losses). Impairments charged to earnings are included within net investment gains (losses) which are reported within the earnings caption of total gains (losses). Lapses associated with embedded derivatives are included with the earnings caption of total gains (losses).
(2)	Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward.
(3)	The amount reported within purchases, sales, issuances and settlements is the purchase/issuance price (for purchases and issuances) and the sales/settlement proceeds (for sales and settlements) based upon the actual date purchased/issued or sold/settled. Items purchased/issued and sold/settled in the same period are excluded from the rollforward. For embedded derivatives, attributed fees are included within this caption along with settlements, if any.

74

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

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

(4)	Total gains and losses (in earnings and other comprehensive income (loss)) are calculated assuming transfers in and/or out of Level 3 occurred at the beginning of the period. Items transferred in and out in the same period are excluded from the rollforward.
(5)	Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.
(6)	Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities.
(7)	Embedded derivative assets and liabilities are presented net for purposes of the rollforward.

Transfers between Levels 1 and 2 —During the three months and six months ended June 30, 2010, transfers between Levels 1 and 2 were not significant.

Transfers in or out of Level 3 —Overall, transfers inand/or out of Level 3 are attributable to a change in the observability of inputs. Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and transparency to underlying inputs cannot be observed, current prices are not available, and when there are significant variances in quoted prices. Assets and liabilities are transferred out of Level 3 when circumstances change such that significant inputs can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable. Transfers inand/or out of any level are assumed to occur at the beginning of the period. Significant transfers inand/or out of Level 3 assets and liabilities for the three months and six months ended June 30, 2010 are summarized below.

During the three months and six months ended June 30, 2010, fixed maturity securities transfers into Level 3 of $224 million and $256 million, respectively, resulted primarily from current market conditions characterized by a lack of trading activity, decreased liquidity and credit ratings downgrades (e.g., from investment grade to below investment grade). These current market conditions have resulted in decreased transparency of valuations and an increased use of broker quotations and unobservable inputs to determine estimated fair value principally for certain CMBS and private placements included in U.S. and foreign corporate securities.

During the three months and six months ended June 30, 2010, fixed maturity securities transfers out of Level 3 of $99 million and $239 million, respectively, and separate account assets transfers out of Level 3 of less than $1 million and $4 million, respectively, resulted primarily from increased transparency of both new issuances that subsequent to issuance and establishment of trading activity, became priced by pricing services and existing issuances that, over time, the Company was able to corroborate pricing received from independent pricing services with observable inputs, or there were increases in market activity and upgraded credit ratings primarily for certain U.S. and foreign corporate securities, ABS and CMBS.

75

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

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

The tables below summarize both realized and unrealized gains and losses for the three months ended June 30, 2010 and 2009 due to changes in estimated fair value recorded in earnings for Level 3 assets and liabilities:

	Total Gains and Losses
	Classification of Realized/Unrealized
	Gains (Losses) included in Earnings
	Net			Net
	Investment			Investment
	Income			Gains (Losses)			Total
	(In millions)
For the Three Months Ended June 30, 2010:
Fixed maturity securities:
U.S. corporate securities	$	2		$	—		$	2
Foreign corporate securities		(1	)		5			4
CMBS		—			1			1
ABS		—			(1	)		(1	)
Foreign government securities		—			—			—
Total fixed maturity securities	$	1		$	5		$	6
Equity securities:
Non-redeemable preferred stock	$	—		$	14		$	14
Common stock		—			4			4
Total equity securities	$	—		$	18		$	18
Net derivatives:
Interest rate contracts	$	—		$	5		$	5
Foreign currency contracts		—			(10	)		(10	)
Credit contracts		—			(4	)		(4	)
Equity market contracts		—			39			39
Total net derivatives	$	—		$	30		$	30
Net embedded derivatives	$	—		$	333		$	333

76

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

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

	Total Gains and Losses
	Classification of Realized/Unrealized
	Gains (Losses) included in Earnings
	Net		Net
	Investment		Investment
	Income		Gains (Losses)			Total
	(In millions)
For the Three Months Ended June 30, 2009:
Fixed maturity securities:
U.S. corporate securities	$	1	$	—		$	1
Foreign corporate securities		—		(23	)		(23	)
CMBS		—		(12	)		(12	)
ABS		—		2			2
Foreign government securities		—		5			5
Total fixed maturity securities	$	1	$	(28	)	$	(27	)
Equity securities:
Non-redeemable preferred stock	$	—	$	(16	)	$	(16	)
Common stock		—		—			—
Total equity securities	$	—	$	(16	)	$	(16	)
Net derivatives	$	—	$	(87	)	$	(87	)
Net embedded derivatives	$	—	$	(75	)	$	(75	)

77

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

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

The tables below summarize both realized and unrealized gains and losses for the six months ended June 30, 2010 and 2009 due to changes in estimated fair value recorded in earnings for Level 3 assets and liabilities:

	Total Gains and Losses
	Classification of Realized/Unrealized
	Gains (Losses) included in Earnings
	Net			Net
	Investment			Investment
	Income			Gains (Losses)			Total
	(In millions)
For the Six Months Ended June 30, 2010:
Fixed maturity securities:
U.S. corporate securities	$	4		$	1		$	5
Foreign corporate securities		(1	)		(1	)		(2	)
RMBS		—			—			—
CMBS		—			—			—
ABS		—			—			—
Total fixed maturity securities	$	3		$	—		$	3
Equity securities:
Non-redeemable preferred stock	$	—		$	14		$	14
Common stock		—			4			4
Total equity securities	$	—		$	18		$	18
Net derivatives:
Interest rate contracts	$	—		$	9		$	9
Foreign currency contracts		—			(15	)		(15	)
Credit contracts		—			(4	)		(4	)
Equity market contracts		—			28			28
Total net derivatives	$	—		$	18		$	18
Net embedded derivatives	$	—		$	123		$	123

78

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

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

	Total Gains and Losses
	Classification of Realized/Unrealized
	Gains (Losses) included in Earnings
	Net			Net
	Investment			Investment
	Income			Gains (Losses)			Total
	(In millions)
For the Six Months Ended June 30, 2009:
Fixed maturity securities:
U.S. corporate securities	$	3		$	(27	)	$	(24	)
Foreign corporate securities		(1	)		(65	)		(66	)
RMBS		—			(4	)		(4	)
CMBS		1			(13	)		(12	)
ABS		—			(20	)		(20	)
Foreign government securities		—			—			—
Total fixed maturity securities	$	3		$	(129	)	$	(126	)
Equity securities:
Non-redeemable preferred stock	$	—		$	(68	)	$	(68	)
Total equity securities	$	—		$	(68	)	$	(68	)
Net derivatives	$	—		$	(72	)	$	(72	)
Net embedded derivatives	$	—		$	(292	)	$	(292	)

79

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

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

The tables below summarize the portion of unrealized gains and losses recorded in earnings for the three months ended June 30, 2010 and 2009 for Level 3 assets and liabilities that were still held at June 30, 2010 and 2009, respectively.

	Changes in Unrealized Gains (Losses)
	Relating to Assets and Liabilities Held at
	June 30, 2010
	Net		Net
	Investment		Investment
	Income		Gains (Losses)			Total
	(In millions)
For the Three Months Ended June 30, 2010:
Fixed maturity securities:
U.S. corporate securities	$	2	$	(1	)	$	1
Foreign corporate securities		—		—			—
CMBS		—		1			1
ABS		—		(1	)		(1	)
Foreign government securities		—		—			—
Total fixed maturity securities	$	2	$	(1	)	$	1
Equity securities:
Non-redeemable preferred stock	$	—	$	—		$	—
Total equity securities	$	—	$	—		$	—
Net derivatives:
Interest rate contracts	$	—	$	6		$	6
Foreign currency contracts		—		(10	)		(10	)
Credit contracts		—		(5	)		(5	)
Equity market contracts		—		38			38
Total net derivatives	$	—	$	29		$	29
Net embedded derivatives	$	—	$	332		$	332

80

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

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

	Changes in Unrealized Gains (Losses)
	Relating to Assets and Liabilities Held at
	June 30, 2009
	Net		Net
	Investment		Investment
	Income		Gains (Losses)			Total
	(In millions)
For the Three Months Ended June 30, 2009:
Fixed maturity securities:
U.S. corporate securities	$	1	$	(6	)	$	(5	)
Foreign corporate securities		—		(19	)		(19	)
CMBS		—		(25	)		(25	)
ABS		—		(15	)		(15	)
Foreign government securities		—		5			5
Total fixed maturity securities	$	1	$	(60	)	$	(59	)
Equity securities:
Non-redeemable preferred stock	$	—	$	—		$	—
Total equity securities	$	—	$	—		$	—
Net derivatives	$	—	$	(91	)	$	(91	)
Net embedded derivatives	$	—	$	(75	)	$	(75	)

81

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

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

The tables below summarize the portion of unrealized gains and losses recorded in earnings for the six months ended June 30, 2010 and 2009 for Level 3 assets and liabilities that were still held at June 30, 2010 and 2009, respectively.

	Changes in Unrealized Gains (Losses)
	Relating to Assets and Liabilities Held at
	June 30, 2010
	Net			Net
	Investment			Investment
	Income			Gains (Losses)			Total
	(In millions)
For the Six Months Ended June 30, 2010:
Fixed maturity securities:
U.S. corporate securities	$	3		$	(4	)	$	(1	)
Foreign corporate securities		(1	)		—			(1	)
CMBS		—			—			—
ABS		—			(1	)		(1	)
Total fixed maturity securities	$	2		$	(5	)	$	(3	)
Equity securities:
Non-redeemable preferred stock	$	—		$	—		$	—
Total equity securities	$	—		$	—		$	—
Net derivatives:
Interest rate contracts	$	—		$	9		$	9
Foreign currency contracts		—			(15	)		(15	)
Credit contracts		—			(4	)		(4	)
Equity market contracts		—			28			28
Total net derivatives	$	—		$	18		$	18
Net embedded derivatives	$	—		$	123		$	123

82

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

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

	Changes in Unrealized Gains (Losses)
	Relating to Assets and Liabilities Held at
	June 30, 2009
	Net			Net
	Investment			Investment
	Income			Gains (Losses)			Total
	(In millions)
For the Six Months Ended June 30, 2009:
Fixed maturity securities:
U.S. corporate securities	$	2		$	(25	)	$	(23	)
Foreign corporate securities		(1	)		(63	)		(64	)
CMBS		1			(26	)		(25	)
ABS		—			(36	)		(36	)
Total fixed maturity securities	$	2		$	(150	)	$	(148	)
Equity securities:
Non-redeemable preferred stock	$	—		$	(19	)	$	(19	)
Total equity securities	$	—		$	(19	)	$	(19	)
Net derivatives	$	—		$	(73	)	$	(73	)
Net embedded derivatives	$	—		$	(296	)	$	(296	)

Fair Value Option — Consolidated Securitization Entities

As discussed in Note 1, upon the adoption of new guidance effective January 1, 2010, the Company has elected fair value accounting for commercial mortgage loans held by and the related long-term debt of the consolidated securitization entities. The following table presents these commercial mortgage loans carried under the fair value option at:

	June 30, 2010
	(In millions)
Unpaid principal balance	$	7,009
Excess of estimated fair value over unpaid principal balance		98
Carrying value at estimated fair value	$	7,107

The following table presents the long-term debt carried under the fair value option related to the commercial mortgage loans at:

	June 30, 2010
	(In millions)
Contractual principal balance	$	6,907
Excess of estimated fair value over contractual principal balance		145
Carrying value at estimated fair value	$	7,052

Interest income on commercial mortgage loans held by consolidated securitization entities is recorded in net investment income. Interest expense on long-term debt of consolidated securitization entities is recorded in other expenses. Gains and losses from initial measurement, subsequent changes in estimated fair value and gains or losses on sales of both the commercial mortgage loans and long-term debt are recognized in net investment gains (losses), which is summarized in Note 2.

83

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

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

Non-Recurring Fair Value Measurements

Certain assets are measured at estimated fair value on a non-recurring basis and are not included in the tables above. The amounts below relate to certain investments measured at estimated fair value during the period and still held at the reporting dates.

	Three Months Ended June 30,
	2010							2009
			Estimated							Estimated
	Carrying		Fair					Carrying		Fair
	Value Prior to		Value After		Gains			Value Prior to		Value After		Gains
	Impairment		Impairment		(Losses)			Impairment		Impairment		(Losses)
	(In millions)
Mortgage loans (1)	$	23	$	23	$	—		$	—	$	—	$	—
Other limited partnership interests (2)	$	24	$	17	$	(7	)	$	36	$	20	$	(16	)
Real estate joint ventures (3)	$	7	$	3	$	(4	)	$	93	$	49	$	(44	)

	Six Months Ended June 30,
	2010							2009
			Estimated							Estimated
	Carrying		Fair					Carrying		Fair
	Value Prior to		Value After		Gains			Value Prior to		Value After		Gains
	Impairment		Impairment		(Losses)			Impairment		Impairment		(Losses)
	(In millions)
Mortgage loans (1)	$	31	$	23	$	(8	)	$	—	$	—	$	—
Other limited partnership interests (2)	$	24	$	17	$	(7	)	$	102	$	38	$	(64	)
Real estate joint ventures (3)	$	25	$	5	$	(20	)	$	93	$	49	$	(44	)

(1)

Mortgage Loans —The impaired mortgage loans presented above were written down to their estimated fair values at the date the impairments were recognized. Estimated fair values for impaired mortgage loans are based on observable market prices or, if the loans are in foreclosure or are otherwise determined to be collateral dependent, on the estimated fair value of the underlying collateral, or the present value of the expected future cash flows. Impairments to estimated fair value and decreases in previous impairments from subsequent improvements in estimated fair value represent non-recurring fair value measurements that have been categorized as Level 3 due to the lack of price transparency inherent in the limited markets for such mortgage loans.

(2)

Other Limited Partnership Interests —The impaired investments presented above were accounted for using the cost basis. Impairments on these cost basis investments were recognized at estimated fair value determined from information provided in the financial statements of the underlying entities in the period in which the impairment was incurred. These impairments to estimated fair value represent non-recurring fair value measurements that have been classified as Level 3 due to the limited activity and price transparency inherent in the market for such investments. This category includes several private equity and debt funds that typically invest primarily in a diversified pool of investments across certain investment strategies including domestic and international leveraged buyout funds; power, energy, timber and infrastructure development funds; venture capital funds; below investment grade debt and mezzanine debt funds. The estimated fair values of these investments have been determined using the NAV of the Company’s ownership interest in the partners’ capital. Distributions from these investments will be generated from investment gains, from operating income from the underlying investments of the funds, and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the funds will be liquidated over the next 2 to 10 years. Unfunded commitments for these investments were $19 million at June 30, 2010.

84

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

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

(3) Real Estate Joint Ventures —The impaired investments presented above were accounted for using the cost basis. Impairments on these cost basis investments were recognized at estimated fair value determined from information provided in the financial statements of the underlying entities in the period in which the impairment was incurred. These impairments to estimated fair value represent non-recurring fair value measurements that have been classified as Level 3 due to the limited activity and price transparency inherent in the market for such investments. This category includes several real estate funds that typically invest primarily in commercial real estate. The estimated fair values of these investments have been determined using the NAV of the Company’s ownership interest in the partners’ capital. Distributions from these investments will be generated from investment gains, from operating income from the underlying investments of the funds, and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the funds will be liquidated over the next 2 to 10 years. Unfunded commitments for these investments were $8 million at June 30, 2010.

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 litigation and contingencies to be reflected in the Company’s consolidated financial statements. The review includes senior legal and financial personnel. Estimates of possible 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 the Company to pay damages or make other expenditures or establish accruals in amounts that could not be estimated at June 30, 2010.

The Company has faced numerous claims, including class action lawsuits, alleging improper marketing or sales of individual life insurance policies, annuities, mutual funds or other products. The Company continues to vigorously defend against the claims in all pending matters. Some sales practices claims have been resolved through settlement. Other sales practices claims have been won by dispositive motions or have gone to trial. Most of the current cases seek substantial damages, including in some cases punitive and treble damages and attorneys’ fees.

85

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

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

Additional litigation relating to the Company’s marketing and sales of individual life insurance, annuities, mutual funds or other products may be commenced in the future.

Retained Asset Account Matters.  MICC offers as a settlement option under its life insurance policies a retained asset account for death benefit payments called a Total Control Account (“TCA”). When a TCA is established for a beneficiary, the Company retains the death benefit proceeds in the general account and pays interest on those proceeds at a rate set by reference to objective indices. Additionally, the accounts enjoy a guaranteed minimum interest rate. Beneficiaries can withdraw all of the funds or a portion of the funds held in the account at any time.

The New York Attorney General recently announced that his office had launched a major fraud investigation into the life insurance industry for practices related to the use of retained asset accounts and that subpoenas requesting comprehensive data related to retained asset accounts have been served on MetLife, Inc. and other insurance carriers. We received the subpoena on July 30, 2010. It is possible that other state and federal regulators or legislative bodies may pursue similar investigations or make related inquiries. We cannot predict what effect any such investigations might have on our earnings or the availability of the TCA, but we believe that our financial statements taken as a whole would not be materially affected. We believe that any allegations that information about the TCA is not adequately disclosed or that the accounts are fraudulent or otherwise violate state or federal laws are without merit.

Travelers Ins. Co., et al. v. Banc of America Securities LLC (S.D.N.Y., filed December 13, 2001).  On January 6, 2009, after a jury trial, the district court entered a judgment in favor of The Travelers Insurance Company, now known as MetLife Insurance Company of Connecticut, in the amount of approximately $42 million in connection with securities and common law claims against the defendant. On May 14, 2009, the district court issued an opinion and order denying the defendant’s post judgment motion seeking a judgment in its favor or, in the alternative, a new trial. On July 20, 2010, the United States Court of Appeals for the Second Circuit issued an order affirming the district court’s judgment in favor of MetLife Insurance Company of Connecticut and the district court’s order denying defendant’s post trial motions. As a final judgment has not yet been entered in MetLife Insurance Company of Connecticut’s favor and the Company has not collected any portion of the judgment, the Company has not recognized any award amount in its consolidated financial statements.

A former Tower Square Securities financial services representative is alleged to have misappropriated funds from customers. The Illinois Securities Division, the U.S. Postal Inspector, the Internal Revenue Service, FINRA and the U.S. Attorney’s Office are conducting inquiries.

Various litigation, claims and assessments against the Company, in addition to those discussed previously and those otherwise provided for in the Company’s consolidated financial statements, have arisen in the course of the Company’s business, including, but not limited to, in connection with its activities as an insurer, employer, investor, investment advisor and taxpayer. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning the Company’s compliance with applicable insurance and other laws and regulations.

It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings or provide reasonable ranges of potential losses. In some of the matters referred to previously, largeand/or indeterminate amounts, including punitive and treble damages, are sought. Although in light of these considerations it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company’s financial position, based on information currently known by the Company’s management, in its opinion, the outcomes of such pending investigations and legal proceedings are not likely to have such an effect. However, given the largeand/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s consolidated net income or cash flows in particular quarterly or annual periods.

86

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

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

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 $1.4 billion and $1.5 billion at June 30, 2010 and December 31, 2009, 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 $241 million and $131 million at June 30, 2010 and December 31, 2009, 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 $591 million and $445 million at June 30, 2010 and December 31, 2009, 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 June 30, 2010 and December 31, 2009, the Company had agreed to fund up to $114 million and $126 million, respectively, of cash upon the request by these affiliates and had transferred collateral consisting of various securities with a fair market value of $151 million and $158 million, respectively, to custody accounts to secure the notes. Each of these affiliates is permitted by contract to sell or repledge this collateral.

Guarantees

The Company has provided a guarantee on behalf of MetLife International Insurance Company, Ltd. (“MLII”), a former affiliate, that is triggered if MLII cannot pay claims because of insolvency, liquidation or rehabilitation. Life insurance coverage in-force, representing the maximum potential obligation under this guarantee, was $297 million and $322 million at June 30, 2010 and December 31, 2009, respectively. The Company does not hold any collateral related to this guarantee, but has 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 both June 30, 2010 and December 31, 2009. The remainder of the risk was ceded to external reinsurers.

87

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

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

6.   Other Expenses

Information on other expenses was as follows:

	Three Months						Six Months
	Ended						Ended
	June 30,						June 30,
	2010			2009			2010			2009
				(In millions)
Compensation	$	47		$	39		$	91		$	70
Commissions		242			229			461			429
Interest and debt issue costs		119			17			244			37
Affiliated interest costs on ceded reinsurance		47			34			80			43
Capitalization of DAC		(268	)		(251	)		(498	)		(478	)
Amortization of DAC and VOBA		460			(48	)		524			28
Rent		—			1			1			2
Insurance tax		12			8			22			18
Other		180			149			333			287
Total other expenses	$	839		$	178		$	1,258		$	436

Interest and Debt Issue Costs

Includes interest expense related to consolidated securitization entities of $101 million and $204 million, for the three months and six months ended June 30, 2010, respectively, and $0 for both the three months and six months ended June 30, 2009, (see Note 2), and interest expense on tax audits of $0 and $5 million, for the three months and six months ended June 30, 2010, respectively, and $0 for both the three months and six months ended June 30, 2009.

Affiliated Expenses

See Note 8 for discussion of affiliated expenses included in the table above.

7.   Business Segment Information

The Company’s business is currently divided into three operating segments: Retirement Products, Corporate Benefit Funding and Insurance Products. In addition, the Company reports certain of its results of operations in Corporate & Other.

Retirement Products offers asset accumulation and income products, including a wide variety of annuities. Corporate Benefit Funding offers pension risk solutions, structured settlements, stable value and investment products and other benefit funding products. Insurance Products offers a broad range of protection products and services to individuals, corporations and other institutions, and is organized into two distinct businesses: Individual Life and Non-Medical Health. Individual Life includes variable life, universal life, term life and whole life insurance products. Non-Medical Health includes individual disability insurance products.

Corporate & Other contains the excess capital not allocated to the business segments, various domestic and internationalstart-up entities and run-off business, the Company’s ancillary international operations, interest expense related to the majority of the Company’s outstanding debt and expenses associated with certain legal proceedings and income tax audit issues. Corporate & Other also includes the elimination of intersegment amounts.

Operating earnings is the measure of segment profit or loss the Company uses to evaluate segment performance and allocate resources. Consistent with GAAP accounting guidance for segment reporting, it is

88

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

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

the Company’s measure of segment performance reported below. Operating earnings does not equate to income (loss) from continuing operations, net of income tax, or net income (loss) as determined in accordance with GAAP and should not be viewed as a substitute for those GAAP measures. The Company believes the presentation of operating earnings herein as the Company measures it for management purposes enhances the understanding of its performance by highlighting the results from operations and the underlying profitability drivers of the businesses.

Operating earnings is defined as operating revenues less operating expenses, net of income tax.

Operating revenues is defined as GAAP revenues (i) less net investment gains (losses); (ii) less amortization of unearned revenue related to net investment gains (losses); (iii) plus scheduled periodic settlement payments on derivatives that are hedges of investments but do not qualify for hedge accounting treatment; and (iv) plus income from discontinued real estate operations, if applicable.

Operating expenses is defined as GAAP expenses (i) less changes in policyholder benefits associated with asset value fluctuations related to experience-rated contractholder liabilities; (ii) less amortization of DAC and VOBA related to net investment gains (losses); and (iii) plus scheduled periodic settlement payments on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment.

In addition, operating revenues and operating expenses do not reflect the consolidation of certain securitization vehicles that are VIEs as required under GAAP.

Set forth in the tables below is certain financial information with respect to the Company’s segments, as well as Corporate & Other for the three months and six months ended June 30, 2010 and 2009. 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. Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital is deployed. The economic capital model accounts for the unique and specific nature of the risks inherent in MetLife’s businesses. 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.

89

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

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

	Operating Earnings
				Corporate
	Retirement			Benefit			Insurance			Corporate									Total
Three Months Ended June 30, 2010	Products			Funding			Products			& Other			Total			Adjustments			Consolidated
	(In millions)
Revenues
Premiums	$	90		$	126		$	38		$	2		$	256		$	—		$	256
Universal life and investment-type product policy fees		258			7			136			2			403			4			407
Net investment income		237			279			118			—			634			91			725
Other revenues		79			1			23			—			103			—			103
Net investment gains (losses)		—			—			—			—			—			613			613
Total revenues		664			413			315			4			1,396			708			2,104
Expenses
Policyholder benefits and claims		146			256			89			(1	)		490			14			504
Interest credited to policyholder account balances		182			48			59			(21	)		268			(11	)		257
Capitalization of DAC		(146	)		(1	)		(107	)		(14	)		(268	)		—			(268	)
Amortization of DAC and VOBA		160			1			68			1			230			230			460
Interest expense		—			—			—			18			18			101			119
Other expenses		260			8			226			34			528			—			528
Total expenses		602			312			335			17			1,266			334			1,600
Provision for income tax expense (benefit)		22			34			(6	)		(20	)		30			132			162
Operating earnings	$	40		$	67		$	(14	)	$	7			100
Adjustments to:
Total revenues														708
Total expenses														(334	)
Provision for income tax (expense) benefit														(132	)
Net income													$	342					$	342

90

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

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

	Operating Earnings
				Corporate
	Retirement			Benefit			Insurance			Corporate									Total
Three Months Ended June 30, 2009	Products			Funding			Products			& Other			Total			Adjustments			Consolidated
	(In millions)
Revenues
Premiums	$	73		$	398		$	29		$	—		$	500		$	—		$	500
Universal life and investment-type product policy fees		170			15			119			3			307			(8	)		299
Net investment income		234			281			104			10			629			(8	)		621
Other revenues		65			1			240			—			306			—			306
Net investment gains (losses)		—			—			—			—			—			(728	)		(728	)
Total revenues		542			695			492			13			1,742			(744	)		998
Expenses
Policyholder benefits and claims		53			540			58			—			651			23			674
Interest credited to policyholder account balances		181			66			59			13			319			(9	)		310
Capitalization of DAC		(154	)		(1	)		(87	)		(9	)		(251	)		—			(251	)
Amortization of DAC and VOBA		29			1			27			—			57			(105	)		(48	)
Interest expense		—			—			—			17			17			—			17
Other expenses		254			9			172			23			458			2			460
Total expenses		363			615			229			44			1,251			(89	)		1,162
Provision for income tax expense (benefit)		63			29			92			(22	)		162			(230	)		(68	)
Operating earnings	$	116		$	51		$	171		$	(9	)		329
Adjustments to:
Total revenues														(744	)
Total expenses														89
Provision for income tax (expense) benefit														230
Net loss													$	(96	)				$	(96	)

91

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

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

	Operating Earnings
				Corporate
	Retirement			Benefit			Insurance			Corporate									Total
Six Months Ended June 30, 2010	Products			Funding			Products			& Other			Total			Adjustments			Consolidated
	(In millions)
Revenues
Premiums	$	148		$	497		$	66		$	—		$	711		$	—		$	711
Universal life and investment-type product policy fees		485			15			266			7			773			3			776
Net investment income		466			548			232			83			1,329			186			1,515
Other revenues		155			2			56			—			213			—			213
Net investment gains (losses)		—			—			—			—			—			342			342
Total revenues		1,254			1,062			620			90			3,026			531			3,557
Expenses
Policyholder benefits and claims		241			755			173			—			1,169			29			1,198
Interest credited to policyholder account balances		364			93			117			24			598			(25	)		573
Capitalization of DAC		(266	)		(2	)		(205	)		(25	)		(498	)		—			(498	)
Amortization of DAC and VOBA		253			1			139			2			395			129			524
Interest expense		—			—			—			35			35			204			239
Other expenses		479			17			434			63			993			—			993
Total expenses		1,071			864			658			99			2,692			337			3,029
Provision for income tax expense (benefit)		64			68			(13	)		(34	)		85			69			154
Operating earnings	$	119		$	130		$	(25	)	$	25			249
Adjustments to:
Total revenues														531
Total expenses														(337	)
Provision for income tax (expense) benefit														(69	)
Net income													$	374					$	374

92

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

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

	Operating Earnings
				Corporate
	Retirement			Benefit			Insurance			Corporate									Total
Six Months Ended June 30, 2009	Products			Funding			Products			& Other			Total			Adjustments			Consolidated
	(In millions)
Revenues
Premiums	$	149		$	481		$	54		$	—		$	684		$	—		$	684
Universal life and investment-type product policy fees		320			20			251			4			595			(12	)		583
Net investment income		426			523			162			(30	)		1,081			(20	)		1,061
Other revenues		121			3			251			—			375			—			375
Net investment gains (losses)		—			—			—			—			—			(1,328	)		(1,328	)
Total revenues		1,016			1,027			718			(26	)		2,735			(1,360	)		1,375
Expenses
Policyholder benefits and claims		200			747			127			—			1,074			27			1,101
Interest credited to policyholder account balances		364			142			116			6			628			(18	)		610
Capitalization of DAC		(298	)		(1	)		(165	)		(14	)		(478	)		—			(478	)
Amortization of DAC and VOBA		186			2			88			1			277			(249	)		28
Interest expense		—			2			—			35			37			—			37
Other expenses		478			17			316			38			849			—			849
Total expenses		930			909			482			66			2,387			(240	)		2,147
Provision for income tax expense (benefit)		30			41			82			(55	)		98			(392	)		(294	)
Operating earnings	$	56		$	77		$	154		$	(37	)		250
Adjustments to:
Total revenues														(1,360	)
Total expenses														240
Provision for income tax (expense) benefit														392
Net loss													$	(478	)				$	(478	)

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

	June 30, 2010		December 31, 2009
	(In millions)
Retirement Products	$	76,373	$	73,840
Corporate Benefit Funding		28,075		28,046
Insurance Products		14,863		13,647
Corporate & Other		20,730		12,156
Total	$	140,041	$	127,689

Net investment income is 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

93

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

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

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.

Operating revenues derived from any customer did not exceed 10% of consolidated operating revenues for the three months and six months ended June 30, 2010 and 2009. Operating revenues from U.S. operations were $1,287 million and $2,497 million for the three months and six months ended June 30, 2010, respectively, which represented 92% and 83%, respectively, of consolidated operating revenues. Operating revenues from U.S. operations were $1,343 million and $2,278 million for the three months and six months ended June 30, 2009, respectively, which represented 77% and 83%, respectively, of consolidated operating revenues.

8.   Related Party Transactions

Service Agreements

The Company has entered into various agreements with affiliates for services necessary to conduct its activities. Typical services provided under these agreements include 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 $340 million and $638 million for the three months and six months ended June 30, 2010, respectively, and $285 million and $559 million for the three months and six months ended June 30, 2009, respectively. For the three months and six months ended June 30, 2010, the aforementioned expenses and fees incurred with affiliates were comprised of $38 million and $74 million, respectively, recorded in compensation, $134 million and $257 million, respectively, recorded in commissions and $168 million and $307 million, respectively, recorded in other expenses. For the three months and six months ended June 30, 2009, the aforementioned expenses and fees incurred with affiliates were comprised of $28 million and $58 million, respectively, recorded in compensation, $152 million and $287 million, respectively, recorded in commissions and $105 million and $214 million, respectively, recorded in other expenses. Revenue received from affiliates related to these agreements and recorded in other revenues was $24 million and $47 million for the three months and six months ended June 30, 2010, respectively, and $17 million and $30 million for the three months and six months ended June 30, 2009, respectively. Revenue received from affiliates related to these agreements and recorded in universal life and investment-type product policy fees was $28 million and $54 million for the three months and six months ended June 30, 2010, respectively, and $20 million and $36 million for the three months and six months ended June 30, 2009, respectively. See Note 2 for expenses related to investment advice under these agreements, recorded in net investment income.

The Company had net receivables from affiliates of $54 million and $46 million at June 30, 2010 and December 31, 2009, respectively, related to the items discussed above. These amounts exclude affiliated reinsurance balances discussed below.

Reinsurance Transactions

The Company has reinsurance agreements with certain MetLife subsidiaries, including MLIC, MetLife Reinsurance Company of South Carolina (“MRSC”), Exeter Reassurance Company, Ltd., General American Life Insurance Company and MetLife Reinsurance Company of Vermont (“MRV”), all of which are related parties.

94

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

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

Information regarding the effect of affiliated reinsurance included in the interim condensed consolidated statements of operations is as follows:

	Three Months						Six Months
	Ended						Ended
	June 30,						June 30,
	2010			2009			2010			2009
	(In millions)
Premiums:
Reinsurance assumed	$	3		$	4		$	7		$	9
Reinsurance ceded		(52	)		(40	)		(111	)		(79	)
Net premiums	$	(49	)	$	(36	)	$	(104	)	$	(70	)
Universal life and investment-type product policy fees:
Reinsurance assumed	$	19		$	(1	)	$	30		$	21
Reinsurance ceded		(72	)		(53	)		(133	)		(86	)
Net universal life and investment-type product policy fees	$	(53	)	$	(54	)	$	(103	)	$	(65	)
Other revenues:
Reinsurance assumed	$	—		$	—		$	—		$	—
Reinsurance ceded		65			279			139			323
Net other revenues	$	65		$	279		$	139		$	323
Policyholder benefits and claims:
Reinsurance assumed	$	5		$	—		$	6		$	13
Reinsurance ceded		(89	)		(6	)		(173	)		(121	)
Net policyholder benefits and claims	$	(84	)	$	(6	)	$	(167	)	$	(108	)
Interest credited to policyholder account balances:
Reinsurance assumed	$	16		$	15		$	31		$	30
Reinsurance ceded		(12	)		(8	)		(24	)		(16	)
Net interest credited to policyholder account balances	$	4		$	7		$	7		$	14
Other expenses:
Reinsurance assumed	$	13		$	10		$	25		$	21
Reinsurance ceded		36			25			60			28
Net other expenses	$	49		$	35		$	85		$	49

95

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

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

Information regarding the effect of affiliated reinsurance included in the consolidated balance sheets is as follows:

	June 30, 2010					December 31, 2009
	Assumed		Ceded			Assumed		Ceded
			(In millions)
Assets:
Premiums, reinsurance and other receivables	$	29	$	9,550		$	30	$	7,157
Deferred policy acquisition costs and value of business acquired		218		(394	)		230		(399	)
Total assets	$	247	$	9,156		$	260	$	6,758
Liabilities:
Future policy benefits	$	28	$	—		$	27	$	—
Other policyholder funds		1,438		373			1,393		284
Other liabilities		11		2,355			9		1,150
Total liabilities	$	1,477	$	2,728		$	1,429	$	1,434

The Company cedes risks to an affiliate related to guaranteed minimum benefit guarantees written directly by the Company. These ceded reinsurance agreements contain embedded derivatives and changes in their fair value are included within net investment gains (losses). The embedded derivatives associated with the cessions are included within premiums, reinsurance and other receivables and were assets of $1,870 million and $724 million at June 30, 2010 and December 31, 2009, respectively. For the three months and six months ended June 30, 2010 and 2009, net investment gains (losses) included $1,413 million and $1,047 million, respectively, and ($626) million and ($1,119) million, respectively, in changes in fair value of such embedded derivatives.

MLI-USA cedes two blocks of business to MRV, on a 90% coinsurance with funds withheld basis. Certain contractual features of this agreement qualify as embedded derivatives, which are separately accounted for at estimated fair value on the Company’s consolidated balance sheet. The embedded derivative related to the funds withheld associated with this reinsurance agreement is included within other liabilities and increased the funds withheld balance by $79 million at June 30, 2010, and decreased the funds withheld balance by $11 million at December 31, 2009. The changes in fair value of the embedded derivatives, included in net investment gains (losses), were ($81) million and ($90) million for the three months and six months ended June 30, 2010, respectively, and ($24) million and ($6) million for the three months and six months ended June 30, 2009, respectively. The reinsurance agreement also includes an experience refund provision, whereby some or all of the profits on the underlying reinsurance agreement are returned to MLI-USA from MRV during the first several years of the reinsurance agreement. The experience refund reduced the funds withheld by MLI-USA from MRV by $64 million and $117 million for the three months and six months ended June 30, 2010, respectively, and $45 million and $83 million for the three months and six months ended June 30, 2009, respectively, and are considered unearned revenue, amortized over the life of the contract using the same assumptions as used for the deferred acquisition costs associated with the underlying policies. Amortization of the unearned revenue associated with the experience refund was $22 million and $45 million for the three months and six months ended June 30, 2010, respectively, and $9 million and $19 million for the three months and six months ended June 30, 2009, respectively, and is included in universal life and investment-type product policy fees in the consolidated statements of operations. At June 30, 2010 and December 31, 2009, unearned revenue related to the experience refund was $418 million and $337 million, respectively, and is included in other policyholder funds in the consolidated balance sheet.

The Company cedes its universal life secondary guarantee (“ULSG”) risk to MRSC under certain reinsurance treaties. These treaties do not expose the Company to a reasonable possibility of a significant loss from insurance

96

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

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

risk and are recorded using the deposit method of accounting. In the second quarter of 2009, the Company completed a review of various ULSG assumptions and projections including its regular annual third party assessment of these treaties and related assumptions. As a result of projected lower lapse rates and lower interest rates, the Company refined its effective yield methodology to include these updated assumptions and resultant projected cash flows. The deposit receivable balance for these treaties was increased by $8 million and $26 million, with a corresponding increase in other revenues, for the three months and six months ended June 30, 2010, respectively, and by $229 million, with a corresponding increase in other revenues, for both the three months and six months ended June 30, 2009.

97

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, and its subsidiaries, including MetLife Investors USA Insurance Company (“MLI-USA”). MetLife Insurance Company of Connecticut is a subsidiary of MetLife, Inc. (“MetLife”). Management’s narrative analysis of the results of operations 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, 2009 (“2009 Annual Report”) filed with the U.S. Securities and Exchange Commission (“SEC”), the forward-looking statement information included below, the “Risk Factors” set forth in Part II, Item 1A, and the additional risk factors referred to therein, and the Company’s interim condensed consolidated financial statements included elsewhere herein.

This narrative analysis may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operations and financial results. Any or all forward-looking statements may turn out to be wrong. Actual results could differ materially from those expressed or implied in the forward-looking statements. See “Note Regarding Forward-Looking Statements.”

The following discussion includes references to our performance measure, operating earnings, that is not based on generally accepted accounting principles in the United States of America (“GAAP”). Operating earnings is the measure of segment profit or loss we use to evaluate segment performance and allocate resources and, consistent with GAAP accounting guidance for segment reporting, is our measure of segment performance. Operating earnings is defined as operating revenues less operating expenses, net of income tax.

Operating revenues is defined as GAAP revenues (i) less net investment gains (losses); (ii) less amortization of unearned revenue related to net investment gains (losses); (iii) plus scheduled periodic settlement payments on derivatives that are hedges of investments but do not qualify for hedge accounting treatment; and (iv) plus income from discontinued real estate operations, if applicable.

Operating expenses is defined as GAAP expenses (i) less changes in policyholder benefits associated with asset value fluctuations related to experience-rated contractholder liabilities; (ii) less amortization of deferred policy acquisition costs (“DAC”) and value of business acquired (“VOBA”) related to net investment gains (losses); and (iii) plus scheduled periodic settlement payments on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment.

In addition, operating revenues and operating expenses do not reflect the consolidation of certain securitization vehicles that are variable interest entities (“VIEs”) as required under GAAP.

We believe the presentation of operating earnings, as we measure it for management purposes, enhances the understanding of our performance by highlighting the results of operations and the underlying profitability drivers of our businesses. Operating earnings should not be viewed as a substitute for GAAP net income (loss). Reconciliations of operating earnings to GAAP net income (loss), the most directly comparable GAAP measure, is included in “— Results of Operations.”

Business

The Company offers individual annuities, individual life insurance, and institutional protection and asset accumulation products. The Company’s Retirement Products offers asset accumulation and income products, including a wide variety of annuities. Corporate Benefit Funding offers pension risk solutions, structured settlements, stable value and investment products and other benefit funding products. Insurance Products offers a broad range of protection products and services to individuals, corporations and other institutions, and is organized into two businesses: Individual Life and Non-Medical Health. Individual Life includes variable life,

98

universal life, term life and whole life insurance products. Non-Medical Health includes individual disability insurance products.

We market our products and services through various distribution groups. Our life insurance and retirement products targeted to individuals are sold via sales forces, comprised of MetLife employees, in addition to third-party organizations. Our corporate benefit funding and non-medical health insurance products are sold via sales forces primarily comprised of MetLife employees. Our sales employees work with all distribution groups to better reach and service customers, brokers, consultants and other intermediaries.

Summary of Critical Accounting Estimates

The preparation of financial statements in conformity with GAAP requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the interim condensed consolidated financial statements. The most critical estimates include those used in determining:

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

In applying the Company’s accounting policies, we make 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 above critical accounting estimates are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Summary of Critical Accounting Estimates” and Note 1 of the Notes to the Consolidated Financial Statements in the 2009 Annual Report. Effective January 1, 2010, the Company adopted new accounting guidance relating to the consolidation of VIEs. See Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements. As part of its regular review of critical accounting estimates, the Company periodically assesses inputs for estimating nonperformance risk (commonly referred to as “own credit”) in fair value measurements. During the second quarter of 2010, the Company completed a study that aggregated and evaluated data, including historical recovery rates of insurance companies as well as policyholder behavior observed over the past two years as the recent financial crisis evolved. As a result, at the end of the second quarter of 2010, the Company refined the manner in which it incorporates expected recovery rates into the nonperformance risk adjustment for purposes of estimating the fair value of investment-type contracts and embedded derivatives within insurance contracts. The refinement impacted the Company’s net income, with no effect on operating earnings. See Note 4 of the Notes to the Interim Condensed Consolidated Financial Statements.

Economic Capital

Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital is deployed. The economic capital model accounts for the unique and specific nature of the risks inherent in MetLife’s businesses. As a part of the economic capital process, a

99

portion of net investment income is credited to the segments based on the level of allocated equity. This is in contrast to the standardized regulatory risk-based capital formula, which is not as refined in its risk calculations with respect to the nuances of the Company’s businesses.

Results of Operations

Six Months Ended June 30, 2010 compared with the Six Months Ended June 30, 2009

Consolidated Results

As the financial markets continue to recover, we have experienced a significant improvement in net investment income and policy fees, as well as a favorable change in net investment gains (losses). We also continue to experience an increase in market share and sales in some of our businesses, most notably in our pension closeout business in the United Kingdom. Premiums associated with the closeout business can vary significantly from period to period. These positive factors were somewhat tempered by the negative impact of the general economic conditions on the demand and sales of certain of our products. Our funding agreement products, primarily the London Inter-Bank Offer Rate (“LIBOR”)-based contracts, were the most significantly affected by the general economic conditions. As a result of companies seeking greater liquidity, investment managers are refraining from repurchasing the contracts when they mature and are opting for more liquid investments. The decrease in sales of these investment-type products is not necessarily evident in our results of operations as the transactions related to these products are recorded through the balance sheet. In addition, sales of our annuity products were down 23%, driven by a decline in fixed annuity sales as compared to the prior period. The unusually high level of fixed annuity sales experienced in the 2009 period was in response to the market disruption and dislocation at that time and, as expected, was not sustained in the current period reflecting the stabilization of the financial markets.

	Six Months
	Ended
	June 30,
	2010			2009			Change			% Change
	(In millions)
Revenues
Premiums	$	711		$	684		$	27			3.9	%
Universal life and investment-type product policy fees		776			583			193			33.1	%
Net investment income		1,515			1,061			454			42.8	%
Other revenues		213			375			(162	)		(43.2	)%
Net investment gains (losses)		342			(1,328	)		1,670			125.8	%
Total revenues		3,557			1,375			2,182			158.7	%
Expenses
Policyholder benefits and claims		1,198			1,101			97			8.8	%
Interest credited to policyholder account balances		573			610			(37	)		(6.1	)%
Capitalization of DAC		(498	)		(478	)		(20	)		(4.2	)%
Amortization of DAC and VOBA		524			28			496			1771.4	%
Interest expense		239			37			202			545.9	%
Other expenses		993			849			144			17.0	%
Total expenses		3,029			2,147			882			41.1	%
Income (loss) before provision for income tax		528			(772	)		1,300			168.4	%
Provision for income tax expense (benefit)		154			(294	)		448			152.4	%
Net income (loss)	$	374		$	(478	)	$	852			178.2	%

Unless otherwise stated, all amounts discussed below are net of income tax.

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During the six months ended June 30, 2010, MICC’s net income (loss) increased $852 million to income of $374 million from a loss of $478 million in the comparable 2009 period. The change was largely due to a $1.7 billion favorable change in net investment gains (losses) before income tax: gains of $342 million in the six months ended June 30, 2010 compared to losses of $1.3 billion in the comparable 2009 period. Offsetting this variance were unfavorable changes in adjustments related to net investment gains (losses) of $363 million, before income tax, principally associated with DAC and VOBA amortization and $457 million of income tax resulting in a total favorable variance related to net investment gains (losses) of $850 million.

We manage our investment portfolio using disciplined Asset/Liability Management (“ALM”) principles, focusing on cash flow and duration to support our current and future liabilities. Our intent is to match the timing and amount of liability cash outflows with invested assets that have cash inflows of comparable timing and amount, while optimizing risk-adjusted net investment income and risk-adjusted total return. Our investment portfolio is heavily weighted toward fixed income investments, with over 80% of our portfolio invested in fixed maturity securities and mortgage loans. These securities and loans have varying maturities and other characteristics which cause them to be generally well suited for matching the cash flow and duration of insurance liabilities. Other invested asset classes including, but not limited to, equity securities, other limited partnership interests and real estate and real estate joint ventures provide additional diversification and opportunity for long-term yield enhancement in addition to supporting the cash flow and duration objectives of our investment portfolio. We also use derivatives as an integral part of our management of the investment portfolio to hedge certain risks, including changes in interest rates, foreign currencies, credit spreads and equity market levels. Additional considerations for our investment portfolio include current and expected market conditions and expectations for changes within our mix of products and business segments.

Investments are purchased to support our insurance liabilities and not to generate net investment gains and losses. However, net investment gains and losses can change significantly from period to period, due to changes in external influences, including movements in interest rates, equity markets, foreign currencies and credit spreads; counterparty specific factors such as financial performance, credit rating and collateral valuation; and internal factors such as portfolio rebalancing. As an investor in the fixed income, equity security, mortgage loan and certain other invested asset classes, we are exposed to the above stated risks, which can lead to both impairments and credit-related losses.

The favorable variance in net investment gains (losses) of $850 million, net of related adjustments, from losses of $709 million in 2009 to gains of $141 million in 2010, was primarily driven by a positive change in freestanding derivatives of $406 million: from losses in the prior year of $314 million to gains in the current year of $92 million. In addition, lower impairments and net realized losses from sales and disposals of investments across most asset classes coupled with lower additions to the mortgage loan valuation allowance contributed $262 million to the improvement. An additional favorable change of $259 million: from losses in the prior year of $180 million to gains in the current year of $79 million, was driven by embedded derivatives primarily associated with variable annuity minimum benefit guarantees.

We use freestanding interest rate, currency, credit and equity derivatives to provide economic hedges of certain invested assets and insurance liabilities, including embedded derivatives within certain of our variable annuity minimum benefit guarantees. The $406 million favorable variance in freestanding derivatives was primarily attributable to market factors, including falling long-term and mid-term interest rates, declining equity markets, increased equity volatility and widening corporate credit spreads. Falling long-term and mid-term interest rates in the current period compared to rising interest rates in the prior period had a positive impact of $302 million on our interest rate derivatives, $41 million of which is attributable to hedges of variable annuity minimum benefit guarantees. In addition, declining equity markets and increased equity volatility in the current period compared to rising equity markets and decreased equity volatility in the prior period had a positive impact of $113 million on our equity derivatives, which we use to hedge variable annuity minimum benefit guarantees. Widening corporate credit spreads had a positive impact of $27 million on our purchased protection credit derivatives. These favorable variances were offset by the negative impact of $27 million due to the U.S. dollar strengthening on certain of our foreign currency derivatives, which are used to hedge foreign denominated asset and liability exposures.

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We measure our variable annuity products with minimum benefit guarantees containing embedded derivatives at fair value separately from the host variable annuity contract, with changes in estimated fair value reported in net investment gains (losses). The estimated fair value of these embedded derivatives also includes an adjustment for nonperformance risk of the related liabilities carried at estimated fair value. The $259 million favorable variance in embedded derivatives was primarily attributable to gains on ceded reinsurance of variable annuity minimum benefit guarantees. The favorable change, from losses in the prior period to gains in the current period, was primarily driven by $1,405 million of gains on ceded reinsurance of certain variable annuity minimum benefit guarantee risks, net of an unfavorable change in the adjustment for the reinsurer’s nonperformance risk of $255 million. This $1,405 million favorable variance was partially offset by an unfavorable change in variable annuity minimum benefit guarantee liabilities from market factors, including falling interest rates, increased equity volatility and declining equity markets. Falling interest rates in the current period compared to rising interest rates in the prior period had a negative impact of $688 million. Increased equity volatility and declining equity markets in the current period as compared to decreased equity volatility and rising equity markets in the prior period had a negative impact of $422 million. The change in variable annuity minimum benefit guarantee liabilities due to market factors was partially offset by a favorable change in the adjustment for nonperformance risk of $237 million on the related liabilities and a $154 million favorable change in freestanding derivatives, including interest rate, equity and foreign currency-related derivatives, that hedge market factors. The aforementioned unfavorable change in the adjustment for the reinsurer’s nonperformance risk in the current period of $255 million was net of a $380 million gain related to a refinement in estimating the spreads used in the adjustment for nonperformance risk. The aforementioned favorable change in the adjustment for nonperformance risk on the related liabilities of $237 million was net of a $256 million loss related to a refinement in estimating the spreads used in the adjustment for nonperformance risk.

Improved market conditions across several invested asset classes and sectors as compared to the prior period resulted in decreases in impairments and in net realized losses from sales and disposals of investments in fixed maturity securities, equity securities, other limited partnership interests and real estate and real estate joint ventures. These decreases, coupled with a decrease in the additions to the mortgage loan valuation allowance, which is also attributed to the improved market conditions, resulted in a $262 million improvement in net investment gains (losses).

As more fully described in the discussion of performance measures above, we use operating earnings, which does not equate to net income (loss) as determined in accordance with GAAP, to analyze our performance, evaluate segment performance, and allocate resources. We believe that the presentation of operating earnings, as we measure it for management purposes, enhances the understanding of our performance by highlighting the results of operations and the underlying profitability drivers of the business. Operating earnings should not be viewed as a substitute for GAAP income (loss), net of income tax. Operating earnings decreased by $1 million to $249 million for the first six months of 2010 from $250 million for the comparable 2009 period.

Reconciliation of net income (loss) to operating earnings

	Six Months
	Ended
	June 30,
	2010			2009
	(In millions)
Net income (loss)	$	374		$	(478	)
Less: Net investment gains (losses)		342			(1,328	)
Less: Adjustments to net income (loss) (1)		(148	)		208
Less: Provision for income tax (expense) benefit		(69	)		392
Operating earnings	$	249		$	250

(1) See definitions of operating revenues and operating expenses for the components of such adjustments.

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Reconciliation of GAAP revenues to operating revenues and GAAP expenses to operating expenses

	Six Months
	Ended
	June 30,
	2010		2009
	(In millions)
Total revenues	$	3,557	$	1,375
Less: Net investment gains (losses)		342		(1,328	)
Less: Adjustments related to net investment gains (losses)		3		(12	)
Less: Other adjustments to revenues (1)		186		(20	)
Total operating revenues	$	3,026	$	2,735
Total expenses	$	3,029	$	2,147
Less: Adjustments related to net investment gains (losses)		129		(249	)
Less: Other adjustments to expenses (1)		208		9
Total operating expenses	$	2,692	$	2,387

(1) See definitions of operating revenues and operating expenses for the components of such adjustments.

Relative changes in financial markets had divergent impacts on our financial results. The market improvement from the prior period resulted in higher net investment income. Such improvement also drove higher average separate account balances and, as a result, increased policy fee income. While markets improved from the prior period, they declined during the second quarter of 2010, resulting in increased amortization of DAC and VOBA, which negatively impacted operating earnings. The increase in DAC and VOBA amortization in the second quarter of 2010 more than offset the decline in amortization that was previously recognized as a result of the improving market conditions that began in the second quarter of 2009 and continued through the first quarter of 2010. Claims experience varied by business, but did not, in total, have a significant impact on our operating earnings.

The decline in operating earnings includes a decrease in other revenues related to certain affiliated reinsurance treaties. The most significant impact was in our Insurance Products segment, which benefited, in the prior period, from the impact of a refinement in the assumptions and methodology used to value a deposit receivable from an affiliated reinsurance treaty of $127 million.

A $161 million increase in net investment income was primarily the result of increasing yields. The improvement in yields increased net investment income by $112 million and growth in average invested assets contributed an additional $49 million. Yields were positively impacted by the effects of improving private equity markets, which began in the latter part of 2009, and stabilizing real estate markets, which began in the first quarter of 2010, on other limited partnership interests and real estate joint ventures. Improving market conditions also drove higher returns in our trading portfolio. In light of these improving market conditions, we continued to reposition the accumulated liquidity in our portfolio to longer duration and higher yielding investments. These improvements in yield were partially offset by the reinvestment of proceeds from maturities and sales during this lower interest rate environment. Growth in the investment portfolio was primarily due to positive net cash flows, which were reinvested primarily in fixed maturity securities and mortgage loans, and an increased allocation to our trading portfolio. Since many of our products are interest-spread based, higher investment income is typically offset by higher interest credited expense. However, interest credited expense decreased $20 million primarily due to lower crediting rates combined with lower average policyholder account balances in our domestic funding agreement business. Certain crediting rates can move consistently with the underlying market indices, primarily LIBOR rates, which have decreased significantly since the second quarter of 2009.

Improving financial markets resulted in an increase in our average separate account balances which generated higher policy fee income of $116 million, most notably in our Retirement Products segment.

During the first half of 2010, results reflected increased, or accelerated, DAC and VOBA amortization of $77 million, primarily stemming from a decline in the market value of our separate account balances. A factor that

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determines the amount of amortization is expected future earnings, which in the annuity business are derived, in part, from fees earned on separate account balances. The market value of our separate account balances declined during the second quarter of 2010, resulting in a decrease in the expected future gross profits, triggering an acceleration of amortization. Although the market values declined during the second quarter of 2010, the average separate balances remained higher than the average in the prior year period. In 2009, the increase in the market value of our separate account balances was due to improved market conditions, resulting in an increase in the expected future gross profits and a corresponding lower level of amortization.

Other expenses increased by $93 million, which was mainly attributable to business growth of $41 million, as well as a $25 million increase in market driven expenses, such as reinsurance costs. Additionally, a $23 million increase in higher variable expenses, such as commissions and premium taxes, a portion of which is offset by DAC capitalization, contributed to this increase.

Liquidity and Capital Resources

Beginning in September 2008, the global financial markets experienced unprecedented disruption, adversely affecting the business environment in general, as well as financial services companies in particular. Conditions in the financial markets have materially improved, but financial institutions may have to pay higher spreads over benchmark U.S. Treasury securities than before the market disruption began. There is still some uncertainty as to whether the stressed conditions that prevailed during the market disruption could recur, which could affect the Company’s ability to meet liquidity needs and obtain capital.

Liquidity Management.  Based upon the strength of its franchise, diversification of its businesses and strong financial fundamentals, we continue to believe that the Company has ample liquidity to meet business requirements under current market conditions and unlikely but reasonably possible stress scenarios. The Company’s short-term liquidity position (cash, and cash equivalents and short-term investments, excluding cash collateral received under the Company’s securities lending program that has been reinvested in cash, cash equivalents, short-term investments and publicly-traded securities and cash collateral received from counterparties in connection with derivative instruments) was $1.9 billion and $1.8 billion at June 30, 2010 and December 31, 2009, respectively. We continuously monitor and adjust our liquidity and capital plans for the Company in light of changing needs and opportunities.

Insurance Liabilities.  The Company’s principal cash outflows primarily relate to the liabilities associated with its various life insurance, annuity and group pension products, operating expenses and income tax, as well as principal and interest on its outstanding debt obligations. Liabilities arising from its insurance activities primarily relate to benefit payments under the aforementioned products, as well as payments for policy surrenders, withdrawals and loans. For annuity or deposit type products, surrender or lapse product behavior differs somewhat by segment. In the Retirement Products segment, which includes individual annuities, lapses and surrenders tend to occur in the normal course of business. During the six months ended June 30, 2010 and 2009, general account surrenders and withdrawals from annuity products were $729 million and $836 million, respectively. In the Corporate Benefit Funding segment, which includes pension closeouts, bank owned life insurance, other fixed annuity contracts, as well as funding agreements and other capital market products, most of the products offered have fixed maturities or fairly predictable surrenders or withdrawals. Of the Corporate Benefit Funding liabilities, $438 million were subject to credit ratings downgrade triggers that permit early termination subject to a notice period of 90 days.

Securities Lending.  Under the Company’s securities lending program, the Company was liable for cash collateral under its control of $6.7 billion and $6.2 billion at June 30, 2010 and December 31, 2009, respectively. For further detail on the securities lending program and the related liquidity needs, see Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements.

Derivatives and Collateral.  The Company pledges collateral to, and has collateral pledged to it by, counterparties under the Company’s current derivative transactions. With respect to derivative transactions with credit ratings downgrade triggers, a two-notch downgrade would have no impact on the Company’s derivative collateral requirements at June 30, 2010.

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Short-term Funding Agreements.  MetLife Short Term Funding LLC (“Short Term Funding”), is an issuer of commercial paper under a program supported by funding agreements issued by MetLife Insurance Company of Connecticut and Metropolitan Life Insurance Company, an affiliate. The Company’s short-term liability under the funding agreement it issued to Short Term Funding was $2.8 billion and $2.9 billion at June 30, 2010 and December 31, 2009, respectively, which is included in policyholder account balances.

Adoption of New Accounting Pronouncements

See “Adoption of New Accounting Pronouncements” in Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements.

Future Adoption of New Accounting Pronouncements

See “Future Adoption of New Accounting Pronouncements” in Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements.

Item 4(T).   Controls and Procedures

Management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined inRule 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer 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 15d-15(f) during the quarter ended June 30, 2010 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 2009 Annual Report; (ii) Part II, Item 1, of MetLife Insurance Company of Connecticut’s Quarterly Report onForm 10-Q for the quarter ended March 31, 2010; and (ii) Note 5 of the Notes to the Interim Condensed Consolidated Financial Statements in Part I of this report.

Retained Asset Account Matters.  MICC offers as a settlement option under its life insurance policies a retained asset account for death benefit payments called a Total Control Account (“TCA”). When a TCA is established for a beneficiary, the Company retains the death benefit proceeds in the general account and pays interest on those proceeds at a rate set by reference to objective indices. Additionally, the accounts enjoy a guaranteed minimum interest rate. Beneficiaries can withdraw all of the funds or a portion of the funds held in the account at any time.

The New York Attorney General recently announced that his office had launched a major fraud investigation into the life insurance industry for practices related to the use of retained asset accounts and that subpoenas requesting comprehensive data related to retained asset accounts have been served on MetLife, Inc. and other insurance carriers. We received the subpoena on July 30, 2010. It is possible that other state and federal regulators or legislative bodies may pursue similar investigations or make related inquiries. We cannot predict what effect any such investigations might have on our earnings or the availability of the TCA, but we believe that our financial statements taken as a whole would not be materially affected. We believe that any allegations that information about the TCA is not adequately disclosed or that the accounts are fraudulent or otherwise violate state or federal laws are without merit.

Travelers Ins. Co., et al. v. Banc of America Securities LLC (S.D.N.Y., filed December 13, 2001).  On January 6, 2009, after a jury trial,the district court entered a judgment in favor of The Travelers Insurance Company, now known as MetLife Insurance Company of Connecticut, in the amount of approximately $42 million in

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connection with securities and common law claims against the defendant. On May 14, 2009, the district court issued an opinion and order denying the defendant’s post judgment motion seeking a judgment in its favor or, in the alternative, a new trial. On July 20, 2010, the United States Court of Appeals for the Second Circuit issued an order affirming the district court’s judgment in favor of MetLife Insurance Company of Connecticut and the district court’s order denying defendant’s post-trial motions. As a final judgment has not yet been entered in MetLife Insurance Company of Connecticut ’s favor and the Company has not collected any portion of the judgment, the Company has not recognized any award amount in its consolidated financial statements.

Various litigation, claims and assessments against the Company, in addition to those discussed previously and those otherwise provided for in the Company’s consolidated financial statements, have arisen in the course of the Company’s business, including, but not limited to, in connection with its activities as an insurer, employer, investor, investment advisor and taxpayer. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning the Company’s compliance with applicable insurance and other laws and regulations.

It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings or provide reasonable ranges of potential losses. In some of the matters referred to previously, largeand/or indeterminate amounts, including punitive and treble damages, are sought. Although in light of these considerations it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company’s financial position, based on information currently known by the Company’s management, in its opinion, the outcomes of such pending investigations and legal proceedings are not likely to have such an effect. However, given the largeand/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s consolidated net income or cash flows in particular quarterly or annual periods.

Item 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 2009 Annual Report.

Difficult Conditions in the Global Capital Markets and the Economy Generally May Materially Adversely Affect Our Business and Results of Operations and These Conditions May Not Improve in the Near Future

Our business and results of operations are materially affected by conditions in the global capital markets and the economy generally, both in the United States and elsewhere around the world. Stressed conditions, volatility and disruptions in global capital markets or in particular markets or financial asset classes can have an adverse effect on us, in part because we have a large investment portfolio. Disruptions in one market or asset class can also spread to other markets or asset classes. Although the disruption in the global financial markets that began in late 2007 has moderated, not all global financial markets are functioning normally, and some remain reliant upon government intervention and liquidity. Upheavals in the financial markets can also affect our business through their effects on general levels of economic activity, employment and customer behavior. Although many economists believe the recent recession ended in the third quarter of 2009, after a brief rebound, the recovery has slowed, and the unemployment rate is expected to remain high for some time. In addition, inflation has fallen over the last several years and remains at very low levels. Some economists believe that disinflation and deflation risk remains in the economy. Our revenues are likely to remain under pressure in such circumstances and our profit margins could erode. Also, in the event of extreme prolonged market events, such as the recent global credit crisis, we could incur significant capital or operating losses. Even in the absence of a market downturn, we are exposed to substantial risk of loss due to market volatility.

We are a significant writer of variable annuity products. The account values of these products decrease as a result of downturns in capital markets. Decreases in account values reduce the fees generated by our variable annuity products, cause the amortization of deferred acquisition costs to accelerate and could increase the level of liabilities we must carry to support those variable annuities issued with any associated guarantees.

Factors such as consumer spending, business investment, government spending, the volatility and strength of the capital markets, and inflation all affect the business and economic environment and, ultimately, the amount and

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profitability of our business. In an economic downturn characterized by higher unemployment, lower family income, lower corporate earnings, lower business investment and lower consumer spending, the demand for our financial and insurance products could be adversely affected. Group insurance, in particular, is affected by the higher unemployment rate. In addition, we may experience an elevated incidence of claims and lapses or surrenders of policies. Our policyholders may choose to defer paying insurance premiums or stop paying insurance premiums altogether. Adverse changes in the economy could affect earnings negatively and could have a material adverse effect on our business, results of operations and financial condition. The recent market turmoil has precipitated, and may continue to raise the possibility of, legislative, regulatory and governmental actions. We cannot predict whether or when such actions may occur, or what impact, if any, such actions could have on our business, results of operations and financial condition. See “— Actions of the U.S. Government, Federal Reserve Bank of New York and Other Governmental and Regulatory Bodies for the Purpose of Stabilizing and Revitalizing the Financial Markets and Protecting Investors and Consumers May Not Achieve the Intended Effect or Could Adversely Affect the Competitive Position of MetLife, Inc. and its Subsidiaries, Including Us,” “— President Obama Recently Signed a Bill Providing for Comprehensive Reform of Financial Services Regulation in the United States, Various Aspects of Which Could Impact Our Business Operations, Capital Requirements and Profitability and Limit Our Growth.” See also “Risk Factors — Our Insurance Businesses Are Heavily Regulated, and Changes in Regulation May Reduce Our Profitability and Limit Our Growth and “Risk Factors — Competitive Factors May Adversely Affect Our Market Share and Profitability” in the 2009 Annual Report.

Actions of the U.S. Government, Federal Reserve Bank of New York and Other Governmental and Regulatory Bodies for the Purpose of Stabilizing and Revitalizing the Financial Markets and Protecting Investors and Consumers May Not Achieve the Intended Effect or Could Adversely Affect the Competitive Position of MetLife, Inc. and its Subsidiaries, Including Us

The Emergency Economic Stabilization Act of 2008 (“EESA”) gave the U.S. Treasury the authority to, among other things, purchase up to $700.0 billion of securities (including newly issued preferred shares and subordinated debt) from financial institutions for the purpose of stabilizing the financial markets. The U.S. federal government, the Federal Reserve Bank of New York, the Federal Deposit Insurance Corporation (“FDIC”) and other governmental and regulatory bodies also took other actions to address the financial crisis. For example, the Federal Reserve Bank of New York made funds available to commercial and financial companies under a number of programs, including the Commercial Paper Funding Facility, which expired in early 2010. The U.S. Treasury established programs based in part on EESA and in part on the separate authority of the Federal Reserve Board and the FDIC, to foster purchases from and by banks, insurance companies and other financial institutions of certain kinds of assets for which valuations have been low and markets weak. Although such actions appear to have provided some stability to the financial markets, our business and financial condition and results of operations could be materially and adversely affected to the extent that credit availability and prices for financial assets revert to their low levels of late 2008 and early 2009 or do not improve further. These programs have largely run their course or been discontinued. More likely to be relevant to MetLife, Inc. and its subsidiaries are the monetary policy by the Federal Reserve Board and the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), which was recently signed by President Obama and will significantly change financial regulation in the U.S. in a number of areas that could affect MetLife. We cannot predict what impact, if any, this could have on our business, results of operations and financial condition.

It is not certain what effect the enactment of Dodd-Frank will have on the financial markets, the availability of credit, asset prices and our operations or investments. See “— President Obama Recently Signed a Bill Providing for Comprehensive Reform of Financial Services Regulation in the United States, Various Aspects of Which Could Impact Our Business Operations, Capital Requirements and Profitability and Limit Our Growth.” Furthermore, Congress has considered, and may consider in the future, legislative proposals that could impact the estimated fair value of mortgage loans, such as legislation that would permit bankruptcy courts to rewrite the terms of a mortgage contract, including reducing the principal balance of mortgage loans owed by bankrupt borrowers, or legislation that requires loan modifications. If such legislation is enacted, it could cause loss of principal on certain of our non-agency prime residential mortgage-backed security (“RMBS”) holdings and could cause a ratings downgrade in such holdings which, in turn, would cause an increase in unrealized losses on such securities and increase the risk based capital that we must hold to support such securities. See “Risk Factors — We Are Exposed to Significant

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Financial and Capital Markets Risk Which May Adversely Affect Our Results of Operations, Financial Condition and Liquidity, and Our Net Investment Income Can Vary from Period to Period” in the 2009 Annual Report. We cannot predict whether the funds made available by the U.S. federal government and its agencies will be enough to continue stabilizing or to further revive the financial markets or, if additional amounts are necessary, whether Congress will be willing to make the necessary appropriations, what the public’s sentiment would be towards any such appropriations, or what additional requirements or conditions might be imposed on the use of any such additional funds.

The choices made by the U.S. Treasury, the Federal Reserve Board and the FDIC in their distribution of funds under EESA and any future asset purchase or other government programs, as well as any decisions made regarding the imposition of additional regulation on large financial institutions may have, over time, the effect of supporting some aspects of the financial services industry more than others. Some of our competitors have received, or may in the future receive, benefits under one or more of the federal government’s programs. This could adversely affect our competitive position. See “Risk Factors — Competitive Factors May Adversely Affect Our Market Share and Profitability” in the 2009 Annual Report. See also “— New and Impending Compensation and Corporate Governance Regulations Could Hinder or Prevent Us From Attracting and Retaining Management and Other Employees with the Talent and Experience to Manage and Conduct Our Business Effectively” and “Risk Factors — Our Insurance Businesses Are Heavily Regulated, and Changes in Regulation May Reduce Our Profitability and Limit Our Growth” in our 2009 Annual Report.

President Obama Recently Signed a Bill Providing for Comprehensive Reform of Financial Services Regulation in the United States, Various Aspects of Which Could Impact Our Business Operations, Capital Requirements and Profitability and Limit Our Growth

On July 21, 2010, President Obama signed Dodd-Frank. Various provisions of Dodd-Frank could affect our business operations and our profitability and limit our growth. For example:

•  As a large, interconnected bank holding company with assets of $50 billion or more, or possibly as an otherwise systemically important financial company, MetLife, Inc., including possibly its subsidiaries, will be subject to enhanced prudential standards imposed on systemically significant financial companies. Enhanced standards will be applied to risk-based capital, liquidity, leverage (unless another, similar, standard is appropriate for the company), resolution plan and credit exposure reporting, concentration limits, and risk management. Off-balance sheet activities are required to be accounted for in meeting capital requirements. In addition, if it was determined that MetLife, Inc. posed a grave threat to U.S. financial stability, the applicable federal regulators would have the right to require it to take one or more other mitigating actions to reduce that risk, including limiting its ability to merge with or acquire another company, terminating activities, restricting its ability to offer financial products or requiring it to sell assets or off-balance sheet items to unaffiliated entities. Enhanced standards would also permit, but not require, regulators to establish requirements with respect to contingent capital, enhanced public disclosures and short term debt limits. These standards are described as being more stringent than those otherwise imposed on bank holding companies; however, the Federal Reserve Board is permitted to apply them on aninstitution-by-institution basis, depending on its determination of the institution’s riskiness. In addition, under Dodd-Frank, all bank holding companies that have elected to be treated as financial holding companies, such as MetLife, Inc., will be required to be “well capitalized” and “well managed” as defined by the Federal Reserve Board, on a consolidated basis and not just at their depository institution(s), a higher standard than is applicable to financial holding companies under current law. This requirement could restrict the amount of capital available to MetLife, Inc.’s subsidiaries, including us.

•  MetLife, Inc., as a bank holding company, will have to meet minimum leverage ratio and risk-based capital requirements on a consolidated basis to be established by the Federal Reserve Board that are not less than those applicable to insured depository institutions under so-called prompt corrective action regulations as in effect on the date of the enactment of the legislation. As a subsidiary of a bank holding company, we, as well as MetLife, Inc., could be subject to other heightened standards, even if MetLife, Inc. is not deemed to be a systemically significant company.

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•  Under the provisions of Dodd-Frank relating to the resolution or liquidation of certain types of financial institutions, including bank holding companies, if MetLife, Inc. were to become insolvent or were in danger of defaulting on its obligations, it could be compelled to undergo liquidation with the FDIC as receiver. For this new regime to be applicable, a number of determinations would have to be made, including that a default by the affected company would have serious adverse effects on financial stability in the United States. If the FDIC were to be appointed as the receiver for such a company, the liquidation of that company would occur under the provisions of the new liquidation authority, and not under the Bankruptcy Code. Although insurance companies will continue to be dissolved under state law, federal regulators could similarly determine an insurer poses a serious threat to U.S. stability and compel liquidation under state regimes. In addition, non-insurer subsidiaries that are not themselves insurance companies may be liquidated under the new liquidation authority. Under the new liquidation authority, the holders of a company’s debt could in certain respects be treated differently than under the Bankruptcy Code. In particular, unsecured creditors and shareholders are intended to bear the losses of the company being liquidated. The FDIC is authorized to establish rules for the priority of creditors’ claims and, under certain circumstances, to treat similarly situated creditors differently. Although it is not possible to assess the full impact of the liquidation authority at this time, it could affect the funding costs of large bank holding companies or financial companies that might be viewed as systemically significant, as well as their respective subsidiaries. It could also lead to an increase in secured financings.

•  Dodd-Frank also includes a new framework of regulation of theOver-The-Counter (“OTC”) derivatives markets which could require clearing of certain types of transactions currently tradedover-the-counter and potentially impose additional costs, including new capital and margin requirements and additional regulation on the Company. Increased margin requirements on our part could reduce our liquidity and narrow the range of securities in which we invest. However, increased margin requirements on our counterparties could reduce our exposure to our counterparties’ default. We use derivatives to mitigate the impact of increased benefit exposures from our annuity products that offer guaranteed benefits The derivative clearing requirements of Dodd-Frank could increase the cost of such mitigation. In addition, we are subject to the risk that hedging and other management procedures prove ineffective in reducing the risks to which insurance policies expose us or that unanticipated policyholder behavior or mortality, combined with adverse market events, produces economic losses beyond the scope of the risk management techniques employed. Any such losses could be increased by any higher costs of writing derivatives or the potentially greater difficulty in customizing derivatives that might result from the enactment of Dodd-Frank.

•  Dodd-Frank restricts the ability of insured depository institutions and of companies, such as MetLife, Inc., that control an insured depository institution and their affiliates, to engage in proprietary trading and to sponsor or invest in funds (referred to in the bill as hedge funds and private equity funds) that rely on certain exemptions from the Investment Company Act of 1940, as amended (the “Investment Company Act”). Dodd-Frank provides an exemption for investment activity by a regulated insurance company or its affiliate solely for the general account of such insurance company if such activity is in compliance with the insurance company investments laws of the state or jurisdiction in which such company is domiciled and the appropriate Federal regulators after consultation with relevant insurance commissioners have not jointly determined such laws to be insufficient to protect the safety and soundness of the institution or the financial stability of the United States. Notwithstanding the foregoing, the appropriate Federal regulatory authorities are permitted under the legislation to impose, as part of rulemaking, additional capital requirements and other restrictions on any exempted activity. Dodd-Frank provides for a period of study and rule making during which the effects of the statutory language may be clarified. Among other considerations, the study is to assess and include recommendations so as to appropriately accommodate the business of insurance within an insurance company subject to regulation in accordance with relevant insurance company investments laws. While these provisions of Dodd-Frank are supposed to accommodate the business of insurance, until the related study and rulemaking are complete, it is unclear whether we may have to alter any of our future investment activities to comply.

•  Until various studies are completed and final regulations are promulgated pursuant to Dodd-Frank, the full impact of Dodd-Frank on the investments and investment activities of MetLife, Inc. and its subsidiaries

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remain unclear. Besides directly limiting our future investment activities, Dodd-Frank could potentially negatively impact the market for, the returns from, or liquidity in, primary and secondary investments in private equity funds and hedge funds that are affiliated with an insured depository institution. The number of sponsors of such funds going forward may diminish, which may impact our available fund investment opportunities. Although Dodd-Frank provides for various transition periods for coming into compliance, fund sponsors that are subject to Dodd-Frank, and whose funds we have invested in, may have to spin off their funds business or reduce their ownership stakes in their funds, thereby potentially impacting our related investments in such funds. In addition, should such funds be required or choose to liquidate or sell their underlying assets, the market value and liquidity of such assets or the broader related asset classes could negatively be affected, including securities and real estate assets that MetLife, Inc. and its subsidiaries hold or may plan to sell. Our existing derivatives counterparties and the financial institutions subject to Dodd-Frank in which we have invested also could be negatively impacted by Dodd-Frank.

The addition of a new regulatory regime over MetLife and its subsidiaries, the likelihood of additional regulations, and the other changes discussed above could require changes to the operations of MetLife and its subsidiaries, including ours. Whether such changes would affect our competitiveness in comparison to other institutions is uncertain, since it is possible that at least some of our competitors will be affected in a similar manner. In addition, competitive effects on our business and operations are possible, however, if MetLife, Inc. were required to pay any new or increased assessments and capital requirements are imposed, and to the extent any new prudential supervisory standards are imposed on MetLife, Inc. but not on its competitors. We cannot predict whether other proposals will be adopted, or what impact, if any, the adoption of Dodd-Frank or other proposals and the resulting studies and regulations could have on our business, financial condition or results of operations or on our dealings with other financial companies. See also “— New and Impending Compensation and Corporate Governance Regulations Could Hinder or Prevent MetLife and Its Affiliates From Attracting and Retaining Management and Other Employees with the Talent and Experience to Manage and Conduct Our Business Effectively.”

Dodd-Frank also creates a new Federal Insurance Office (“FIO”) with the U.S. Treasury Department. Although explicitly not a regulatory body, the FIO may request documents and information from insurers, has limited subpoena power and is tasked with studying the potential modernization of the insurance industry, including possibly a federal charter. Moreover, Dodd-Frank potentially affects such a wide range of the activities and markets in which we engage and participate that it may not be possible to anticipate all of the ways in which it could affect us. For example, many of our methods for managing risk and exposures are based upon the use of observed historical market behavior or statistics based on historical models. Historical market behavior may be altered by the enactment of Dodd-Frank. As a result of this enactment and otherwise, these methods may not fully predict future exposures, which can be significantly greater than our historical measures indicate.

Legislative and Regulatory Activity in Health Care and Other Employee Benefits Could Increase the Costs or Administrative Burdens of Providing Benefits to Employees Who Conduct Our Business or Hinder or Prevent MetLife and its Affiliates From Attracting and Retaining Employees, or Affect our Profitability As a Provider of Life Insurance, Annuities, and Non-Medical Health Insurance Benefit Products

The Patient Protection and Affordable Care Act, signed into law on March 23, 2010, and The Health Care and Education Reconciliation Act of 2010, signed into law on March 30, 2010 (together, the “Health Care Act”), may lead to fundamental changes in the way that employers, including affiliates of MetLife, provide health care benefits, other benefits, and other forms of compensation to their employees and former employees. Among other changes, and subject to various effective dates, the Health Care Act generally restricts certain limits on benefits, mandates coverage for certain kinds of care, extends the required coverage of dependent children through age 26, eliminates pre-existing condition exclusions or limitations, requires cost reporting and, in some cases, requires premium rebates to participants under certain circumstances, limits coverage waiting periods, establishes several penalties on employers who fail to offer sufficient coverage to their full-time employees, and requires employers under certain circumstances to provide employees with vouchers to purchase their own health care coverage. The Health Care Act also provides for increased taxation of “high cost” coverage, restricts the tax deductibility of certain compensation paid by health care and some other insurers, reduces the tax deductibility of retiree health care costs to the extent of any retiree prescription drug benefit subsidy provided to the employer by the federal government, increases

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Medicare taxes on certain high earners, and establishes health insurance “exchanges” for individual purchases of health insurance.

We depend on employees of MetLife affiliates to conduct our business. The impact of the Health Care Act on MetLife’s affiliates as employers and on the benefit plans they sponsor for their employees or retirees and their dependents, whether those benefits remain competitive or effective in meeting their business objectives, and our costs to provide such benefits and our tax liabilities in connection with benefits or compensation, cannot be predicted. Furthermore, we cannot predict the impact of choices that will be made by various regulators, including the U.S. Treasury, the Internal Revenue Service, the United States Department of Health and Human Services, and state regulators, to promulgate regulations or guidance, or to make determinations under or related to the Health Care Act. Either the Health Care Act or any of these regulatory actions could adversely affect the ability of MetLife and its affiliates to attract, retain, and motivate talented associates. They could also result in increased or unpredictable costs to provide employee benefits, and could harm our competitive position if MetLife or its affiliates are subject to fees, penalties, tax provisions or other limitations in the Health Care Act and our competitors are not.

The Health Care Act also imposes requirements on us as a provider of certain products, subject to various effective dates. It also imposes requirements on the purchasers of certain of these products. We cannot predict the impact of the Act or of regulations, guidance or determinations made by various regulators, on the various products that we offer. Either the Health Care Act or any of these regulatory actions could adversely affect our ability to offer certain of these products in the same manner as we do today. They could also result in increased or unpredictable costs to provide certain products, and could harm our competitive position if the Health Care Act has a disparate impact on our products compared to products offered by our competitors.

The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 also includes certain provisions for defined benefit pension plan funding relief. These provisions may impact the likelihoodand/or timing of corporate plan sponsors terminating their plansand/or engaging in transactions to partially or fully transfer pension obligations to an insurance company. We have issued general account and separate account group annuity products that enable a plan sponsor to transfer these risks, often in connection with the termination of defined benefit pension plans. Consequently, this legislation could indirectly affect the mix of our business, with fewer closeouts and more non-guaranteed funding products, and adversely impact our results of operations.

Defaults on Our Mortgage Loans and Volatility in Performance May Adversely Affect Our Profitability

Our mortgage loans face default risk and are principally collateralized by commercial and agricultural properties. The carrying value of mortgage loans is stated at original cost net of repayments, amortization of premiums, accretion of discounts and valuation allowances. We establish valuation allowances for estimated impairments at the balance sheet date. Such valuation allowances are based on the excess carrying value of the loan over the present value of expected future cash flows discounted at the loan’s original effective interest rate, the estimated fair value of the loan’s collateral if the loan is in the process of foreclosure or otherwise collateral dependent, or the loan’s observable market price. We also establish valuation allowances for loan losses for pools of loans with similar risk characteristics, such as property types, or loans having similarloan-to-value or ratios and debt service coverage ratios, when based on past experience, it is probable that a credit event has occurred and the amount of the loss can be reasonably estimated. These valuation allowances are based on loan risk characteristics, historical default rates and loss severities, real estate market fundamentals and outlook as well as other relevant factors. At June 30, 2010, loans that were either delinquent or in the process of foreclosure totaled less than 0.8% of our mortgage loan investments. The performance of our mortgage loan investments, however, may fluctuate in the future. In addition, substantially all of our mortgage loansheld-for-investment have balloon payment maturities. An increase in the default rate of our mortgage loan investments could have a material adverse effect on our business, results of operations and financial condition through realized investment losses or increases in our valuation allowances.

Further, any geographic or sector concentration of our mortgage loans may have adverse effects on our investment portfolios and consequently on our consolidated results of operations or financial condition. While we seek to mitigate this risk by having a broadly diversified portfolio, events or developments that have a negative effect on any particular geographic region or sector may have a greater adverse effect on the investment portfolios to

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the extent that the portfolios are concentrated. Moreover, our ability to sell assets relating to such particular groups of related assets may be limited if other market participants are seeking to sell at the same time. In addition, legislative proposals that would allow or require modifications to the terms of mortgage loans could be enacted. We cannot predict whether these proposals will be adopted, or what impact, if any, such proposals or, if enacted, such laws, could have on our business or investments.

A Downgrade or a Potential Downgrade in Our Financial Strength Ratings or those of MetLife’s Other Insurance Subsidiaries, or MetLife’s Credit Ratings Could Result in a Loss of Business and Materially Adversely Affect Our Financial Condition and Results of Operations

Financial strength ratings, which various Nationally Recognized Statistical Rating Organizations (each, an “NRSRO”) publish as indicators of an insurance company’s ability to meet contractholder and policyholder obligations, are important to maintaining public confidence in our products, our ability to market our products and our competitive position.

Downgrades in our financial strength ratings could have a material adverse effect on our financial condition and results of operations in many ways, including:

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

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

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

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

•  adversely affecting our ability to obtain reinsurance at reasonable prices or at all.

In view of the difficulties experienced during 2008 and 2009 by many financial institutions, including our competitors in the insurance industry, we believe it is possible that the NRSROs will continue to heighten the level of scrutiny that they apply to such institutions, will continue to increase the frequency and scope of their credit reviews, will continue to request additional information from the companies that they rate, and may adjust upward the capital and other requirements employed in the NRSRO models for maintenance of certain ratings levels. Rating agencies use an “outlook statement” of “positive,” “stable,” “negative” or “developing” to indicate a medium- or long-term trend in credit fundamentals which, if continued, may lead to a ratings change. A rating may have a “stable” outlook to indicate that the rating is not expected to change; however, a “stable” rating does not preclude a rating agency from changing a rating at any time, without notice. Certain rating agencies assign rating modifiers such as “CreditWatch” or “Under Review” to indicate their opinion regarding the potential direction of a rating. These ratings modifiers are generally assigned in connection with certain events such as potential mergers and acquisitions, or material changes in a company’s results, in order for the rating agencies to perform its analysis to fully determine the rating implications of the event. Certain rating agencies have recently implemented rating actions, including downgrades, outlook changes and modifiers, for MetLife, Inc.’s and certain of its subsidiaries’ insurer financial strength and credit ratings.

In February 2010, Fitch Ratings downgraded our ratings by one-notch. In February 2010, Standard & Poor’s Ratings Services (“S&P”), a Standard & Poor’s Financial Services LLC business, and A.M. Best each placed our ratings on “CreditWatch with negative implications” and “Under Review with negative implications,” respectively. In March 2010, Moody’s changed our ratings outlook from stable to negative outlook. In August 2010, S&P removed us from “CreditWatch with negative implications” and affirmed our ratings with a “negative” outlook. We believe that all the NRSROs will continue to review the ratings of MetLife, Inc. and its subsidiaries in light of the acquisition by MetLife, Inc. of American Life Insurance Company, a subsidiary of ALICO Holdings LLC, and Delaware American Life Insurance Company (collectively, the “Acquisition”). The NRSROs may take further action at, or in anticipation of, the consummation of the Acquisition.

We cannot predict what actions rating agencies may take, or what actions we may take in response to the actions of rating agencies, which could adversely affect our business. As with other companies in the financial services industry, our ratings could be downgraded at any time and without any notice by any NRSRO.

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If Our Business Does Not Perform Well or if Actual Experience Versus Estimates Used in Valuing and Amortizing DAC, Deferred Sales Inducements (“DSI”) and VOBA Vary Significantly, We May Be Required to Accelerate the Amortization and/or Impair the DAC, DSI and VOBA Which Could Adversely Affect Our Results of Operations or Financial Condition

We incur significant costs in connection with acquiring new and renewal business. Those costs that vary with and are primarily related to the production of new and renewal business are deferred and referred to as DAC. Bonus amounts credited to certain policyholders, either immediately upon receiving a deposit or as excess interest credits for a period of time, are referred to as “DSI”. The recovery of DAC and DSI is dependent upon the future profitability of the related business. The amount of future profit or margin is dependent principally on investment returns in excess of the amounts credited to policyholders, mortality, morbidity, persistency, interest crediting rates, dividends paid to policyholders, expenses to administer the business, creditworthiness of reinsurance counterparties and certain economic variables, such as inflation. Of these factors, we anticipate that investment returns are most likely to impact the rate of amortization of such costs. The aforementioned factors enter into management’s estimates of gross profits, which generally are used to amortize such costs. If the estimates of gross profits were overstated, then the amortization of such costs would be accelerated in the period the actual experience is known and would result in a charge to income. Significant or sustained equity market declines could result in an acceleration of amortization of the DAC and DSI related to variable annuity and variable universal life contracts, resulting in a charge to income. Such adjustments could have a material adverse effect on our results of operations or financial condition.

VOBA reflects the estimated fair value of in-force contracts in a life insurance company acquisition and represents the portion of the purchase price that is allocated to the value of the right to receive future cash flows from the insurance and annuity contracts in-force at the acquisition date. VOBA is based on actuarially determined projections. Actual experience may vary from the projections. Revisions to estimates result in changes to the amounts expensed in the reporting period in which the revisions are made and could result in a charge to income. Also, as VOBA is amortized similarly to DAC and DSI, an acceleration of the amortization of VOBA would occur if the estimates of gross profits were overstated. Accordingly, the amortization of such costs would be accelerated in the period in which the actual experience is known and would result in a charge to net income. Significant or sustained equity market declines could result in an acceleration of amortization of the VOBA related to variable annuity and variable universal life contracts, resulting in a charge to income. Such adjustments could have a material adverse effect on our results of operations or financial condition.

Guarantees Within Certain of Our Products that Protect Policyholders Against Significant Downturns in Equity Markets May Decrease Our Earnings, Increase the Volatility of Our Results if Hedging or Risk Management Strategies Prove Ineffective, Result in Higher Hedging Costs and Expose Us to Increased Counterparty Risk

Certain of our variable annuity products include guaranteed benefits. These include guaranteed death benefits, guaranteed withdrawal benefits, lifetime withdrawal guarantees, guaranteed minimum accumulation benefits, and guaranteed minimum income benefits. Periods of significant and sustained downturns in equity markets, increased equity volatility, or reduced interest rates could result in an increase in the valuation of the future policy benefit or policyholder account balance liabilities associated with such products, resulting in a reduction to net income. We use reinsurance in combination with derivative instruments to mitigate the liability exposure and the volatility of net income associated with these liabilities, and while we believe that these and other actions have mitigated the risks related to these benefits, we remain liable for the guaranteed benefits in the event that reinsurers or derivative counterparties are unable or unwilling to pay. In addition, we are subject to the risk that hedging and other management procedures prove ineffective or that unanticipated policyholder behavior or mortality, combined with adverse market events, produces economic losses beyond the scope of the risk management techniques employed. These, individually or collectively, may have a material adverse effect on net income, financial condition or liquidity. We are also subject to the risk that the cost of hedging these guaranteed minimum benefits increases, resulting in a reduction to net income.

The valuation of certain of the foregoing liabilities (carried at fair value) includes an adjustment for nonperformance risk that reflects the credit standing of the issuing entity. This adjustment, which is not hedged, is based in part on publicly available information regarding credit spreads related to MetLife’s debt,

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including credit default swaps. In periods of extreme market volatility, movements in these credit spreads can have a significant impact on net income.

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. See Note 5 of the Notes to the Interim Condensed Consolidated Financial Statements.

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

On a quarterly and annual basis, we review relevant information with respect to litigation and contingencies to be reflected in our consolidated financial statements. The review includes senior legal and financial personnel. Estimates of possible 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 at June 30, 2010.

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 New York Attorney General recently announced that his office had launched a major fraud investigation into the life insurance industry for practices related to the use of retained asset accounts and that subpoenas requesting comprehensive data related to retained asset accounts have been served on MetLife, Inc. and other insurance carriers. We received the subpoena on July 30, 2010. We offer a retained asset account for death benefit payments called a Total Control Account (“TCA”) as a settlement option under our life insurance policies. When a TCA is established for a beneficiary, we retain the death benefit proceeds in the general account and pay interest on those proceeds at a rate set by reference to objective indices. Additionally, the accounts enjoy a guaranteed minimum interest rate. Beneficiaries can withdraw all of the funds or a portion of the funds held in the account at any time. It is possible that other state and federal regulators or legislative bodies may pursue similar investigations or make related inquiries. We cannot predict what effect any such investigations might have on our earnings or the availability of the TCA, but we believe that our financial statements taken as a whole would not be materially affected. We believe that any allegations that information about the TCA is not adequately disclosed or that the accounts are fraudulent or violate state or federal laws are without merit.

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

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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.

New and Impending Compensation and Corporate Governance Regulations Could Hinder or Prevent MetLife and Its Affiliates From Attracting and Retaining Management and Other Employees with the Talent and Experience to Manage and Conduct Our Business Effectively

The compensation and corporate governance practices of financial institutions will become subject to increasing regulation and scrutiny. Dodd-Frank includes new requirements that will affect our corporate governance and compensation practices or those of our affiliates, including some that may lead to additional requirements for membership on Board committees, require policies to recover compensation previously paid under certain circumstances, require additional performance and compensation disclosure, and other requirements. See “— President Obama Recently Signed a Bill Providing for Comprehensive Reform of Financial Services Regulation in the United States, Various Aspects of Which Could Impact Our Business Operations, Capital Requirements and Profitability and Limit Our Growth.” In addition, the Federal Reserve Board, the FDIC and other U.S. bank regulators have released guidelines on incentive compensation that may apply to or impact MetLife, Inc. as a bank holding company. These restrictions could hinder or prevent us from attracting and retaining management and other employees with the talent and experience to manage and conduct our business effectively. Other new rules could also limit our tax deductions for certain compensation paid to executive employees in excess of specified amounts. We may also be subject to requirements and restrictions on our business if we participate in some of the programs established in whole or in part under EESA.

Changes in U.S. Federal and State Securities Laws and Regulations May Affect Our Operations and Our Profitability

Federal and state securities laws and regulations apply to insurance products that are also “securities,” including variable annuity contracts and variable life insurance policies. As a result, our activities in offering and selling variable insurance contracts and policies are subject to extensive regulation under these securities laws. We issue variable annuity contracts and variable life insurance policies through separate accounts that are registered with the SEC as investment companies under the Investment Company Act. Each registered separate account is generally divided intosub-accounts, each of which invests in an underlying mutual fund which is itself a registered investment company under the Investment Company Act. In addition, the variable annuity contracts and variable life insurance policies issued by the separate accounts are registered with the SEC under the Securities Act. Our subsidiary, Tower Square, is registered with the SEC as a broker-dealer under the Exchange Act, and is a member of, and subject to regulation by, FINRA. Further, Tower Square is registered as an investment adviser with the SEC under the Investment Advisers Act of 1940, and is also registered as an investment adviser in various states.

Federal and state securities laws and regulations are primarily intended to ensure the integrity of the financial markets and to protect investors in the securities markets, as well as protect investment advisory or brokerage clients. These laws and regulations generally grant regulatory agencies broad rulemaking and enforcement powers, including the power to limit or restrict the conduct of business for failure to comply with the securities laws and regulations. A number of changes have recently been suggested to the laws and regulations that govern the conduct of our variable insurance products business that could have a material adverse effect on our financial condition and results of operations. For example, Dodd-Frank authorizes the SEC to establish a standard of conduct applicable to brokers and dealers when providing personalized investment advice to retail and other customers. This standard of conduct would be to act in the best interest of the customer without regard to the financial or other interest of the broker or dealer providing the advice. In addition, the NAIC has adopted a revised Suitability in Annuity Transactions Model Regulation, that will, if enacted by the states, place new responsibilities upon issuing insurance companies with respect to the suitability of annuity sales, including responsibilities for training agents.

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Item 6.   Exhibits

(Note Regarding Reliance on Statements in Our Contracts:In reviewing the agreements included as exhibits to this Quarterly Report onForm 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about MetLife Insurance Company of Connecticut, its subsidiaries or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and (i) should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; (iii) may apply standards of materiality in a way that is different from what may be viewed as material to investors; and (iv) were made only at the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. Accordingly, these representations and warranties may not describe the actual state of affairs at the date they were made or at any other time. Additional information about MetLife Insurance Company of Connecticut and its subsidiaries may be found elsewhere in this Quarterly Report onForm 10-Q and MetLife Insurance Company of Connecticut’s other public filings, which are available without charge through the SEC’s website at www.sec.gov.)

Exhibit
No.			Description
	31	.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31	.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32	.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32	.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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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/  Peter M. Carlson

Name:     Peter M. Carlson

Title:  Executive Vice-President, Finance Operations and

Chief Accounting Officer

(Authorized Signatory and Principal Accounting Officer)

Date: August 12, 2010

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Exhibit Index

(Note Regarding Reliance on Statements in Our Contracts:In reviewing the agreements included as exhibits to this Quarterly Report onForm 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about MetLife Insurance Company of Connecticut, its subsidiaries or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and (i) should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; (iii) may apply standards of materiality in a way that is different from what may be viewed as material to investors; and (iv) were made only at the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. Accordingly, these representations and warranties may not describe the actual state of affairs at the date they were made or at any other time. Additional information about MetLife Insurance Company of Connecticut and its subsidiaries may be found elsewhere in this Quarterly Report onForm 10-Q and MetLife Insurance Company of Connecticut’s other public filings, which are available without charge through the SEC’s website at www.sec.gov.)

Exhibit
No.			Description
	31	.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31	.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32	.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32	.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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