REGISTRATION STATEMENT NO. 333-136191
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 3
METLIFE INSURANCE COMPANY OF CONNECTICUT
(Registrant)
METLIFE INSURANCE COMPANY OF CONNECTICUT
(Depositor)
ONE CITYPLACE, HARTFORD, CONNECTICUT 06103-3415
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including area code: (860) 308-1000
JAMES L. LIPSCOMB, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
METLIFE INSURANCE COMPANY OF CONNECTICUT
ONE CITYPLACE, HARTFORD CONNECTICUT
(Name and Address of Agent for Service)
COPIES TO:
DIANE E. AMBLER
KIRKPATRICK & LOCKHART PRESTON GATES ELLIS LLP
1601 K STREET, NW
WASHINGTON, DC 20006
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Approximate Date of Proposed Public Offering: As soon as practicable following
the effectiveness of the Registration Statement.
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus contained
herein relates to Registration No. 333-118415.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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UNALLOCATED GROUP VARIABLE ANNUITY CONTRACT
PROSPECTUS
This prospectus describes a group variable annuity contract (the "Contract")
issued by MetLife Insurance Company of Connecticut (the "Company," "us" or "we")
designed to fund plans ("Plans") established under section 401 of the Internal
Revenue Code of 1986, as amended (the "Code") that have entered into an
agreement for administrative services with a third party administrator ("TPA").
These services are separate and distinct from the Contract. A separate fee is
payable to the TPA by the Plan in connection with these administrative services.
Amounts held under the Plans may be entitled to tax-deferred treatment under the
Code. The Company is not a party to the Plan.
Purchase of this Contract through a Plan does not provide any additional tax
deferral benefits beyond those provided by the Plan. Accordingly, if you are
purchasing this Contract through a Plan, you should consider purchasing the
Contract for its Death Benefit, Annuity Option Benefits or other non-tax related
benefits.
The Contract's value will vary daily to reflect the investment experience of the
funding options you select and the interest credited to the Fixed Account. The
Variable Funding Options available for Contracts through MetLife of CT Separate
Account QPN for Variable Annuities purchased on or after April 30, 2007 are:
<Table>
AMERICAN FUNDS INSURANCE SERIES -- CLASS 2 Janus Forty Portfolio -- Class A(+)
American Funds Global Growth Fund Lord Abbett Bond Debenture
American Funds Growth Fund Portfolio -- Class A
American Funds Growth-Income Fund Lord Abbett Growth and Income
DREYFUS VARIABLE INVESTMENT FUND -- INITIAL Portfolio -- Class B
SHARES Lord Abbett Mid-Cap Value
Dreyfus Variable Investment Fund Portfolio -- Class B(+)
Appreciation Portfolio MFS(R) Value Portfolio -- Class A
Dreyfus Variable Investment Fund Developing Met/AIM Capital Appreciation
Leaders Portfolio Portfolio -- Class A
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS Neuberger Berman Real Estate
TRUST -- CLASS 2 Portfolio -- Class A
Franklin Small-Mid Cap Growth Securities Pioneer Fund Portfolio -- Class A
Fund -- Class 2 Pioneer Strategic Income Portfolio -- Class
Templeton Developing Markets Securities A
Fund Third Avenue Small Cap Value
Templeton Foreign Securities Fund Portfolio -- Class B(+)
JANUS ASPEN SERIES -- SERVICE SHARES METLIFE INVESTMENT FUNDS, INC.
Mid Cap Growth Portfolio MetLife Investment Diversified Bond
LEGG MASON PARTNERS EQUITY TRUST Fund -- Class I
Legg Mason Partners Small Cap Value MetLife Investment International Stock
Fund -- Class A Fund -- Class I
LEGG MASON PARTNERS INCOME TRUST MetLife Investment Large Company Stock
Legg Mason Partners Investment Grade Bond Fund -- Class I
Fund -- Class A MetLife Investment Small Company Stock
LEGG MASON PARTNERS VARIABLE PORTFOLIOS II(+) Fund -- Class I
Legg Mason Partners Variable Fundamental METROPOLITAN SERIES FUND, INC.
Value Portfolio -- Class I(+) BlackRock Aggressive Growth
LEGG MASON PARTNERS VARIABLE EQUITY TRUST(+) Portfolio -- Class D
Legg Mason Partners Variable Aggressive BlackRock Bond Income Portfolio -- Class A
Growth Portfolio -- Class I(+) FI Large Cap Portfolio -- Class A
Legg Mason Partners Variable Appreciation FI Value Leaders Portfolio -- Class D
Portfolio -- Class I(+) MFS(R) Total Return Portfolio -- Class F
Legg Mason Partners Variable Capital and T. Rowe Price Large Cap Growth
Income Portfolio -- Class I(+) Portfolio -- Class B
Legg Mason Partners Variable Equity Index Western Asset Management U.S. Government
Portfolio -- Class II(+) Portfolio -- Class A
Legg Mason Partners Variable Investors PIMCO VARIABLE INSURANCE
Portfolio -- Class I(+) TRUST -- ADMINISTRATIVE CLASS
Legg Mason Partners Variable Large Cap Total Return Portfolio
Growth Portfolio(+) TEMPLETON GROWTH FUND, INC. -- CLASS A
Legg Mason Partners Variable Small Cap VAN KAMPEN LIFE INVESTMENT TRUST -- CLASS II
Growth Portfolio -- Class I(+) Van Kampen Life Investment Trust Comstock
Legg Mason Partners Variable Social Portfolio
Awareness Portfolio(+) Van Kampen Life Investment Trust Strategic
LEGG MASON PARTNERS VARIABLE INCOME TRUST(+) Growth Portfolio(+)
Legg Mason Partners Variable Adjustable VARIABLE INSURANCE PRODUCTS FUND -- SERVICE
Rate Income Portfolio(+) CLASS 2
Legg Mason Partners Variable Diversified VIP Contrafund(R) Portfolio
Strategic Income Portfolio -- Class II(+) VIP Mid Cap Portfolio
Legg Mason Partners Variable Global High METROPOLITAN SERIES FUND, INC. -- ASSET
Yield Bond Portfolio -- Class I(+) ALLOCATION PORTFOLIOS -- CLASS B
Legg Mason Partners Variable Money Market MetLife Conservative Allocation Portfolio
Portfolio(+) MetLife Conservative to Moderate Allocation
MET INVESTORS SERIES TRUST Portfolio
Batterymarch Mid-Cap Stock MetLife Moderate Allocation Portfolio
Portfolio -- Class A MetLife Moderate to Aggressive Allocation
BlackRock High Yield Portfolio -- Class Portfolio
A(+) MetLife Aggressive Allocation Portfolio
BlackRock Large-Cap Core Portfolio -- Class
E(+)
Harris Oakmark International
Portfolio -- Class A
</Table>
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(+) This Variable Funding Option has been subject to a merger, substitution,
name or other change. Please see Appendix B for more information.
The Contract, certain contract features and/or some of the funding options may
not be available in all states.
This prospectus sets forth the information that you should know before investing
in the Contract. Please keep this prospectus for future reference. You can
receive additional information about your Contract by requesting a Statement of
Additional Information ("SAI") dated April 30, 2007. We filed the SAI with the
Securities and Exchange Commission ("SEC") and it is incorporated by reference
into this prospectus. To request a copy, write to MetLife Insurance Company of
Connecticut, Annuity Operations and Services, One Cityplace, 185 Asylum Street,
3CP, Hartford, CT 06103-3415, call 1-800-233-3591, or access the SEC's website
(http://www.sec.gov). See Appendix D for the SAI's table of contents. More
information about the Funding Options may be found in the prospectuses for the
Funding Options.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR THE ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OF ANY BANK, AND ARE NOT ISSUED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
PROSPECTUS DATED: APRIL 30, 2007
TABLE OF CONTENTS
<Table>
Glossary................................ 3
Summary................................. 5
Fee Table............................... 7
Condensed Financial Information......... 12
The Annuity Contract and The Retirement
Plan.................................. 12
The Annuity Contract.................... 12
General............................... 13
Contract Owner Inquiries.............. 13
Unallocated Contracts................. 13
Purchase Payments..................... 13
Crediting Purchase Payments........... 13
Accumulation Units.................... 14
Account Value......................... 14
The Variable Funding Options.......... 14
Notice of Substitution................ 16
Charges and Deductions Under the
Contract.............................. 22
General............................... 22
Surrender Charge...................... 23
Daily Asset Charge.................... 24
Variable Liquidity Benefit Charge..... 25
Funding Option Charges................ 25
Premium Tax........................... 25
Changes in Taxes Based upon Premium or
Value.............................. 26
TPA Administrative Charges............ 26
Transfers............................... 26
Transfers of Cash Value between
Funding Options.................... 26
Market Timing/ Excessive Trading...... 26
Transfers from Funding Options to
Contracts Not Issued by Us......... 28
Transfers to or from Other Contracts
Issued by Us....................... 28
Transfers from Contracts Not Issued by
Us................................. 28
Access to Your Money.................... 28
Ownership Provisions.................... 29
Types of Ownership.................... 29
Contract Owner........................ 29
Beneficiary........................... 29
Death Benefit........................... 29
Death Benefits Prior to the Annuity
Commencement Date.................. 29
The Annuity Period...................... 30
Maturity Date (Annuity Commencement
Date).............................. 30
Allocation of Annuity................. 30
Variable Annuity...................... 30
Determination of First Annuity
Payment............................ 30
Determination of Second and Subsequent
Annuity Payments................... 31
Fixed Annuity......................... 31
Election of Options................... 31
Retired Life Certificate.............. 31
Allocation of Cash Surrender Value
During the Annuity Period.......... 31
Annuity Options....................... 32
Variable Liquidity Benefit............ 32
Miscellaneous Contract Provisions....... 33
Contract Termination.................. 33
Suspension of Payments................ 33
Misstatement.......................... 33
The Separate Account.................... 34
Performance Information............... 34
Federal Tax Considerations.............. 35
General Taxation of Annuities......... 35
Qualified Annuity Contracts........... 36
Taxation of Qualified Annuity
Contracts.......................... 36
Mandatory Distributions for Qualified
Plans.............................. 36
Designated Roth Accounts for 403(b)
Plans and 401(k) Plans............. 37
Penalty Tax for Premature
Distributions...................... 38
Taxation of Death Benefit Proceeds.... 38
Other Tax Considerations................ 38
Puerto Rico Tax Considerations........ 38
Non-Resident Aliens................... 39
Hurricane Relief...................... 39
Changes to Tax Rules and
Interpretations.................... 39
Other Information....................... 40
The Insurance Company................. 40
Financial Statements.................. 40
Distribution of the Contracts......... 40
Conformity with State and Federal
Laws............................... 41
Voting Rights......................... 41
Contract Modification................. 41
Postponement of Payment (the Emergency
"Procedure")....................... 41
Restrictions on Financial
Transactions....................... 41
Legal Proceedings....................... 41
Appendix A -- Condensed Financial
Information........................... A-1
Appendix B -- Additional Information
Regarding the Underlying Funds........ B-1
Appendix C -- Portfolio Legal and
Marketing Names....................... C-1
Appendix D -- Contents of the Statements
of Additional Information............. D-1
</Table>
2
GLOSSARY
ACCUMULATION PERIOD -- The period before the commencement of Annuity payments.
ACCUMULATION UNIT -- An accounting unit of measure used to calculate values
before Annuity payments begin.
ANNUITANT -- A person on whose life the Annuity payments are to be made under a
Contract.
ANNUITY -- Payment of income for a stated period or amount.
ANNUITY COMMENCEMENT DATE -- The date on which Annuity payments are to begin.
ANNUITY PERIOD -- The period following commencement of Annuity payments.
BENEFICIARY(IES) -- The person(s) or trustee designated to receive contract
values in the event of a Participant's or Annuitant's death.
CASH SURRENDER VALUE -- The Cash Value less any amounts deducted upon surrender,
outstanding loans, any applicable premium taxes or other surrender charges not
previously deducted.
CASH VALUE -- The value of the Accumulation Units in Your Account less any
reductions for administrative charges. Sometimes referred to as "Account Value."
CODE -- The Internal Revenue Code of 1986, as amended, and all related laws and
regulations that are in effect during the term of this Contract.
COMPANY (WE, US, OUR) -- MetLife Insurance Company of Connecticut.
COMPETING FUND -- Any investment option under the Plan, which in our opinion,
consists primarily of fixed income securities and/or money market instruments.
CONTRACT DATE -- The date on which the Contract becomes effective, as shown on
the specifications page of the Contract.
CONTRACT DISCONTINUANCE -- The termination of the Contract Owner of the
Contract.
CONTRACT OWNER (YOU, YOUR) -- The Trustee or entity owning the Contract.
CONTRACT YEAR -- The twelve month period commencing with the Contract Date or
with any anniversary thereof.
DUE PROOF OF DEATH -- (i) a copy of a certified death certificate; (ii) a copy
of a certified decree of a court of competent jurisdiction as to the finding of
death; (iii) a written statement by a medical doctor who attended the deceased;
or (iv) any other proof satisfactory to us.
INSURANCE COMMISSIONS DISCLOSURE FORM -- The document required under the
Employee Retirement Income Security Act regarding commissions paid to agents
involved in the contract sale.
EXCESS PLAN CONTRIBUTIONS -- Plan contributions including excess deferrals,
excess contributions, excess aggregate contributions, excess annual additions,
and excess nondeductible contributions that require correction by the plan
administrator.
FIXED ACCOUNT -- Part of the General Account of the Company.
FIXED ANNUITY -- An Annuity with payments which remain fixed as to dollar amount
throughout the payment period and which do not vary with the investment
experience of a Separate Account.
FUNDING OPTIONS -- The variable investment options to which Purchase Payments
under the Contract may be allocated.
GENERAL ACCOUNT -- The Company's General Account in which amounts are held if
directed to the Fixed Account during the Accumulation Period and in which
reserves are maintained for Fixed Annuities during the Annuity Period.
HOME OFFICE -- MetLife Insurance Company of Connecticut, One Cityplace,
Hartford, CT 06103, or any other office that we may designate for the purpose of
administering this contract.
3
MATURITY DATE -- The date on which the Annuity payments are to begin.
PARTICIPANT -- An eligible person who is a member in the Plan.
PURCHASE PAYMENTS -- Payments made to the Contract.
PLAN -- An employer's retirement plan that qualifies for special tax treatment
under section 401 of the Code.
SEPARATE ACCOUNT -- MetLife of CT Separate Account QPN for Variable Annuities. A
segregated account exempt from registration with the Securities and Exchange
Commission pursuant to Section 3(c)(11) of the Investment Company Act of 1940,
the assets of which are invested solely in the Underlying Funds. The assets of
the Separate Account are held exclusively for the benefit of Contract Owners.
SUBACCOUNT -- The portion of the assets of the Separate Account that is
allocated to a particular Underlying Fund.
THIRD PARTY ADMINISTRATOR ("TPA") The entity that has separately contracted with
the Contract Owner to provide administrative and/or distribution services for
the Plan.
UNDERLYING FUND -- A portfolio of an open-end management investment company that
is registered with the Securities and Exchange Commission in which the
Subaccounts invest.
VALUATION DATE -- A day on which the New York Stock Exchange is open for
business. The value of the Separate Account is determined at the close of the
New York Stock Exchange on such days.
VALUATION PERIOD -- The Period between the end of one Valuation Date and the end
of the next Valuation Date.
VARIABLE ANNUITY -- An Annuity providing for payments varying in amount in
accordance with the investment experience of the assets held in the underlying
securities of the Separate Account.
WRITTEN REQUEST -- Instructions in a written form, satisfactory to us, and
received at the Home Office.
YOU, YOUR -- The Contract Owner, the Plan Trustee.
YOUR ACCOUNT -- Accumulation Units credited to you under this Contract.
4
SUMMARY:
UNALLOCATED GROUP VARIABLE ANNUITY CONTRACTS
THIS SUMMARY DETAILS SOME OF THE MORE IMPORTANT POINTS THAT YOU SHOULD KNOW AND
CONSIDER BEFORE PURCHASING THE CONTRACT. PLEASE READ THE ENTIRE PROSPECTUS
CAREFULLY.
CAN YOU GIVE ME A GENERAL DESCRIPTION OF THE CONTRACTS? The Contracts offered by
MetLife Insurance Company of Connecticut are designed for use in conjunction
with certain qualified plans including tax-qualified pension or profit sharing
plans under Section 401 of the Code. The minimum Purchase Payment allowed is an
average of $10,000 annually per Contract. The maximum Purchase Payment allowed
without Company approval is $3,000,000.
Because of the size of these Contracts, the involvement of the Third Party
Administrator, the unallocated nature of the Contract, and a competitive bidding
process, which may include negotiation, many of the charges imposed in the
Contract are likely to vary from one Plan to the next. The Contract design
allows the Company maximum flexibility, within the limitations imposed by law,
to "custom design" a charge structure that is likely to be acceptable to a
particular prospective Contract Owner.
The Contracts are issued on an unallocated basis. They are designed only for use
with certain Plans where the employer has secured the services of a Third Party
Administrator ("TPA") whose services are separate and distinct from the
Contracts. The Contracts are designed for use with Plans that secure the
services of a TPA that we have agreed may administer these Contracts. (The
Contracts are not designed for use with Plans that secure the services of any
other third party administrator.) If you purchase a Contract and later wish to
terminate the TPA services provided by the TPA you must also terminate the
Contract.
All Purchase Payments are allocated among the available Funding Options under
the Contract, as directed by the Contract Owner. There are not individual
allocations for individual Participants. The Contract Owner, through the TPA,
must maintain records of the account balance for each Participant.
The Contract, like all deferred variable annuity contracts, has two phases: the
accumulation phase and the payout phase (annuity period). During the
accumulation phase generally, pre tax contributions accumulate on a tax deferred
basis and are taxed as income upon withdrawal, presumably when the Participant
is in a lower tax bracket. The payout phase occurs when amounts attributable to
a Participant are distributed from the Contract. The amount of money accumulated
in the Contract determines the amount of income paid out during the payout
phase.
During the payout phase of amounts attributable to a Participant, you may elect
Annuity payments in the form of a variable annuity, a fixed annuity, or a
combination of both. If you elect for a Participant to receive payments from
your annuity, you can choose one of a number of annuity options.
Once you choose one of the annuity options attributable to a Participant and
payments begin, it cannot be changed. During the payout phase, those amounts
will be allocated to the same investment choices as during the accumulation
phase. If amounts are directed to the Funding Options, the dollar amount of the
payments may increase or decrease.
WHO IS THE CONTRACT ISSUED TO? The contract is issued to a Plan trustee. Where
we refer to "you," we are referring to the Plan trustee. The Contracts are
issued on an unallocated basis, and provide for fixed (General Account) and
variable (Separate Account) accumulations and annuity payouts. Where we refer to
your Contract, we are referring to a group unallocated Contract. We hold all
Purchase Payments under the Contract at your direction. As Contract Owner, you
have all rights in and obligations of the Contract. There are no individual
accounts under the Contract for individual participants in the Plan. We will
take direction only from you or your designee regarding the Contract. Depending
on your retirement plan provisions, certain features and/or funding options
described in this prospectus may not be available to you. Your retirement plan
provisions supercede the prospectus. The Contract may not currently be available
for sale in all states. Contracts issued in your state may provide different
features and benefits from and impose different costs (such as waiver of the
withdrawal charge on all Annuity Payments) than those described in this
prospectus.
CAN YOU GIVE A GENERAL DESCRIPTION OF THE FUNDING OPTIONS AND HOW THEY OPERATE?
The Funding Options represent Subaccounts of the Separate Account. You can
direct the Separate Account, through its Subaccounts, to use Purchase Payments
to purchase shares of one or more of the Underlying Funds that holds securities
consistent with its own investment policy. Depending on which Subaccounts you
select, the Underlying Funds may be retail funds that are
5
available to the public or they may be mutual funds that are only available to
insurance company separate accounts. Depending on market conditions, you (or for
allocated Contracts, Participants) may make or lose money in any of these
Funding Options.
You can transfer among the variable Funding Options without any current tax
implications. Currently there is no limit to the number of transfers allowed. We
may, in the future, limit the number of transfers allowed. At a minimum, we
would always allow one transfer every six months. We reserve the right to
restrict transfers that we determine will disadvantage other Contract Owners.
You may also transfer between the Fixed Account and the variable Funding Options
at least once every six months, provided you transfer no more than 20% of the
Fixed Account value out in any Contract Year. Additional restrictions may apply.
Amounts previously transferred from the Fixed Account to the Variable Funding
Options may not be transferred back to the Fixed Account for a period of at
least three months from the date of the transfer.
WHAT EXPENSES WILL BE ASSESSED UNDER THE CONTRACT? The Contract has insurance
features and investment features, and there are costs related to each. We deduct
a maximum Daily Asset Charge (also called the mortality and expense risk charge
or M&E charge) daily of 1.50% (1.30% for unallocated Contracts in Florida) of
the amounts you direct to the Funding Options. Each Funding Option also charges
for management costs and other expenses.
If you withdraw amounts from the Contract, a surrender charge may apply. The
amount of the charge depends on the length of time the Contract has been in
force. If you withdraw all amounts under the Contract, or if you begin receiving
annuity/income payments, we may be required by your state to deduct a premium
tax. For Contracts issued on or after May 24, 2005, the maximum surrender charge
is 5% of the amount surrendered in the first Contract Year, 4% in year two, 3%
in year three, 2% in year four, 1% in year five, and 0% beginning in the sixth
year. For Contracts issued before May 24, 2005, the maximum surrender charge is
5% of the amount surrendered in the first two Contract Years, up to 4% in years
three and four, up to 3% in years five and six, up to 2% in years seven and
eight, and 0% beginning in the ninth year.
Upon annuitization, if the Variable Liquidity Benefit is selected, there is a
maximum charge of 5% of the amounts withdrawn. Please refer to "The Annuity
Period" for a description of this benefit.
HOW WILL MY PURCHASE PAYMENTS AND WITHDRAWALS BE TAXED? Generally, the payments
you make to a qualified Contract during the accumulation phase are made with
before tax dollars. Generally, Participants will be taxed on Purchase Payments
attributable to them and on any earnings upon a withdrawal or receipt of Annuity
payments. If a Participant is younger than age 59 1/2 when he or she makes a
withdrawal, the Participant may be charged a 10% federal penalty tax on the
amount withdrawn. Participants may be required by federal tax laws to begin
receiving payments of amounts attributable to them or risk paying a penalty tax.
HOW MAY I ACCESS MY MONEY? You can take withdrawals any time during the
accumulation phase. Withdrawal charges may apply, as well as income taxes,
and/or a penalty tax on amounts withdrawn.
WHAT IS THE DEATH BENEFIT UNDER THE CONTRACT? If provided by the Contract, a
death benefit is provided in the event of death of the Participant prior to the
earlier of the Participant's 75th birthday or the Annuity Commencement Date.
Death benefits may not be available in all jurisdictions.
WHERE MAY I FIND OUT MORE ABOUT ACCUMULATION UNIT VALUES? The Condensed
Financial Information in Appendix A to this prospectus provides more information
about Accumulation Unit Values.
6
FEE TABLE
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The following tables describe the fees and expenses that you will pay when
buying, owning, and surrendering the Contract. The first table describes the
fees and expenses that you will pay at the time that you buy the Contract,
surrender the Contract, or transfer Account Value between Variable Funding
Options. Expenses shown do not include premium taxes, which may be applicable.
CONTRACT OWNER TRANSACTION EXPENSES
MAXIMUM TRANSACTION EXPENSES
<Table>
SURRENDER CHARGE:........................... 5%(1), (2)
As a percentage of amount surrendered
</Table>
<Table>
VARIABLE LIQUIDITY BENEFIT CHARGE:.......... 5%(3)
</Table>
The next table describes the fees and expenses that you will pay periodically
during the time that you own the Contract, not including Underlying Fund fees
and expenses.
(1) For Contracts issued on or after May 24, 2005, the surrender charge
declines to zero after the end of the 5th Contract Year. The charge is as
follows:
<Table>
<Caption>
CONTRACT YEAR
- ------------------------------------------
GREATER THAN OR EQUAL TO BUT LESS THAN SURRENDER CHARGE
0 years 1 years 5%
1 years 2 years 4%
2 years 3 years 3%
3 years 4 years 2%
4 years 5 years 1%
5 + years 0%
</Table>
(2) For Contracts issued before May 24, 2005, the surrender charge declines to
zero after the end of the 8(th) Contract Year. The charge is as follows:
<Table>
<Caption>
CONTRACT YEAR
- ------------------------------------------
GREATER THAN OR EQUAL TO BUT LESS THAN SURRENDER CHARGE
0 years 2 years 5%
2 years 4 years 4%
4 years 6 years 3%
6 years 8 years 2%
8+ years 0%
</Table>
(3) This withdrawal charge only applies when an Annuitant makes a surrender
after beginning to receive Annuity payments. For Contracts issued on or
after May 24, 2005, the charge is as follows:
<Table>
<Caption>
CONTRACT YEAR
- ------------------------------------------
GREATER THAN OR EQUAL TO BUT LESS THAN WITHDRAWAL CHARGE
0 years 1 years 5%
1 years 2 years 4%
2 years 3 years 3%
3 years 4 years 2%
4 years 5 years 1%
5+ years 0%
</Table>
7
For Contracts issued before May 24, 2005, the charge is as follows:
<Table>
<Caption>
CONTRACT YEAR
- ------------------------------------------
GREATER THAN OR EQUAL TO BUT LESS THAN WITHDRAWAL CHARGE
0 years 2 years 5%
2 years 4 years 4%
4 years 6 years 3%
6 years 8 years 2%
8+ years 0%
</Table>
MAXIMUM ANNUAL SEPARATE ACCOUNT CHARGES
RANGE OF DAILY ASSET (MORTALITY & EXPENSE RISK) CHARGE(4)
<Table>
<Caption>
AGGREGATE CONTRACT ASSETS TOTAL ANNUAL DAILY ASSET CHARGE
- --------------------------- -------------------------------
$0 -- $499,999.99 1.50%
$500,000 -- $999,999.99 1.30%
$1,000,000 -- $1,999,999.99 1.20%
$2,000,000 -- $2,999,999.99 1.10%
$3,000,000 -- $3,999,999.99 1.00%
$4,000,000 and over 0.85%
</Table>
We may reduce or eliminate the surrender charge and/or the daily asset charge
under the Contract. See "Charges and Deductions" below.
(4) We are waiving the following amounts of the M&E charge on these
Subaccounts: 0.15% for the Subaccount investing in the Western Asset
Management U.S. Government Portfolio of the Metropolitan Series Fund,
Inc.; an amount equal to the underlying fund expenses that are in excess
of 0.91% for the Subaccount investing in the Harris Oakmark International
Portfolio of the Met Investors Series Trust; and an amount equal to the
underlying expenses that were in excess of 0.87% for the Subaccount
investing in the Lord Abbett Growth and Income Portfolio -- Class B of the
Met Investors Series Trust.
UNDERLYING FUND EXPENSES AS OF DECEMBER 31, 2006 (UNLESS OTHERWISE INDICATED):
The first table below shows the range (minimum and maximum) of the total annual
operating expenses charged by all of the Underlying Funds, before any voluntary
or contractual fee waivers and/or expense reimbursements. The second table shows
each Underlying Fund's management fee, distribution and/or service fees (12b-1)
if applicable, and other expenses. The Underlying Funds provided this
information and we have not independently verified it. More detail concerning
each Underlying Fund's fees and expenses is contained in the prospectus for each
Underlying Fund. Current prospectuses for the Underlying Funds can be obtained
by calling your TPA at 1-800-519-9117.
MINIMUM AND MAXIMUM TOTAL ANNUAL UNDERLYING FUND OPERATING EXPENSES
<Table>
<Caption>
MINIMUM MAXIMUM
------- -------
TOTAL ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Underlying Fund assets, including
management fees, distribution and/or service fees (12b-1), and other
expenses)............................................................ 0.46% 1.72%
</Table>
UNDERLYING FUND FEES AND EXPENSES
(as a percentage of average daily net assets)
<Table>
<Caption>
DISTRIBUTION TOTAL CONTRACTUAL FEE NET TOTAL
AND/OR ANNUAL WAIVER ANNUAL
MANAGEMENT SERVICE OTHER OPERATING AND/OR EXPENSE OPERATING
UNDERLYING FUND: FEE (12b-1) FEES EXPENSES EXPENSES REIMBURSEMENT EXPENSES*
- ---------------- ------------ -------------- ---------- ----------- ----------------- -----------
AMERICAN FUNDS INSURANCE
SERIES -- CLASS 2
American Funds Global Growth Fund.. 0.55% 0.25% 0.03% 0.83% -- 0.83%
American Funds Growth Fund......... 0.32% 0.25% 0.02% 0.59% -- 0.59%
</Table>
8
<Table>
<Caption>
DISTRIBUTION TOTAL CONTRACTUAL FEE NET TOTAL
AND/OR ANNUAL WAIVER ANNUAL
MANAGEMENT SERVICE OTHER OPERATING AND/OR EXPENSE OPERATING
UNDERLYING FUND: FEE (12b-1) FEES EXPENSES EXPENSES REIMBURSEMENT EXPENSES*
- ---------------- ------------ -------------- ---------- ----------- ----------------- -----------
American Funds Growth-Income Fund.. 0.27% 0.25% 0.01% 0.53% -- 0.53%
DREYFUS VARIABLE INVESTMENT
FUND -- INITIAL SHARES
Dreyfus Variable Investment Fund
Appreciation Portfolio.......... 0.75% -- 0.07% 0.82% -- 0.82%
Dreyfus Variable Investment Fund
Developing Leaders Portfolio.... 0.75% -- 0.07% 0.82% -- 0.82%
FIDELITY(R) VARIABLE INSURANCE
PRODUCTS -- SERVICE CLASS 2
VIP Contrafund(R) Portfolio........ 0.57% 0.25% 0.09% 0.91% -- 0.91%
VIP Mid Cap Portfolio.............. 0.57% 0.25% 0.11% 0.93% -- 0.93%
FRANKLIN TEMPLETON VARIABLE INSURANCE
PRODUCTS TRUST -- CLASS 2
Franklin Small-Mid Cap Growth
Securities Fund................. 0.48% 0.25% 0.30% 1.03% 0.01% 1.02%(1)
Templeton Developing Markets
Securities Fund................. 1.23% 0.25% 0.24% 1.72% -- 1.72%
Templeton Foreign Securities Fund.. 0.63% 0.25% 0.18% 1.06% 0.03% 1.03%(2)
JANUS ASPEN SERIES -- SERVICE SHARES
Mid Cap Growth Portfolio........... 0.64% 0.25% 0.06% 0.95% -- 0.95%
LEGG MASON PARTNERS EQUITY TRUST
Legg Mason Partners Small Cap Value
Fund-Class A.................... 0.75% 0.25% 0.13% 1.13% -- 1.13%
LEGG MASON PARTNERS INCOME TRUST
Legg Mason Partners Investment
Grade Bond Fund -- Class A...... 0.63% 0.25% 0.18% 1.06% -- 1.06%
LEGG MASON PARTNERS VARIABLE
PORTFOLIOS II
Legg Mason Partners Variable
Fundamental Value
Portfolio -- Class I............ 0.75% 0.25% 0.13% 1.13% -- 1.13%
LEGG MASON PARTNERS VARIABLE EQUITY
TRUST
Legg Mason Partners Variable
Aggressive Growth
Portfolio -- Class I++.......... 0.75% -- 0.02% 0.77% -- 0.77%
Legg Mason Partners Variable
Appreciation Portfolio.......... 0.70% -- 0.01% 0.71% -- 0.71%
Legg Mason Partners Variable
Capital and Income
Portfolio -- Class I............ 0.75% -- 0.05% 0.80% -- 0.80%
Legg Mason Partners Variable Equity
Index Portfolio -- Class II..... 0.31% 0.25% 0.03% 0.59% -- 0.59%
Legg Mason Partners Variable
Investors Portfolio -- Class I.. 0.65% -- 0.07% 0.72% -- 0.72%
Legg Mason Partners Variable Large
Cap Growth Portfolio -- Class
I++............................. 0.75% -- 0.04% 0.79% -- 0.79%
Legg Mason Partners Variable Small
Cap Growth Portfolio -- Class
I............................... 0.75% -- 0.21% 0.96% -- 0.96%
Legg Mason Partners Variable Social
Awareness Portfolio++........... 0.66% -- 0.12% 0.78% -- 0.78%
LEGG MASON PARTNERS VARIABLE INCOME
TRUST
Legg Mason Partners Variable
Adjustable Rate Income
Portfolio++..................... 0.55% 0.25% 0.22% 1.02% -- 1.02%
Legg Mason Partners Variable
Diversified Strategic Income
Portfolio -- Class II........... 0.65% -- 0.08% 0.73% -- 0.73%
Legg Mason Partners Variable Global
High Yield Bond
Portfolio -- Class I............ 0.80% -- 0.18% 0.98% -- 0.98%
Legg Mason Partners Variable Money
Market Portfolio++.............. 0.45% -- 0.03% 0.48% -- 0.48%
MET INVESTORS SERIES TRUST(3)
Batterymarch Mid-Cap Stock
Portfolio -- Class A............ 0.70% -- 0.11% 0.81% -- 0.81%(4)
BlackRock High Yield
Portfolio -- Class A............ 0.60% -- 0.32% 0.92% -- 0.92%(5)
BlackRock Large-Cap Core
Portfolio -- Class E............ 0.63% 0.15% 0.22% 1.00% -- 1.00%(6)
Harris Oakmark International
Portfolio -- Class A............ 0.78% -- 0.13% 0.91% -- 0.91%
Janus Forty Portfolio -- Class A... 0.65% -- 0.06% 0.71% -- 0.71%(7)
</Table>
9
<Table>
<Caption>
DISTRIBUTION TOTAL CONTRACTUAL FEE NET TOTAL
AND/OR ANNUAL WAIVER ANNUAL
MANAGEMENT SERVICE OTHER OPERATING AND/OR EXPENSE OPERATING
UNDERLYING FUND: FEE (12b-1) FEES EXPENSES EXPENSES REIMBURSEMENT EXPENSES*
- ---------------- ------------ -------------- ---------- ----------- ----------------- -----------
Lord Abbett Bond Debenture
Portfolio -- Class A............ 0.50% -- 0.04% 0.54% -- 0.54%
Lord Abbett Growth and Income
Portfolio -- Class B............ 0.50% 0.25% 0.03% 0.78% -- 0.78%
Lord Abbett Mid-Cap Value
Portfolio -- Class B............ 0.68% 0.25% 0.07% 1.00% -- 1.00%
MFS(R) Value Portfolio -- Class A.. 0.73% -- 0.23% 0.96% -- 0.96%(8)
Met/AIM Capital Appreciation
Portfolio -- Class A............ 0.77% -- 0.09% 0.86% -- 0.86%(9)
Neuberger Berman Real Estate
Portfolio -- Class A............ 0.64% -- 0.04% 0.68% -- 0.68%
Pioneer Fund Portfolio -- Class A.. 0.75% -- 0.30% 1.05% 0.05% 1.00%(10)
Pioneer Strategic Income
Portfolio -- Class A............ 0.70% -- 0.12% 0.82% -- 0.82%(11)
Third Avenue Small Cap Value
Portfolio -- Class B............ 0.74% 0.25% 0.04% 1.03% -- 1.03%
METLIFE INVESTMENT FUNDS -- CLASS
I(12)
MetLife Investment Diversified Bond
Fund............................ 0.41% -- 0.09% 0.50% 0.01% 0.49%(13)
MetLife Investment International
Stock Fund...................... 0.73% -- 0.20% 0.93% 0.01% 0.92%
MetLife Investment Large Company
Stock Fund...................... 0.52% -- 0.11% 0.63% 0.01% 0.62%
MetLife Investment Small Company
Stock Fund...................... 0.64% -- 0.14% 0.78% 0.01% 0.77%(14)
METROPOLITAN SERIES FUND, INC.
BlackRock Aggressive Growth
Portfolio -- Class D............ 0.72% 0.10% 0.06% 0.88% -- 0.88%
BlackRock Bond Income
Portfolio -- Class A............ 0.39% -- 0.07% 0.46% 0.01% 0.45%(15)
FI Large Cap Portfolio -- Class A.. 0.78% -- 0.06% 0.84% -- 0.84%(16)
FI Value Leaders Portfolio -- Class
D............................... 0.64% 0.10% 0.07% 0.81% -- 0.81%
MFS(R) Total Return
Portfolio -- Class F............ 0.53% 0.20% 0.05% 0.78% -- 0.78%(17)
T. Rowe Price Large Cap Growth
Portfolio -- Class B............ 0.60% 0.25% 0.08% 0.93% -- 0.93%
Western Asset Management U.S.
Government Portfolio -- Class
A............................... 0.50% -- 0.07% 0.57% -- 0.57%
PIMCO VARIABLE INSURANCE
TRUST -- ADMINISTRATIVE CLASS
Total Return Portfolio............. 0.25% 0.15% 0.25% 0.65% -- 0.65%
TEMPLETON GROWTH FUND, INC. -- CLASS
A.................................. 0.57% 0.25% 0.23% 1.05% -- 1.05%
VAN KAMPEN LIFE INVESTMENT TRUST
Comstock Portfolio -- Class II..... 0.56% 0.25% 0.03% 0.84% -- 0.84%
Strategic Growth Portfolio -- Class
II.............................. 0.70% 0.25% 0.08% 1.03% -- 1.03%
</Table>
<Table>
<Caption>
TOTAL CONTRACTUAL FEE
DISTRIBUTION AND/OR ANNUAL WAIVER
MANAGEMENT SERVICE OTHER OPERATING AND/OR EXPENSE NET TOTAL ANNUAL
UNDERLYING FUND: FEE (12b-1) FEES EXPENSES EXPENSES REIMBURSEMENT OPERATING EXPENSES*
- ---------------- ---------- ------------------- -------- --------- --------------- -------------------
METROPOLITAN SERIES
FUND, INC.
MetLife Aggressive
Allocation
Portfolio -- Class
B.................. 0.10% 0.25% 0.07% 0.42% 0.07% 0.35%
MetLife Conservative
Allocation
Portfolio -- Class
B.................. 0.10% 0.25% 0.09% 0.44% 0.09% 0.35%
MetLife Conservative
to Moderate
Allocation
Portfolio -- Class
B.................. 0.10% 0.25% 0.02% 0.37% 0.02% 0.35%
MetLife Moderate
Allocation
Portfolio -- Class
B.................. 0.10% 0.25% 0.01% 0.36% 0.01% 0.35%
MetLife Moderate to
Aggressive
Allocation
Portfolio -- Class
B.................. 0.10% 0.25% 0.01% 0.36% 0.01% 0.35%
<Caption>
NET TOTAL ANNUAL
OPERATING EXPENSES
INCLUDING
UNDERLYING FUND
UNDERLYING FUND: EXPENSES
- ---------------- ------------------
METROPOLITAN SERIES
FUND, INC.
MetLife Aggressive
Allocation
Portfolio -- Class
B.................. 1.10%(18)
MetLife Conservative
Allocation
Portfolio -- Class
B.................. 0.96%
MetLife Conservative
to Moderate
Allocation
Portfolio -- Class
B.................. 1.00%
MetLife Moderate
Allocation
Portfolio -- Class
B.................. 1.05%
MetLife Moderate to
Aggressive
Allocation
Portfolio -- Class
B.................. 1.10%
</Table>
- ---------
* New Total Annual Operating Expenses do not reflect (1) voluntary waivers
of fees or expenses; (2) contractual waivers that are in effect for less
than one year from the date of this Prospectus; or (3) expense reductions
resulting from custodial fee credits or directed brokerage arrangements.
++ Fees and Expenses are based on the Portfolio's fiscal year ended October
31, 2006.
10
NOTES
(1) Other Expenses include 0.01% of "Acquired Fund Fees and Expenses," which
are fees and expenses attributable to underlying portfolios in which the
Portfolio invested during the preceding fiscal year. The manager has
agreed in advance to reduce its fee from assets invested by the Fund in a
Franklin Templeton money market fund (the acquired fund) to the extent
that the Fund's fees and expenses are due to those of the acquired fund.
This reduction is required by the Trust's board of trustees and an
exemptive order of the Securities and Exchange Commission (SEC).
(2) Other Expenses include 0.03% of "Acquired Fund Fees and Expenses," which
are fees and expenses attributable to underlying portfolios in which the
Portfolio invested during the preceding fiscal year. The manager has
agreed in advance to reduce its fee from assets invested by the Fund in a
Franklin Templeton money market fund (the acquired fund) to the extent
that the Fund's fees and expenses are due to those of the acquired fund.
This reduction is required by the Trust's board of trustees and an
exemptive order of the Securities and Exchange Commission (SEC).
(3) Other Expenses have been restated to reflect new custodian, fund
administration and transfer agent fee schedules, as if these fee schedules
had been in effect for the previous fiscal year.
(4) Other Expenses have been restated to reflect the current Met Investors
Series Trust fee schedule, as if that schedule had applied to the
Portfolio for the entire fiscal year.
(5) Other Expenses have been restated to reflect the current Met Investors
Series Trust fee schedule, as if that schedule had applied to the
Portfolio for the entire fiscal year. The Management Fee has been restated
to reflect an amended management fee agreement, as if the agreement had
been in effect during the previous fiscal year.
(6) Other Expenses have been restated to reflect the current Met Investors
Series Trust fee schedule, as if that schedule had applied to the
Portfolio for the entire fiscal year. The Management Fee has been restated
to reflect an amended management fee agreement, as if the agreement had
been in effect during the previous fiscal year. This is a new share class
for this Portfolio. Operating expenses are estimated based on the expenses
of the Class A shares of the Portfolio.
(7) Other Expenses have been restated to reflect the current Met Investors
Series Trust fee schedule, as if that schedule had applied to the
Portfolio for the entire fiscal year.
(8) Other Expenses have been restated to reflect the current Met Investors
Series Trust fee schedule, as if that schedule had applied to the
Portfolio for the entire fiscal year. The Management Fee has been restated
to reflect an amended management fee agreement, as if the agreement had
been in effect during the previous fiscal year.
(9) Other Expenses have been restated to reflect the current Met Investors
Series Trust fee schedule, as if that schedule had applied to the
Portfolio for the entire fiscal year. The Management Fee has been restated
to reflect an amended management fee agreement, as if the agreement had
been in effect during the previous fiscal year. The Portfolio's fiscal
year end has been changed from 10/31 to 12/31. The fees and expenses shown
are for the Portfolio's last fiscal year ended October 31, 2006.
(10) Other Expenses have been restated to reflect the current Met Investors
Series Trust fee schedule, as if that schedule had applied to the
Portfolio for the entire fiscal year. Pursuant to an expense limitation
agreement, the Investment Adviser has agreed, for a period of one year
commencing May 1, 2007, to limit its fee and to reimburse expenses to the
extent necessary to limit total operating expenses to 1.00%, excluding
12b-1 fees.
(11) Other Expenses have been restated to reflect the current Met Investors
Series Trust fee schedule, as if that schedule had applied to the
Portfolio for the entire fiscal year. The Management Fee has been restated
to reflect an amended management fee agreement, as if the agreement had
been in effect during the previous fiscal year. The Portfolio's fiscal
year end has been changed from 10/31 to 12/31. The fees and expenses shown
are for the Portfolio's last fiscal year ended October 31, 2006.
(12) Other Expenses have been restated to reflect current fees, as if current
fees had been in effect for the previous fiscal year.
(13) Assumes fee schedules were in place for the full year with Wellington
Management Company, LLP.
(14) Assumes fee schedules were in place for the full year with Delaware
Management Company.
(15) MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007
through April 30, 2008, to reduce the Management Fee to the annual rate of
0.325% for amounts over $1 billion but less than $2 billion.
(16) The Management Fee has been restates to reflect current fees and has been
in effect for the previous fiscal year.
(17) The Management Fee has been restated to reflect current fees, as if
current fees had been in effect for the previous fiscal year.
(18) These Portfolios are "funds of funds" that invest substantially all of
their assets in other portfolios of the Met Investors Series Trust and the
Metropolitan Series Fund, Inc. Because the Portfolios invest in other
underlying portfolios, each Portfolio will also bear its pro rata portion
of the operating expenses of the underlying portfolios in which the
Portfolio invests, including the management fee. The weighted average of
the total operating expenses of the underlying portfolios, after any
applicable fee waivers and expense reimbursements, as of December 31,
2006, were: 0.61% for the MetLife Conservative Allocation Portfolio, 0.65%
for the MetLife Conservative to Moderate Allocation Portfolio, 0.70% for
the MetLife Moderate Allocation Portfolio, 0.75% for the MetLife Moderate
to Aggressive Allocation Portfolio and 0.75% for the MetLife Aggressive
Strategy Portfolio. The total operating expenses of the Portfolios,
including the weighted average of the total operating expenses of the
underlying portfolio before any applicable fee waivers and expense
reimbursements, as of December 31, 2006, were: 1.05% for the MetLife
Conservative Allocation Portfolio, 1.02% for the MetLife Conservative to
Moderate Allocation Portfolio, 1.07% for the MetLife Moderate Allocation
Portfolio, 1.11% for the MetLife Moderate to Aggressive Allocation
Portfolio and 1.18% for the MetLife Aggressive Strategy Portfolio.
Contract and Policy Owners may be able to realize lower aggregate expenses
by investing directly in the underlying portfolios instead of investing in
the Portfolios. A Contract or Policy Owner who chooses to invest directly
in the underlying portfolios would not, however, receive the asset
allocation services provided by Met Investors Advisory LLC. (See the fund
prospectus for a description of each Portfolio's target allocation.)
MetLife Advisers, LLC has contractually agreed, for the period May 1, 2007
through April 30, 2008, to waive fees or pay all expenses (other than
brokerage costs, taxes, interest and any extraordinary expenses) so as to
limit net total annual operating expenses of the Portfolio to 0.10%,
excluding 12b-1 fees.
11
EXAMPLES
These examples are intended to help you compare the cost of investing in the
Contract with the cost of investing in other variable annuity contracts. These
costs include Contract Owner transaction expenses, contract fees, separate
account annual expenses, and Underlying Fund total annual operating expenses.
These examples do not represent past or future expenses. Your actual expenses
may be more or less than those shown.
These examples assume that you invest $10,000 in the Contract for the time
periods indicated and that your investment has a 5% return each year. The
examples reflect the annual contract administrative charge, factoring in that
the charge is waived for contracts over a certain value. Additionally, the
examples are based on the minimum and maximum Underlying Fund total annual
operating expenses shown above, and do not reflect any Underlying Fund fee
waivers and/or expense reimbursements. The examples assume you have allocated
all of your Contract Value to either the Underlying Fund with the maximum total
annual operating expenses or the Underlying Fund with the minimum total annual
operating expenses.
EXAMPLE 1 (FOR CONTRACTS ISSUED ON OR AFTER MAY 24, 2005)
<Table>
<Caption>
IF CONTRACT IS SURRENDERED AT THE IF CONTRACT IS NOT SURRENDERED OR
END OF PERIOD SHOWN: ANNUITIZED AT END OF PERIOD SHOWN:
---------------------------------------------- ----------------------------------
FUNDING OPTION 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS
- -------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Underlying Fund with Maximum Total
Annual Operating Expenses............... $825 $1,293 $1,782 $3,509 $325 $993 $1,682
Underlying Fund with Minimum Total
Annual Operating Expenses............... $700 $917 $1,159 $2,284 $200 $617 $1,059
<Caption>
IF
CONTRACT
IS NOT
SURREN-
DERED OR
ANNUITIZED
AT END OF
PERIOD
SHOWN:
----------
FUNDING OPTION 10 YEARS
- -------------- ----------
Underlying Fund with Maximum Total
Annual Operating Expenses............... $3,509
Underlying Fund with Minimum Total
Annual Operating Expenses............... $2,284
</Table>
EXAMPLE 2 (FOR CONTRACTS ISSUED BEFORE MAY 24, 2005)
<Table>
<Caption>
IF CONTRACT IS SURRENDERED AT THE IF CONTRACT IS NOT SURRENDERED OR
END OF PERIOD SHOWN: ANNUITIZED AT END OF PERIOD SHOWN:
---------------------------------------------- ----------------------------------
FUNDING OPTION 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS
- -------------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Underlying Fund with Maximum Total
Annual Operating Expenses............... $825 $1,393 $1,982 $3,509 $325 $993 $1,682
Underlying Fund with Minimum Total
Annual Operating Expenses............... $700 $1,017 $1,359 $2,284 $200 $617 $1,059
<Caption>
IF
CONTRACT
IS NOT
SURREN-
DERED OR
ANNUITIZED
AT END OF
PERIOD
SHOWN:
----------
FUNDING OPTION 10 YEARS
- -------------- ----------
Underlying Fund with Maximum Total
Annual Operating Expenses............... $3,509
Underlying Fund with Minimum Total
Annual Operating Expenses............... $2,284
</Table>
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
See Appendix A.
THE ANNUITY CONTRACT AND THE RETIREMENT PLAN
- --------------------------------------------------------------------------------
The Contract may provide that all or some of the rights or choices as described
in this Prospectus are subject to the plan's terms. For example, limitations may
apply to investment choices, purchase payments, withdrawals, transfers, loans,
the death benefit and Annuity options.
The Contract may provide that a plan administrative fee will be paid by making a
withdrawal from the Contract Value. Also, the Contract may require a signed
authorization from the plan administrator to exercise certain rights. We may
rely on the plan administrator's statements to us as to the terms of the plan.
We are not a party to the retirement plan. We will not be responsible for
determining what the plan says.
THE ANNUITY CONTRACT
- --------------------------------------------------------------------------------
The unallocated group variable annuity contract is between the Contract Owner
("you") and the Company. This is the prospectus -- it is not the Contract. The
prospectus highlights many contract provisions to focus your attention on
12
the Contract's essential features. Your rights and obligations under the
Contract will be determined by the language of the Contract itself. When you
receive your Contract, we suggest you read it promptly and carefully. There may
be differences in your Contract from the descriptions in this prospectus because
of the requirements of the state where we issued your Contract. We will include
any such differences in your Contract.
We encourage you to evaluate the fees, expenses, benefits and features of this
group annuity contract against those of other investment products, including
other group annuity products offered by us and other insurance companies. Before
purchasing this or any other investment product you should consider whether the
product you purchase is consistent with your risk tolerance, investment
objectives, investment time horizon, financial and tax situation, liquidity
needs and how you intend to use the annuity.
GENERAL
The Contracts described in this prospectus are designed for use only with plans
that qualify for special tax treatment under Section 401 of the Code. Purchase
Payments may be allocated to your choice of one or more Funding Options.
Purchase Payments less any applicable premium tax ("Net Purchase Payments") are
applied to purchase Separate Account Accumulation Units of the appropriate
Funding Option. The Accumulation Unit value will be determined as of the end of
the Valuation Period during which the payments were received. The value of your
investment during the Accumulation Period will vary in accordance with the net
income and performance of each Funding Option's individual investments. While
you will not receive any dividends or capital gains from the Funding Options,
they will be reflected in the value of that Funding Option's corresponding
Accumulation Unit. During the Variable Annuity payout period, Annuity payments
and reserve values will vary in accordance with these factors.
Certain changes and elections must be made in writing to the Company. Where the
term "Written Request" is used, it means that you must send written information
to our Home Office in a form and content satisfactory to us.
Purchase of this Contract does not provide your Plan with any additional tax
deferral benefits beyond those provided by the Plan. Accordingly, you should
consider purchasing the Contract for its Death Benefit, Annuity Option Benefits
or other non-tax related benefits.
CONTRACT OWNER INQUIRIES
Any questions you have about your Contract should be directed to the TPA at 1-
800-519-9117.
UNALLOCATED CONTRACTS
The Contract is issued on an unallocated basis. It is designed for use with
certain Plans where the employer has secured the services of a TPA that we have
agreed may administer these Contracts. The TPA's services are separate and
distinct from the Contract. The Company is not responsible for and has no
obligation relating to services performed for the Plan by the TPA.
We will issue the Contracts to the Plan sponsor or the Plan trustee. We hold all
Purchase Payments under the Contract, as directed by the Contract Owner or its
designee. There are no individual accounts under the Contract for individual
Participants in the Plan.
PURCHASE PAYMENTS
The minimum average Purchase Payment allowed is $10,000 annually per Contract.
We may refuse to accept total purchase payments over $3,000,000.
CREDITING PURCHASE PAYMENTS
We accept purchase payments made by check or cashier's check. We do not accept
cash, money orders or traveler's checks. We apply Net Purchase Payments to
purchase Accumulation Units of the selected Funding Options. We will apply the
initial Purchase Payment less any applicable premium tax within two business
days after we receive it at our Home Office with a properly completed
application or order request. If your request or other information accompanying
the initial Purchase Payment is incomplete when received, we will hold the
Purchase Payment for up to five business days. If we cannot obtain the necessary
information within five business days of our receipt of the
13
initial Purchase Payment, we will return the Purchase Payment in full, unless
you specifically consent for us to keep it until you provide the necessary
information.
We reserve the right to refuse purchase payments made via a personal check in
excess of $100,000. Purchase payments over $100,000 may be accepted in other
forms, including but not limited to, EFT/wire transfers, certified checks,
corporate checks, and checks written on financial institutions. The form in
which we receive a purchase payment may determine how soon subsequent
disbursement requests may be fulfilled. (See "Access To Your Money.")
We will credit subsequent Purchase Payments to a Contract on the same business
day we receive them, if they are received in good order by our Home Office by
4:00 p.m. Eastern time. A business day is any day that the New York Stock
Exchange is open for regular trading (except when trading is restricted due to
an emergency as defined by the Securities and Exchange Commission).
Where permitted by state law, we reserve the right to restrict Purchase Payments
into the Fixed Account whenever the credited interest rate on the Fixed Account
is equal to the minimum guaranteed interest rate specified under the Contract.
We will provide you with the address of the office to which purchase payments
are to be sent.
ACCUMULATION UNITS
The period between the Contract Date and the Maturity Date is the Accumulation
Period. During the Accumulation Period, an Accumulation Unit is used to
calculate the value of a Contract. Each Funding Option has a corresponding
Accumulation Unit value. The Accumulation Units are valued each business day and
their values may increase or decrease from day to day. The daily change in the
value of an Accumulation Unit each day is based on the investment performance of
the corresponding Underlying Fund, and the deduction of separate account charges
shown in the Fee Table in this prospectus. The number of Accumulation Units we
will credit to your Contract once we receive a Purchase Payment, or transfer
request (or liquidate for a withdrawal request) is determined by dividing the
amount directed to each Funding Option (or taken from each Variable Funding
Option) by the value of its Accumulation Unit. Normally, we calculate the value
of an Accumulation Unit for each Funding Option as of the close of regular
trading (generally 4:00 p.m. Eastern time) each day the New York Stock Exchange
is open. After the value is calculated, we credit your Contract. During the
Annuity Period (i.e., after the Maturity Date), you are credited with Annuity
Units.
ACCOUNT VALUE
During the Accumulation Period, we determine the Account Value by multiplying
the total number of Funding Option Accumulation Units credited to that account
by the current Accumulation Unit value for the appropriate Funding Option, and
adding the sums for each Funding Option. There is no assurance that the value in
any of the Funding Options will equal or exceed the Purchase Payments made to
such Funding Options.
THE VARIABLE FUNDING OPTIONS
You choose the Variable Funding Options to which you allocate your Purchase
Payments. From time to time we may make new Variable Funding Options available.
These Variable Funding Options are Subaccounts of the Separate Account. The
Subaccounts invest in the Underlying Funds. You are not investing directly in
the Underlying Fund. Each Underlying Fund is a portfolio of an open-end
management investment company that is registered with the SEC under the
Investment Company Act of 1940. These Underlying Funds are not publicly traded
and are only offered through variable annuity contracts, variable life insurance
products, and may be in some instances, certain retirement plans. They are not
the same retail mutual funds as those offered outside of a variable annuity or
variable life insurance product, although the investment practices and fund
names may be similar and the portfolio managers may be identical. Accordingly,
the performance of the retail mutual fund is likely to be different from that of
the Underlying Fund.
A few of the Underlying Funds are retail mutual funds which are also available
to investors outside of variable annuity products. The investment return of the
subaccounts of the Contract that invest in these retail funds will be lower than
the investment return of the corresponding retail funds themselves due to the
Contract charges and expenses you bear while you hold the Contract.
14
We select the Underlying Funds offered through this Contract based on several
criteria, including asset class coverage, the strength of the adviser's or
subadviser's reputation and tenure, brand recognition, performance, and the
capability and qualification of each investment firm. Another factor we consider
during the selection process is whether the Underlying Fund's adviser or
subadviser is one of our affiliates or whether the Underlying Fund, its adviser,
its subadviser(s), or an affiliate will make payments to us or our affiliates.
In this regard, the profit distributions we receive from our affiliated
investment advisers are a component of the total revenue that we consider in
configuring the features and investment choices available in the variable
insurance products that we and our affiliated insurance companies issue. Since
we and our affiliated insurance companies may benefit more from the allocation
of assets to portfolios advised by our affiliates than those that are not, we
may be more inclined to offer portfolios advised by our affiliates in the
variable insurance products we issue. For additional information on these
arrangements, see "Payments We Receive." We review the Underlying Funds
periodically and may remove an Underlying Fund or limit its availability to new
Purchase Payments and/or transfers of Contract Value if we determine that the
Underlying Fund no longer meets one or more of the selection criteria, and/or if
the Underlying Fund has not attracted significant allocations from Contract
Owners. In some cases, we have included Underlying Funds based on
recommendations made by broker-dealer firms. When the Company develops a
variable annuity product in cooperation with a fund family or distributor (e.g.,
a "private label" product) the Company will generally include Underlying Funds
based on recommendations made by the fund family or distributor, whose selection
criteria may differ from the Company's selection criteria.
WE DO NOT PROVIDE ANY INVESTMENT ADVICE AND DO NOT RECOMMEND OR ENDORSE ANY
PARTICULAR UNDERLYING FUND. YOU BEAR THE RISK OF ANY DECLINE IN THE CONTRACT
VALUE OF YOUR CONTRACT RESULTING FROM THE PERFORMANCE OF THE UNDERLYING FUNDS
YOU HAVE CHOSEN.
If investment in the Underlying Funds or a particular Underlying Fund is no
longer possible, in our judgment becomes inappropriate for purposes of the
Contract, or for any other reason in our sole discretion, we may substitute
another Underlying Fund or Underlying Funds without your consent. The
substituted Underlying Fund may have different fees and expenses. Substitution
may be made with respect to existing investments or the investment of future
Purchase Payments, or both. However, we will not make such substitution without
any necessary approval of the Securities and Exchange Commission and applicable
state insurance departments. Furthermore, we may close Underlying Funds to
allocations of Purchase Payments or Account Value, or both, at any time in our
sole discretion.
In certain circumstances, the Company's ability to remove or replace an
Underlying Fund may be limited by the terms of a five-year agreement between
MetLife, Inc. (MetLife) and Legg Mason, Inc. (Legg Mason) relating to the use of
certain Underlying Funds advised by Legg Mason affiliates. The agreement sets
forth the conditions under which the Company can remove an Underlying Fund,
which, in some cases, may differ from the Company's own selection criteria. In
addition, during the term of the agreement, subject to the Company's fiduciary
and other legal duties, the Company is generally obligated in the first instance
to consider Underlying Funds advised by Legg Mason affiliates in seeking to make
a substitution for an Underlying Fund advised by a Legg Mason affiliate. The
agreement was originally entered into on July 1, 2005 by MetLife and certain
affiliates of Citigroup Inc. (Citigroup) as part of MetLife's acquisition of The
Travelers Insurance Company (now MetLife Insurance Company of Connecticut) and
The Travelers Life and Annuity Company (now MetLife Life and Annuity Company of
Connecticut) from Citigroup. Legg Mason replaced the Citigroup affiliates as a
party to the agreement when Citigroup sold its asset management business to Legg
Mason. The agreement also obligates Legg Mason to continue making payments to
the Company with respect to Underlying Funds advised by Legg Mason affiliates,
on the same terms provided for in administrative services agreements between
Citigroup's asset management affiliates and The Travelers insurance companies
that predated the acquisition.
PAYMENTS WE RECEIVE. As described above, an investment adviser (other than our
affiliates MetLife Advisers, LLC, and Met Investors Advisory, LLC) or subadviser
of an Underlying Fund, or its affiliates, may make payments to the Company
and/or certain of our affiliates. These payments may be used for any corporate
purpose, including payment of expenses for certain administrative, marketing and
support services with respect to the Contract and, in the Company's role as
intermediary with respect to, the Underlying Funds. The Company and its
affiliates may profit from these payments. These payments may be derived, in
whole or in part, from the advisory fee deducted from Underlying Fund assets.
Contract Owners, through their indirect investment in the Underlying Funds, bear
the costs of these advisory fees (see the Underlying Funds' prospectuses for
more information). The amount of the payments we receive is based on a
percentage of assets of the Underlying Funds attributable to the Contracts and
certain other variable insurance products that the Company and its affiliates
issue. These percentages differ and some advisers or subadvisers (or other
affiliates) may pay the Company more than others. These percentages currently
range up to
15
0.50%. Additionally, an investment adviser or subadviser of an Underlying Fund
or its affiliates may provide the Company with wholesaling services that assist
in the distribution of the Contracts and may pay the Company and/or certain of
our affiliates amounts to participate in sales meetings. These amounts may be
significant and may provide the adviser or subadviser (or their affiliate) with
increased access to persons involved in the distribution of the Contracts.
The Company and/or certain of its affiliated insurance companies have joint
ownership interests in affiliated investment advisers MetLife Advisers, LLC and
Met Investors Advisory, LLC, which are formed as "limited liability companies".
The Company's ownership interests in MetLife Advisers, LLC and Met Investors
Advisory, LLC entitle us to profit distributions if the adviser makes a profit
with respect to the advisory fees it receives from the Underlying Fund. The
Company will benefit accordingly from assets allocated to the Underlying Funds
to the extent they result in profits to the advisers. (See "Fee
Table -- Underlying Fund Fees and Expenses" for information on the management
fees paid by the Underlying Funds and the Statement of Additional Information
for the Underlying Funds for information on the management fees paid by the
advisers to the subadvisers.)
Certain Underlying Funds have adopted a Distribution Plan under Rule 12b-1 of
the Investment Company Act of 1940. An Underlying Fund's 12b-1 Plan, if any, is
described in more detail in the Underlying Fund's prospectus. (See "Fee
Table -- Underlying Fund Fees and Expenses" and "Other Information-Distribution
of the Contracts.") Any payments we receive pursuant to those 12b-1 Plans are
paid to us or our distributor. Payments under an Underlying Fund's 12b-1 Plan
decrease the Underlying Fund's investment return.
We make certain payments to American Funds Distributors, Inc., principal
underwriter for the American Funds Insurance Series. (See "Other
Information -- Distribution of the Contracts.")
Each Underlying Fund has different investment objectives and risks. The
Underlying Fund prospectuses contain more detailed information on each
Underlying Fund's investment strategy, investment advisers and its fees. You may
obtain an Underlying Fund prospectus by calling 1-800-233-3591 or through your
registered representative. We do not guarantee the investment results of the
Underlying Funds.
NOTICE OF SUBSTITUTION
MetLife Insurance Company of Connecticut and MetLife Life and Annuity Company of
Connecticut, (together the "Company") filed an application with the Securities
and Exchange Commission ("SEC") requesting an order to allow the Company to
remove the four MetLife Investment Funds ("Existing Funds") and substitute four
new Underlying Funds ("Replacement Funds") as shown below. The Replacement Funds
are portfolios of the Metropolitan Series Fund, Inc. Each Replacement Fund will
be added as an Underlying Fund on or before the date of the substitution.
To the extent required by law, approval of the proposed substitution is being
obtained from the state insurance regulators in certain jurisdictions.
The Company believes that the proposed substitutions are in the best interest of
Contract Owners. Each Replacement Fund will have at least a similar investment
objective and policies as the Existing Fund. The Company will bear all expenses
related to the substitutions, and it will have no tax consequences for you. The
Company anticipates that, if such order is granted, the proposed substitutions
will occur on or about November 9, 2007.
The proposed substitution and respective subadviser is:
<Table>
<Caption>
EXISTING FUND AND SUBADVISERS REPLACEMENT FUND AND SUBADVISER
- --------------------------------------------- ---------------------------------------------
METLIFE INVESTMENT LARGE COMPANY STOCK FUND METLIFE STOCK INDEX PORTFOLIO
Wellington Management Company LLP MetLife Investment Advisors Company, LLC
ClearBridge Advisors, LLC and SSgA Funds
Management, Inc.
METLIFE INVESTMENT SMALL COMPANY STOCK FUND RUSSELL 2000(R) PORTFOLIO OF MET SERIES FUND
Delaware Management Company, OFI MetLife Investment Advisors Company, LLC
Institutional Asset Management, Inc. and
SSgA Funds Management, Inc.
METLIFE INVESTMENT INTERNATIONAL STOCK FUND MORGAN STANLEY EAFE(R) INDEX PORTFOLIO
AllianceBernstein L.P., Oechsle MetLife Investment Advisors Company, LLC
International Advisors LLC and SSgA Funds
Management, Inc.
METLIFE INVESTMENT DIVERSIFIED BOND FUND LEHMAN BROTHERS(R) AGGREGATE BOND INDEX
PORTFOLIO
Western Asset Management Company, MetLife Investment Advisors Company, LLC
Wellington Management Company LLP and SSgA
Funds Management, Inc.
</Table>
16
Please note that:
- No action is required on your part at this time. You will not need to
file a new election or take any immediate action if the SEC approves
the substitutions.
- The elections you have on file for allocating your Contract Value and
Purchase Payments will be redirected to the Replacement Funds unless
you change your elections and transfer your Contract Value before the
substitutions take place.
- You may transfer amounts in your Contract among the variable funding
options and the fixed option as usual. The substitutions will not be
treated as transfers for purposes of the transfer provisions of your
Contract, subject to the Company's restrictions on transfers to
prevent or limit "market timing" and excessive trading activities by
Contract Owners or agents of Contract Owners.
- If you make one transfer from one of the above Existing Funds before
the substitution, or from the Replacement Fund after the substitution,
any transfer charge that might otherwise be imposed will be waived
from the date of this Notice through the date that is 30 days after
the substitution.
- On the effective date of the substitutions, your Contract Value in the
variable funding options will be the same as before the substitutions.
However, the number of units you receive in the Replacement Funds will
be different from the number of units in your Existing Funds, due to
the difference in unit values.
- There will be no tax consequences to you.
Following the substitutions, if you had Contract Value in an Existing Fund, we
will send you a prospectus for Metropolitan Series Fund, Inc., as well as notice
of the actual date of the substitutions and confirmation of the transfers.
Please contact your registered representative if you have any questions.
* * * * *
The current Underlying Funds are listed below, along with their investment
advisers and any subadviser. Your Plan may not offer all of these Funding
Options to participants.
<Table>
<Caption>
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------- --------------------------------- ---------------------------------
AMERICAN FUNDS INSURANCE SERIES
American Funds Global Growth Seeks capital appreciation Capital Research and Management
Fund -- Class 2 through stocks. Company ("CRMC")
American Funds Growth Seeks capital appreciation CRMC
Fund -- Class 2 through stocks.
American Funds Growth-Income Seeks both capital appreciation CRMC
Fund -- Class 2 and income.
DREYFUS VARIABLE INVESTMENT FUND
Dreyfus Variable Investment Seeks long-term capital growth The Dreyfus Corporation
Fund Appreciation consistent with the preservation ("Dreyfus") Subadviser: Fayez
Portfolio -- Initial Shares of capital. Its secondary goal is Sarofim & Co.
current income.
Dreyfus Variable Investment Seeks capital growth. Dreyfus
Fund Developing Leaders
Portfolio -- Initial Shares
FRANKLIN TEMPLETON VARIABLE
INSURANCE PRODUCTS TRUST
Franklin Small-Mid Cap Growth Seeks long-term capital growth. Franklin Advisers, Inc.
Securities Fund -- Class 2
Templeton Developing Markets Seeks long-term capital Templeton Asset Management Ltd.
Securities Fund -- Class 2 appreciation.
</Table>
17
<Table>
<Caption>
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------- --------------------------------- ---------------------------------
Templeton Foreign Securities Seeks long-term capital growth. Templeton Investment Counsel, LLC
Fund -- Class 2 Subadviser: Franklin Templeton
Investment Management Limited
JANUS ASPEN SERIES
Mid Cap Growth Seeks long-term growth of Janus Capital Management LLC
Portfolio -- Service Shares capital.
LEGG MASON PARTNERS EQUITY TRUST
Legg Mason Partners Small Cap Seeks long-term capital growth. LMPFA
Value Fund -- Class A Subadviser: Clear Bridge
Advisors, LLC ("CBA")
LEGG MASON PARTNERS INCOME TRUST
Legg Mason Partners Investment Seeks as high a level of current Legg Mason Partners Fund Advisor,
Grade Bond Fund -- Class A income as is consistent with LLC ("LMPFA")
prudent investment management and Subadviser: Western Asset
preservation of capital. Management Company ("WAM")
LEGG MASON PARTNERS VARIABLE
PORTFOLIOS II
Legg Mason Partners Variable Seeks long-term capital growth. LMPFA
Fundamental Value Current income is a secondary Subadviser: CBA
Portfolio -- Class I consideration. The investment
objective is non-fundamental and
may be changed by the Board of
Trustees without the approval of
shareholders or Policy holders.
LEGG MASON PARTNERS VARIABLE
EQUITY TRUST
Legg Mason Partners Variable Seeks capital appreciation. This LMPFA
Aggressive Growth objective may be changed without Subadviser: CBA
Portfolio -- Class I shareholder approval.
Legg Mason Partners Variable Seeks long-term appreciation of LMPFA
Appreciation capital. This objective may be Subadviser: CBA
Portfolio -- Class I changed without shareholder
approval.
Legg Mason Partners Variable Seeks total return (that is, a LMPFA
Capital and Income combination of income and long- Subadviser: CBA and WAM
Portfolio -- Class I term capital appreciation). The
investment objective is non-
fundamental and may be changed by
the Board of Trustees without the
approval of shareholders or
Policy holders.
Legg Mason Partners Variable Seeks investment results that, LMPFA
Equity Index before expenses, correspond to Subadviser: Batterymarch
Portfolio -- Class II the price and yield performance Financial Management Inc.
of the S&P 500 Index. The fund ("Batterymarch")
will hold substantially all of
the stocks in the S&P 500 Index,
with comparable economic sector
weightings, market capitalization
and liquidity. This objective may
be changed without shareholder
approval.
</Table>
18
<Table>
<Caption>
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------- --------------------------------- ---------------------------------
Legg Mason Partners Variable Seeks long-term growth of LMPFA
Investors Portfolio -- Class capital. Current income is a Subadviser: CBA
I secondary objective. These
objectives may be changed without
shareholder approval.
Legg Mason Partners Variable Seeks long-term growth of LMPFA
Large Cap Growth Portfolio capital. This objective may be Subadviser: CBA
changed without shareholder
approval.
Legg Mason Partners Variable Seeks long-term growth of LMPFA
Small Cap Growth capital. This objective may be Subadviser: CBA
Portfolio -- Class I changed without Shareholder
approval.
Legg Mason Partners Variable Seeks long-term capital LMPFA
Social Awareness Portfolio appreciation and retention of net Subadviser: Legg Mason Investment
investment income. This objective Counsel, LLC
may be changed without
shareholder approval.
LEGG MASON PARTNERS VARIABLE
INCOME TRUST
Legg Mason Partners Variable Seeks to provide high current LMPFA
Adjustable Rate Income income and to limit the degree of Subadviser: WAM
Portfolio fluctuation of its net asset
value resulting from movements in
interest rates. This objective
may be changed without
shareholder approval.
Legg Mason Partners Variable Seeks high current income. The LMPFA
Diversified Strategic Income investment objective is non- Subadvisers: WAM and Western
Portfolio -- Class II fundamental and may be changed by Asset Management Company Limited
the Board of Trustees without the
approval of shareholders or
Policy holders.
Legg Mason Partners Variable Seeks to maximize total return, LMPFA
Global High Yield Bond consistent with the preservation Subadviser: WAM
Portfolio -- Class I of capital. This objective may be
changed without shareholder
approval.
Legg Mason Partners Variable Seeks to maximize current income LMPFA
Money Market Portfolio consistent with preservation of Subadviser: WAM
capital. This objective may be
changed without shareholder
approval.
MET INVESTORS SERIES TRUST
Batterymarch Mid-Cap Stock Seeks growth of capital. Met Investors Advisory LLC
Portfolio -- Class A (''MIA")
Subadviser: Batterymarch
BlackRock High Yield Seeks to maximize total return, MIA
Portfolio -- Class A consistent with income generation Subadviser: BlackRock Financial
and prudent investment Management Inc.
management.
BlackRock Large-Cap Core Seeks long-term capital growth. MIA
Portfolio Subadviser: BlackRock Advisors,
LLC ("BlackRock Advisors")
Harris Oakmark International Seeks long-term capital MIA
Portfolio -- Class A appreciation. Subadviser: Harris Associates
L.P.
</Table>
19
<Table>
<Caption>
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------- --------------------------------- ---------------------------------
Janus Forty Portfolio -- Class Seeks capital appreciation MIA
A Subadviser: Janus Capital
Management LLC
Lord Abbett Bond Debenture Seeks high current income and the MIA
Portfolio -- Class A opportunity for capital Subadviser: Lord, Abbett & Co.
appreciation to produce a high LLC ("Lord, Abbett")
total return.
Lord Abbett Growth and Income Seeks growth of capital and MIA
Portfolio -- Class B current income without excessive Subadviser: Lord, Abbett
fluctuations in the market value.
Lord Abbett Mid-Cap Value Seeks capital appreciation MIA
Portfolio -- Class B through investments primarily in Subadviser: Lord Abbett
equity securities which are
believed to be undervalued in the
marketplace.
Met/AIM Capital Appreciation Seeks capital appreciation. MIA
Portfolio -- Class A Subadviser: A I M Capital
Management, Inc.
MFS(R) Value Portfolio -- Class Seeks capital appreciation and MIA
A reasonable income. Subadviser: Massachusetts
Financial Services Company
("MFS")
Neuberger Berman Real Estate Seeks to provide total return MIA
Portfolio -- Class A through investment in real estate Subadviser: Neuberger Berman
securities, emphasizing both Management, Inc.
capital appreciation and current
income.
Pioneer Fund Portfolio -- Class Seeks reasonable income and MIA
A capital growth. Subadviser: Pioneer Investment
Management, Inc.
Pioneer Strategic Income Seeks a high level of current MIA
Portfolio -- Class A income. Subadviser: Pioneer Investment
Management, Inc.
Third Avenue Small Cap Seeks long-term capital MIA
Portfolio -- Class B appreciation. Subadviser: Third Avenue
Management LLC
METLIFE INVESTMENT FUNDS
MetLife Investment Diversified Seeks to provide maximum long- MetLife Investment Funds
Bond Fund -- Class I term total return (capital Management LLC ("MIFM")
appreciation and income) by Subadvisers: WAM; Wellington
investing primarily in fixed Management Company LLP
income securities. ("Wellington"); and SSgA Funds
Management, Inc. ("SSgA")
MetLife Investment Seeks maximum long-term total MIFM
International Stock return (capital appreciation and Subadvisers: Alliance Bernstein
Fund -- Class I income) by investing primarily in L.P.; Oechsle International
common stocks of established non- Advisors LLC; and SSgA
U.S. companies.
MetLife Investment Large Seeks maximum long-term total MIFM
Company Stock Fund -- Class return (capital appreciation and Subadvisers: Wellington; CBA;
I income) by investing primarily in and SSgA
common stocks of well-established
companies.
</Table>
20
<Table>
<Caption>
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------- --------------------------------- ---------------------------------
MetLife Investment Small Seeks to provide maximum long- MIFM
Company Stock Fund -- Class term total return (capital Subadvisers: Delaware Management
I appreciation and income) by Company; OFI Institutional Asset
investing primarily in common Management, Inc.; and SSgA
stocks of small companies.
METROPOLITAN SERIES FUND, INC.
BlackRock Aggressive Growth Seeks maximum capital MetLife Advisers, LLC ("MetLife
Portfolio -- Class D appreciation. Advisers")
Subadviser: BlackRock Advisors
BlackRock Bond Income Seeks competitive total return MetLife Advisers
Portfolio -- Class A primarily from investing in Subadviser: BlackRock Advisors
fixed-income securities.
FI Large Cap Portfolio -- Class Seeks long-term growth of MetLife Advisers
A capital. Subadviser: Fidelity Management &
Research Company, Inc. ("FMRC")
FI Value Leaders Seeks long-term growth of MetLife Advisers
Portfolio -- Class D capital. Subadviser: FMRC
MFS(R) Total Return Seeks a favorable total return MetLife Advisers
Portfolio -- Class F through investment in a Subadviser: MFS
diversified portfolio.
T. Rowe Price Large Cap Growth Seeks long-term growth of capital MetLife Advisers
Portfolio -- Class B and, secondarily, dividend Subadviser: T. Rowe Price
income. Associates, Inc.
Western Asset Management U.S. Seeks to maximize total return MetLife Advisers
Government consistent with preservation of Subadviser: WAM
Portfolio -- Class A capital and maintenance of
liquidity.
MetLife Aggressive Allocation Seeks growth of capital. MetLife Advisers
Portfolio -- Class B
MetLife Conservative Allocation Seeks a high level of current MetLife Advisers
Portfolio -- Class B income, with growth of capital as
a secondary objective.
MetLife Conservative to Seeks high total return in the MetLife Advisers
Moderate Allocation form of income and growth of
Portfolio -- Class B capital, with a greater emphasis
on income.
MetLife Moderate Allocation Seeks a balance between a high MetLife Advisers
Portfolio -- Class B level of current income and
growth of capital, with a greater
emphasis on growth of capital.
MetLife Moderate to Aggressive Seeks growth of capital. MetLife Advisers
Allocation
Portfolio -- Class B
PIMCO VARIABLE INSURANCE TRUST
Total Return Seeks maximum total return, Pacific Investment Management
Portfolio -- Administrative consistent with preservation of Company LLC
Class capital and prudent investment
management.
TEMPLETON GROWTH FUND, Seeks long-term capital growth. Templeton Global Advisors Limited
INC. -- CLASS A
</Table>
21
<Table>
<Caption>
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------- --------------------------------- ---------------------------------
VAN KAMPEN LIFE INVESTMENT TRUST
Van Kampen Life Investment Seeks capital growth and income Van Kampen Asset Management ("Van
Trust Comstock through investments in equity Kampen")
Portfolio -- Class II securities, including common
stocks, preferred stocks and
securities convertible into
common and preferred stocks.
Van Kampen Life Investment Seeks capital appreciation. Van Kampen
Trust Strategic Growth
Portfolio -- Class II
VARIABLE INSURANCE PRODUCTS FUND
VIP Contrafund(R) Seeks long-term capital FMRC
Portfolio -- Service Class 2 appreciation.
VIP Mid Cap Seeks long-term growth of FMRC
Portfolio -- Service Class 2 capital.
</Table>
ASSET ALLOCATION PORTFOLIOS
The MetLife Conservative Allocation Portfolio, the MetLife Conservative to
Moderate Allocation Portfolio, the MetLife Moderate Allocation Portfolio, the
MetLife Moderate to Aggressive Allocation Portfolio and the MetLife Aggressive
Allocation Portfolio, also known as the "asset allocation portfolios", are "fund
of funds" portfolios that invest substantially all of their assets in other
portfolios of the Metropolitan Series Fund, Inc. of the or the Met Investors
Series Trust. Therefore, each of these asset allocation portfolios will bear its
pro-rata share of the fees and expenses incurred by the underlying portfolio in
which it invests in addition to its own management fees and expenses. This will
reduce the investment return of each of the asset allocation portfolios. The
expense levels will vary over time, depending on the mix of underlying
portfolios in which the asset allocation portfolio invests. Contract Owners may
be able to realize lower aggregate expenses by investing directly in the
underlying portfolios instead of investing in the asset allocation portfolios. A
Contract Owner who chooses to invest directly in the underlying portfolios would
not however, receive asset allocation services provided by MetLife Advisers. For
more information regarding the asset allocation portfolios, please read the
prospectus for these portfolios.
CHARGES AND DEDUCTIONS UNDER THE CONTRACT
- --------------------------------------------------------------------------------
GENERAL
We deduct the charges described below. The charges are for the service and
benefits we provide, costs and expenses we incur, and risks we assume under the
Contracts. Services and benefits we provide include:
- the ability for you to make withdrawals and surrenders under the
Contracts;
- the death benefit paid on the death of a Participant;
- the available Funding Options and related programs; and
- administration of the annuity options available under the Contracts.
Costs and expenses we incur include:
- losses associated with various overhead and other expenses associated
with providing the services and benefits provided by the Contracts;
- sales and marketing expenses including commission payments to your
sales agent; and
- other costs of doing business.
22
Risks we assume include:
- that Annuitants may live longer than estimated when the annuity
factors under the Contracts were established;
- that the amount of the Death Benefit will be greater than the contract
value; and
- that the costs of providing the services and benefits under the
Contracts will exceed the charges deducted.
We may also deduct a charge for premium taxes.
Unless otherwise specified, charges are deducted proportionately from all
Funding Options in which Plan assets are invested.
We may reduce or eliminate the withdrawal charge, the administrative charges
and/or the mortality and expense risk charge under the Contract based upon
characteristics of the group. Such characteristics include, but are not limited
to, the nature of the group, size, facility by which purchase payments will be
paid, and aggregate amount of anticipated persistency. The availability of a
reduction or elimination of the withdrawal charge or the administrative charge
will be made in a reasonable manner and will not be unfairly discriminatory to
the interest of any Contract Owner
The amount of a charge may not necessarily correspond to the costs associated
with providing the services or benefits indicated by the designated charge. For
example, the withdrawal charge we collect may not fully cover all of the sales
and distribution expenses we actually incur. We may also profit on one or more
of the charges. We may use any such profits for any corporate purpose, including
the payment of sales expenses.
Contracts purchased prior to May 24, 2005 may be subject to fees and charges
that differ from those described herein based on a competitive bidding process,
which may have included negotiation of fees and charges based on factors such
as, but not limited to: the total number of Plan participants, the aggregate of
all Plan participant account values, present or anticipated levels of Purchase
Payments, distributions, transfers, administrative expenses, and distribution
expenses (including commissions payable to the selling broker-dealer).
SURRENDER CHARGE
Purchase Payments made under the Contract are not subject to a front-end sales
load. However, upon withdrawal, the Company will charge a maximum surrender
charge of 5% on the total amount withdrawn. For Contracts issued on or after May
24, 2005, the surrender charge declines to zero after the fifth Contract Year.
The surrender charge schedule is:
<Table>
<Caption>
CONTRACT YEAR
GREATER THAN OR EQUAL TO BUT LESS THAN SURRENDER CHARGE
0 years 1 years 5%
1 year 2 years 4%
2 years 3 years 3%
3 years 4 years 2%
4 years 5 years 1%
5+ years 0%
</Table>
For Contracts issued before May 24, 2005, the surrender charge declines to zero
after the eighth Contract Year. The surrender charge schedule for these
Contracts is:
<Table>
<Caption>
CONTRACT YEAR
GREATER THAN OR EQUAL TO BUT LESS THAN SURRENDER CHARGE
0 years 2 years 5%
2 years 4 years 4%
4 years 6 years 3%
6 years 8 years 2%
8+ years 0%
</Table>
23
The surrender charge can be changed if the Company anticipates it will incur
decreased sales-related expenses due to the nature of the Plan to which the
Contract is issued or the involvement of a TPA. When considering a change in the
surrender charges, the Company will take into account:
(a) the size of plan assets and the expected amount of annual
contributions, and
(b) the expected level of agent, TPA or Company involvement during the
establishment and maintenance of the Contract, including the amount of
enrollment activity required, and the amount of service required by
the Contract Owner in support of the Plan, and
(c) the expected level of commission the Company may pay to the agent for
distribution expenses, and
(d) any other relevant factors that the Company anticipates will increase
or decrease the sales-related expenses associated with the sale of the
Contract in connection with the Plan.
Except as noted below, the surrender charge will not be assessed for withdrawals
made under the following circumstances:
<Table>
- - retirement (as defined by the terms of - disability as defined in Code section
your Plan and consistent with IRS rules) 72(m)(7)
- - separation from service/severance from - minimum required distributions (generally
employment at age 70 1/2)
- - loans (if available in your Plan) - return of Excess Plan Contributions
- - hardship (as defined by the Code) - transfers to an employer stock fund
- - Death - certain Plan expenses as mutually agreed
upon
- - annuitization under this Contract or
another contract issued by us
</Table>
The surrender charge will apply to allowable distributions made to highly
compensated employees of Plan with less than fifty participants until after the
fifth Contract Year.
DAILY ASSET CHARGE
This charge is also known as the mortality and expense risk (M&E) charge and is
deducted on each Valuation Date from amounts held in the Separate Account. The
charge will vary based on the expected aggregate Contract assets during the
first Contract year, as determined by the Company. This charge is equal to a
maximum of 1.50% annually (1.30% for unallocated Contracts in Florida) of the
amounts allocated to each Funding Option. The daily asset charge applicable to
your Contract will depend on the expected level of aggregate Contract assets
during your first Contract Year. Below are the variations of the charge based on
different levels of expected aggregate contract assets:
<Table>
<Caption>
AGGREGATE CONTRACT ASSETS DAILY ASSET CHARGE
- --------------------------- ------------------
$0 -- $499,999.99 1.50%
$500,000 -- $999,999.99 1.30%
$1,000,000 -- $1,999,999.99 1.20%
$2,000,000 -- $2,999,999.99 1.10%
$3,000,000 -- $3,999,999.99 1.00%
$4,000,000 and over 0.85%
</Table>
The mortality risk portion compensates the Company for guaranteeing to provide
Annuity payments according to the terms of the Contract regardless of how long
the Annuitant lives and for providing the death benefit if a Participant dies
prior to the Annuity Commencement Date. The expense risk portion of the daily
asset charge compensates the Company for the risk that the charges under the
Contract, which cannot be increased during the duration of the Contract, will be
insufficient to cover actual costs. Actual costs and expenses we incur include:
- losses associated with various overhead and other expenses associated
with providing the services and benefits provided by the Contracts;
24
- sales, commission and marketing expenses, and
- other costs of doing business.
We may, under some circumstances, agree to change the daily asset charge for a
Plan from the charge level that would otherwise apply based on the aggregate
Contract assets based on factors such as annual contributions, the number of
employees, demographics of Plan Participants (which may reduce mortality and
expenses of the Plan), and any other factors that the Company considers
relevant.
Although variable Annuity payments made under the Contracts will vary in
accordance with the investment performance of each Funding Option's investment
portfolio, payments will not be affected by: (a) the Company's actual mortality
experience among Annuitants after retirement, or (b) the Company's actual
expenses, if greater than the deductions provided for in the Contracts because
of the expense and mortality undertakings by the Company.
VARIABLE LIQUIDITY BENEFIT CHARGE
If the Variable Liquidity Benefit is selected, there is a maximum charge of 5%
of the amounts withdrawn during the annuity period. This charge is not assessed
during the accumulation phase.
For Contracts issued on or after May 24, 2005, We will assess the charge as a
percentage of the total benefit received as follows:
<Table>
<Caption>
CONTRACT YEAR WITHDRAWAL CHARGE
- ------------------------------------------ -----------------
GREATER THAN OR EQUAL TO BUT LESS THAN
0 years 1 years 5%
1 years 2 years 4%
2 years 3 years 3%
3 years 4 years 2%
4 years 5 years 1%
5+ years 0%
</Table>
For Contracts issued before May 24, 2005, We will assess the charge as a
percentage of the total benefit received as follows:
<Table>
<Caption>
CONTRACT YEAR WITHDRAWAL CHARGE
- ------------------------------------------ -----------------
GREATER THAN OR EQUAL TO BUT LESS THAN
0 years 2 years 5%
2 years 4 years 4%
4 years 6 years 3%
6 years 8 years 2%
8+ years 0%
</Table>
Please refer to Payment Options for a description of this benefit.
FUNDING OPTION CHARGES
There are certain deductions from and expenses paid out of the assets of each
Funding Option. These are described in the applicable prospectus for each
Funding Option. Underlying Funding Option expenses are not fixed or guaranteed
and are subject to change by the Fund.
PREMIUM TAX
Certain state and local governments charge premium taxes ranging from 0% to
3.5%, depending upon jurisdiction. We are responsible for paying these taxes and
will determine the method used to recover premium tax expenses incurred. We will
deduct any applicable premium taxes from your Contract value either upon death,
surrender, annuitization, or at the time you make Purchase Payments to the
Contract, but no earlier than when we have a tax liability under state law.
25
CHANGES IN TAXES BASED UPON PREMIUM OR VALUE
If there is any change in a law assessing taxes against the Company based upon
premiums, contract gains or value of the Contract, we reserve the right to
charge you proportionately for this tax.
TPA ADMINISTRATIVE CHARGES
We may be directed by the Contract Owner to deduct charges from Purchase
Payments or cash values for payment to the Contract Owner and/or the TPA for
Plan-related expenses. These charges are not levied by the Contract. Such
charges may include maintenance fees and transaction fees.
TRANSFERS
- --------------------------------------------------------------------------------
TRANSFERS OF CASH VALUE BETWEEN FUNDING OPTIONS
Subject to the limitations described below, you may transfer all or part of your
Cash Value between Variable Funding Options at any time up to 30 days before the
Maturity Date. After the Maturity Date, you may make transfers only if allowed
by your Contract or with our consent. Transfer requests received at our Home
Office that are in good order before the close of the New York Stock Exchange
will be processed according to the value(s) next computed following the close of
business. Transfer requests received on a non-business day or after the close of
the New York Stock Exchange will be processed based on the value(s) next
computed on the next business day.
Cash Values may generally be transferred from the Funding Option(s) to the Fixed
Account at any time. No transfers will be allowed between the Fixed Account and
any Competing Fund. Cash Values previously transferred from the Fixed Account to
a non-competing Funding Options may not be transferred back to the Fixed Account
or any Competing Fund for a period of at least three months from the date of
transfer. We reserve the right to limit the number of transfers and percentage
of Cash Value to be transferred from the Fixed Account to the Funding Options
and to Contracts not issued by us. The minimum limitation on the number of
transfers would be one in any six-month period. Where permitted by state law, we
reserve the right to restrict transfers from the Funding Options to the Fixed
Account whenever the credited interest rate on the Fixed Account is equal to the
minimum guaranteed interest rate specified under the Contract.
Currently, there are no charges for transfers; however, we reserve the right to
charge a fee for any transfer request which exceeds twelve per year. Since each
Underlying Fund may have different overall expenses, a transfer of Contract
Values from one Variable Funding Option to another could result in your
investment becoming subject to higher or lower expenses. Also, when making
transfers, you should consider the inherent risks associated with the Variable
Funding Options to which your Contract Value is allocated.
MARKET TIMING/EXCESSIVE TRADING
Frequent requests from Contract Owners to transfer Cash Value may dilute the
value of an Underlying Fund's shares if the frequent trading involves an attempt
to take advantage of pricing inefficiencies created by a lag between a change in
the value of the securities held by the Underlying Fund and the reflection of
that change in the Underlying Fund's share price ("arbitrage trading").
Regardless of the existence of pricing inefficiencies, frequent transfers may
also increase brokerage and administrative costs of the Underlying Funds and may
disrupt fund management strategy, requiring an Underlying Fund to maintain a
high cash position and possibly resulting in lost investment opportunities and
forced liquidations ("disruptive trading"). Accordingly, arbitrage trading and
disruptive trading activities (referred to collectively as "market timing") may
adversely affect the long-term performance of the underlying funds, which may in
turn adversely affect Contract Owners and other persons who may have an interest
in the Contracts (e.g., annuitants and beneficiaries).
We have policies and procedures that attempt to detect and deter frequent
transfers in situations where we determine there is a potential for arbitrage
trading. Currently, we believe that such situations may be present in the
international, small-cap, and high-yield underlying funds (i.e., the American
Funds Global Growth Fund, American Funds Growth Fund, American Funds Growth-
Income Fund, Dreyfus Variable Investment Fund Developing Leaders Portfolio,
Franklin Small-Mid Cap Growth Securities Fund, Templeton Developing Markets
Securities Fund, Templeton Foreign Securities Fund, Legg Mason Partners Small
Cap Value Fund, Legg Mason Partners Diversified Strategic Income Portfolio, Legg
Mason Partners Variable Global High Yield Bond Portfolio, BlackRock High Yield
26
Portfolio, Harris Oakmark International Portfolio, Lord Abbett Bond Debenture
Portfolio, Pioneer Strategic Income Portfolio, Third Avenue Small Cap Value
Portfolio, MetLife Investment International Stock Fund, MetLife Investment Small
Company Stock Fund, and Templeton Growth Fund, Inc. -- the "Monitored
Portfolios") and we monitor transfer activity in those Monitored Portfolios. In
addition, as described below, we intend to treat all American Funds Insurance
Series portfolios ("American Funds portfolios") as Monitored Portfolios. We
employ various means to monitor transfer activity, such as examining the
frequency and size of transfers into and out of the Monitored Portfolios within
given periods of time. For example, we currently monitor transfer activity to
determine if, for each of the Monitored Portfolios, in a three-month period
there were two or more "round-trips" of a certain dollar amount or greater. A
round-trip is defined as a transfer in followed by a transfer out within the
next 10 calendar days or a transfer out followed by a transfer in within the
next 10 calendar days. In the case of a Contract that has been restricted
previously, a single round-trip of a certain dollar amount or greater will
trigger the transfer restrictions described below.
We do not believe that other Underlying Funds present a significant opportunity
to engage in arbitrage trading and therefore do not monitor transfer activity in
those Underlying Funds. We may change the Monitored Portfolios at any time
without notice in our sole discretion. In addition to monitoring transfer
activity in certain Underlying Funds, we rely on the Underlying Fund to bring
any potential disruptive trading activity they identify to our attention for
investigation on a case-by-case basis. We will also investigate other harmful
transfer activity that we identify from time to time. We may revise these
policies and procedures in our sole discretion at any time without prior notice.
AMERICAN FUNDS MONITORING POLICY. As a condition to making their portfolios
available in our products, American Funds requires us to treat all American
Funds Insurance Series portfolios ("American Funds portfolios") as Monitored
Portfolios under our current market timing and excessive trading policies and
procedures. Further, American Funds Distributors requires us to impose
additional specified monitoring criteria for all American Funds portfolios
available under the Contract, regardless of the potential for arbitrage trading.
We are required to monitor transfer activity in American Funds portfolios to
determine if there were two or more transfers in followed by transfers out, in
each case of a certain dollar amount or greater, in any 30-day period. A first
violation of the American Funds monitoring policy will result in a written
notice of violation; a second violation will result in the imposition of the
transfer restrictions described below. Further, as Monitored Portfolios, our
current market timing and excessive trading policies and procedures also will
apply to American Funds portfolios, and transfer restrictions may be imposed
upon a violation of either monitoring policy. Although we do not have the
operational or systems capability at this time to impose the American Funds
monitoring policy and/or to treat all of the American Funds portfolios as
Monitored Portfolios under our policy, we intend to do so in the future.
Our policies and procedures may result in transfer restrictions being applied to
deter market timing. Currently, when we detect transfer activity in the
Monitored Portfolios that exceeds our current transfer limits, or other transfer
activity that we believe may be harmful to other Contract Owners or other
persons who have an interest in the Contracts, we will exercise our contractual
right to restrict your number of transfers to one every six months. In addition,
we also reserve the right, but do not have the obligation, to further restrict
the right to request transfers by any market timing firm or any other third
party who has been authorized to initiate transfers on behalf of multiple
Contract Owners. We may, among other things:
- reject the transfer instructions of any agent acting under a power of
attorney on behalf of more than one owner, or
- reject the transfer or exchange instructions of individual owners who
have executed pre-authorized transfer forms which are submitted by
market timing firms or other third parties on behalf of more than one
owner.
The detection and deterrence of harmful transfer activity involves judgments
that are inherently subjective, such as the decision to monitor only those
underlying funds that we believe are susceptible to arbitrage trading or the
determination of the transfer limits. Our ability to detect and/or restrict such
transfer activity may be limited by operational and technological systems, as
well as our ability to predict strategies employed by Contract Owners to avoid
such detection. Our ability to restrict such transfer activity also may be
limited by provisions of the Contract. Accordingly, there is no assurance that
we will prevent all transfer activity that may adversely affect Contract Owners
and other persons with interests in the Contracts. We do not accommodate market
timing in any Underlying Funds and there are no arrangements in place to permit
any Contract Owner to engage in market timing; we apply our policies and
procedures without exception, waiver, or special arrangement.
27
The Underlying Funds may have adopted their own policies and procedures with
respect to frequent purchases and redemptions of their respective shares, and we
reserve the right to enforce these policies and procedures. For example,
Underlying Funds may assess a redemption fee (which we reserve the right to
collect) on shares held for a relatively short period. The prospectuses for the
Underlying Funds describe any such policies and procedures, which may be more or
less restrictive than the policies and procedures we have adopted. Although we
may not have the contractual authority or the operational capacity to apply the
frequent trading policies and procedures of the Underlying Funds we have entered
into a written agreement as required by SEC regulation with each Underlying Fund
or its principal underwriter that obligates us to provide to the Underlying
Funds promptly upon request certain information about the trading activity of
individual Contract Owners, and to execute instructions from the Underlying Fund
to restrict or prohibit further purchase payments or transfers by specific
Contract Owners who violate the frequent trading policies established by the
Underlying Fund.
In addition, Contract Owners and other persons with interests in the Contracts
should be aware that the purchase and redemption orders received by the
Underlying Funds generally are "omnibus" orders from intermediaries such as
retirement plans or separate accounts funding variable insurance contracts. The
omnibus orders reflect the aggregation and netting of multiple orders from
individual owners of variable insurance contracts and/or individual retirement
plan participants. The omnibus nature of these orders may limit the Underlying
Funds in their ability to apply their frequent trading policies and procedures.
In addition, the other insurance companies and/or retirement plans may have
different policies and procedures or may not have any such policies and
procedures because of contractual limitations. For these reasons, we cannot
guarantee that the Underlying Fund (and thus Contract Owners) will not be harmed
by transfer activity relating to other insurance companies and/or retirement
plans that may invest in the Underlying Funds. If an Underlying Fund believes
that an omnibus order reflects one or more transfer requests from Contract
Owners engaged in disruptive trading activity, the Underlying Fund may reject
the entire omnibus order.
In accordance with applicable law, we reserve the right to modify or terminate
the transfer privilege at any time. We also reserve the right to defer or
restrict the transfer privilege at any time that we are unable to purchase or
redeem shares of any of the Underlying Fund, including any refusal or
restriction on purchases or redemptions of their shares as a result of their own
policies and procedures on market timing activities (even if an entire omnibus
order is rejected due to the market timing activity of a single Contract Owner.
You should read the Underlying Fund prospectuses for more details.
TRANSFERS FROM FUNDING OPTIONS TO CONTRACTS NOT ISSUED BY US
You may transfer all or any part of Your Contract's Cash Surrender Value,
subject to the restrictions of the Fixed Account, if applicable, from any
Funding Option to any contract not issued by us. Such transfers may be subject
to a sales or surrender charge, as described in the Contract.
TRANSFERS TO OR FROM OTHER CONTRACTS ISSUED BY US
Under specific conditions, we may allow you to transfer to this Contract the
Contract value of other group annuity contracts we have issued to you or to
transfer amounts from this Contract to another Contract issued by us without
applying a sales or surrender charge to the funds being transferred. Once the
transfer is complete and we have established an account for you at your
direction, a new sales or surrender charge may apply, as described in the new
Contract.
TRANSFERS FROM CONTRACTS NOT ISSUED BY US
Under specific conditions, when authorized by the state insurance department, we
may credit a Plan up to 4% of the amount transferred to us from another
investment vehicle as reimbursement to the Plan for any exit penalty assessed by
the other investment vehicle provider. We will recover this credit through
reduced compensation paid to the servicing agent or broker.
ACCESS TO YOUR MONEY
- --------------------------------------------------------------------------------
Before the Maturity Date, we will pay all or any portion of your Cash Surrender
Value to the Contract Owner or at the Contract Owner's direction, to the
Participant. A Contract Owner's account may be surrendered for cash without the
consent of any Participant, as provided in the Plan.
28
We may defer payment of any Cash Surrender Value for up to seven days after we
receive the request in good order. The Cash Surrender Value equals the Contract
or account cash value less any applicable withdrawal charge, outstanding cash
loans, and any premium tax not previously deducted. The Cash Surrender Value may
be more or less than the Purchase Payments made depending on the value of the
Contract or account at the time of surrender.
We may withhold payment of Cash Surrender Value or a Participant's loan proceeds
if any portion of those proceeds would be derived from a Contract Owner's check
that has not yet cleared (i.e., that could still be dishonored by your banking
institution). We may use telephone, fax, Internet or other means of
communication to verify that payment from the Contract Owner's check has been or
will be collected. We will not delay payment longer than necessary for us to
verify that payment has been or will be collected. Contract Owners may avoid the
possibility of delay in the disbursement of proceeds coming from a check that
has not yet cleared by providing us with a certified check.
The trust of a Section 401(k) plan may not generally distribute amounts
attributable to employer contributions prior to the employee's retirement,
death, disability or severance from employment. (See "Federal Tax
Considerations").
OWNERSHIP PROVISIONS
- --------------------------------------------------------------------------------
TYPES OF OWNERSHIP
CONTRACT OWNER
We issue only the Contract. Where we refer to "you," we are referring to the
Contract Owner. The Annuitant, generally a Plan Participant, is the individual
upon whose life the Maturity Date and the amount of monthly Annuity payments
depend.
At Your direction, Participants will receive all payments while they are alive
unless You direct them to an alternate recipient.
BENEFICIARY
At Your direction, Participants name the beneficiary in a Written Request. The
beneficiary has the right to receive any remaining contractual benefits upon the
death of the Participant. If more than one beneficiary survives the Participant,
they will share equally in benefits unless we receive other instructions, by
Written Request before the death of the Participant.
Unless an irrevocable beneficiary has been named, Participants generally have
the right to change any beneficiary by Written Request during the lifetime of
the Participant and while the Contract continues.
DEATH BENEFIT
- --------------------------------------------------------------------------------
DEATH BENEFITS PRIOR TO THE ANNUITY COMMENCEMENT DATE
DEATH BENEFITS MAY NOT BE AVAILABLE IN ALL JURISDICTIONS.
If provided by the Contract, in the event the Participant dies before the
selected Annuity Commencement Date or the Participant's attainment of age 75
(whichever occurs first), the death benefit payable will be the greater of (a)
the Cash Value of the amount attributable to the Participant or (b) the total
Purchase Payments made under the Contract attributable to that Participant, less
any applicable premium tax and prior surrenders not previously deducted and any
outstanding loan balance as of the date we receive Due Proof of Death.
The death benefit amount is determined in the same manner as with an allocated
contract, subject to the Plan providing the Company with required information
about participant contributions, withdrawals, outstanding loan amounts, and any
other required information.
If the Participant dies on or after age 75 and before the Annuity Commencement
Date, we will pay the Beneficiary the Cash Value attributable to the Participant
less any applicable premium tax, prior surrenders not previously deducted, and
any outstanding loan balance, as of the date we receive Due Proof of Death.
29
We will pay this benefit upon receiving Due Proof of Death along with a Written
Request setting forth the Cash Value and the total Purchase Payments
attributable to the Participant under the Contract. In addition, we will require
copies of records and any other reasonable proof we find necessary to verify the
Cash Value and total Purchase Payments attributable to the Participant under the
Contract.
The death benefit may be taken by the Beneficiary in one of three ways: 1) in a
single sum, in which case payment will be made within seven days of our receipt
of Due Proof of Death, unless subject to postponement as explained below; 2)
within five years of the Participant's date of death; or 3); applied to a
lifetime Annuity. The Beneficiary may choose to have Annuity payments made on a
variable basis, fixed basis, or a combination of the two.
THE ANNUITY PERIOD
- --------------------------------------------------------------------------------
MATURITY DATE (ANNUITY COMMENCEMENT DATE)
Under the Contract, you can direct us to make regular income payments to
Participants ("Annuity payments"). You can choose the month and the year in
which those payments begin ("Annuity Commencement Date"). You can also choose
among income plans (annuity options). While the Participant is alive, the
selection can be changed any time up to the Annuity Commencement Date. Annuity
payments are a series of periodic payments (a) for life; (b) for life with
either a minimum number of payments or a specific amount assured; (c) for the
joint lifetime of the Participant and another person, and thereafter during the
lifetime of the survivor; or (d) for a fixed period or fixed amount. We may
require proof that the Participant is alive before Annuity payments are made.
Not all options may be available in all states.
You may direct us to annuitize amounts attributable to a Participant at any time
after you purchase the Contract. Certain annuity options may be used to meet the
minimum required distribution requirements of federal tax law, or a program of
partial surrenders may be used instead. These mandatory distribution
requirements take effect generally upon either the later of the Participant's
attainment of age 70 1/2 or year of retirement; or the death of the Participant.
Participants should seek independent tax advice regarding the election of
minimum required distributions.
ALLOCATION OF ANNUITY
You may elect for Participants to receive Annuity payments in the form of a
variable annuity, a fixed annuity, or a combination of both. If, at the time
Annuity payments begin, you have not made an election, we will apply the
applicable cash value to provide an annuity funded by the same funding options
selected during the accumulation period. At least 30 days before the Annuity
Commencement Date, you may transfer the Contract Value among the funding options
in order to change the basis on which we will determine Annuity payments. (See
Transfers.)
VARIABLE ANNUITY
You may choose an annuity payout that fluctuates depending on the investment
experience of the Funding Options. We determine the number of Annuity Units
credited to the Contract by dividing the first monthly Annuity payment
attributable to each Funding Option by the corresponding Accumulation Unit value
as of 14 days before the date Annuity payments begin. We use an Annuity Unit to
measure the dollar value of an Annuity payment. The number of Annuity Units (but
not their value) remains fixed during the annuity period.
DETERMINATION OF FIRST ANNUITY PAYMENT
Your Contract contains the tables we use to determine your first monthly Annuity
Payment. If you elect a variable annuity, the amount we apply to it will be the
Cash Surrender Value as of 14 days before the date Annuity Payments begin, less
any applicable premium taxes not previously deducted.
The amount of your first monthly payment depends on the annuity option you
elected and the Annuitant's adjusted age. Your Contract contains the formula for
determining the adjusted age. We determine the total first monthly Annuity
Payment by multiplying the benefit per $1,000 of value shown in the Contract
tables by the number of thousands of dollars of Contract Value you apply to that
annuity option. The Contract tables factor in an assumed daily net investment
factor of 3.0%. We call this your net investment rate. Your net investment rate
corresponds to an annual interest rate of 3.0%. This means that if the
annualized investment performance, after expenses, of your Variable Funding
Options is less than 3.0%, then the dollar amount of your variable Annuity
Payments will decrease.
30
However, if the annualized investment performance, after expenses, of your
Variable Funding Options is greater than 3.0%, then the dollar amount of your
variable Annuity Payments will increase.
DETERMINATION OF SECOND AND SUBSEQUENT ANNUITY PAYMENTS
The dollar amount of all subsequent Annuity Payments changes from month to month
based on the investment experience of the applicable funding options. The total
amount of each Annuity Payment will equal the sum of the basic payments in each
funding option. We determine the actual amounts of these payments by multiplying
the number of Annuity Units we credited to each funding option by the
corresponding Annuity Unit value as of the date 14 days before the date the
payment.
FIXED ANNUITY
A Fixed Annuity provides for payments that do not vary during the Annuity
Period. The dollar amount remains constant throughout the payment period. The
dollar amount of the first Fixed Annuity payment will be calculated as described
under "Amount of First Payment." All subsequent payments will be in the same
amount. If it would provide a larger payment, the first Fixed Annuity payment
will be determined using the Life Annuity Tables in effect on the Maturity Date.
ELECTION OF OPTIONS
Any amount distributed from the Contract may be applied to any one of the
annuity options described below. The minimum amount that can be placed under an
annuity option is $2,000 unless we consent to a lesser amount. If any periodic
payments due are less than $100, we reserve the right to make payments at less
frequent intervals.
Election of any of these options must be made by Written Request to our Home
Office at least 30 days prior to the date such election is to become effective.
The form of such annuity option shall be determined by the Contract Owner. The
following information must be provided with any such request:
- the Participant's name, address, date of birth, social security
number;
- the amount to be distributed;
- the annuity option which is to be purchased;
- the date the annuity option payments are to begin;
- if the form of the annuity provides a death benefit in the event of
the Participant's death, the name, relationship and address of the
beneficiary as designated by you; and
- any other data that we may require.
The beneficiary, as specified in item (e) above, may be changed by you or the
Participant as long as we are notified by Written Request while the Participant
is alive and before payments have begun. If the beneficiary designation is
irrevocable, such designation cannot be changed or revoked without the consent
of the beneficiary. After we receive the Written Request and the written consent
of the beneficiary (if required), the new beneficiary designation will take
effect as of the date the notice is signed. We have no further responsibility
for any payment we made before the Written Request.
RETIRED LIFE CERTIFICATE
We will issue to each person to whom annuity benefits are being paid under your
Contract a certificate setting forth a statement in substance of the benefits to
which such person is entitled under the Contract.
ALLOCATION OF CASH SURRENDER VALUE DURING THE ANNUITY PERIOD
At the time an annuity option is elected, you or the TPA also may elect to have
the Cash Surrender Value attributable to a Participant applied to provide a
variable annuity, a fixed annuity, or a combination of both. If no election is
made to the contrary, the Cash Surrender Value will provide an annuity, which
varies with the investment experience of the corresponding Funding Option(s) at
the time of election. You or the TPA, if you so authorize, may elect to
31
transfer cash values from one funding option to another, as described in the
provision Transfers of Cash Value Between Funding Options, in order to
reallocate the basis on which Annuity payments will be determined. Once Annuity
payments have begun, no further transfers are allowed.
ANNUITY OPTIONS
Option 1 -- Life Annuity/No Refund. A life annuity is an annuity payable during
the lifetime of the Annuitant and terminating with the last monthly payment
preceding the death of the Annuitant.
Option 2 -- Life Annuity With 120, 180 or 240 Monthly Payments Assured. An
annuity payable monthly during the lifetime of an Annuitant with the provision
that if, at the death of the Annuitant, payments have been made for less than
120,180 or 240 months, as elected, then we will continue to make payments to the
designated beneficiary during the remainder of the period.
Option 3 -- Life Annuity -- Cash Refund. We will make monthly Annuity payments
during the lifetime of the Annuitant, ceasing with the last payment due prior to
the death of the Annuitant, provided that, at the death of the Annuitant, the
beneficiary will receive an additional payment equal to the dollar value, if
any, of (a) minus (b) where, for a variable annuity:
(a) is the total amount applied under the option divided by the Annuity
Unit value on the due date of the first Annuity payment; and
(b) is
1. the number of Annuity Units represented by each payment; times
2. the number of payments made;
and for a Fixed Annuity:
(a) is the cash value applied on the Annuity Commencement Date under this
option; and
(b) is the dollar amount of Annuity payments already paid.
Option 4 -- Joint and Last Survivor Life Annuity. Monthly Annuity payments based
upon the joint lifetime of two persons selected: payments made first to the
Annuitant, and upon his/her death, paid to the survivor. No more payments will
be made after the death of the survivor.
Option 5 -- Joint and Last Survivor Life Annuity -- Annuity Reduced on Death of
Primary Payee. Monthly Annuity payments to the Annuitant during the joint
lifetime of the two persons selected. One of the two persons will be designated
as the primary payee. The other will be designated as the secondary payee. On
the death of the secondary payee, if survived by the primary payee, we will
continue to make monthly Annuity payments to the primary payee in the same
amount that would have been payable during the joint lifetime of the two
persons.
On the death of the primary payee, if survived by the secondary payee, we will
continue to make monthly Annuity payments to the secondary payee in an amount
equal to 50% of the payments, which would have been made during the lifetime of
the primary payee. No further payments will be made following the death of the
survivor.
Option 6 -- Payments for a Fixed Period -- We will make monthly payments for the
period selected. If at the death of the Annuitant, payments have been made for
less than the period selected, we will continue to make payments to the
designated Beneficiary during the remainder of the period. Please note that
Option 6 may not satisfy minimum required distribution rules for qualified
contracts. Consult your tax advisor before electing this option.
Option 7 -- Other Annuity Options. We will make other arrangements for Annuity
payments as may be mutually agreed upon by you and us.
VARIABLE LIQUIDITY BENEFIT
This benefit is only offered with variable annuity option "Payments for a Fixed
Period" where the payments are made on a variable basis.
32
At any time after annuitization and before death, a participant may surrender
and receive a payment equal to (A) minus (B), where (A) equals the present value
of remaining certain payments, and (B) equals a withdrawal charge not to exceed
the maximum surrender charge rate shown on the specifications page of the
contract (provided that the Contract is not beyond the fifth or eighth Contract
Year, as specified in the applicable chart), multiplied by (A). The interest
rate used to calculate the present value is a rate 1% higher than the Assumed
(Daily) Net Investment Factor used to calculate the Annuity Payments. The
remaining period certain payments are assumed to be level payments equal to the
most recent period certain payment prior to the request for this liquidity
benefit. A withdrawal charge is not imposed if the surrender is made after the
expiration of the withdrawal charge period shown on the specifications page of
the Contract.
MISCELLANEOUS CONTRACT PROVISIONS
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CONTRACT TERMINATION
You may discontinue this Contract by Written Request at any time for any reason.
Because the Contracts are designed only for use with Plans where the employer
has secured the services of a TPA we have agreed may administer the Contract, if
You choose to terminate the TPA's services, You must also terminate the
Contract.
We reserve the right to discontinue this Contract if:
- the Cash Value of the Contract is less than the termination amount
stated in Your Contract; or
- we determine within our sole discretion and judgment that the Plan or
administration of the Plan is not in conformity with applicable law;
or
- we receive notice that is satisfactory to us of plan termination.
If we discontinue this Contract or we receive your Written Request to
discontinue the Contract, we will, in our sole discretion and judgment:
- accept no further payments for this Contract; and
- pay you the Cash Surrender Value of the Funding Options; and
- pay you the Cash Surrender Value of the Fixed Account, if applicable.
If the Contract is discontinued, we will distribute the Cash Surrender Value to
you at the most current address available on our records. Discontinuance of the
Contract will not affect payments we are making under annuity options, that
began before the date of discontinuance. In New York (for Contracts issued on or
after April 30, 2007) and certain other states we are required to pay you the
Cash Value upon our discontinuance of the Contract.
SUSPENSION OF PAYMENTS
The Company reserves the right to suspend or postpone the date of any payment or
determination of values on any business day (1) when the New York Stock Exchange
is closed; (2) when trading on the New York Stock Exchange is restricted; (3)
when an emergency exists, as determined by the SEC, so that the sale of
securities held in the Separate Account may not reasonably occur, or so that the
Company may not reasonably determine the value the Separate Account's net
assets; or (4) during any other period when the SEC, by order, so permits for
the protection of security holders. At any time, payments from the Fixed Account
may be delayed up to 6 months.
MISSTATEMENT
We may require proof of age of the Owner, Annuitant or beneficiary before making
any payments under this Contract that are measured by the Owner's, Annuitant's
or beneficiary's life. If the age of the measuring life has been misstated, the
amount payable will be the amount that would have been provided at the correct
age.
Once income payments have begun, any overpayments or underpayments will be
deducted from or added to the payment or payments made after the adjustment. In
certain states we may be required to pay interest on any underpayments.
33
THE SEPARATE ACCOUNT
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MetLife of CT Separate Account QPN for Variable Annuities was established on
December 26, 1995 and is exempt from registration with the SEC pursuant to
Section 3(c)(11) the Investment Company Act of 1940, as amended. We will invest
Separate Account assets attributable to the Contracts exclusively in the shares
of the Funding Options. We may also offer contracts through the separate account
that are not registered with the SEC.
We hold the assets of the separate account for the exclusive and separate
benefit of the owners of the Separate Account, according to the laws of
Connecticut. Income, gains and losses, whether or not realized, from assets
allocated to the Separate Account are, in accordance with the Contracts,
credited to or charged against the Separate account without regard to other
income, gains and losses of the Company. The assets held by the Separate Account
are not chargeable with liabilities arising out of any other business that we
may conduct. Obligations under the Contract are obligations of the Company. Any
obligations that exceed the assets in the Separate Account are payable by the
Company's general account. The amount of the guaranteed death benefit that
exceeds the Contract Value is paid from the Company's general account. Benefit
amounts paid from the general account are subject to the financial strength and
claims paying ability of the Company.
All investment income and other distributions of the funding options are payable
to the Separate Account. We reinvest all such income and/or distributions in
shares of the respective funding option at net asset value. Shares of the
funding options are currently sold only to life insurance company separate
accounts to fund variable annuity and variable life insurance contracts or to
qualified pension or retirement plans as permitted under the Internal Revenue
Code of 1986, as amended, and the regulations thereunder.
The Company reserves the right, subject to compliance with the law, to
substitute investment alternatives under the Contract and/or to offer additional
Funding Options.
Certain Funding Options are considered Competing Funds, and are subject to
transfer restrictions. These options are noted as such in your Contract. Certain
Funding Options are not currently considered Competing Funds, but may be so in
the future because of an allowable change in the Funding Option's investment
strategy. These are also noted in your Contract.
Certain variable annuity separate accounts and variable life insurance separate
accounts may invest in the funding options simultaneously (called "mixed" and
"shared" funding). It is conceivable that in the future it may be
disadvantageous to do so. Although the Company and the Variable Funding Options
do not currently foresee any such disadvantages either to variable annuity
Contract Owners or variable life policy owners, each Variable Funding Option's
Board of Directors intends to monitor events in order to identify any material
conflicts between them and to determine what action, if any, should be taken. If
a Board of Directors was to conclude that separate funds should be established
for variable life and variable annuity separate accounts, the variable annuity
Contract Owners would not bear any of the related expenses, but variable annuity
Contract Owners and variable life insurance policy owners would no longer have
the economies of scale resulting from a larger combined fund.
We reserve the right to transfer assets of the Separate Account to another
separate account, and to modify the structure or operation of the Separate
Account, subject to the necessary regulatory approvals. If we do so, we
guarantee that the modification will not affect your Account Value.
PERFORMANCE INFORMATION
In advertisements for the Contract, we may include performance figures to show
you how a Variable Funding Option has performed in the past. These figures are
rates of return or yield quotations shown as a percent. These figures show past
performance of a Variable Funding Option and are not an indication of how a
Variable Funding Option will perform in the future.
Performance figures for each Variable Funding Option are based in part on the
performance of a corresponding Underlying Funding Option. In some cases, the
Underlying Fund may have existed before the technical inception of the
corresponding Variable Funding Option. In those cases, we can create
"hypothetical historical performance" of a Variable Funding Option. These
figures show the performance that the Variable Funding Option would have
achieved had it been available during the entire history of the Underlying Fund.
34
In a low interest rate environment, yields for money market Subaccounts, after
deduction of the Mortality and Expense Risk Charge, Administrative Expense
Charge and the charge for any optional benefit riders (if applicable), may be
negative even though the Underlying Fund's yield, before deducting for such
charges, is positive. If you allocate a portion of your Contract Value to a
money market Subaccount or participate in an asset allocation program where
Contract Value is allocated to a money market Subaccount under the applicable
asset allocation model, that portion of your Contract Value may decrease in
value.
FEDERAL TAX CONSIDERATIONS
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The following general discussion of the federal income tax consequences related
to the Participant's (for purposes of this section, referred to as "You")
investment in this Contract is not intended to cover all situations, and is not
meant to provide tax or legal advice. Because of the complexity of the law and
the fact that the tax results will vary depending on many factors, you should
consult your tax and/or legal adviser regarding the tax implications of
purchasing this Contract based upon your individual situation. For further tax
information, an additional discussion of certain tax matters may be contained in
the SAI. You are responsible for determining whether your purchase of a
Contract, withdrawals, annuity payments and any other transactions under your
Contract satisfy applicable tax law. We are not responsible for determining if
your employer's plan or arrangement satisfies the requirements of the Code
and/or the Employee Retirement Income Security Act of 1974 (ERISA).
GENERAL TAXATION OF ANNUITIES
Congress has recognized the value of saving for retirement by providing certain
tax benefits, in the form of tax deferral, for premiums paid under an annuity
and permitting tax-free transfers between the various investment options offered
under the Contract. The Internal Revenue Code ("Code") governs how earnings on
your investment in the Contract are ultimately taxed, depending upon the type of
contract, qualified or non-qualified, and the manner in which the money is
distributed, as briefly described below. In analyzing the benefits of tax
deferral it is important to note that the Jobs and Growth Tax Relief
Reconciliation Act of 2003 amended Code Section 1 to reduce the marginal tax
rates on long-term capital gains and dividends to 5% and 15%. The reduced rates
apply during 2003 through 2008, and thereafter will increase to prior levels.
Earnings under annuity contracts, like interest payable on fixed investments
(notes, bonds, etc.) continue to be taxed as ordinary income (top rate of 35%).
Tax-Free Exchanges: Code Section 1035 provides that, if certain conditions are
met, no gain or loss is recognized when an annuity contract is received in
exchange for a life, endowment, or annuity contract. Since different annuity
contracts have different expenses, fees and benefits, a tax-free exchange could
result in your investment becoming subject to higher or lower fees and/or
expenses.
Federal Estate Taxes. While no attempt is being made to discuss the Federal
estate tax implications of the Contract, you should keep in mind that the value
of an annuity contract owned by a decedent and payable to a beneficiary by
virtue of surviving the decedent is included in the decedent's gross estate.
Depending on the terms of the annuity contract, the value of the annuity
included in the gross estate may be the value of the lump sum payment payable to
the designated beneficiary or the actuarial value of the payments to be received
by the beneficiary. Consult an estate planning advisor for more information.
Generation-Skipping transfer tax. Under certain circumstances, the Code may
impose a "generation skipping transfer tax" when all or part of an annuity
contract is transferred to, or a death benefit is paid to, an individual two or
more generations younger than the Contract Owner. Regulations issued under the
Code may require us to deduct the tax from your Contract, or from any applicable
payment, and pay it directly to the IRS
To the extent permitted under Federal income tax law, the Separate Account may
claim the benefit of certain tax credits attributable to taxes paid by certain
of the Portfolios to foreign jurisdictions.
The rules for state and local income taxes may differ from the Federal income
tax rules. Contract Owners and prospective contract owners of the Contract
should consult their own tax advisors and the law of the applicable taxing
jurisdiction to determine what rules and tax benefits apply to the contract.
35
QUALIFIED ANNUITY CONTRACTS
If you purchase your Contract with proceeds of an eligible rollover distribution
from any qualified employee pension plan or individual retirement annuity (IRA),
your Contract is referred to as a Qualified Contract. Some examples of Qualified
Contracts are: IRAs, tax-sheltered annuities established by public school
systems or certain tax-exempt organizations under Code Section 403(b), corporate
sponsored pension and profit-sharing plans (including 401(k) plans), Keogh Plans
(for self-employed individuals), and certain other qualified deferred
compensation plans. Another type of Qualified Contract is a Roth IRA, under
which after-tax contributions accumulate until maturity, when amounts (including
earnings) may be withdrawn tax-free. The rights and benefits under a Qualified
Contract may be limited by the terms of the retirement plan, regardless of the
terms and conditions of the Contract. Plan participants making contributions to
Qualified Contracts will be subject to the required minimum distribution rules
as provided by the Code and described below.
All IRAs, Roth IRAs, TSAs (ERISA and non-ERISA), sec.457(b), sec.403(a), SEP and
SIMPLE plans and 401(a) and 401(k) plans (hereinafter "Qualified Plans" unless
otherwise specified) receive tax deferral under the Code. Although there are no
additional tax benefits by funding your Qualified Plan with an annuity, doing so
does offer you additional insurance benefits such as the availability of a
guaranteed income for life.
KEOGH A Keogh plan is generally a qualified retirement plan (defined
contribution or defined benefit) that covers a self-employed person. Other
employees may also be covered. Special rules apply to contribution limits in the
case of a self-employed person. The tax rules work similarly to the withdrawal,
distribution and eligible distribution rules as under IRAs. However, there may
be some differences: consult your tax advisor.
TAXATION OF QUALIFIED ANNUITY CONTRACTS
Under a qualified annuity, since amounts paid into the Contract have generally
not yet been taxed, the full amount of such distributions, including the amount
attributable to Purchase Payments, whether paid in the form of lump-sum
withdrawals or Annuity Payments, are generally taxed at the ordinary income tax
rate unless the distribution is transferred to an eligible rollover account or
contract. The Contract is available as a vehicle for IRA rollovers and for other
Qualified Contracts. There are special rules which govern the taxation of
Qualified Contracts, including withdrawal restrictions, requirements for
mandatory distributions, and contribution limits. Amounts rolled over to the
Contract from other qualified plan funding vehicles are generally not subject to
current taxation.
MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS
Federal tax law requires that minimum annual distributions begin by April 1st of
the calendar year following the calendar year in which an IRA owner attains age
70 1/2. Participants in qualified plans, 475(b) plans, and 403(b) annuities may
defer minimum distributions until the later of April 1st of the calendar year
following the calendar year in which they attain age 70 1/2 or the year of
retirement (except for 5% or more owners) . If you own more than one individual
retirement annuity and/or account, you may satisfy the minimum distribution
rules on an aggregate basis (i.e. determine the total amount of required
distributions from all IRAs and take the required amount from any one or more
IRAs). A similar aggregate approach is available to meet your 403(b) minimum
distribution requirements if you have multiple 403(b) annuities. Recently
promulgated Treasury regulations changed the distribution requirements;
therefore, it is important that you consult your tax adviser as to the impact of
these regulations on your personal situation.
Final income tax regulations regarding minimum distribution requirements were
released in June 2004. These regulations affect both deferred and income
annuities. Under these new rules, effective with respect to minimum
distributions required for the 2006 distribution year, in general, the value of
all benefits under a deferred annuity (including death benefits in excess of
cash value must be added to the Contract Value in computing the amount required
to be distributed over the applicable period. We will provide You with
additional information as to the amount of your interest in the Contract that is
subject to required minimum distributions under this new rule and either compute
the required amount for You or offer to do so at Your request. The new rules are
not entirely clear and you should consult your own tax advisors as to how these
rules affect your own Contract.
MINIMUM DISTRIBUTIONS FOR BENEFICIARIES UPON THE ANNUITANT'S DEATH: Upon the
death of the Annuitant (a plan participant) of a Qualified Contract, the
participant's remaining interest in the Contract must be completely withdrawn
within 5 years from the date of death (including in a single lump sum) or
minimum distributions may be taken over the life expectancy of the individual
beneficiaries (and in certain situations, trusts for individuals),
36
provided such distributions are payable at least annually and begin within one
year from the date of death. Alternative rules permit a spousal beneficiary
under a qualified contract to defer the minimum distribution requirements until
the end of the year in which the deceased spouse would have attained age 70 1/2
or to rollover the death proceeds to his or her own IRA or to another eligible
retirement plan in which he or she participates.
NOTE TO PARTICIPANTS IN QUALIFIED PLANS INCLUDING 401, 403(b), 457 AS WELL AS
IRA OWNERS: While annual plan contribution limits may be increased from time to
time by Congress and the IRS for federal income tax purposes, these limits must
be adopted by each state for the higher limits to be effective at a state income
tax level. In other words, the permissible contribution limit for income tax
purposes may be different at the federal level from your state's income tax
laws. Therefore, in certain states, a portion of the contributions may not be
excludible or deductible from state income taxes. Please consult your employer
or tax adviser regarding this issue.
DESIGNATED ROTH ACCOUNTS FOR 403(B) PLANS AND 401(K) PLANS
Effective January 1, 2006, employers that have established and maintain TSA or
401(k) plans ("collectively the Plan") may also establish a Qualified Roth
Contribution Program under Section 402A of the Code ("Designated Roth Accounts")
to accept after tax contributions as part of the TSA or 401(k) plan. In
accordance with our administrative procedures we may permit these contributions
to be made as purchase payments to a Section 403(b) Contract or to a Contract
issued under a 401(k) program under the following conditions:
1. The employer maintaining the plan has demonstrated to our satisfaction
that Designated Roth Accounts are permitted under the Plan.
2. In accordance with our administrative procedures, the amount of
elective deferrals has been irrevocably designated as an after-tax
contribution to the Designated Roth Account.
3. All state regulatory approvals have been obtained to permit the
Contract to accept such after-tax elective deferral contributions
(and, where permitted under the Qualified Roth Contribution Program
and the Contract, rollovers and trustee-to trustee transfers from
other Designated Roth Accounts).
4. In accordance with our procedures and in a form satisfactory to us, we
may accept rollovers from other funding vehicles under any Qualified
Roth Contribution Program of the same type in which the employee
participates as well as trustee-to-trustee transfers from other
funding vehicles under the same Qualified Roth Contribution Program
for which the participant is making elective deferral contributions to
the Contract.
5. No other contribution types (including employer contributions,
matching contributions, etc.) will be allowed as designated Roth
contributions, unless they become permitted under the Code.
6. If permitted under the federal tax law, we may permit both pre-tax
contributions under a Plan as well as after-tax contributions under
that Plan's Qualified Roth Contribution Program to be made under the
same Contract as well as rollover contributions and contributions by
trustee-to-trustee transfers. In such cases, we will account
separately for the designated Roth contributions and the earnings
thereon from the contributions and earnings made under the pre-tax TSA
plan or pre-tax 401(k) plan (whether made as elective deferrals,
rollover contributions or trustee-to-trustee transfers). As between
the pre-tax or traditional Plan and the Qualified Roth Contribution
Program, we will allocate any living benefits or death benefits
provided under the Contract on a reasonable basis, as permitted under
the tax law. However, we reserve the right to require a separate TSA
Contract to accept designated Roth TSA contributions and a separate
section 401(k) Contract to accept designated Roth 401(k)
contributions.
7. We may refuse to accept contributions made as rollovers and trustee-
to-trustee transfers, unless we are furnished with a breakdown as
between participant contributions and earnings at the time of the
contribution.
Many of the federal income tax rules pertaining to Designated Roth Accounts have
not yet been finalized. Both you and your employer should consult their own tax
and legal advisors prior to making or permitting contributions to be made to a
Qualified Roth Contribution Program.
37
The following general tax rules are based on our understanding of the Code and
any regulations issued through December 31, 2005, and are subject to change and
to different interpretation as well as additional guidance in respect to areas
not previously addressed:
- The employer must permit contributions under a pre-tax 403(b) or pre-
tax 401 (k) plan in order to permit contributions to be irrevocably
designated and made part of the Qualified Roth Contribution Program.
- Elective deferral contributions to the Designated Roth Account must be
aggregated with all other elective deferral contributions made by a
taxpayer for purposes of the individual Code Section 402(g) limits and
the Code Section 414(v) limits (age 50+catch-up) as well as
contribution limits that apply under the Plan.
- In general, the same tax law rules with respect to restricted monies,
triggering events and permitted distributions will apply to the
Designated Roth Accounts under the Plan as apply to the traditional
pre-tax accounts under the Plan (e.g., death or disability of
participant, severance from employment, attainment of age 59 1/2,
hardship withdrawals only with respect to contributions, if permitted
under the Plan).
- If the amounts have been held under any Designated Roth Account of a
participant for at least five years, and are made on account of death,
disability, or after attainment of age 59 1/2, then any withdrawal,
distribution or payment of these amounts is generally free of federal
income tax ("Qualified Distribution").
- Unlike Roth IRAs, withdrawal, distributions and payments that do not
meet the five year rule will generally be taxed on a pro-rated basis
with respect to earnings and after-tax contributions. The 10% penalty
tax will generally apply on the same basis as a traditional pre-tax
account under the Plan. Additionally, rollover distributions may only
be made tax-free into another Designated Roth Account or into a Roth
IRA.
- Some states may not permit contributions to be made to a Qualified
Roth Contribution Program or may require additional conforming
legislation for these rules to become effective.
PENALTY TAX FOR PREMATURE DISTRIBUTIONS
For Qualified Contracts, taxable distributions taken before the Contract Owner
has reached the age of 59 1/2 will be subject to a 10% additional tax penalty
unless the distribution is taken in a series of periodic distributions, for life
or life expectancy, or unless the distribution follows the death or disability
of the Contract Owner. Other exceptions may be available in certain qualified
plans. The 10% additional tax is in addition to any penalties that may apply
under your Contract and the normal income taxes due on the distribution.
TAXATION OF DEATH BENEFIT PROCEEDS
Amounts may be distributed from a Contract because of the death of an owner or
Annuitant. Generally, such amounts are includable in the income of the recipient
as follows: (i) if distributed in a lump sum, they are taxed in the same manner
as a full surrender of the Contract; or (ii) if distributed under a payment
option, they are taxed in the same way as Annuity Payments.
Under the Code, withdrawals need not be made by a particular age. However, it is
possible that the Internal Revenue Service may determine that the Contract must
be surrendered or annuity payments must commence by a certain age (e.g., 85 or
older) or your Contract may require that you commence payments by a certain age.
OTHER TAX CONSIDERATIONS
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PUERTO RICO TAX CONSIDERATIONS
The Puerto Rico Internal Revenue Code of 1994 (the "1994 Code") taxes
distributions from non-qualified annuity contracts differently than in the U.S.
Distributions that are not in the form of an annuity (including partial
surrenders and period certain payments) are treated under the 1994 Code first as
a return of investment. Therefore, a substantial portion of the amounts
distributed will generally be excluded from gross income for Puerto Rico tax
purposes until the cumulative amount paid exceeds your tax basis. The amount of
income on annuity distributions (payable over your lifetime) is also calculated
differently under the 1994 Code. Since Puerto Rico residents are also subject to
U.S. income tax on all income other than income sourced to Puerto Rico and the
Internal Revenue Service issued
38
guidance in 2004 which indicated that the income from an annuity contract issued
by a U.S. life insurer would be considered U.S. source income, the timing of
recognition of income from an annuity contract could vary between the two
jurisdictions. Although the 1994 Code provides a credit against the Puerto Rico
income tax for U.S. income taxes paid, an individual may not get full credit
because of the timing differences. You should consult with a personal tax
adviser regarding the tax consequences of purchasing an annuity contract and/or
any proposed distribution, particularly a partial distribution or election to
annuitize.
NON-RESIDENT ALIENS
Distributions to non-resident aliens ("NRAs") are subject to special and complex
tax and withholding rules under the Code with respect to U.S. source income,
some of which are based upon the particular facts and circumstances of the
Contract Owner, the beneficiary and the transaction itself. As stated above, the
IRS has taken the position that income from the Contract received by NRAs is
considered U.S. source income. In addition, Annuity Payments to NRAs in many
countries are exempt from U.S. tax (or subject to lower rates) based upon a tax
treaty, provided that the Contract Owner complies with the applicable
requirements. NRAs should seek guidance from a tax adviser regarding their
personal situation.
HURRICANE RELIEF
DISTRIBUTIONS
Your plan may provide for "qualified hurricane distributions" pursuant to the
Katrina Emergency Tax Relief Act of 2005 and the Gulf Opportunity Zone Act of
2005. Subject to an aggregate limit of $100,000 among all eligible retirement
plans, a participant's qualified hurricane distributions are not subject to the
10% early withdrawal penalty that might otherwise apply to a qualified annuity
under section 72(t).
To the extent a participant "repays" a qualified hurricane distribution by
contributing within three years of the distribution date to an eligible
retirement plan that accepts rollover contributions, it will generally be
treated as a timely direct trustee-to-trustee transfer and will not be subject
to income tax. To the extent a participant does not repay a qualified hurricane
distribution within three years, he or she will include the distribution in
gross income ratably over the three-tax year period, beginning with the tax year
in which the distribution is received, unless the participant elects to opt out
of three-year averaging by including the qualified hurricane distribution in
gross income for the year it is received. Consult your independent tax advisor
to determine if hurricane relief is available to Your particular situation.
LOANS
Your plan may provide for increased limits and delayed repayment of participant
loans, where otherwise permitted by your plan, pursuant to the Katrina Emergency
Tax Relief Act of 2005 and the Gulf Opportunity Zone Act of 2005. An eligible
retirement plan other than an IRA may allow a plan loan to delay loan repayment
by certain individuals impacted by Hurricanes Katrina, Rita and Wilma , whose
principal places of abode on certain dates were located in statutorily defined
disaster areas and who sustained an economic loss due to the hurricane.
Generally, if the due date for any repayment with respect to such loan occurs
during a period beginning on September 23, 2005 (for purposes of Hurricane
Katrina) or October 23, 2005 (for purposes of Hurricanes Rita and Wilma) and
ending on December 31, 2006, then such due date may be delayed for one year.
Note: For purposes of these loan rules, an individual cannot be a qualified
individual with respect to more than one hurricane. Consult your independent tax
advisor to determine if hurricane relief is available to Your particular
situation.
CHANGES TO TAX RULES AND INTERPRETATIONS
Changes in applicable tax rules and interpretations can adversely affect the tax
treatment of your Contract. These changes may take effect retroactively.
Examples of changes that could create adverse tax consequences include:
- Possible taxation of transfers between subaccounts or transfers from a
subaccount to the Fixed Account or Fixed Annuity.
- Possible taxation as if you were the Contract Owner of your portion of
the Separate Account's assets.
- Possible limits on the number of funding options available or the
frequency of transfers among them.
39
TAX CREDITS AND DEDUCTIONS. The Company may be entitled to certain tax benefits
related to the assets of the Separate Account. These tax benefits, which may
include foreign tax credits and corporate dividend received deductions, are not
passed back to the Separate Account or to contract owners since the Company is
the owner of the assets from which the tax benefits are derived.
OTHER INFORMATION
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THE INSURANCE COMPANY
MetLife Insurance Company of Connecticut is a stock insurance company chartered
in 1863 in Connecticut and continuously engaged in the insurance business since
that time. It is licensed to conduct life insurance business in all states of
the United States, the District of Columbia, Puerto Rico, Guam, the U.S. and
British Virgin Islands and the Bahamas.. The Company is a wholly-owned
subsidiary of MetLife, Inc., a publicly traded company. MetLife, Inc., through
its subsidiaries and affiliates, is a leading provider of insurance and other
financial services to individual and institutional customers. The Company's Home
Office is located at One Cityplace, Hartford, Connecticut 06103-3415.
FINANCIAL STATEMENTS
The financial statements for the Company are located in the Statement of
Additional Information.
DISTRIBUTION OF THE CONTRACTS
DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT. MetLife Insurance Company of
Connecticut (the "Company") has appointed MetLife Investors Distribution Company
("MLIDC") to serve as the principal underwriter and distributor of the
securities offered through this prospectus, pursuant to the terms of a
Distribution and Principal Underwriting Agreement. Prior to October 20, 2006,
the principal underwriter and distributor was MLI Distribution, LLC, which
merged with and into MLIDC on that date. MLIDC, which is an affiliate of the
Company, also acts as the principal underwriter and distributor of other
variable annuity contracts and variable life insurance policies issued by the
Company and its affiliated companies. The Company reimburses MLIDC for expenses
MLIDC incurs in distributing the Contracts (e.g., commissions payable to retail
broker-dealers who sell the Contracts). MLIDC does not retain any fees under the
Contracts; however, MLIDC may receive 12b-1 fees from the Underlying Funds.
MLIDC's principal executive offices are located at 5 Park Plaza, Suite 1900,
Irvine, CA 92614. MLIDC is registered as a broker-dealer with the Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as well
as the securities commissions in the states in which it operates, and is a
member of the National Association of Securities Dealers, Inc. ("NASD").
MLIDC and the Company has entered into a selling agreement with Smith Barney, a
member of the NASD. Applications for the Contract are solicited by registered
representatives who are associated persons of Smith Barney. Such representatives
act as appointed agents of the Company under applicable state insurance law and
must be licensed to sell variable insurance products. The Company intends to
offer the Contract in all jurisdictions where it is licensed to do business and
where the Contract is approved. The Contracts are offered on a continuous basis.
COMPENSATION. Smith Barney is paid compensation for the promotion and sale of
the Contracts. Registered representatives who solicit sales of the Contract
typically receive a portion of the compensation payable to the broker-dealer
firm. The amount the registered representative receives depends on the agreement
between the firm and the registered representative. This agreement may also
provide for the payment of other types of cash and non-cash compensation and
other benefits. A broker-dealer firm or registered representative of a firm may
receive different compensation for selling one product over another and/or may
be inclined to favor one product provider over another product provider due to
differing compensation rates.
We generally pay compensation as a percentage of purchase payments invested in
the Contract. Alternatively, we may pay lower compensation on purchase payments
but pay periodic asset-based compensation based on all or a portion of the
Account Value. The amount and timing of compensation may vary depending on the
selling agreement but is not expected to exceed 7.50% of Purchase Payments (if
up-front compensation is paid to registered representatives) and up to 1.50%
annually of average Account Value (if asset-based compensation is paid to
registered representatives).
40
We pay American Funds Distributors, Inc., principal underwriter for the American
Funds Insurance Series, a percentage of all Purchase Payments allocated to the
American Funds Global Growth Fund, the American Funds Growth Fund, and the
American Funds Growth-Income Fund for services it provides in marketing the
Underlying Fund's shares in connection with the Contract.
CONFORMITY WITH STATE AND FEDERAL LAWS
The laws of the state in which we deliver a Contract govern that Contract. Where
a state has not approved a Contract feature or funding option, it will not be
available in that state. Any paid up annuity, Cash Surrender Value or death
benefits that are available under the Contract are not less than the minimum
benefits required by the statutes of the state in which we delivered the
Contract. We reserve the right to make any changes, including retroactive
changes, in the Contract to the extent that the change is required to meet the
requirements of any law or regulation issued by any governmental agency to which
the Company, the Contract or the Contract Owner is subject.
VOTING RIGHTS
The Company is the legal owner of the shares of the Underlying Funds. However,
we believe that when an Underlying Fund solicits proxies in conjunction with a
vote of shareholders we are required to obtain from you and from other owners
instructions on how to vote those shares. We will vote all shares, including
those we may own on our own behalf, and those where we have not received
instructions from Contract Owners, in the same proportion as shares for which we
received voting instructions. The effect of this proportional voting is that a
small number of Contract Owners may control the outcome of the vote. Should we
determine that we are no longer required to comply with the above, we will vote
on the shares in our own right. In certain limited circumstances, and when
permitted by law, we may disregard voting instructions. If we do disregard
voting instructions, a summary of that action and the reasons for such action
would be included in the next annual report to Contract Owners.
CONTRACT MODIFICATION
We reserve the right to modify the Contract to keep it qualified under all
related law and regulations that are in effect during the term of this Contract.
We will obtain the approval of any regulatory authority needed for the
modifications.
POSTPONEMENT OF PAYMENT (THE "EMERGENCY PROCEDURE")
Payment of any benefit or determination of values may be postponed whenever: (1)
the New York Stock Exchange is closed; (2) when trading on the New York Stock
Exchange is restricted; (3) when an emergency exists as determined by the
Commission so that disposal of the securities held in the Funding Options is not
reasonably practicable or it is not reasonably practicable to determine the
value of the Funding Option's net assets; or (4) during any other period when
the Commission, by order, so permits for the protection of Contract Owners. This
Emergency Procedure will supercede any provision of the Contract that specifies
a Valuation Date. At any time, payments from the Fixed Account may also be
delayed.
RESTRICTIONS ON FINANCIAL TRANSACTIONS
Federal laws designed to counter terrorism and prevent money laundering might,
in certain circumstances, require us to block a Contract Owner's ability to make
certain transactions and thereby refuse to accept any request for transfers,
withdrawals, surrenders, or death benefits, until the instructions are received
from the appropriate regulator. We may also be required to provide additional
information about you and your Contract to government regulators.
LEGAL PROCEEDINGS
In the ordinary course of business, the Company, similar to other life insurance
companies, is involved in lawsuits (including class action lawsuits),
arbitrations and other legal proceedings. Also, from time to time, state and
federal regulators or other officials conduct formal and informal examinations
or undertake other actions dealing with various aspects of the financial
services and insurance industries. In some legal proceedings involving insurers,
substantial damages have been sought and/or material settlement payments have
been made.
41
It is not possible to predict with certainty the ultimate outcome of any pending
legal proceeding or regulatory action. However, the Company does not believe any
such action or proceeding will have a material adverse effect upon the Separate
Account or upon the ability of MLIDC to perform its contract with the Separate
Account or of the Company to meet its obligations under the contracts.
THIS PAGE INTENTIONALLY LEFT BLANK.
42
APPENDIX A -- CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
METLIFE OF CT SEPARATE ACCOUNT QPN FOR VARIABLE ANNUITIES
ACCUMULATION UNIT VALUES (IN DOLLARS)
The following Accumulation Unit Value ("AUV") information should be read in
conjunction with the Separate Account's audited financial statement and notes,
which are included in the Statement of Additional Information ("SAI"). The first
table provides the AUV information for the minimum Separate Account Charge
available under the Contract. The second table provides the AUV information for
the maximum Separate Account Charge available under the Contract. The Separate
Account charges that fall in between this range are included in the SAI, which
is free of charge. You may request a copy of the SAI by calling the toll-free
number found on the first page of this prospectus or by mailing in the coupon
attached in Appendix D. Please refer to the Fee Table section of this prospectus
for more information on Separate Account charges.
SEPARATE ACCOUNT CHARGES 0.85%
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Dreyfus A Bonds Plus, Inc. (9/96)................ 2006 1.514 1.514 --
2005 1.498 1.514 --
2004 1.465 1.498 --
2003 1.412 1.465 2,145,600
2002 1.320 1.412 2,094,388
2001 1.273 1.320 1,042,558
2000 1.164 1.273 750,367
1999 1.158 1.164 88,730
Smith Barney Aggressive Growth Subaccount Inc.
(Class A) (10/96)................................ 2006 3.029 3.029 --
2005 3.029 3.029 --
2004 2.961 3.029 --
2003 2.187 2.961 4,760,254
2002 3.280 2.187 3,413,159
2001 3.482 3.280 2,623,649
2000 2.948 3.482 958,607
1999 2.015 2.948 --
Templeton Growth Fund Subaccount (Class A)
(8/96)........................................... 2006 2.358 2.848 4,166,939
2005 2.199 2.358 4,464,912
2004 1.896 2.199 4,113,426
2003 1.439 1.896 3,385,486
2002 1.603 1.439 2,760,058
2001 1.608 1.603 2,441,637
2000 1.594 1.608 2,710,568
1999 1.274 1.594 203,506
</Table>
A-1
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
AIM Equity Funds, Inc.
AIM Equity Charter Subaccount (Class A) (10/96).. 2006 1.351 1.351 --
2005 1.348 1.351 --
2004 1.251 1.348 --
2003 1.017 1.251 1,979,921
2002 1.224 1.017 1,973,053
2001 1.605 1.224 1,828,936
2000 1.897 1.605 1,728,182
1999 1.525 1.897 321,276
AIM Equity Constellation Subaccount (Class A)
(10/96).......................................... 2006 1.287 1.287 --
2005 1.295 1.287 --
2004 1.230 1.295 --
2003 0.959 1.230 4,242,169
2002 1.285 0.959 3,957,205
2001 1.697 1.285 4,095,362
2000 1.909 1.697 4,236,668
1999 1.292 1.909 368,659
AllianceBernstein Value Funds
AllianceBernstein Growth and Income Subaccount
(Class A) (9/96)................................. 2006 2.199 2.199 --
2005 2.202 2.199 --
2004 1.984 2.202 0
2003 1.519 1.984 3,740,575
2002 2.086 1.519 3,087,811
2001 2.143 2.086 2,478,333
2000 1.902 2.143 1,270,032
1999 1.784 1.902 329,224
AllianceBernstein Variable Products Series Fund,
Inc.
AllianceBernstein Growth and Income Subaccount
(Class B) (5/04)................................. 2006 1.121 1.174 --
2005 1.081 1.121 8,536,045
2004 1.000 1.081 8,546,572
</Table>
A-2
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
AllianceBernstein Large-Cap Growth Subaccount
(Class B) (6/01)................................. 2006 0.899 0.885 --
2005 0.789 0.899 552,065
2004 0.735 0.789 305,176
2003 0.601 0.735 321,788
2002 0.876 0.601 89,889
2001 1.000 0.876 11,190
American Funds Insurance Series
American Funds Global Growth Subaccount (Class 2)
(5/04)........................................... 2006 1.254 1.497 1,342,732
2005 1.108 1.254 438,114
2004 1.000 1.108 59,671
American Funds Growth Subaccount (Class 2)
(5/04)........................................... 2006 1.257 1.373 4,539,659
2005 1.091 1.257 2,719,316
2004 1.000 1.091 634,173
American Funds Growth-Income Subaccount (Class 2)
(5/04)........................................... 2006 1.136 1.297 2,662,287
2005 1.082 1.136 1,404,509
2004 1.000 1.082 387,314
Capital Appreciation Fund
Capital Appreciation Fund (8/96)................. 2006 2.452 2.432 --
2005 2.092 2.452 5,664,971
2004 1.765 2.092 5,685,509
2003 1.425 1.765 6,508,698
2002 1.919 1.425 6,708,476
2001 2.618 1.919 7,216,515
2000 3.380 2.618 7,104,811
1999 2.455 3.380 1,417,820
Delaware VIP Trust
Delaware VIP REIT Subaccount (Standard Class)
(5/03)........................................... 2006 1.757 2.311 --
2005 1.654 1.757 984,660
2004 1.269 1.654 492,087
2003 1.000 1.269 --
</Table>
A-3
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Delaware VIP Small Cap Value Subaccount (Standard
Class) (6/98).................................... 2006 1.075 1.075 --
2005 1.075 1.075 --
2004 1.075 1.075 --
2003 1.075 1.075 --
2002 1.153 1.075 --
2001 1.040 1.153 1,360,904
2000 0.887 1.040 422,461
1999 0.858 0.887 70,932
Dreyfus Variable Investment Fund
Dreyfus VIF Appreciation Subaccount (Initial
Shares) (7/98)................................... 2006 1.099 1.269 2,438,048
2005 1.062 1.099 2,693,587
2004 1.019 1.062 3,410,103
2003 0.848 1.019 3,421,428
2002 1.027 0.848 3,371,300
2001 1.143 1.027 1,014,715
2000 1.160 1.143 752,012
1999 1.108 1.160 288,351
Dreyfus VIF Developing Leaders Subaccount
(Initial Shares) (6/98).......................... 2006 1.433 1.475 5,819,927
2005 1.366 1.433 6,866,674
2004 1.237 1.366 7,464,007
2003 0.948 1.237 7,519,088
2002 1.182 0.948 6,888,777
2001 1.269 1.182 3,516,585
2000 1.130 1.269 1,689,990
1999 0.895 1.130 280,504
Fidelity Advisor Series I
FASI Advisor Growth Opportunities Subaccount
(Class T) (8/96)................................. 2006 1.291 1.291 --
2005 1.283 1.291 --
2004 1.209 1.283 --
2003 0.944 1.209 1,184,883
2002 1.227 0.944 1,018,310
2001 1.458 1.227 1,380,771
2000 1.799 1.458 1,689,528
1999 1.750 1.799 411,854
</Table>
A-4
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Franklin Templeton Variable Insurance Products
Trust
FTVIPT Franklin Small-Mid Cap Growth Securities
Subaccount (Class 2) (5/01)...................... 2006 1.030 1.110 645,745
2005 0.991 1.030 547,033
2004 0.897 0.991 442,627
2003 0.659 0.897 246,300
2002 0.932 0.659 55,152
2001 1.000 0.932 239
FTVIPT Mutual Shares Securities Subaccount (Class
2) (5/03)........................................ 2006 1.473 1.729 --
2005 1.344 1.473 373,491
2004 1.203 1.344 84,453
2003 1.000 1.203 --
FTVIPT Templeton Developing Markets Securities
Subaccount (Class 2) (5/03)...................... 2006 2.271 2.884 1,471,006
2005 1.797 2.271 951,217
2004 1.453 1.797 154,390
2003 1.000 1.453 --
FTVIPT Templeton Foreign Securities Subaccount
(Class 2) (5/04)................................. 2006 1.263 1.521 2,538,465
2005 1.156 1.263 1,980,292
2004 1.000 1.156 1,042,246
Janus Aspen Series
Janus Aspen Global Life Sciences Subaccount
(Service Shares) (5/00).......................... 2006 1.036 1.093 --
2005 0.930 1.036 --
2004 0.821 0.930 --
2003 0.656 0.821 736,329
2002 0.940 0.656 550,506
2001 1.139 0.940 615,849
2000 1.000 1.139 218,507
</Table>
A-5
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Janus Aspen Global Technology Subaccount (Service
Shares) (5/00)................................... 2006 0.393 0.420 --
2005 0.355 0.393 --
2004 0.356 0.355 --
2003 0.245 0.356 2,602,852
2002 0.419 0.245 1,493,761
2001 0.674 0.419 1,296,089
2000 1.000 0.674 577,862
Janus Aspen Growth and Income Subaccount (Service
Shares) (5/00)................................... 2006 0.853 0.915 --
2005 0.767 0.853 872,657
2004 0.693 0.767 815,572
2003 0.566 0.693 787,153
2002 0.729 0.566 494,712
2001 0.851 0.729 356,515
2000 1.000 0.851 224,293
Janus Aspen Mid Cap Growth Subaccount (Service
Shares) (5/00)................................... 2006 0.512 0.575 4,218,950
2005 0.461 0.512 5,073,291
2004 0.386 0.461 5,888,561
2003 0.289 0.386 3,895,826
2002 0.405 0.289 2,995,658
2001 0.676 0.405 2,842,752
2000 1.000 0.676 761,964
Lazard Retirement Series, Inc.
Lazard Retirement Small Cap Subaccount (5/03).... 2006 1.575 1.779 --
2005 1.527 1.575 136,457
2004 1.341 1.527 15,783
2003 1.000 1.341 --
</Table>
A-6
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Legg Mason Partners Income Trust
LMPIT Investment Grade Bond Subaccount (Class A)
(9/96)........................................... 2006 1.828 1.868 2,056,653
2005 1.810 1.828 2,348,916
2004 1.715 1.810 2,212,938
2003 1.644 1.715 2,331,185
2002 1.474 1.644 1,995,804
2001 1.355 1.474 1,179,604
2000 1.227 1.355 582,516
1999 1.330 1.227 90,943
Legg Mason Partners Investment Series
LMPIS Growth and Income Subaccount (5/01)........ 2006 1.016 1.133 253,983
2005 0.986 1.016 242,145
2004 0.919 0.986 317,589
2003 0.712 0.919 213,923
2002 0.922 0.712 20,373
2001 1.000 0.922 511
LMPIS Premier Selections All Cap Growth
Subaccount (5/01)................................ 2006 0.933 0.993 1,763,613
2005 0.885 0.933 2,762,821
2004 0.867 0.885 3,236,033
2003 0.651 0.867 129,385
2002 0.897 0.651 66,914
2001 1.000 0.897 11,259
Legg Mason Partners Investment Trust
LMPIT S&P 500 Index Subaccount (Class A) (6/98).. 2006 1.127 1.288 --
2005 1.091 1.127 --
2004 0.999 1.091 --
2003 0.787 0.999 7,971,964
2002 1.024 0.787 7,362,447
2001 1.179 1.024 6,616,285
2000 1.312 1.179 5,402,676
1999 1.159 1.312 1,521,954
</Table>
A-7
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Legg Mason Partners Variable Portfolios V
LMPVPV Small Cap Growth Opportunities Subaccount
(5/01)........................................... 2006 1.173 1.313 1,129,579
2005 1.128 1.173 957,414
2004 0.984 1.128 845,870
2003 0.699 0.984 265,005
2002 0.948 0.699 89,897
2001 1.000 0.948 889
Legg Mason Partners Variable Portfolios I, Inc.
LMPVPI All Cap Subaccount (Class I) (9/98)....... 2006 1.986 2.326 2,276,235
2005 1.925 1.986 2,464,434
2004 1.792 1.925 2,379,470
2003 1.300 1.792 1,042,306
2002 1.750 1.300 769,395
2001 1.732 1.750 573,962
2000 1.477 1.732 159,505
1999 1.215 1.477 6,529
LMPVPI Global High Yield Bond Subaccount (Class
I) (7/98)........................................ 2006 1.585 1.739 956,992
2005 1.540 1.585 989,355
2004 1.398 1.540 1,048,194
2003 1.135 1.398 891,546
2002 1.067 1.135 365,911
2001 1.023 1.067 228,426
2000 1.032 1.023 147,257
1999 0.998 1.032 54,919
LMPVPI Investors Subaccount (Class I) (10/98).... 2006 1.543 1.809 2,868,438
2005 1.460 1.543 3,792,254
2004 1.334 1.460 4,291,564
2003 1.017 1.334 1,245,143
2002 1.333 1.017 1,326,104
2001 1.402 1.333 526,074
2000 1.227 1.402 55,492
1999 1.141 1.227 388
</Table>
A-8
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
LMPVPI Total Return Subaccount (Class I)
(10/98).......................................... 2006 1.308 1.460 1,844,495
2005 1.277 1.308 3,589,832
2004 1.185 1.277 3,210,198
2003 1.031 1.185 3,049,178
2002 1.116 1.031 3,278,980
2001 1.135 1.116 112,923
2000 1.061 1.135 31,298
1999 1.072 1.061 4,940
Legg Mason Partners Variable Portfolios II
LMPVPII Appreciation Subaccount (8/98)........... 2006 1.321 1.504 3,262,102
2005 1.278 1.321 3,288,155
2004 1.185 1.278 3,132,978
2003 0.959 1.185 2,144,041
2002 1.173 0.959 1,606,801
2001 1.232 1.173 634,170
2000 1.248 1.232 415,965
1999 1.162 1.248 179,746
LMPVPII Diversified Strategic Income Subaccount
(8/98)........................................... 2006 1.326 1.386 744,422
2005 1.304 1.326 805,864
2004 1.232 1.304 847,856
2003 1.112 1.232 765,323
2002 1.070 1.112 585,176
2001 1.046 1.070 368,933
2000 1.026 1.046 173,691
1999 1.022 1.026 52,883
LMPVPII Equity Index Subaccount (Class II)
(5/04)........................................... 2006 1.124 1.283 10,039,121
2005 1.087 1.124 10,945,884
2004 1.000 1.087 10,176,459
LMPVPII Fundamental Value Subaccount (5/01)...... 2006 1.016 1.016 --
2005 1.016 1.016 --
2004 0.991 1.016 --
2003 0.721 0.991 1,449,813
2002 0.924 0.721 718,902
2001 1.000 0.924 70,515
</Table>
A-9
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Legg Mason Partners Variable Portfolios III, Inc.
LMPVPIII Adjustable Rate Income Subaccount
(9/03)........................................... 2006 1.019 1.052 171,151
2005 1.004 1.019 72,513
2004 1.001 1.004 19,632
2003 1.000 1.001 --
LMPVPIII Aggressive Growth Subaccount (5/00)..... 2006 1.048 1.131 16,039,306
2005 0.947 1.048 18,236,317
2004 0.869 0.947 20,020,240
2003 0.651 0.869 1,316,927
2002 0.975 0.651 1,738,552
2001 1.025 0.975 111,144
2000 1.000 1.025 3,924
LMPVPIII International All Cap Growth Subaccount
(6/98)........................................... 2006 0.743 0.743 --
2005 0.743 0.743 --
2004 0.725 0.743 --
2003 0.574 0.725 2,820,706
2002 0.779 0.574 2,884,010
2001 1.141 0.779 2,876,624
2000 1.511 1.141 2,210,898
1999 0.926 1.511 124,239
LMPVPIII Large Cap Growth Subaccount (10/98)..... 2006 1.670 1.732 2,111,467
2005 1.601 1.670 2,830,511
2004 1.609 1.601 3,050,426
2003 1.099 1.609 2,777,396
2002 1.474 1.099 2,267,275
2001 1.699 1.474 1,979,828
2000 1.842 1.699 1,415,573
1999 1.575 1.842 453,048
LMPVPIII Large Cap Value Subaccount (7/98)....... 2006 1.047 1.047 --
2005 1.047 1.047 --
2004 1.076 1.047 --
2003 0.850 1.076 2,481,180
2002 1.150 0.850 2,464,540
2001 1.263 1.150 1,421,141
2000 1.126 1.263 678,702
1999 1.163 1.126 257,485
</Table>
A-10
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
LMPVPIII Money Market Subaccount (6/98).......... 2006 1.172 1.216 20,595,080
2005 1.150 1.172 22,818,645
2004 1.150 1.150 20,530,321
2003 1.152 1.150 21,093,981
2002 1.147 1.152 22,098,884
2001 1.116 1.147 11,165,977
2000 1.061 1.116 8,805,802
1999 1.029 1.061 3,961,130
LMPVPIII Social Awareness Stock Subaccount
(5/04)........................................... 2006 1.125 1.202 729,791
2005 1.087 1.125 929,941
2004 1.000 1.087 903,951
Lord Abbett Series Fund, Inc.
Lord Abbett Growth and Income Subaccount (Class
VC) (5/04)....................................... 2006 1.137 1.322 1,436,402
2005 1.110 1.137 993,167
2004 1.000 1.110 254,413
Lord Abbett Mid-Cap Value Subaccount (Class VC)
(5/04)........................................... 2006 1.250 1.391 1,567,185
2005 1.164 1.250 1,375,488
2004 1.000 1.164 334,061
Met Investors Series Trust
MIST Batterymarch Mid-Cap Stock Subaccount (Class
A) (4/06)........................................ 2006 2.697 2.581 520,791
MIST BlackRock High Yield Subaccount (Class A)
(4/06)........................................... 2006 1.312 1.389 495,975
MIST BlackRock Large-Cap Core Subaccount (Class
A) (4/06)........................................ 2006 1.102 1.173 353,790
MIST Dreman Small-Cap Value Subaccount (Class A)
(4/06)........................................... 2006 1.161 1.244 --
MIST Harris Oakmark International Subaccount
(Class A) (4/06)*................................ 2006 1.588 1.758 3,318,276
MIST Janus Capital Appreciation Subaccount (Class
A) (4/06)........................................ 2006 2.432 2.506 4,015,647
MIST Legg Mason Partners Managed Assets
Subaccount (Class A) (4/06)...................... 2006 1.056 1.122 --
MIST Lord Abbett Bond Debenture Subaccount (Class
A) (4/06)........................................ 2006 1.105 1.164 376,970
</Table>
A-11
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
MIST Lord Abbett Growth and Income Subaccount
(Class B) (4/06)................................. 2006 1.001 1.081 9,839,723
MIST Met/AIM Capital Appreciation Subaccount
(Class A) (4/06)................................. 2006 1.240 1.231 4,137,362
MIST Met/AIM Small Cap Growth Subaccount (Class
A) (4/06)........................................ 2006 1.165 1.162 --
MIST MFS(R) Value Subaccount (Class A) (4/06).... 2006 1.288 1.430 1,073,910
MIST Neuberger Berman Real Estate Subaccount
(Class A) (4/06)................................. 2006 1.003 1.226 2,751,358
MIST Pioneer Fund Subaccount (Class A) (4/06).... 2006 1.504 1.626 128,120
MIST Pioneer Mid-Cap Value Subaccount (Class A)
(4/06)........................................... 2006 1.123 1.187 --
MIST Pioneer Strategic Income Subaccount (Class
A) (4/06)........................................ 2006 1.641 1.708 557,439
MIST Third Avenue Small Cap Value Subaccount
(Class B) (11/06)................................ 2006 1.779 1.819 250,730
MetLife Investment Funds, Inc.
MetLife Investment Diversified Bond Subaccount
(Class I) (9/00)................................. 2006 1.318 1.363 2,624,935
2005 1.302 1.318 2,512,085
2004 1.255 1.302 2,013,039
2003 1.199 1.255 1,290,995
2002 1.109 1.199 440,961
2001 1.047 1.109 1,023
2000 1.000 1.047 472
MetLife Investment International Stock Subaccount
(Class I) (7/00)................................. 2006 0.938 1.176 2,763,084
2005 0.825 0.938 2,191,780
2004 0.724 0.825 1,827,942
2003 0.562 0.724 1,031,287
2002 0.729 0.562 99,407
2001 0.937 0.729 --
2000 1.000 0.937 --
</Table>
A-12
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
MetLife Investment Large Company Stock Subaccount
(Class I) (7/01)................................. 2006 1.041 1.162 2,422,727
2005 0.984 1.041 2,311,268
2004 0.902 0.984 1,925,187
2003 0.710 0.902 1,135,582
2002 0.928 0.710 123,764
2001 1.000 0.928 --
MetLife Investment Small Company Stock Subaccount
(Class I) (9/00)................................. 2006 1.219 1.373 1,985,695
2005 1.146 1.219 2,052,379
2004 1.005 1.146 1,745,560
2003 0.709 1.005 1,012,111
2002 0.937 0.709 135,433
2001 0.930 0.937 8,580
2000 1.000 0.930 486
Metropolitan Series Fund, Inc.
MSF BlackRock Aggressive Growth Subaccount (Class
D) (4/06)........................................ 2006 0.650 0.637 4,896,902
MSF BlackRock Bond Income Subaccount (Class A)
(4/06)........................................... 2006 1.434 1.497 1,384,134
MSF FI Large Cap Subaccount (Class A) (4/06)..... 2006 1.761 1.794 3,284,540
MSF FI Value Leaders Subaccount (Class D)
(4/06)........................................... 2006 2.103 2.168 1,245,971
MSF MetLife Aggressive Allocation Subaccount
(4/06)........................................... 2006 1.000 1.064 32,895
2005 1.000 1.000 --
MSF MetLife Conservative Allocation Subaccount
(4/06)........................................... 2006 1.000 1.047 12,250
2005 1.000 1.000 --
MSF MetLife Conservative to Moderate Allocation
Subaccount (4/06)................................ 2006 1.000 1.053 18,857
2005 1.000 1.000 --
MSF MetLife Moderate Allocation Subaccount
(4/06)........................................... 2006 1.000 1.058 41,732
2005 1.000 1.000 --
MSF MetLife Moderate to Aggressive Allocation
Subaccount (4/06)................................ 2006 1.000 1.063 211,263
2005 1.000 1.000 --
</Table>
A-13
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
MSF MFS(R) Total Return Subaccount (Class F)
(4/06)........................................... 2006 2.124 2.282 4,817,897
MSF T. Rowe Price Large Cap Growth Subaccount
(Class B) (4/06)................................. 2006 0.998 1.074 1,685,383
MSF Western Asset Management U.S. Government
Subaccount (Class A) (4/06)*..................... 2006 1.056 1.098 2,418,766
Neuberger Berman Equity Assets
Neuberger Berman Guardian Subaccount (Advisor
Class) (9/96).................................... 2006 1.489 1.489 --
2005 1.489 1.489 --
2004 1.300 1.489 --
2003 0.974 1.300 568,596
2002 1.328 0.974 453,050
2001 1.370 1.328 329,459
2000 1.417 1.370 1,197,792
1999 1.384 1.417 11,806
Neuberger Berman Partners Subaccount (Advisor
Class) (8/96).................................... 2006 1.975 1.975 --
2005 1.829 1.975 --
2004 1.555 1.829 --
2003 1.158 1.555 446,964
2002 1.559 1.158 480,842
2001 1.629 1.559 581,013
2000 1.642 1.629 940,412
1999 1.591 1.642 29,137
Oppenheimer Variable Account Funds
Oppenheimer Main Street/VA Subaccount (Service
Shares) (5/04)................................... 2006 1.130 1.197 --
2005 1.078 1.130 1,297,609
2004 1.000 1.078 893,164
</Table>
A-14
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
PBHG Funds
PBHG Growth Subaccount (Advisor Class) (8/96).... 2006 0.856 0.856 --
2005 0.847 0.856 --
2004 0.796 0.847 --
2003 0.641 0.796 3,831,000
2002 0.930 0.641 3,551,143
2001 1.437 0.930 3,403,219
2000 1.884 1.437 3,336,105
1999 0.951 1.884 81,919
PIMCO Variable Insurance Trust
PIMCO VIT Total Return Subaccount (Administrative
Class) (5/01).................................... 2006 1.257 1.295 3,715,245
2005 1.238 1.257 3,822,666
2004 1.190 1.238 2,622,835
2003 1.143 1.190 2,070,679
2002 1.057 1.143 1,333,302
2001 1.000 1.057 4,845
Putnam Variable Trust
Putnam VT International Equity Subaccount (Class
IB) (5/01)....................................... 2006 1.041 1.041 --
2005 1.032 1.041 --
2004 0.895 1.032 --
2003 0.703 0.895 691,910
2002 0.861 0.703 371,606
2001 1.000 0.861 4,143
Putnam VT Small Cap Value Subaccount (Class IB)
(5/01)........................................... 2006 1.745 2.029 1,799,959
2005 1.644 1.745 2,019,651
2004 1.314 1.644 1,615,013
2003 0.885 1.314 964,833
2002 1.093 0.885 486,614
2001 1.000 1.093 11,204
</Table>
A-15
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Smith Barney Equity Funds
SBEF Social Awareness Subaccount (Class A)
(4/98)........................................... 2006 1.195 1.195 --
2005 1.221 1.195 --
2004 1.145 1.221 --
2003 0.938 1.145 743,583
2002 1.116 0.938 833,102
2001 1.265 1.116 724,842
2000 1.255 1.265 624,681
1999 1.173 1.255 172,749
Smith Barney Funds, Inc.
SBF U.S. Government Securities Subaccount
(9/96)........................................... 2006 1.550 1.550 --
2005 1.533 1.550 --
2004 1.493 1.533 --
2003 1.469 1.493 --
2002 1.374 1.469 116,798
2001 1.294 1.374 1,254,114
2000 1.187 1.294 651,112
1999 1.195 1.187 136,617
Smith Barney Investments Funds Inc.
LMPIF Small Cap Value Subaccount (Class A)
(5/01)........................................... 2006 1.726 1.906 1,499,917
2005 1.633 1.726 1,585,184
2004 1.363 1.633 1,397,998
2003 1.000 1.363 781,206
2002 1.085 1.000 290,533
2001 1.000 1.085 6,233
The Dreyfus/Laurel Funds, Inc.
Dreyfus Disciplined Stock Subaccount (7/98)...... 2006 0.980 0.980 --
2005 0.964 0.980 --
2004 0.902 0.964 --
2003 0.738 0.902 961,650
2002 0.966 0.738 877,868
2001 1.124 0.966 759,956
2000 1.249 1.124 566,227
1999 1.099 1.249 220,782
</Table>
A-16
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
The Travelers Series Trust
Travelers AIM Capital Appreciation Subaccount
(5/04)........................................... 2006 1.161 1.240 --
2005 1.077 1.161 5,985,605
2004 1.000 1.077 7,670,721
Travelers Convertible Securities Subaccount
(5/04)........................................... 2006 1.034 1.105 --
2005 1.039 1.034 100,140
2004 1.000 1.039 51,002
Travelers Disciplined Mid Cap Stock Subaccount
(8/98)........................................... 2006 2.463 2.697 --
2005 2.210 2.463 767,505
2004 1.914 2.210 912,079
2003 1.443 1.914 1,018,357
2002 1.698 1.443 861,556
2001 1.785 1.698 586,466
2000 1.544 1.785 408,896
1999 1.280 1.544 23,462
Travelers Equity Income Subaccount (10/96)....... 2006 1.997 2.103 --
2005 1.928 1.997 1,630,993
2004 1.769 1.928 1,628,175
2003 1.360 1.769 1,206,421
2002 1.594 1.360 875,782
2001 1.722 1.594 771,387
2000 1.591 1.722 624,166
1999 1.575 1.591 123,889
Travelers Federated High Yield Subaccount
(11/96).......................................... 2006 1.276 1.312 --
2005 1.255 1.276 556,442
2004 1.146 1.255 673,485
2003 0.945 1.146 575,432
2002 0.919 0.945 348,358
2001 0.909 0.919 175,609
2000 0.998 0.909 168,313
1999 1.000 0.998 --
</Table>
A-17
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Travelers Federated Stock Subaccount (11/96)..... 2006 0.844 0.844 --
2005 0.844 0.844 --
2004 0.844 0.844 --
2003 0.844 0.844 --
2002 1.058 0.844 --
2001 1.049 1.058 417,512
2000 1.020 1.049 435,627
1999 1.000 1.020 --
Travelers Large Cap Subaccount (9/96)............ 2006 1.705 1.761 --
2005 1.582 1.705 2,593,839
2004 1.498 1.582 2,273,592
2003 1.212 1.498 1,483,004
2002 1.583 1.212 1,373,967
2001 1.931 1.583 1,306,621
2000 2.277 1.931 1,102,112
1999 1.893 2.277 236,492
Travelers Mercury Large Cap Core Subaccount
(6/98)........................................... 2006 1.035 1.102 --
2005 0.932 1.035 471,059
2004 0.811 0.932 339,486
2003 0.675 0.811 273,985
2002 0.909 0.675 250,849
2001 1.183 0.909 236,322
2000 1.263 1.183 154,583
1999 1.037 1.263 55,544
Travelers MFS(R) Mid Cap Growth Subaccount
(6/01)........................................... 2006 0.612 0.650 --
2005 0.599 0.612 6,394,866
2004 0.530 0.599 675,840
2003 0.390 0.530 539,127
2002 0.768 0.390 171,567
2001 1.000 0.768 --
Travelers MFS(R) Total Return Subaccount (8/96).. 2006 2.052 2.124 --
2005 2.011 2.052 5,188,386
2004 1.819 2.011 4,556,506
2003 1.574 1.819 4,058,731
2002 1.676 1.574 3,225,897
2001 1.690 1.676 2,954,370
2000 1.462 1.690 2,659,405
1999 1.436 1.462 280,991
</Table>
A-18
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Travelers MFS(R) Value Subaccount (5/04)......... 2006 1.189 1.288 --
2005 1.126 1.189 653,670
2004 1.000 1.126 96,004
Travelers Mondrian International Stock Subaccount
(9/96)........................................... 2006 1.379 1.588 --
2005 1.270 1.379 3,528,909
2004 1.106 1.270 3,880,823
2003 0.868 1.106 1,955,346
2002 1.005 0.868 1,763,121
2001 1.374 1.005 1,400,753
2000 1.564 1.374 1,028,559
1999 1.289 1.564 221,723
Travelers Pioneer Fund Subaccount (5/03)......... 2006 1.414 1.504 --
2005 1.346 1.414 25,965
2004 1.221 1.346 46,245
2003 1.000 1.221 20,694
Travelers Pioneer Strategic Income Subaccount
(9/96)........................................... 2006 1.620 1.641 --
2005 1.576 1.620 263,744
2004 1.433 1.576 42,622
2003 1.209 1.433 --
2002 1.152 1.209 14,659
2001 1.114 1.152 226,703
2000 1.128 1.114 601,764
1999 1.119 1.128 14,223
Travelers Quality Bond Subaccount (7/97)......... 2006 1.443 1.434 --
2005 1.432 1.443 1,733,864
2004 1.399 1.432 2,029,453
2003 1.318 1.399 1,939,724
2002 1.257 1.318 1,886,704
2001 1.183 1.257 351,147
2000 1.115 1.183 94,371
1999 1.113 1.115 49,616
</Table>
A-19
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Travelers Strategic Equity Subaccount (9/96)..... 2006 1.692 1.770 --
2005 1.672 1.692 1,663,546
2004 1.530 1.672 1,808,388
2003 1.164 1.530 1,751,702
2002 1.768 1.164 1,840,156
2001 2.058 1.768 2,121,335
2000 2.538 2.058 2,185,325
1999 1.978 2.538 338,183
Travelers U.S. Government Securities Subaccount
(5/04)........................................... 2006 1.093 1.056 --
2005 1.056 1.093 3,000,711
2004 1.000 1.056 2,787,026
Van Kampen Life Investment Trust
Van Kampen LIT Comstock Subaccount (Class II)
(5/03)........................................... 2006 1.510 1.738 494,374
2005 1.463 1.510 397,785
2004 1.256 1.463 62,874
2003 1.000 1.256 --
Van Kampen LIT Enterprise Subaccount (Class II)
(5/01)........................................... 2006 0.825 0.825 --
2005 0.816 0.825 --
2004 0.793 0.816 --
2003 0.637 0.793 113,474
2002 0.912 0.637 12,124
2001 1.000 0.912 --
Van Kampen LIT Strategic Growth Subaccount (Class
II) (5/01)....................................... 2006 0.777 0.791 235,007
2005 0.728 0.777 171,825
2004 0.688 0.728 157,703
2003 0.546 0.688 96,334
2002 0.817 0.546 19,163
2001 1.000 0.817 278
Variable Insurance Products Fund
VIP Contrafund(R) Subaccount (Service Class 2)
(6/01)........................................... 2006 1.409 1.557 3,054,556
2005 1.219 1.409 1,941,620
2004 1.067 1.219 831,275
2003 0.840 1.067 --
2002 0.937 0.840 --
2001 1.000 0.937 --
</Table>
A-20
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.85% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
VIP Mid Cap Subaccount (Service Class 2) (5/01).. 2006 1.825 2.035 4,578,092
2005 1.560 1.825 3,900,831
2004 1.262 1.560 2,749,438
2003 0.921 1.262 1,113,141
2002 1.032 0.921 222,423
2001 1.000 1.032 --
</Table>
SEPARATE ACCOUNT CHARGES 1.50%
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Dreyfus A Bonds Plus, Inc. (9/96)................ 2006 1.429 1.429 --
2005 1.417 1.429 --
2004 1.395 1.417 3,279,761
2003 1.354 1.395 6,173,953
2002 1.274 1.354 5,829,201
2001 1.236 1.274 3,192,325
2000 1.138 1.236 2,034,004
1999 1.135 1.138 1,910,298
1998 1.122 1.135 1,201,465
1997 1.040 1.122 300,413
Smith Barney Aggressive Growth Subaccount Inc.
(Class A) (10/96)................................ 2006 2.879 2.879 --
2005 2.879 2.879 --
2004 2.823 2.879 --
2003 2.098 2.823 6,640,561
2002 3.167 2.098 5,404,513
2001 3.384 3.167 7,064,512
2000 2.884 3.384 4,376,152
1999 1.788 2.884 3,495,537
1998 1.344 1.788 1,634,779
1997 1.063 1.344 279,218
</Table>
A-21
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Templeton Growth Fund Subaccount (Class A)
(8/96)........................................... 2006 2.216 2.660 10,506,686
2005 2.080 2.216 11,556,208
2004 1.805 2.080 12,919,588
2003 1.379 1.805 13,010,237
2002 1.546 1.379 12,161,792
2001 1.561 1.546 10,980,144
2000 1.558 1.561 9,557,128
1999 1.212 1.558 10,293,355
1998 1.262 1.212 8,312,609
1997 1.102 1.262 5,173,181
AIM Equity Funds, Inc.
AIM Equity Charter Subaccount (Class A) (10/96).. 2006 1.280 1.280 --
2005 1.281 1.280 --
2004 1.197 1.281 3,733,446
2003 0.980 1.197 6,559,985
2002 1.186 0.980 6,160,197
2001 1.566 1.186 5,763,328
2000 1.863 1.566 4,299,342
1999 1.413 1.863 3,542,245
1998 1.130 1.413 1,481,196
1997 1.000 1.130 427,068
AIM Equity Constellation Subaccount (Class A)
(10/96).......................................... 2006 1.219 1.219 --
2005 1.231 1.219 --
2004 1.177 1.231 5,178,916
2003 0.923 1.177 13,099,269
2002 1.246 0.923 12,697,514
2001 1.656 1.246 11,283,066
2000 1.875 1.656 7,933,875
1999 1.318 1.875 6,931,263
1998 1.125 1.318 4,733,048
1997 1.000 1.125 1,025,760
</Table>
A-22
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
AllianceBernstein Value Funds
AllianceBernstein Growth and Income Subaccount
(Class A) (9/96)................................. 2006 2.074 2.074 --
2005 2.083 2.074 --
2004 1.890 2.083 6,469,898
2003 1.456 1.890 12,109,687
2002 2.013 1.456 11,304,520
2001 2.082 2.013 8,939,823
2000 1.859 2.082 6,435,804
1999 1.704 1.859 7,397,888
1998 1.426 1.704 4,794,720
1997 1.124 1.426 2,226,537
AllianceBernstein Variable Products Series Fund,
Inc.
AllianceBernstein Growth and Income Subaccount
(Class B) (5/04)................................. 2006 1.109 1.159 --
2005 1.076 1.109 17,734,860
2004 1.000 1.076 10,307,530
AllianceBernstein Large-Cap Growth Subaccount
(Class B) (6/01)................................. 2006 0.872 0.854 --
2005 0.771 0.872 951,877
2004 0.723 0.771 907,070
2003 0.594 0.723 413,368
2002 0.873 0.594 179,332
2001 1.000 0.873 18,209
American Funds Insurance Series
American Funds Global Growth Subaccount (Class 2)
(5/04)........................................... 2006 1.240 1.471 2,396,988
2005 1.103 1.240 1,313,171
2004 1.000 1.103 286,997
American Funds Growth Subaccount (Class 2)
(5/04)........................................... 2006 1.243 1.350 6,913,220
2005 1.086 1.243 3,980,066
2004 1.000 1.086 1,373,848
American Funds Growth-Income Subaccount (Class 2)
(5/04)........................................... 2006 1.123 1.275 4,794,228
2005 1.077 1.123 3,195,600
2004 1.000 1.077 961,627
</Table>
A-23
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Capital Appreciation Fund
Capital Appreciation Fund (8/96)................. 2006 2.304 2.280 --
2005 1.979 2.304 18,563,953
2004 1.680 1.979 23,158,000
2003 1.366 1.680 27,329,517
2002 1.850 1.366 27,954,350
2001 2.542 1.850 26,206,652
2000 3.303 2.542 20,889,039
1999 2.184 3.303 18,194,490
1998 1.371 2.184 8,622,300
1997 1.103 1.371 4,113,833
Delaware VIP Trust
Delaware VIP REIT Subaccount (Standard Class)
(5/03)........................................... 2006 1.727 2.257 --
2005 1.636 1.727 1,777,079
2004 1.264 1.636 1,084,433
2003 1.000 1.264 90,438
Delaware VIP Small Cap Value Subaccount (Standard
Class) (6/98).................................... 2006 1.044 1.044 --
2005 1.044 1.044 --
2004 1.044 1.044 --
2003 1.044 1.044 --
2002 1.127 1.044 --
2001 1.023 1.127 1,182,116
2000 0.878 1.023 397,599
1999 0.937 0.878 255,686
1998 1.000 0.937 132,786
Dreyfus Variable Investment Fund
Dreyfus VIF Appreciation Subaccount (Initial
Shares) (7/98)................................... 2006 1.046 1.201 5,754,950
2005 1.018 1.046 7,060,613
2004 0.983 1.018 8,454,795
2003 0.824 0.983 9,229,603
2002 1.004 0.824 9,404,573
2001 1.124 1.004 1,413,165
2000 1.148 1.124 1,162,227
1999 1.046 1.148 758,484
1998 1.000 1.046 34,225
</Table>
A-24
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Dreyfus VIF Developing Leaders Subaccount
(Initial Shares) (6/98).......................... 2006 1.364 1.395 8,789,537
2005 1.309 1.364 10,977,038
2004 1.193 1.309 12,712,825
2003 0.920 1.193 12,742,617
2002 1.154 0.920 11,059,130
2001 1.248 1.154 5,539,829
2000 1.118 1.248 2,288,777
1999 0.922 1.118 693,155
1998 1.000 0.922 27,345
Fidelity Advisor Series I
FASI Advisor Growth Opportunities Subaccount
(Class T) (8/96)................................. 2006 1.217 1.217 --
2005 1.213 1.217 --
2004 1.151 1.213 7,180,575
2003 0.904 1.151 11,313,660
2002 1.183 0.904 10,824,709
2001 1.416 1.183 9,805,844
2000 1.758 1.416 8,775,132
1999 1.718 1.758 9,819,448
1998 1.407 1.718 6,723,225
1997 1.111 1.407 2,557,801
Franklin Templeton Variable Insurance Products
Trust
FTVIPT Franklin Small-Mid Cap Growth Securities
Subaccount (Class 2) (5/01)...................... 2006 0.999 1.070 1,245,900
2005 0.968 0.999 1,259,582
2004 0.881 0.968 1,114,447
2003 0.652 0.881 674,331
2002 0.928 0.652 221,616
2001 1.000 0.928 21,813
FTVIPT Mutual Shares Securities Subaccount (Class
2) (5/03)........................................ 2006 1.448 1.689 --
2005 1.329 1.448 656,050
2004 1.198 1.329 351,824
2003 1.000 1.198 157,970
</Table>
A-25
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
FTVIPT Templeton Developing Markets Securities
Subaccount (Class 2) (5/03)...................... 2006 2.232 2.816 2,063,801
2005 1.778 2.232 1,283,293
2004 1.447 1.778 433,489
2003 1.000 1.447 39,268
FTVIPT Templeton Foreign Securities Subaccount
(Class 2) (5/04)................................. 2006 1.249 1.495 2,297,478
2005 1.151 1.249 1,807,817
2004 1.000 1.151 938,304
Janus Aspen Series
Janus Aspen Global Life Sciences Subaccount
(Service Shares) (5/00).......................... 2006 0.999 1.046 862,409
2005 0.903 0.999 1,350,337
2004 0.802 0.903 1,245,527
2003 0.645 0.802 1,708,950
2002 0.930 0.645 1,374,928
2001 1.134 0.930 1,174,634
2000 1.000 1.134 287,420
Janus Aspen Global Technology Subaccount (Service
Shares) (5/00)................................... 2006 0.379 0.402 2,309,556
2005 0.345 0.379 2,527,407
2004 0.348 0.345 2,463,715
2003 0.241 0.348 4,358,250
2002 0.414 0.241 2,876,087
2001 0.671 0.414 1,391,117
2000 1.000 0.671 384,868
Janus Aspen Growth and Income Subaccount (Service
Shares) (5/00)................................... 2006 0.822 0.880 --
2005 0.744 0.822 1,901,939
2004 0.677 0.744 1,596,028
2003 0.556 0.677 1,611,500
2002 0.722 0.556 1,280,338
2001 0.848 0.722 750,369
2000 1.000 0.848 213,396
</Table>
A-26
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Janus Aspen Mid Cap Growth Subaccount (Service
Shares) (5/00)................................... 2006 0.493 0.551 12,474,519
2005 0.447 0.493 13,988,779
2004 0.377 0.447 9,493,263
2003 0.284 0.377 7,436,895
2002 0.401 0.284 6,591,378
2001 0.673 0.401 4,375,808
2000 1.000 0.673 1,276,921
Lazard Retirement Series, Inc.
Lazard Retirement Small Cap Subaccount (5/03).... 2006 1.548 1.739 --
2005 1.511 1.548 543,026
2004 1.335 1.511 132,665
2003 1.000 1.335 39,116
Legg Mason Partners Income Trust
LMPIT Investment Grade Bond Subaccount (Class A)
(9/96)........................................... 2006 1.718 1.744 3,442,527
2005 1.713 1.718 4,635,064
2004 1.633 1.713 5,648,321
2003 1.575 1.633 6,206,492
2002 1.422 1.575 4,975,708
2001 1.316 1.422 2,745,427
2000 1.200 1.316 1,749,624
1999 1.340 1.200 1,582,059
1998 1.256 1.340 667,345
1997 1.088 1.256 39,358
Legg Mason Partners Investment Series
LMPIS Growth and Income Subaccount (5/01)........ 2006 0.985 1.092 257,336
2005 0.963 0.985 366,742
2004 0.903 0.963 359,520
2003 0.704 0.903 187,387
2002 0.918 0.704 98,410
2001 1.000 0.918 202
</Table>
A-27
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
LMPIS Premier Selections All Cap Growth
Subaccount (5/01)................................ 2006 0.905 0.957 1,998,280
2005 0.864 0.905 2,534,642
2004 0.852 0.864 2,817,499
2003 0.644 0.852 63,002
2002 0.893 0.644 12,449
2001 1.000 0.893 --
Legg Mason Partners Investment Trust
LMPIT S&P 500 Index Subaccount (Class A) (6/98).. 2006 1.073 1.218 10,694,114
2005 1.046 1.073 11,991,921
2004 0.963 1.046 12,143,706
2003 0.764 0.963 20,325,258
2002 1.000 0.764 18,301,810
2001 1.159 1.000 14,532,732
2000 1.298 1.159 9,413,874
1999 1.098 1.298 5,983,591
1998 1.000 1.098 674,500
Legg Mason Partners Variable Portfolios V
LMPVPV Small Cap Growth Opportunities Subaccount
(5/01)........................................... 2006 1.138 1.266 1,416,753
2005 1.101 1.138 1,240,390
2004 0.967 1.101 1,122,188
2003 0.691 0.967 595,459
2002 0.944 0.691 144,091
2001 1.000 0.944 3,114
Legg Mason Partners Variable Portfolios I, Inc.
LMPVPI All Cap Subaccount (Class I) (9/98)....... 2006 1.893 2.203 3,069,891
2005 1.847 1.893 3,614,900
2004 1.731 1.847 4,023,241
2003 1.264 1.731 2,326,401
2002 1.712 1.264 1,798,839
2001 1.706 1.712 1,016,177
2000 1.464 1.706 324,323
1999 1.217 1.464 74,983
1998 1.000 1.217 3,830
</Table>
A-28
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
LMPVPI Global High Yield Bond Subaccount (Class
I) (7/98)........................................ 2006 1.509 1.645 2,007,200
2005 1.476 1.509 2,108,663
2004 1.349 1.476 2,074,998
2003 1.102 1.349 1,879,704
2002 1.043 1.102 1,020,867
2001 1.007 1.043 555,181
2000 1.022 1.007 342,867
1999 0.983 1.022 256,124
1998 1.000 0.983 4,867
LMPVPI Investors Subaccount (Class I) (10/98).... 2006 1.472 1.715 5,565,457
2005 1.403 1.472 6,896,463
2004 1.290 1.403 8,252,636
2003 0.990 1.290 4,311,697
2002 1.305 0.990 4,108,146
2001 1.383 1.305 1,468,923
2000 1.218 1.383 834,971
1999 1.107 1.218 453,956
1998 1.000 1.107 107
LMPVPI Total Return Subaccount (Class I)
(10/98).......................................... 2006 1.248 1.384 3,933,394
2005 1.226 1.248 5,007,135
2004 1.145 1.226 5,917,662
2003 1.002 1.145 7,316,582
2002 1.092 1.002 7,560,643
2001 1.118 1.092 92,027
2000 1.052 1.118 23,191
1999 1.059 1.052 4,403
1998 1.000 1.059 327
Legg Mason Partners Variable Portfolios II
LMPVPII Appreciation Subaccount (8/98)........... 2006 1.259 1.424 13,223,387
2005 1.225 1.259 15,966,366
2004 1.143 1.225 8,394,226
2003 0.932 1.143 7,705,127
2002 1.147 0.932 6,673,938
2001 1.213 1.147 1,209,411
2000 1.236 1.213 598,108
1999 1.109 1.236 265,638
1998 1.000 1.109 3,920
</Table>
A-29
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
LMPVPII Diversified Strategic Income Subaccount
(8/98)........................................... 2006 1.264 1.312 607,533
2005 1.251 1.264 724,864
2004 1.189 1.251 1,336,554
2003 1.081 1.189 1,432,767
2002 1.046 1.081 1,086,753
2001 1.030 1.046 473,155
2000 1.017 1.030 300,569
1999 1.014 1.017 161,640
1998 1.000 1.014 8,816
LMPVPII Equity Index Subaccount (Class II)
(5/04)........................................... 2006 1.112 1.261 6,469,380
2005 1.082 1.112 7,573,568
2004 1.000 1.082 8,765,423
LMPVPII Fundamental Value Subaccount (5/01)...... 2006 0.996 0.996 --
2005 0.996 0.996 --
2004 0.974 0.996 --
2003 0.713 0.974 2,217,288
2002 0.920 0.713 970,025
2001 1.000 0.920 42,220
Legg Mason Partners Variable Portfolios III, Inc.
LMPVPIII Adjustable Rate Income Subaccount
(9/03)........................................... 2006 1.004 1.030 229,231
2005 0.996 1.004 322,199
2004 0.999 0.996 66,742
2003 1.000 0.999 1,001
LMPVPIII Aggressive Growth Subaccount (5/00)..... 2006 1.010 1.083 26,698,179
2005 0.919 1.010 32,284,111
2004 0.848 0.919 42,068,628
2003 0.640 0.848 19,446,180
2002 0.965 0.640 17,497,218
2001 1.021 0.965 1,203,575
2000 1.000 1.021 354,651
</Table>
A-30
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
LMPVPIII International All Cap Growth Subaccount
(6/98)........................................... 2006 0.714 0.714 --
2005 0.714 0.714 --
2004 0.699 0.714 --
2003 0.557 0.699 5,915,745
2002 0.761 0.557 5,356,482
2001 1.122 0.761 2,456,750
2000 1.495 1.122 1,495,354
1999 0.905 1.495 289,465
1998 1.000 0.905 29,109
LMPVPIII Large Cap Growth Subaccount (10/98)..... 2006 1.593 1.642 3,624,798
2005 1.537 1.593 4,410,403
2004 1.555 1.537 5,248,863
2003 1.070 1.555 4,236,093
2002 1.443 1.070 2,949,924
2001 1.675 1.443 2,061,137
2000 1.827 1.675 1,166,407
1999 1.417 1.827 520,491
1998 1.000 1.417 23,624
LMPVPIII Large Cap Value Subaccount (7/98)....... 2006 1.008 1.008 --
2005 1.008 1.008 --
2004 1.038 1.008 --
2003 0.825 1.038 4,372,400
2002 1.123 0.825 3,940,977
2001 1.242 1.123 1,288,285
2000 1.114 1.242 376,327
1999 1.131 1.114 154,662
1998 1.000 1.131 4,506
LMPVPIII Money Market Subaccount (6/98).......... 2006 1.116 1.150 27,848,188
2005 1.102 1.116 31,824,576
2004 1.109 1.102 35,546,930
2003 1.118 1.109 34,961,875
2002 1.121 1.118 28,636,267
2001 1.097 1.121 17,617,182
2000 1.050 1.097 9,939,860
1999 1.017 1.050 6,843,599
1998 1.000 1.017 3,447,634
</Table>
A-31
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
LMPVPIII Social Awareness Stock Subaccount
(5/04)........................................... 2006 1.113 1.181 1,524,156
2005 1.082 1.113 1,999,728
2004 1.000 1.082 2,371,397
Lord Abbett Series Fund, Inc.
Lord Abbett Growth and Income Subaccount (Class
VC) (5/04)....................................... 2006 1.124 1.299 3,030,493
2005 1.105 1.124 3,330,405
2004 1.000 1.105 325,252
Lord Abbett Mid-Cap Value Subaccount (Class VC)
(5/04)........................................... 2006 1.236 1.367 1,539,893
2005 1.159 1.236 1,383,348
2004 1.000 1.159 605,973
Met Investors Series Trust
MIST Batterymarch Mid-Cap Stock Subaccount (Class
A) (4/06)........................................ 2006 2.565 2.444 2,126,925
MIST BlackRock High Yield Subaccount (Class A)
(4/06)........................................... 2006 1.551 1.636 873,995
MIST BlackRock Large-Cap Core Subaccount (Class
A) (4/06)........................................ 2006 1.047 1.109 1,242,209
MIST Dreman Small-Cap Value Subaccount (Class A)
(4/06)........................................... 2006 1.157 1.234 32,623
MIST Harris Oakmark International Subaccount
(Class A) (4/06)*................................ 2006 1.490 1.643 5,464,160
MIST Janus Capital Appreciation Subaccount (Class
A) (4/06)........................................ 2006 2.280 2.340 15,179,427
MIST Legg Mason Partners Managed Assets
Subaccount (Class A) (4/06)...................... 2006 1.051 1.111 5,582
MIST Lord Abbett Bond Debenture Subaccount (Class
A) (4/06)........................................ 2006 1.091 1.144 353,367
MIST Lord Abbett Growth and Income Subaccount
(Class B) (4/06)................................. 2006 1.001 1.077 18,565,726
MIST Met/AIM Capital Appreciation Subaccount
(Class A) (4/06)................................. 2006 1.224 1.210 9,190,734
MIST Met/AIM Small Cap Growth Subaccount (Class
A) (4/06)........................................ 2006 1.161 1.153 35,871
MIST MFS(R) Value Subaccount (Class A) (4/06).... 2006 1.271 1.406 1,033,204
</Table>
A-32
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
MIST Neuberger Berman Real Estate Subaccount
(Class A) (4/06)................................. 2006 1.003 1.221 3,905,358
MIST Pioneer Fund Subaccount (Class A) (4/06).... 2006 1.475 1.587 212,276
MIST Pioneer Mid-Cap Value Subaccount (Class A)
(4/06)........................................... 2006 1.116 1.175 14,132
MIST Pioneer Strategic Income Subaccount (Class
A) (4/06)........................................ 2006 1.539 1.595 1,679,403
MIST Third Avenue Small Cap Value Subaccount
(Class B) (11/06)................................ 2006 1.739 1.776 726,415
MetLife Investment Funds, Inc.
MetLife Investment Diversified Bond Subaccount
(Class I) (9/00)................................. 2006 1.273 1.308 3,125,142
2005 1.266 1.273 3,182,118
2004 1.228 1.266 2,898,084
2003 1.181 1.228 1,956,941
2002 1.100 1.181 416,597
2001 1.045 1.100 533
2000 1.000 1.045 --
MetLife Investment International Stock Subaccount
(Class I) (7/00)................................. 2006 0.905 1.128 3,176,741
2005 0.801 0.905 2,670,171
2004 0.708 0.801 2,463,932
2003 0.553 0.708 1,499,079
2002 0.722 0.553 21,847
2001 0.934 0.722 1,473
2000 1.000 0.934 2,045
MetLife Investment Large Company Stock Subaccount
(Class I) (7/01)................................. 2006 1.011 1.121 2,719,840
2005 0.962 1.011 2,780,772
2004 0.888 0.962 2,512,896
2003 0.703 0.888 1,619,243
2002 0.925 0.703 33,378
2001 1.000 0.925 448
</Table>
A-33
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
MetLife Investment Small Company Stock Subaccount
(Class I) (9/00)................................. 2006 1.177 1.318 3,385,203
2005 1.114 1.177 3,525,701
2004 0.984 1.114 4,555,600
2003 0.698 0.984 3,747,728
2002 0.929 0.698 55,236
2001 0.929 0.929 2,883
2000 1.000 0.929 228
Metropolitan Series Fund, Inc.
MSF BlackRock Aggressive Growth Subaccount (Class
D) (4/06)........................................ 2006 0.629 0.615 13,891,601
MSF BlackRock Bond Income Subaccount (Class A)
(4/06)........................................... 2006 1.353 1.407 2,821,508
MSF FI Large Cap Subaccount (Class A) (4/06)..... 2006 1.653 1.676 8,061,123
MSF FI Value Leaders Subaccount (Class D)
(4/06)........................................... 2006 1.975 2.027 3,673,762
MSF MetLife Aggressive Allocation Subaccount
(4/06)........................................... 2006 1.000 1.059 259,608
2005 1.000 1.000 --
MSF MetLife Conservative Allocation Subaccount
(4/06)........................................... 2006 1.000 1.042 209,401
2005 1.000 1.000 --
MSF MetLife Conservative to Moderate Allocation
Subaccount (4/06)................................ 2006 1.000 1.048 305,946
2005 1.000 1.000 --
MSF MetLife Moderate Allocation Subaccount
(4/06)........................................... 2006 1.000 1.053 1,022,753
2005 1.000 1.000 --
MSF MetLife Moderate to Aggressive Allocation
Subaccount (4/06)................................ 2006 1.000 1.058 1,799,899
2005 1.000 1.000 --
MSF MFS(R) Total Return Subaccount (Class F)
(4/06)........................................... 2006 1.992 2.130 12,522,537
MSF T. Rowe Price Large Cap Growth Subaccount
(Class B) (4/06)................................. 2006 0.998 1.070 2,705,886
MSF Western Asset Management U.S. Government
Subaccount (Class A) (4/06)*..................... 2006 1.042 1.079 5,280,065
</Table>
A-34
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Neuberger Berman Equity Assets
Neuberger Berman Guardian Subaccount (Advisor
Class) (9/96).................................... 2006 1.405 1.405 --
2005 1.409 1.405 --
2004 1.238 1.409 775,961
2003 0.933 1.238 1,796,696
2002 1.281 0.933 2,277,264
2001 1.331 1.281 2,409,992
2000 1.385 1.331 2,286,945
1999 1.306 1.385 3,006,359
1998 1.304 1.306 2,956,389
1997 1.130 1.304 1,619,801
Neuberger Berman Partners Subaccount (Advisor
Class) (8/96).................................... 2006 1.863 1.863 --
2005 1.730 1.863 --
2004 1.480 1.730 2,380,900
2003 1.110 1.480 3,504,196
2002 1.504 1.110 3,391,929
2001 1.581 1.504 3,247,968
2000 1.605 1.581 3,097,806
1999 1.518 1.605 4,257,560
1998 1.460 1.518 4,064,439
1997 1.153 1.460 2,188,643
Oppenheimer Variable Account Funds
Oppenheimer Main Street/VA Subaccount (Service
Shares) (5/04)................................... 2006 1.118 1.182 --
2005 1.073 1.118 648,860
2004 1.000 1.073 789,706
</Table>
A-35
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
PBHG Funds
PBHG Growth Subaccount (Advisor Class) (8/96).... 2006 0.808 0.808 --
2005 0.802 0.808 --
2004 0.758 0.802 4,394,951
2003 0.614 0.758 8,947,912
2002 0.897 0.614 8,741,222
2001 1.395 0.897 8,528,725
2000 1.841 1.395 6,476,068
1999 0.973 1.841 5,448,002
1998 0.985 0.973 5,932,646
1997 1.036 0.985 3,951,610
PIMCO Variable Insurance Trust
PIMCO VIT Total Return Subaccount (Administrative
Class) (5/01).................................... 2006 1.220 1.248 5,870,103
2005 1.209 1.220 5,904,054
2004 1.170 1.209 5,460,183
2003 1.131 1.170 4,357,604
2002 1.052 1.131 2,200,569
2001 1.000 1.052 125,425
Putnam Variable Trust
Putnam VT International Equity Subaccount (Class
IB) (5/01)....................................... 2006 1.014 1.014 --
2005 1.007 1.014 --
2004 0.880 1.007 333,106
2003 0.695 0.880 979,701
2002 0.857 0.695 522,973
2001 1.000 0.857 72,970
Putnam VT Small Cap Value Subaccount (Class IB)
(5/01)........................................... 2006 1.693 1.956 3,920,654
2005 1.605 1.693 3,969,603
2004 1.291 1.605 3,492,490
2003 0.876 1.291 2,386,011
2002 1.088 0.876 1,271,145
2001 1.000 1.088 73,756
</Table>
A-36
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Smith Barney Equity Funds
SBEF Social Awareness Subaccount (Class A)
(4/98)........................................... 2006 1.139 1.139 --
2005 1.168 1.139 --
2004 1.102 1.168 372,560
2003 0.909 1.102 2,859,809
2002 1.089 0.909 2,313,618
2001 1.242 1.089 2,012,534
2000 1.241 1.242 1,554,596
1999 1.115 1.241 958,015
1998 1.000 1.115 76,156
Smith Barney Funds, Inc.
SBF U.S. Government Securities Subaccount
(9/96)........................................... 2006 1.462 1.462 --
2005 1.451 1.462 --
2004 1.422 1.451 1,242,897
2003 1.408 1.422 1,399,987
2002 1.326 1.408 2,237,014
2001 1.257 1.326 2,887,386
2000 1.161 1.257 1,656,955
1999 1.181 1.161 1,459,175
1998 1.130 1.181 982,386
1997 1.046 1.130 409,545
Smith Barney Investments Funds Inc.
LMPIF Small Cap Value Subaccount (Class A)
(5/01)........................................... 2006 1.674 1.837 1,136,472
2005 1.594 1.674 1,291,992
2004 1.340 1.594 1,387,836
2003 0.989 1.340 763,522
2002 1.081 0.989 424,372
2001 1.000 1.081 17,404
</Table>
A-37
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
The Dreyfus/Laurel Funds, Inc.
Dreyfus Disciplined Stock Subaccount (7/98)...... 2006 0.937 0.937 --
2005 0.924 0.937 --
2004 0.870 0.924 1,328,241
2003 0.717 0.870 2,448,406
2002 0.944 0.717 2,308,787
2001 1.106 0.944 1,796,096
2000 1.237 1.106 1,549,375
1999 1.062 1.237 1,028,136
1998 1.000 1.062 224,209
The Travelers Series Trust
Travelers AIM Capital Appreciation Subaccount
(5/04)........................................... 2006 1.149 1.224 --
2005 1.073 1.149 12,161,921
2004 1.000 1.073 9,984,969
Travelers Convertible Securities Subaccount
(5/04)........................................... 2006 1.023 1.091 --
2005 1.035 1.023 95,656
2004 1.000 1.035 66,802
Travelers Disciplined Mid Cap Stock Subaccount
(8/98)........................................... 2006 2.348 2.565 --
2005 2.120 2.348 2,488,257
2004 1.848 2.120 2,909,201
2003 1.402 1.848 2,901,932
2002 1.662 1.402 1,508,067
2001 1.758 1.662 793,070
2000 1.530 1.758 406,412
1999 1.369 1.530 58,747
1998 1.000 1.369 4,253
Travelers Equity Income Subaccount (10/96)....... 2006 1.879 1.975 --
2005 1.826 1.879 3,967,894
2004 1.687 1.826 4,731,716
2003 1.305 1.687 4,899,058
2002 1.540 1.305 4,176,695
2001 1.673 1.540 3,403,675
2000 1.557 1.673 2,828,028
1999 1.506 1.557 2,959,164
1998 1.360 1.506 2,162,143
1997 1.046 1.360 563,967
</Table>
A-38
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Travelers Federated High Yield Subaccount
(11/96).......................................... 2006 1.513 1.551 --
2005 1.497 1.513 947,377
2004 1.377 1.497 1,121,022
2003 1.142 1.377 1,153,240
2002 1.118 1.142 882,698
2001 1.113 1.118 807,170
2000 1.230 1.113 740,124
1999 1.211 1.230 803,198
1998 1.174 1.211 555,833
1997 1.033 1.174 162,039
Travelers Federated Stock Subaccount (11/96)..... 2006 1.295 1.295 --
2005 1.295 1.295 --
2004 1.295 1.295 --
2003 1.295 1.295 --
2002 1.633 1.295 --
2001 1.631 1.633 500,949
2000 1.595 1.631 445,566
1999 1.537 1.595 847,381
1998 1.324 1.537 668,271
1997 1.012 1.324 445,664
Travelers Large Cap Subaccount (9/96)............ 2006 1.603 1.653 --
2005 1.497 1.603 5,659,374
2004 1.427 1.497 6,952,585
2003 1.162 1.427 4,313,654
2002 1.528 1.162 3,924,349
2001 1.876 1.528 3,670,359
2000 2.226 1.876 2,689,641
1999 1.748 2.226 2,128,563
1998 1.309 1.748 856,487
1997 1.075 1.309 204,119
Travelers Mercury Large Cap Core Subaccount
(6/98)........................................... 2006 0.986 1.047 --
2005 0.893 0.986 1,240,345
2004 0.782 0.893 1,129,244
2003 0.655 0.782 957,738
2002 0.889 0.655 869,331
2001 1.163 0.889 659,007
2000 1.251 1.163 327,133
1999 1.026 1.251 146,840
1998 1.000 1.026 52,472
</Table>
A-39
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Travelers MFS(R) Mid Cap Growth Subaccount
(6/01)........................................... 2006 0.595 0.629 --
2005 0.586 0.595 17,380,444
2004 0.521 0.586 1,797,736
2003 0.386 0.521 1,130,446
2002 0.766 0.386 588,596
2001 1.000 0.766 154,932
Travelers MFS(R) Total Return Subaccount (8/96).. 2006 1.929 1.992 --
2005 1.902 1.929 13,700,725
2004 1.732 1.902 15,103,315
2003 1.509 1.732 15,792,184
2002 1.616 1.509 13,182,342
2001 1.641 1.616 10,609,801
2000 1.428 1.641 7,999,892
1999 1.412 1.428 8,266,235
1998 1.284 1.412 5,664,111
1997 1.075 1.284 2,618,836
Travelers MFS(R) Value Subaccount (5/04)......... 2006 1.176 1.271 --
2005 1.121 1.176 447,743
2004 1.000 1.121 127,667
Travelers Mondrian International Stock Subaccount
(9/96)........................................... 2006 1.296 1.490 --
2005 1.202 1.296 6,053,891
2004 1.054 1.202 7,448,390
2003 0.832 1.054 3,579,394
2002 0.970 0.832 3,073,863
2001 1.334 0.970 2,780,325
2000 1.529 1.334 2,031,009
1999 1.276 1.529 1,698,154
1998 1.149 1.276 926,359
1997 1.076 1.149 281,976
Travelers Pioneer Fund Subaccount (5/03)......... 2006 1.390 1.475 --
2005 1.331 1.390 197,581
2004 1.216 1.331 153,515
2003 1.000 1.216 98,264
</Table>
A-40
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Travelers Pioneer Strategic Income Subaccount
(9/96)........................................... 2006 1.523 1.539 --
2005 1.492 1.523 1,386,236
2004 1.365 1.492 896,739
2003 1.159 1.365 941,856
2002 1.111 1.159 886,995
2001 1.082 1.111 1,814,009
2000 1.103 1.082 1,559,280
1999 1.107 1.103 1,661,178
1998 1.116 1.107 1,431,206
1997 1.052 1.116 702,154
Travelers Quality Bond Subaccount (7/97)......... 2006 1.365 1.353 --
2005 1.364 1.365 3,374,701
2004 1.340 1.364 3,835,364
2003 1.272 1.340 4,264,219
2002 1.220 1.272 4,411,306
2001 1.156 1.220 1,309,124
2000 1.097 1.156 549,681
1999 1.102 1.097 456,543
1998 1.031 1.102 127,793
1997 1.000 1.031 721
Travelers Strategic Equity Subaccount (9/96)..... 2006 1.590 1.660 --
2005 1.582 1.590 5,030,438
2004 1.457 1.582 6,357,023
2003 1.116 1.457 7,138,608
2002 1.705 1.116 7,026,081
2001 1.998 1.705 6,218,031
2000 2.480 1.998 4,918,296
1999 1.904 2.480 4,488,836
1998 1.498 1.904 2,710,828
1997 1.178 1.498 582,489
Travelers U.S. Government Securities Subaccount
(5/04)........................................... 2006 1.081 1.042 --
2005 1.052 1.081 7,031,317
2004 1.000 1.052 2,884,567
Van Kampen Life Investment Trust
Van Kampen LIT Comstock Subaccount (Class II)
(5/03)........................................... 2006 1.484 1.697 1,186,033
2005 1.447 1.484 1,039,939
2004 1.251 1.447 479,118
2003 1.000 1.251 125,687
</Table>
A-41
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.50% (CONTINUED)
<Table>
<Caption>
NUMBER OF UNITS
UNIT VALUE AT UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR BEGINNING OF YEAR END OF YEAR END OF YEAR
- -------------- ---- ----------------- ------------- ---------------
Van Kampen LIT Enterprise Subaccount (Class II)
(5/01)........................................... 2006 0.803 0.803 --
2005 0.797 0.803 --
2004 0.780 0.797 74,867
2003 0.630 0.780 394,232
2002 0.908 0.630 23,271
2001 1.000 0.908 2,190
Van Kampen LIT Strategic Growth Subaccount (Class
II) (5/01)....................................... 2006 0.754 0.762 973,798
2005 0.711 0.754 891,392
2004 0.676 0.711 891,266
2003 0.540 0.676 868,640
2002 0.814 0.540 477,046
2001 1.000 0.814 51,986
Variable Insurance Products Fund
VIP Contrafund(R) Subaccount (Service Class 2)
(6/01)........................................... 2006 1.368 1.502 5,290,311
2005 1.191 1.368 4,316,893
2004 1.049 1.191 2,348,693
2003 0.831 1.049 863,425
2002 0.933 0.831 372,402
2001 1.000 0.933 28,185
VIP Mid Cap Subaccount (Service Class 2) (5/01).. 2006 1.771 1.961 5,940,396
2005 1.523 1.771 5,275,586
2004 1.240 1.523 3,860,372
2003 0.911 1.240 1,505,297
2002 1.027 0.911 692,312
2001 1.000 1.027 14,876
</Table>
The date next to each funding option name reflects the date money first came
into the funding option through the Separate Account.
Funding options not listed above had no amounts allocated to them or were not
available as of December 31, 2006.
Number of Units outstanding at the end of the period may include units for
Contracts Owners in payout phase, where appropriate.
If an accumulation unit value has no assets and units across all sub-accounts
within the Separate Account, and has had no assets and units for the history
displayed on the Condensed Financial Information in the past, then it may not be
displayed.
Variable Funding Option mergers and substitutions that occurred between January
1, 2005 and December 31, 2006, are displayed below. Please see Appendix _ for
more information on Variable Funding Option name changes, mergers and
substitutions.
A-42
Effective on or about 05/01/06, Capital Appreciation Fund merged into Met
Investors Series Trust -- Janus Capital Appreciation Portfolio -- Class A and is
no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust -- Disciplined Mid-
Cap Stock Portfolio merged into Met Investors Series Trust -- Batterymarch Mid-
Cap Stock Portfolio -- Class A and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust -- Federated High
Yield Portfolio merged into Met Investors Series Trust -- Federated High Yield
Portfolio -- Class A and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust -- Mondrian
International Stock Portfolio merged into Met Investors Series Trust -- Harris
Oakmark International Stock Portfolio -- Class A and is no longer available as a
funding option.
Effective on or about 05/01/06, The Travelers Series Trust -- Convertible
Securities Portfolio merged into Met Investors Series Trust -- Lord Abbett Bond
Debenture Portfolio -- Class A and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust -- Mercury Large Cap
Core Portfolio merged into Met Investors Series Trust -- Mercury Large-Cap Core
Portfolio -- Class A and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust -- AIM Capital
Appreciation Portfolio merged into Met Investors Series Trust -- Met/AIM Capital
Appreciation Portfolio -- Class A and is no longer available as a funding
option.
Effective on or about 05/01/06, The Travelers Series Trust -- MFS(R) Value
Portfolio merged into Met Investors Series Trust -- MFS(R) Value
Portfolio -- Class A and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust -- Pioneer Fund
Portfolio merged into Met Investors Series Trust -- Pioneer Fund
Portfolio -- Class A and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust -- Pioneer Strategic
Income Portfolio -- Class A merged into Met Investors Series Trust -- Pioneer
Strategic Income Portfolio -- Class A and is no longer available as a funding
option.
Effective on or about 05/01/06, The Travelers Series Trust -- MFS(R) Mid Cap
Growth Portfolio merged into Metropolitan Series Fund, Inc. -- BlackRock
Aggressive Growth Portfolio -- Class D and is no longer available as a funding
option.
Effective on or about 05/01/06, The Travelers Series Trust -- Travelers Quality
Bond Portfolio merged into Metropolitan Series Fund, Inc. -- BlackRock Bond
Income Portfolio -- Class A and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust -- Large Cap
Portfolio merged into Metropolitan Series Fund, Inc. -- FI Large Cap
Portfolio -- Class A and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust -- Strategic Equity
Portfolio merged into Metropolitan Series Fund, Inc. -- FI Large Cap
Portfolio -- Class A and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust -- Equity Income
Portfolio merged into Metropolitan Series Fund, Inc. -- FI Value Leaders
Portfolio -- Class D and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust -- MFS(R) Total
Return Portfolio merged into Metropolitan Series Fund, Inc. -- MFS(R) Total
Return Portfolio -- Class F and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust -- U.S. Government
Securities Portfolio merged into Metropolitan Series Fund, Inc.-Western Asset
Manager U.S. Government Portfolio -- Class A and is no longer available as a
funding option.
Effective on or about 05/01/06 Oppenheimer Variable Account Funds -- Oppenheimer
Main Street Fund/VA-Service Shares was replaced by Met Investors Series
Trust -- Lord Abbett Growth and Income Portfolio -- Class B and is no longer
available as a funding option.
A-43
Effective on or about 05/01/06 Franklin Templeton Variable Insurance Products
Trust -- Mutual Shares Securities Fund -- Class 2 Shares was replaced by Met
Investors Series Trust -- Lord Abbett Growth and Income Portfolio -- Class B and
is no longer available as a funding option.
Effective on or about 05/01/06, AllianceBernstein Variable Products Series Fund,
Inc -- AllianceBernstein Large Cap Growth Portfolio -- Class B was replaced by
Metropolitan Series Fund, Inc. -- T. Rowe Price Large Cap Growth
Portfolio -- Class B and is no longer available as a funding option.
Effective on or about 05/01/06 Janus Aspen Series-Janus Aspen Series Growth and
Income Portfolio was replaced by Metropolitan Series Fund, Inc. -- T. Rowe Price
Large Cap Growth Portfolio -- Class B and is no longer available as a funding
option.
Effective on or about 05/01/06, Delaware VIP Trust -- Delaware VIP REIT Series
Standard Class was replaced by Met Investors Series Trust -- Neuberger Berman
Real Estate Portfolio -- Class A and is no longer available as a funding option.
Effective on or about 11/13/06, Lazard Retirement Series, Inc. -- Lazard Small
Cap Portfolio was replaced by the Met Investors Series Trust -- Third Avenue
Small Cap Portfolio and is no longer available as a funding option.
A-44
APPENDIX B -- ADDITIONAL INFORMATION REGARDING THE UNDERLYING FUNDS
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION REGARDING THE UNDERLYING FUNDS:
Some of the Underlying Funds listed below were subject to a merger, substitution
or other change. The charts below identify the former name and new name of each
of these Underlying Funds, and, where applicable, the former name and new name
of the trust of which the Underlying Fund is part.
UNDERLYING FUND NAME CHANGES
<Table>
<Caption>
FORMER NAME NEW NAME
- --------------------------------------------- ---------------------------------------------
LEGG MASON PARTNERS VARIABLE PORTFOLIOS I, LEGG MASON PARTNERS VARIABLE PORTFOLIOS I,
INC. INC.
Legg Mason Partners Variable High Yield Legg Mason Partners Variable Global High
Bond Portfolio Yield Bond Portfolio
LEGG MASON PARTNERS VARIABLE PORTFOLIOS III, LEGG MASON PARTNERS VARIABLE PORTFOLIO III,
INC. INC.
Legg Mason Partners Variable Social Legg Mason Partners Variable Social
Awareness Stock Portfolio Awareness Portfolio
LEGG MASON PARTNERS VARIABLE PORTFOLIO IV, LEGG MASON PARTNERS VARIABLE PORTFOLIO II
INC.
Legg Mason Partners Variable Multiple Legg Mason Partners Variable Capital and
Discipline Portfolio -- Balanced All Income Portfolio -- Class I
Cap Growth and Value Portfolio
MET INVESTORS SERIES TRUST MET INVESTORS SERIES TRUST
Federated High Yield Portfolio -- Class A BlackRock High Yield Portfolio -- Class A
Janus Capital Appreciation Janus Forty Portfolio -- Class A
Portfolio -- Class A
Mercury Large-Cap Core Portfolio -- Class A BlackRock Large-Cap Core
Portfolio -- Class E
VAN KAMPEN LIFE INVESTMENT TRUST -- CLASS II VAN KAMPEN LIFE INVESTMENT TRUST -- CLASS II
Van Kampen Life Investment Trust Emerging Van Kampen Life Investment Trust Strategic
Growth Portfolio Growth Portfolio
</Table>
UNDERLYING FUND MERGERS/REORGANIZATIONS
The former Underlying Funds were merged with and into the new Underlying Fund
<Table>
<Caption>
FORMER UNDERLYING FUND NEW UNDERLYING FUND
- --------------------------------------------- ---------------------------------------------
LEGG MASON PARTNERS INVESTMENT SERIES LEGG MASON PARTNERS VARIABLE PORTFOLIOS III,
INC.
Legg Mason Partners Variable Premier Legg Mason Partners Variable Aggressive
Selections All Cap Growth Portfolio Growth Portfolio -- Class I
LEGG MASON PARTNERS INVESTMENT SERIES LEGG MASON PARTNERS VARIABLE PORTFOLIOS II
Legg Mason Partner Variable Growth and Legg Mason Partners Variable Appreciation
Income Portfolio Portfolio -- Class I
LEGG MASON PARTNERS VARIABLE PORTFOLIOS I, LEGG MASON PARTNERS VARIABLE PORTFOLIOS II,
INC. INC.
Legg Mason Partners Variable All Cap Legg Mason Partners Variable Fundamental
Portfolio -- Class I Value Portfolio -- Class I
LEGG MASON PARTNERS VARIABLE PORTFOLIO I, LEGG MASON PARTNERS VARIABLE PORTFOLIO IV,
INC. INC.
Legg Mason Partners Variable Total Return Legg Mason Partners Variable Capital and
Portfolio Income Portfolio -- Balanced All Cap
Growth and Value Portfolio -- Class I
LEGG MASON PARTNERS VARIABLE PORTFOLIOS V LEGG MASON PARTNERS VARIABLE PORTFOLIOS I,
INC.
Legg Mason Partners Variable Small Cap Legg Mason Partners Variable Small Cap Growth
Growth Opportunities Portfolio Portfolio -- Class I
</Table>
B-1
UNDERLYING FUND SUBSTITUTIONS
The following new Underlying Funds were replaced by the former Underlying Funds.
<Table>
<Caption>
FORMER UNDERLYING FUND NEW UNDERLYING FUND
- --------------------------------------------- ---------------------------------------------
LORD ABBETT SERIES FUND, INC. -- CLASS VC MET INVESTORS SERIES TRUST
Lord Abbett Growth and Income Series Fund Lord Abbett Growth and Income
Portfolio -- Class B
Lord Abbett Mid Cap Portfolio Lord Abbett Mid-Cap Portfolio -- Class B
PUTNAM VARIABLE TRUST MET INVESTORS SERIES TRUST
Putnam VT Small Cap Value Fund Third Avenue Small Cap Value
Portfolio -- Class B
</Table>
FUND FAMILY NAME CHANGES
<Table>
<Caption>
FORMER NAME NEW NAME
- --------------------------------------------- ---------------------------------------------
LEGG MASON PARTNERS INVESTMENT FUNDS, INC. LEGG MASON PARTNERS EQUITY TRUST
Legg Mason Partners Small Cap Value Fund Legg Mason Partners Small Cap Value Fund
LEGG MASON PARTNERS INVESTMENT FUNDS, INC. LEGG MASON PARTNERS INCOME TRUST
Legg Mason Partners Investment Grade Bond Legg Mason Partners Investment Grade Bond
Fund Fund
LEGG MASON PARTNERS VARIABLE PORTFOLIOS II LEGG MASON PARTNERS VARIABLE EQUITY TRUST
Legg Mason Partners Variable Appreciation Legg Mason Partners Variable Appreciation
Portfolio Portfolio -- Class I
Legg Mason Partners Variable Equity Index Legg Mason Partners Variable Equity Index
Portfolio -- Class II Portfolio -- Class II
LEGG MASON PARTNERS VARIABLE PORTFOLIOS I, LEGG MASON PARTNERS VARIABLE EQUITY TRUST
INC.
Legg Mason Partners Variable Investors Legg Mason Partners Variable Investors
Portfolio Portfolio -- Class I
LEGG MASON PARTNERS VARIABLE PORTFOLIOS I, LEGG MASON PARTNERS VARIABLE INCOME TRUST
INC.
Legg Mason Partners Variable Global High Legg Mason Partners Variable Global High
Yield Bond Portfolio Yield Bond Portfolio -- Class I
LEGG MASON PARTNERS VARIABLE PORTFOLIOS II LEGG MASON PARTNERS VARIABLE INCOME TRUST
Legg Mason Partners Variable Diversified Legg Mason Partners Variable Diversified
Strategic Income Portfolio Strategic Income Portfolio
LEGG MASON PARTNERS VARIABLE PORTFOLIOS III, LEGG MASON PARTNERS VARIABLE INCOME TRUST
INC.
Legg Mason Partners Variable Adjustable Legg Mason Partners Variable Adjustable Rate
Rate Income Portfolio Income Portfolio
Legg Mason Partners Variable Money Market Legg Mason Partners Variable Money Market
Portfolio Portfolio
LEGG MASON PARTNERS VARIABLE PORTFOLIOS III, LEGG MASON PARTNERS VARIABLE EQUITY TRUST
INC.
Legg Mason Partners Variable Aggressive Legg Mason Partners Variable Aggressive
Growth Portfolio Growth Portfolio -- Class I
Legg Mason Partners Variable Large Cap Legg Mason Partners Variable Large Cap Growth
Growth Portfolio Portfolio
Legg Mason Partners Variable Social Legg Mason Partners Variable Social Awareness
Awareness Stock Portfolio Portfolio
</Table>
B-2
SHARE CLASS NAME CHANGES
<Table>
<Caption>
FORMER NAME NEW NAME
- --------------------------------------------- ---------------------------------------------
LEGG MASON PARTNERS VARIABLE PORTFOLIOS II LEGG MASON PARTNERS VARIABLE EQUITY TRUST
Legg Mason Partners Variable Appreciation Legg Mason Partners Variable Appreciation
Portfolio Portfolio -- Class I
LEGG MASON PARTNERS VARIABLE PORTFOLIOS III, LEGG MASON PARTNERS VARIABLE EQUITY TRUST
INC.
Legg Mason Partners Variable Aggressive Legg Mason Partners Variable Aggressive
Growth Portfolio Growth Portfolio -- Class I
LEGG MASON PARTNERS VARIABLE PORTFOLIOS II LEGG MASON PARTNERS VARIABLE PORTFOLIOS II
Legg Mason Partners Variable Fundamental Legg Mason Partners Variable Fundamental
Value Portfolio Value Portfolio -- Class I
</Table>
UNDERLYING FUND SHARE CLASS EXCHANGE
The following former Underlying Fund share class was exchanged into the new
Underlying Fund share class.
<Table>
<Caption>
FORMER UNDERLYING FUND SHARE CLASS NEW UNDERLYING FUND SHARE CLASS
- --------------------------------------------- ---------------------------------------------
MET INVESTORS SERIES TRUST MET INVESTORS SERIES TRUST
BlackRock Large-Cap Core Portfolio -- Class BlackRock Large-Cap Core
A Portfolio -- Class E
</Table>
B-3
THIS PAGE INTENTIONALLY LEFT BLANK.
APPENDIX C
- --------------------------------------------------------------------------------
PORTFOLIO LEGAL AND MARKETING NAMES
<Table>
<Caption>
SERIES FUND/TRUST PORTFOLIO/SERIES MARKETING NAME
- --------------------------------- --------------------------------- ---------------------------------
AMERICAN FUNDS INSURANCE SERIES Global Growth Fund American Funds Global Growth Fund
AMERICAN FUNDS INSURANCE SERIES Growth-Income Fund American Funds Growth-Income Fund
AMERICAN FUNDS INSURANCE SERIES Growth Fund American Funds Growth Fund
DREYFUS VARIABLE INVESTMENT FUND Appreciation Portfolio Dreyfus VIF Appreciation
Portfolio
DREYFUS VARIABLE INVESTMENT FUND Developing Leaders Portfolio Dreyfus VIF Developing Leaders
Portfolio
JANUS ASPEN SERIES Mid Cap Growth Portfolio Janus Aspen Series Mid Cap Growth
Portfolio
METROPOLITAN SERIES FUND, INC. FI Large Cap Portfolio FI Large Cap Portfolio (Fidelity)
MET INVESTORS SERIES TRUST Growth and Income Portfolio Lord Abbett Growth and Income
Series Fund -- Class VC
MET INVESTORS SERIES TRUST Mid-Cap Value Portfolio Lord Abbett Mid-Cap Value Series
Fund -- Class VC
METROPOLITAN SERIES FUND, INC. FI Value Leaders Portfolio FI Value Leaders Portfolio
(Fidelity)
PIMCO VARIABLE INSURANCE TRUST Total Return Portfolio PIMCO VIT Total Return Portfolio
REGISTERED FIXED ACCOUNT Registered Fixed Fixed Account
VAN KAMPEN LIFE INVESTMENT TRUST Van Kampen Life Investment Trust Van Kampen LIT Comstock Portfolio
Comstock Portfolio
VAN KAMPEN LIFE INVESTMENT TRUST Van Kampen Life Investment Trust Van Kampen LIT Strategic Growth
Strategic Growth Portfolio Portfolio
VARIABLE INSURANCE PRODUCTS Contrafund(R) Portfolio Fidelity VIP Contrafund(R)
Portfolio
VARIABLE INSURANCE PRODUCTS Mid Cap Portfolio Fidelity VIP Mid Cap Portfolio
</Table>
C-1
THIS PAGE INTENTIONALLY LEFT BLANK.
APPENDIX D
- --------------------------------------------------------------------------------
CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
The Statement of Additional Information contains more specific information and
financial statements relating to the Separate Account and the Company. A list of
the contents of the Statement of Additional Information is set forth below:
The Insurance Company
Principal Underwriter
Distribution and Principal Underwriting Agreement
Valuation of Assets
Calculation of Money Market Yield
Federal Tax Considerations
Independent Registered Public Accounting Firms
Condensed Financial Information
Financial Statements
- --------------------------------------------------------------------------------
Copies of the Statement of Additional Information dated April 30, 2007 (Form MIC
Book 94) are available without charge. To request a copy, please check the box
and complete the coupon found below and mail it to: MetLife Insurance Company of
Connecticut, Annuity Operations and Services, One Cityplace, 185 Asylum Street,
3CP, Hartford, Connecticut, 06103-3415.
Name: -----------------------------------------------
Address: --------------------------------------------
[ ] MIC Book 94
D-1
UNALLOCATED GROUP VARIABLE CONTRACT
METLIFE RETIREMENT PERSPECTIVES
STATEMENT OF ADDITIONAL INFORMATION
APRIL 30, 2007
DATED
FOR
METLIFE OF CT SEPARATE ACCOUNT QPN FOR VARIABLE ANNUITIES
ISSUED BY
METLIFE INSURANCE COMPANY OF CONNECTICUT
TABLE OF CONTENTS
<Table>
THE INSURANCE COMPANY........................................................ 2
PRINCIPAL UNDERWRITER........................................................ 2
DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT............................ 2
VALUATION OF ASSETS.......................................................... 4
CALCULATION OF MONEY MARKET YIELD............................................ 5
FEDERAL TAX CONSIDERATIONS................................................... 5
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM................................ 7
CONDENSED FINANCIAL INFORMATION.............................................. 8
FINANCIAL STATEMENTS......................................................... 1
</Table>
THE INSURANCE COMPANY
MetLife Insurance Company of Connecticut (the "Company") is a stock insurance
company chartered in 1863 in Connecticut and continuously engaged in the
insurance business since that time. The Company is licensed to conduct life
insurance business in all states of the United States, the District of Columbia,
Puerto Rico, Guam, the U.S. and British Virgin Island and the Bahamas. The
Company is a wholly-owned subsidiary of MetLife, Inc., a publicly traded
company. MetLife, Inc., through its subsidiaries and affiliates, is a leading
provider of insurance and other financial services to individual and
institutional customers. The Company's Home Office is located at One Cityplace,
Hartford, Connecticut 06103-3415.
STATE REGULATION. The Company is subject to the laws of the state of Connecticut
governing insurance companies and to regulation by the Insurance Commissioner of
the state of Connecticut (the "Commissioner"). An annual statement covering the
operations of the Company for the preceding year, as well as its financial
conditions as of December 31 of such year, must be filed with the Commissioner
in a prescribed format on or before March 1 of each year. The Company's books
and assets are subject to review or examination by the Commissioner or his
agents at all times, and a full examination of its operations is conducted at
least once every four years.
The Company is also subject to the insurance laws and regulations of all other
states in which it is licensed to operate. However, the insurance departments of
each of these states generally apply the laws of the home state (jurisdiction of
domicile) in determining the field of permissible investments.
THE SEPARATE ACCOUNT. MetLife of CT Separate Account QPN for Variable Annuities
(the "Separate Account") meets the definition of a separate account under the
federal securities laws, and complies with the provisions of the 1940 Act.
Additionally, the operations of the Separate Account are subject to the
provisions of Section 38a-433 of the Connecticut General Statutes, which
authorizes the Commissioner to adopt regulations under it. Section 38a-433
contains no restrictions on the investments of the Separate Account, and the
Commissioner has adopted no regulations under the Section that affect the
Separate Account. The Company holds title to the assets of the Separate Account.
The assets are kept physically segregated and are held separate and apart from
the Company's general corporate assets. Records are maintained of all purchases
and redemptions of the Underlying Funds held in each of the Variable Funding
Options.
PRINCIPAL UNDERWRITER
MetLife Investors Distribution Company ("MLIDC")* serves as principal
underwriter for the Separate Account and the Contracts. The offering is
continuous. MLIDC's principal executive offices are located at 5 Park Plaza,
Suite 1900, Irvine, CA 92614. MLIDC is affiliated with the Company and the
Separate Account.
DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT
Information about the distribution of the Contracts is contained in the
prospectus (see "Other Information -- Distribution of the Variable Annuity
Contracts"). Additional information is provided below.
Under the terms of the Distribution and Principal Underwriting Agreement among
the Separate Account, MLIDC and the Company, MLIDC acts as agent for the
distribution of the Contracts and as principal underwriter for the Contracts.
The Company reimburses MLIDC for certain sales and overhead expenses connected
with sales functions.
2
The following table shows the amount of commissions paid to and the amount of
commissions retained by the Distributor and Principal Underwriter over the past
three years.
UNDERWRITING COMMISSIONS
<Table>
<Caption>
UNDERWRITING COMMISSIONS PAID AMOUNT OF UNDERWRITING
TO THE DISTRIBUTOR BY THE COMMISSIONS RETAINED BY THE
YEAR COMPANY* DISTRIBUTOR*
- -------------------------------- -------------------------------- --------------------------------
2006............................ $ 92,981,365 $0
2005............................ $135,616,994 $0
2004............................ $117,306,200 $0
</Table>
*Effective as of October 20, 2006, the former principal underwriter for the
Separate Account and the Contracts merged with and into MetLife Investors
Distribution Company.
The Company and MLIDC have also entered into preferred distribution arrangements
with certain broker-dealer firms. These arrangements are sometimes called "shelf
space" arrangements. Under these arrangements, the Company and MLIDC pay
separate, additional compensation to the broker-dealer firms for services the
broker-dealer firms provide in connection with the distribution of the Company's
products. These services may include providing the Company with access to the
distribution network of the broker-dealer firms, the hiring and training of the
broker-dealer firms' sales personnel, the sponsoring of conferences and seminars
by the broker-dealer firms, or general marketing services performed by the
broker-dealer firms. The broker-dealer firms may also provide other services or
incur other costs in connection with distributing the Company's products.
These preferred distribution arrangements will not be offered to all broker-
dealer firms and the terms of such arrangements may differ between broker-dealer
firms. Compensation payable under such arrangements may be based on aggregate,
net or anticipated sales of the Contract, total assets attributable to sales of
the Contract by registered representatives of the broker-dealer firms or based
on the length of time that a Contract owner has owned the Contract. Any such
compensation payable to a broker-dealer firm will be made by MLIDC or the
Company out of their own assets and will not result in any additional direct
charge to you. Such compensation may cause the broker-dealer firms and their
registered representatives to favor the Company's products. The amount of
additional compensation (non-commission amounts) paid to selected broker-dealer
firms during 2006 ranged from $2,029 to $2,179,850. The amount of commissions
paid to selected broker-dealer firms during 2006 ranged from $1,229,012 to
$11,402,602. The amount of total compensation (includes non-commission as well
as commission amounts) paid to selected broker-dealer firms during 2006 ranged
from $1,231,041 to $13,582,452.
The following list sets forth the names of broker-dealer firms that have entered
into preferred distribution arrangements with the Company and MLIDC under which
the broker-dealer firms received additional compensation in 2006 in connection
with the sale of our variable annuity contracts, variable life policies and
other insurance products (including the Contracts). The broker-dealer firms are
listed in alphabetical order:
Citicorp Investment Services
Citigroup Global Markets Inc. (d/b/a Smith Barney)
DWS Scudder Distributors, Inc.
Merrill Lynch, Pierce, Fenner & Smith, Incorporated
Morgan Stanley DW, Inc.
PFS Investments, Inc. (d/b/a Primerica)
Pioneer Funds Distributor, Inc.
Tower Square Securities, Inc.
3
There are other broker-dealer firms who receive compensation for servicing our
contracts, and the account value of the contracts or the amount of added
purchase payments received may be included in determining their additional
compensation, if any.
REDUCTION OR ELIMINATION OF THE WITHDRAWAL CHARGE. We may reduce or eliminate
the withdrawal charge under the Contract when certain sales or administration of
the Contract result in savings or reduced expenses and/or risks. We will not
reduce or eliminate the withdrawal charge where such reduction or elimination
would be unfairly discriminatory to any person.
VALUATION OF ASSETS
FUNDING OPTIONS. The value of the assets of each Funding Option is determined at
4:00 p.m. eastern time on each business day, unless we need to close earlier due
to an emergency. A business day is any day the New York Stock Exchange is open.
It is expected that the Exchange will be closed on Saturdays and Sundays and on
the observed holidays of New Year's Day, Martin Luther King, Jr. Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Each security traded on a national
securities exchange is valued at the last reported sale price on the business
day. If there has been no sale on that day, then the value of the security is
taken to be the mean between the reported bid and asked prices on the business
day or on the basis of quotations received from a reputable broker or any other
recognized source.
THE CONTRACT VALUE. The value of an Accumulation Unit on any business day is
determined by multiplying the value on the preceding business day by the net
investment factor for the valuation period just ended. The net investment factor
is used to measure the investment performance of a Funding Option from one
valuation period to the next. The net investment factor for a Funding Option for
any valuation period is equal to the sum of 1.000000 plus the net investment
rate (the gross investment rate less any applicable Funding Option deductions
during the valuation period relating to the mortality and expense risk charge
and the administrative expense charge). The gross investment rate of a Funding
Option is equal to (a) minus (b), divided by (c) where:
(a) = investment income plus capital gains and losses (whether realized
or unrealized);
(b) = any deduction for applicable taxes (presently zero); and
(c) = the value of the assets of the funding option at the beginning of
the valuation period.
The gross investment rate may be either positive or negative. A Funding Option's
investment income includes any distribution whose ex-dividend date occurs during
the valuation period.
ACCUMULATION UNIT VALUE. The value of the Accumulation Unit for each Funding
Option was initially established at $1.00. The value of an Accumulation Unit on
any business day is determined by multiplying the value on the preceding
business day by the net investment factor for the valuation period just ended.
The net investment factor is calculated for each Funding Option and takes into
account the investment performance, expenses and the deduction of certain
expenses.
ANNUITY UNIT VALUE. The initial Annuity Unit value applicable to each Funding
Option was established at $1.00. An Annuity Unit value as of any business day is
equal to (a) the value of the Annuity Unit on the preceding business day,
multiplied by (b) the corresponding net investment factor for the business day
just ended, divided by (c) the assumed net investment factor for the valuation
period. (For example, the assumed net investment factor based on an annual
assumed net investment rate of 3.0% for a valuation period of one day is
1.000081 and, for a period of two days, is 1.000081 x 1.000081.)
4
CALCULATION OF MONEY MARKET YIELD
From time to time, we may quote in advertisements and sales literature the
current yield for a money market Subaccount for a 7-day period in a manner that
does not take into consideration any realized or unrealized gains or losses on
shares of the Underlying Fund or on its respective portfolio securities. On a
Contract-specific basis, the current yield is computed by: (a) determining the
net change (exclusive of realized gains and losses on the sales of securities
and unrealized appreciation and depreciation) at the end of the 7-day period in
the value of a hypothetical account under a Contract having a balance of one
Accumulation Unit at the beginning of the period, (b) dividing such net change
in Subaccount value by the Subaccount value at the beginning of the period to
determine the base period return; and (c) annualizing this quotient on a 365-day
basis. (1) net income from the Underlying Fund attributable to the hypothetical
account; and (2) Contract-level charges and deductions imposed under the
Contract which are attributable to the hypothetical account.
On a Contract-specific basis, current yield will be calculated according to the
following formula:
Current Yield = ((NCF - ES) / UV) x (365 / 7)
Where:
NCF = the net change in the value of the Underlying Fund (exclusive of realized
gains and losses on the sale of securities and unrealized appreciation and
depreciation) for the 7-day period attributable to a hypothetical account having
a balance of one Accumulation Unit.
ES = per unit expenses for the hypothetical account for the 7-day period.
UV = the unit value on the first day of the 7-day period.
We may also quote the effective yield of a money market Subaccount for the same
7-day period, determined on a compounded basis. The effective yield is
calculated by compounding the unannualized base period return according to the
following formula:
Effective Yield = (1 + ((NCF - ES) / UV)) 365 / 7 - 1
Where:
NCF = the net change in the value of the Underlying Fund (exclusive of realized
gains and losses on the sale of securities and unrealized appreciation and
depreciation) for the 7-day period attributable to a hypothetical account having
a balance of one Accumulation Unit.
ES = per unit expenses of the hypothetical account for the 7-day period.
UV = the unit value for the first day of the 7-day period.
Because of the charges and deductions imposed under the Contract, the yield for
the Subaccount will be lower than the yield for the corresponding Underlying
Fund. The yields on amounts held in the Subaccount normally will fluctuate on a
daily basis. Therefore, the disclosed yield for any given past period is not an
indication or representation of future yields or rates of return. The actual
yield for the Subaccount is affected by changes in interest rates on money
market securities, average portfolio maturity of the Underlying Fund, the types
and qualities of portfolio securities held by the Underlying Fund, and the
Underlying Fund's operating expenses. Yields on amounts held in the Subaccount
may also be presented for periods other than a 7-day period.
FEDERAL TAX CONSIDERATIONS
The following description of the federal income tax consequences under this
Contract is general in nature and is therefore not exhaustive and is not
intended to cover all situations. Because of the complexity of the law and the
fact that the tax results will vary according to the factual status of the
individual involved, a person contemplating purchase of an annuity contract and
by a Contract Owner or beneficiary who may make elections under a Contract
should consult with a qualified tax or legal adviser.
5
FOREIGN TAX CREDIT
To the extent permitted under federal income tax law, the Separate Account may
claim the benefit of certain tax credits attributable to taxes paid by certain
of the Portfolios to foreign jurisdictions.
MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS
Federal tax law requires that minimum annual distributions begin by April 1st of
the calendar year following the later of calendar year in which a participant
under a qualified plan or a Section 403(b) annuity attains age 70 1/2 or
retires. Minimum annual distributions under an IRA must begin by April 1(st) of
the calendar year in which the Contract Owner attains 70 1/2 regardless of when
he or she retires. Distributions must also begin or be continued according to
the minimum distribution rules under the Code following the death of the
Contract Owner or the annuitant. You should note that the U.S. Treasury recently
issued regulations clarifying the operation of the required minimum distribution
rules.
QUALIFIED PENSION AND PROFIT-SHARING PLANS
Like most other contributions made under a qualified pension or profit-sharing
plan, purchase payments made by an employer are not currently taxable to the
participant and increases in the value of a contract are not subject to taxation
until received by a participant or beneficiary.
Distributions are generally taxable to the participant or beneficiary as
ordinary income in the year of receipt. Any distribution that is considered the
participant's "investment in the contract" is treated as a return of capital and
is not taxable. Under a qualified plan, the investment in the contract may be
zero.
The annual limits that apply to the amounts that may be contributed to a defined
contribution plan each year were increased by EGTRRA. The maximum total annual
limit was increased from $35,000 to $40,000 ($42,000 for 2005). The limit on
employee salary reduction deferrals (commonly referred to as "401(k)
contributions") increase on a graduated basis; $11,000 in 2002, $12,000 in 2003,
$13,000 in 2004, $14,000 in 2005 and $15,000 in 2006. The $15,000 annual limit
will be indexed for inflation after 2006. Additional "catch-up contributions"
may be made by individuals age 50 or over.
Amounts attributable to salary reduction contributions under Code Section 401(k)
and income thereon may not be withdrawn prior to severance from employment,
death, total and permanent disability, attainment of age 59 1/2, or in the case
of hardship.
FEDERAL INCOME TAX WITHHOLDING
The portion of a distribution, which is taxable income to the recipient, will be
subject to federal income tax withholding as follows:
1. ELIGIBLE ROLLOVER DISTRIBUTION FROM SECTION 403(B) PLANS OR ARRANGEMENTS,
FROM QUALIFIED PENSION AND PROFIT-SHARING PLANS, OR FROM 457 PLANS
SPONSORED BY GOVERNMENTAL ENTITIES
There is a mandatory 20% tax withholding for plan distributions that are
eligible for rollover to an IRA or to another qualified retirement plan
(including a 457 plan sponsored by a governmental entity) but that are not
directly rolled over. A distribution made directly to a participant or
beneficiary may avoid this result if:
(a) a periodic settlement distribution is elected based upon a life or
life expectancy calculation, or
(b) a term-for-years settlement distribution is elected for a period of
ten years or more, payable at least annually, or
(c) a minimum required distribution as defined under the tax law is taken
after the attainment of the age of 70 1/2 or as otherwise required by
law, or
(d) the distribution is a hardship distribution.
A distribution including a rollover that is not a direct rollover will be
subject to the 20% withholding, and the 10% additional tax penalty on premature
withdrawals may apply to any amount not added back in the rollover. The 20%
withholding may be recovered when the participant or beneficiary files a
personal income tax return for the year if a
6
rollover was completed within 60 days of receipt of the funds, except to the
extent that the participant or spousal beneficiary is otherwise underwithheld or
short on estimated taxes for that year.
2. OTHER NON-PERIODIC DISTRIBUTIONS (FULL OR PARTIAL REDEMPTIONS)
To the extent not subject to 20% mandatory withholding as described in 1. above,
the portion of a non-periodic distribution, which constitutes taxable income,
will be subject to federal income tax withholding, if the aggregate
distributions exceed $200 for the year, unless the recipient elects not to have
taxes withheld. If no such election is made, 10% of the taxable portion of the
distribution will be withheld as federal income tax; provided that the recipient
may elect any other percentage. Election forms will be provided at the time
distributions are requested. This form of withholding applies to all annuity
programs.
3. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD GREATER THAN
ONE YEAR)
The portion of a periodic distribution, which constitutes taxable income, will
be subject to federal income tax withholding under the wage withholding tables
as if the recipient were married claiming three exemptions. A recipient may
elect not to have income taxes withheld or have income taxes withheld at a
different rate by providing a completed election form. Election forms will be
provided at the time distributions are requested. This form of withholding
applies to all annuity programs.
Recipients who elect not to have withholding made are liable for payment of
federal income tax on the taxable portion of the distribution. Recipients may
also be subject to penalties under the estimated tax payment rules if
withholding and estimated tax payments are not sufficient to cover tax
liabilities.
Recipients who do not provide a social security number or other taxpayer
identification number will not be permitted to elect out of withholding.
Additionally, U.S citizens residing outside of the country, or U.S. legal
residents temporarily residing outside the country, are subject to different
withholding rules and generally cannot elect out of withholding.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The financial statements of MetLife of CT Separate Account QPN for Variable
Annuities (formerly, The Travelers Separate Account QPN for Variable Annuities)
and the consolidated financial statements and financial statement schedules of
MetLife Insurance Company of Connecticut ("MetLife Connecticut") (formerly known
as "The Travelers Insurance Company") and its subsidiaries (collectively the
"Company") (which report expresses an unqualified opinion and includes an
explanatory paragraph relating to a Transfer Agreement entered into on October
11, 2006 between MetLife Connecticut and MetLife Investors Group, Inc. ("MLIG"),
both subsidiaries of MetLife, Inc. ("MetLife"), pursuant to which MetLife
Connecticut acquired all of the stock of MetLife Investors USA Insurance Company
("MLI-USA") from MLIG. As the transaction was between entities under common
control, the transaction was recorded and accounted for in a manner similar to a
pooling-of-interests from July 1, 2005 (the "Acquisition Date"); further, as
MLI-USA has been controlled by MetLife for longer than MetLife Connecticut, all
amounts reported for periods prior to the Acquisition Date are those of MLI-USA)
included in this Statement of Additional Information have been audited by
Deloitte & Touche LLP, an independent registered public accounting firm, as
stated in their reports appearing herein, and are included in reliance upon the
reports of such firm given upon their authority as experts in accounting and
auditing.
7
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
The following tables provide the Accumulation Unit Values information for the
*mid-range* combinations of separate account charges. The Accumulation Unit
Value information for the minimum separate account charge and the maximum
variable account charge are contained in the Prospectus.
SEPARATE ACCOUNT CHARGES 1.00%
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Dreyfus A Bonds Plus, Inc. (9/96).................... 2006 1.500 1.500 --
2005 1.485 1.500 --
2004 1.455 1.485 --
2003 1.404 1.455 1,332,371
2002 1.314 1.404 990,621
2001 1.269 1.314 631,638
2000 1.163 1.269 367,103
1999 1.158 1.163 54,481
Smith Barney Aggressive Growth Subaccount Inc.
(Class A) (10/96).................................. 2006 3.005 3.005 --
2005 3.005 3.005 --
2004 2.940 3.005 --
2003 2.174 2.940 2,233,263
2002 3.266 2.174 1,882,950
2001 3.472 3.266 1,906,340
2000 2.944 3.472 1,038,981
1999 2.015 2.944 97,282
Templeton Growth Fund Subaccount (Class A) (8/96).. 2006 2.334 2.815 1,329,621
2005 2.180 2.334 1,276,579
2004 1.882 2.180 1,935,867
2003 1.431 1.882 1,628,705
2002 1.596 1.431 1,841,121
2001 1.604 1.596 1,752,513
2000 1.592 1.604 1,646,412
1999 1.274 1.592 105,067
AIM Equity Funds, Inc.
AIM Equity Charter Subaccount (Class A) (10/96).... 2006 1.338 1.338 --
2005 1.336 1.338 --
2004 1.242 1.336 --
2003 1.012 1.242 1,372,504
2002 1.218 1.012 1,422,245
2001 1.600 1.218 1,558,047
2000 1.895 1.600 1,069,400
1999 1.525 1.895 146,528
</Table>
8
SEPARATE ACCOUNT CHARGES 1.00% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
AIM Equity Constellation Subaccount (Class A)
(10/96)............................................ 2006 1.275 1.275 --
2005 1.283 1.275 --
2004 1.221 1.283 --
2003 0.953 1.221 3,282,253
2002 1.280 0.953 2,724,511
2001 1.692 1.280 3,055,878
2000 1.907 1.692 2,015,558
1999 1.292 1.907 210,691
AllianceBernstein Value Funds
AllianceBernstein Growth and Income Subaccount
(Class A) (9/96)................................... 2006 2.178 2.178 --
2005 2.183 2.178 --
2004 1.970 2.183 --
2003 1.510 1.970 2,526,632
2002 2.077 1.510 1,968,319
2001 2.137 2.077 1,926,548
2000 1.900 2.137 1,662,947
1999 1.784 1.900 175,208
AllianceBernstein Variable Products Series Fund, Inc.
AllianceBernstein Growth and Income Subaccount
(Class B) (5/04)................................... 2006 1.118 1.171 --
2005 1.079 1.118 3,780,258
2004 1.000 1.079 4,658,967
AllianceBernstein Large-Cap Growth Subaccount
(Class B) (6/01)................................... 2006 0.893 0.878 --
2005 0.785 0.893 131,366
2004 0.732 0.785 134,040
2003 0.599 0.732 138,480
2002 0.875 0.599 3,220
2001 1.000 0.875 --
American Funds Insurance Series
American Funds Global Growth Subaccount (Class 2)
(5/04)............................................. 2006 1.250 1.491 467,232
2005 1.107 1.250 159,813
2004 1.000 1.107 73,933
American Funds Growth Subaccount (Class 2) (5/04).. 2006 1.253 1.368 1,290,110
2005 1.090 1.253 666,910
2004 1.000 1.090 161,134
American Funds Growth-Income Subaccount (Class 2)
(5/04)............................................. 2006 1.133 1.292 649,045
2005 1.081 1.133 295,088
2004 1.000 1.081 66,624
</Table>
9
SEPARATE ACCOUNT CHARGES 1.00% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Capital Appreciation Fund
Capital Appreciation Fund (8/96)................... 2006 2.427 2.406 --
2005 2.074 2.427 1,985,786
2004 1.752 2.074 3,812,594
2003 1.417 1.752 4,800,128
2002 1.911 1.417 4,103,443
2001 2.611 1.911 4,916,970
2000 3.376 2.611 4,379,036
1999 2.455 3.376 1,562,766
Delaware VIP Trust
Delaware VIP REIT Subaccount (Standard Class)
(5/03)............................................. 2006 1.750 2.298 --
2005 1.649 1.750 225,503
2004 1.268 1.649 206,091
2003 1.000 1.268 --
Delaware VIP Small Cap Value Subaccount (Standard
Class) (6/98)...................................... 2006 1.069 1.069 --
2005 1.069 1.069 --
2004 1.069 1.069 --
2003 1.069 1.069 --
2002 1.148 1.069 --
2001 1.037 1.148 288,818
2000 0.886 1.037 127,663
1999 0.858 0.886 63,418
Dreyfus Variable Investment Fund
Dreyfus VIF Appreciation Subaccount (Initial
Shares) (7/98)..................................... 2006 1.088 1.254 744,997
2005 1.053 1.088 958,402
2004 1.012 1.053 1,761,210
2003 0.844 1.012 1,710,461
2002 1.023 0.844 1,802,401
2001 1.140 1.023 367,383
2000 1.159 1.140 317,184
1999 1.108 1.159 305,262
Dreyfus VIF Developing Leaders Subaccount (Initial
Shares) (6/98)..................................... 2006 1.419 1.457 1,963,713
2005 1.354 1.419 2,186,979
2004 1.228 1.354 2,739,031
2003 0.942 1.228 3,292,568
2002 1.177 0.942 2,739,389
2001 1.266 1.177 1,185,414
2000 1.128 1.266 836,777
1999 0.895 1.128 131,440
</Table>
10
SEPARATE ACCOUNT CHARGES 1.00% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Fidelity Advisor Series I
FASI Advisor Growth Opportunities Subaccount (Class
T) (8/96).......................................... 2006 1.278 1.278 --
2005 1.271 1.278 --
2004 1.201 1.271 --
2003 0.938 1.201 1,413,522
2002 1.222 0.938 1,448,255
2001 1.454 1.222 1,875,756
2000 1.797 1.454 1,890,423
1999 1.750 1.797 280,726
Franklin Templeton Variable Insurance Products Trust
FTVIPT Franklin Small-Mid Cap Growth Securities
Subaccount (Class 2) (5/01)........................ 2006 1.022 1.100 215,995
2005 0.986 1.022 175,198
2004 0.893 0.986 161,473
2003 0.657 0.893 145,113
2002 0.931 0.657 18,388
2001 1.000 0.931 --
FTVIPT Mutual Shares Securities Subaccount (Class
2) (5/03).......................................... 2006 1.467 1.720 --
2005 1.341 1.467 113,813
2004 1.202 1.341 86,010
2003 1.000 1.202 --
FTVIPT Templeton Developing Markets Securities
Subaccount (Class 2) (5/03)........................ 2006 2.261 2.868 474,440
2005 1.792 2.261 253,272
2004 1.452 1.792 47,031
2003 1.000 1.452 --
FTVIPT Templeton Foreign Securities Subaccount
(Class 2) (5/04)................................... 2006 1.260 1.515 631,646
2005 1.155 1.260 374,098
2004 1.000 1.155 301,755
Janus Aspen Series
Janus Aspen Global Life Sciences Subaccount
(Service Shares) (5/00)............................ 2006 1.027 1.082 --
2005 0.924 1.027 --
2004 0.817 0.924 --
2003 0.654 0.817 324,405
2002 0.937 0.654 270,117
2001 1.138 0.937 196,529
2000 1.000 1.138 5,829
</Table>
11
SEPARATE ACCOUNT CHARGES 1.00% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Janus Aspen Global Technology Subaccount (Service
Shares) (5/00)..................................... 2006 0.390 0.416 0
2005 0.353 0.390 0
2004 0.354 0.353 0
2003 0.244 0.354 1,426,477
2002 0.418 0.244 773,991
2001 0.673 0.418 398,477
2000 1.000 0.673 61,585
Janus Aspen Growth and Income Subaccount (Service
Shares) (5/00)..................................... 2006 0.846 0.906 --
2005 0.762 0.846 201,434
2004 0.689 0.762 247,646
2003 0.564 0.689 272,178
2002 0.728 0.564 158,159
2001 0.850 0.728 82,703
2000 1.000 0.850 11,932
Janus Aspen Mid Cap Growth Subaccount (Service
Shares) (5/00)..................................... 2006 0.508 0.569 1,840,661
2005 0.458 0.508 2,229,221
2004 0.384 0.458 2,137,058
2003 0.288 0.384 1,448,361
2002 0.404 0.288 1,589,075
2001 0.676 0.404 1,690,060
2000 1.000 0.676 282,556
Lazard Retirement Series, Inc.
Lazard Retirement Small Cap Subaccount (5/03)...... 2006 1.569 1.770 --
2005 1.523 1.569 31,901
2004 1.339 1.523 4,870
2003 1.000 1.339 --
Legg Mason Partners Investment Funds, Inc.
LMPIF Investment Grade Bond Subaccount (Class A)
(9/96)............................................. 2006 1.809 1.846 911,728
2005 1.795 1.809 933,988
2004 1.702 1.795 1,172,175
2003 1.634 1.702 1,363,041
2002 1.468 1.634 972,574
2001 1.352 1.468 564,847
2000 1.226 1.352 433,672
1999 1.330 1.226 152,934
</Table>
12
SEPARATE ACCOUNT CHARGES 1.00% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Legg Mason Partners Investment Series
LMPIS Growth and Income Subaccount (5/01).......... 2006 1.008 1.123 221,435
2005 0.981 1.008 166,525
2004 0.915 0.981 131,392
2003 0.710 0.915 89,492
2002 0.921 0.710 4,913
2001 1.000 0.921 --
LMPIS Premier Selections All Cap Growth Subaccount
(5/01)............................................. 2006 0.926 0.984 923,766
2005 0.880 0.926 954,538
2004 0.864 0.880 2,000,694
2003 0.650 0.864 11,918
2002 0.896 0.650 2,654
2001 1.000 0.896 --
Legg Mason Partners Investment Trust
LMPIT S&P 500 Index Subaccount (Class A) (6/98).... 2006 1.116 1.273 --
2005 1.082 1.116 --
2004 0.991 1.082 --
2003 0.783 0.991 5,134,443
2002 1.020 0.783 4,088,681
2001 1.175 1.020 3,246,745
2000 1.310 1.175 2,688,837
1999 1.159 1.310 948,682
Legg Mason Partners Variable Portfolios V
LMPVPV Small Cap Growth Opportunities Subaccount
(5/01)............................................. 2006 1.165 1.302 350,750
2005 1.122 1.165 302,859
2004 0.980 1.122 263,954
2003 0.697 0.980 194,706
2002 0.947 0.697 23,212
2001 1.000 0.947 61
Legg Mason Partners Variable Portfolios I, Inc.
LMPVPI All Cap Subaccount (Class I) (9/98)......... 2006 1.966 2.299 794,784
2005 1.908 1.966 868,168
2004 1.779 1.908 987,579
2003 1.293 1.779 750,549
2002 1.742 1.293 494,304
2001 1.727 1.742 376,185
2000 1.475 1.727 282,205
1999 1.215 1.475 30,504
</Table>
13
SEPARATE ACCOUNT CHARGES 1.00% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
LMPVPI Global High Yield Bond Subaccount (Class I)
(7/98)............................................. 2006 1.569 1.719 588,175
2005 1.527 1.569 500,840
2004 1.388 1.527 544,310
2003 1.129 1.388 388,948
2002 1.062 1.129 153,838
2001 1.021 1.062 97,593
2000 1.031 1.021 51,596
1999 0.998 1.031 14,067
LMPVPI Investors Subaccount (Class I) (10/98)...... 2006 1.527 1.788 1,700,821
2005 1.448 1.527 1,787,678
2004 1.325 1.448 2,418,858
2003 1.011 1.325 452,569
2002 1.327 1.011 485,129
2001 1.399 1.327 116,968
2000 1.226 1.399 40,063
1999 1.141 1.226 1,379
LMPVPI Total Return Subaccount (Class I) (10/98)... 2006 1.295 1.443 853,851
2005 1.266 1.295 945,608
2004 1.176 1.266 1,337,270
2003 1.025 1.176 2,209,765
2002 1.111 1.025 1,912,159
2001 1.132 1.111 88,651
2000 1.059 1.132 88,405
1999 1.072 1.059 44,762
Legg Mason Partners Variable Portfolios II
LMPVPII Appreciation Subaccount (8/98)............. 2006 1.308 1.487 1,223,509
2005 1.267 1.308 1,768,235
2004 1.176 1.267 2,077,542
2003 0.954 1.176 2,320,137
2002 1.168 0.954 1,625,242
2001 1.229 1.168 500,194
2000 1.246 1.229 382,467
1999 1.162 1.246 122,427
LMPVPII Diversified Strategic Income Subaccount
(8/98)............................................. 2006 1.313 1.370 411,154
2005 1.293 1.313 389,636
2004 1.224 1.293 420,883
2003 1.106 1.224 502,652
2002 1.066 1.106 456,003
2001 1.043 1.066 233,236
2000 1.025 1.043 173,521
1999 1.022 1.025 108,295
</Table>
14
SEPARATE ACCOUNT CHARGES 1.00% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
LMPVPII Equity Index Subaccount (Class II) (5/04).. 2006 1.121 1.277 3,854,937
2005 1.086 1.121 3,655,254
2004 1.000 1.086 5,338,281
LMPVPII Fundamental Value Subaccount (5/01)........ 2006 1.012 1.012 --
2005 1.012 1.012 --
2004 0.987 1.012 --
2003 0.719 0.987 336,926
2002 0.923 0.719 142,058
2001 1.000 0.923 --
Legg Mason Partners Variable Portfolios III, Inc.
LMPVPIII Adjustable Rate Income Subaccount (9/03).. 2006 1.016 1.047 129,904
2005 1.002 1.016 15,979
2004 1.000 1.002 88
2003 1.000 1.000 --
LMPVPIII Aggressive Growth Subaccount (5/00)....... 2006 1.039 1.120 7,508,906
2005 0.940 1.039 8,477,137
2004 0.864 0.940 8,952,803
2003 0.649 0.864 2,279,204
2002 0.973 0.649 1,923,735
2001 1.024 0.973 96,515
2000 1.000 1.024 --
LMPVPIII International All Cap Growth Subaccount
(6/98)............................................. 2006 0.737 0.737 --
2005 0.737 0.737 --
2004 0.720 0.737 --
2003 0.571 0.720 1,958,973
2002 0.776 0.571 1,525,755
2001 1.138 0.776 830,381
2000 1.509 1.138 629,698
1999 0.926 1.509 46,154
LMPVPIII Large Cap Growth Subaccount (10/98)....... 2006 1.653 1.712 1,139,679
2005 1.587 1.653 1,164,340
2004 1.597 1.587 1,234,781
2003 1.093 1.597 1,212,464
2002 1.468 1.093 1,058,830
2001 1.695 1.468 960,702
2000 1.840 1.695 671,360
1999 1.575 1.840 324,071
</Table>
15
SEPARATE ACCOUNT CHARGES 1.00% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
LMPVPIII Large Cap Value Subaccount (7/98)......... 2006 1.039 1.039 --
2005 1.039 1.039 --
2004 1.068 1.039 --
2003 0.845 1.068 1,913,927
2002 1.145 0.845 1,654,233
2001 1.259 1.145 799,117
2000 1.124 1.259 417,017
1999 1.163 1.124 104,807
LMPVPIII Money Market Subaccount (6/98)............ 2006 1.160 1.202 8,689,221
2005 1.140 1.160 7,578,346
2004 1.141 1.140 9,511,109
2003 1.145 1.141 12,518,721
2002 1.142 1.145 11,843,626
2001 1.113 1.142 5,886,521
2000 1.060 1.113 5,435,474
1999 1.029 1.060 1,726,776
LMPVPIII Social Awareness Stock Subaccount (5/04).. 2006 1.122 1.197 470,376
2005 1.086 1.122 786,605
2004 1.000 1.086 763,599
Lord Abbett Series Fund, Inc.
Lord Abbett Growth and Income Subaccount (Class VC)
(5/04)............................................. 2006 1.134 1.316 436,700
2005 1.109 1.134 143,621
2004 1.000 1.109 63,506
Lord Abbett Mid-Cap Value Subaccount (Class VC)
(5/04)............................................. 2006 1.246 1.385 383,766
2005 1.163 1.246 281,105
2004 1.000 1.163 244,167
Met Investors Series Trust
MIST Batterymarch Mid-Cap Stock Subaccount (Class
A) (4/06).......................................... 2006 2.668 2.551 260,791
MIST BlackRock High Yield Subaccount (Class A)
(4/06)............................................. 2006 1.298 1.373 205,886
MIST BlackRock Large-Cap Core Subaccount (Class A)
(4/06)............................................. 2006 1.090 1.159 328,339
MIST Dreman Small-Cap Value Subaccount (Class A)
(4/06)............................................. 2006 1.160 1.241 --
MIST Harris Oakmark International Subaccount (Class
A) (4/06) *........................................ 2006 1.571 1.738 2,094,764
MIST Janus Capital Appreciation Subaccount (Class
A) (4/06).......................................... 2006 2.406 2.477 2,433,872
MIST Legg Mason Partners Managed Assets Subaccount
(Class A) (4/06)................................... 2006 1.055 1.119 --
</Table>
16
SEPARATE ACCOUNT CHARGES 1.00% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
MIST Lord Abbett Bond Debenture Subaccount (Class
A) (4/06).......................................... 2006 1.102 1.159 155,273
MIST Lord Abbett Growth and Income Subaccount
(Class B) (4/06)................................... 2006 1.001 1.080 4,283,424
MIST Met/AIM Capital Appreciation Subaccount (Class
A) (4/06).......................................... 2006 1.236 1.226 2,857,200
MIST Met/AIM Small Cap Growth Subaccount (Class A)
(4/06)............................................. 2006 1.164 1.160 --
MIST MFS(R) Value Subaccount (Class A) (4/06)...... 2006 1.284 1.425 293,014
MIST Neuberger Berman Real Estate Subaccount (Class
A) (4/06).......................................... 2006 1.003 1.225 719,674
MIST Pioneer Fund Subaccount (Class A) (4/06)...... 2006 1.497 1.617 40,966
MIST Pioneer Mid-Cap Value Subaccount (Class A)
(4/06)............................................. 2006 1.121 1.185 --
MIST Pioneer Strategic Income Subaccount (Class A)
(4/06)............................................. 2006 1.623 1.688 272,422
MIST Third Avenue Small Cap Value Subaccount (Class
B) (11/06)......................................... 2006 1.770 1.809 77,520
MetLife Investment Funds, Inc.
MetLife Investment Diversified Bond Subaccount
(Class I) (9/00)................................... 2006 1.307 1.350 713,666
2005 1.294 1.307 1,241,377
2004 1.249 1.294 1,128,809
2003 1.194 1.249 801,076
2002 1.107 1.194 163,848
2001 1.047 1.107 5,202
2000 1.000 1.047 --
MetLife Investment International Stock Subaccount
(Class I) (7/00)................................... 2006 0.930 1.165 832,495
2005 0.819 0.930 707,055
2004 0.721 0.819 637,393
2003 0.560 0.721 388,051
2002 0.728 0.560 6,670
2001 0.936 0.728 400
2000 1.000 0.936 --
MetLife Investment Large Company Stock Subaccount
(Class I) (7/01)................................... 2006 1.034 1.152 528,397
2005 0.979 1.034 727,228
2004 0.899 0.979 572,564
2003 0.708 0.899 387,191
2002 0.927 0.708 961
2001 1.000 0.927 --
</Table>
17
SEPARATE ACCOUNT CHARGES 1.00% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
MetLife Investment Small Company Stock Subaccount
(Class I) (9/00)................................... 2006 1.209 1.361 508,789
2005 1.138 1.209 681,640
2004 1.000 1.138 702,679
2003 0.706 1.000 462,605
2002 0.935 0.706 16,319
2001 0.930 0.935 138
2000 1.000 0.930 --
Metropolitan Series Fund, Inc.
MSF BlackRock Aggressive Growth Subaccount (Class
D) (4/06).......................................... 2006 0.645 0.632 2,471,248
MSF BlackRock Bond Income Subaccount (Class A)
(4/06)............................................. 2006 1.418 1.479 514,510
MSF FI Large Cap Subaccount (Class A) (4/06)....... 2006 1.743 1.774 2,212,688
MSF FI Value Leaders Subaccount (Class D) (4/06)... 2006 2.081 2.143 655,895
MSF MetLife Aggressive Allocation Subaccount
(4/06)............................................. 2006 1.000 1.063 32,682
2005 1.000 1.000 --
MSF MetLife Conservative Allocation Subaccount
(4/06)............................................. 2006 1.000 1.046 488
2005 1.000 1.000 --
MSF MetLife Conservative to Moderate Allocation
Subaccount (4/06).................................. 2006 1.000 1.052 7,316
2005 1.000 1.000 --
MSF MetLife Moderate Allocation Subaccount (4/06).. 2006 1.000 1.057 11,290
2005 1.000 1.000 --
MSF MetLife Moderate to Aggressive Allocation
Subaccount (4/06).................................. 2006 1.000 1.062 194,585
2005 1.000 1.000 --
MSF MFS(R) Total Return Subaccount (Class F)
(4/06)............................................. 2006 2.101 2.255 1,620,603
MSF T. Rowe Price Large Cap Growth Subaccount
(Class B) (4/06)................................... 2006 0.998 1.073 395,870
MSF Western Asset Management U.S. Government
Subaccount (Class A) (4/06) *...................... 2006 1.053 1.094 1,095,892
</Table>
18
SEPARATE ACCOUNT CHARGES 1.00% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Neuberger Berman Equity Assets
Neuberger Berman Guardian Subaccount (Advisor
Class) (9/96)...................................... 2006 1.475 1.475 --
2005 1.476 1.475 --
2004 1.291 1.476 --
2003 0.968 1.291 740,655
2002 1.323 0.968 206,893
2001 1.367 1.323 575,437
2000 1.415 1.367 727,494
1999 1.384 1.415 18,842
Neuberger Berman Partners Subaccount (Advisor
Class) (8/96)...................................... 2006 1.957 1.957 --
2005 1.814 1.957 --
2004 1.544 1.814 --
2003 1.152 1.544 685,449
2002 1.552 1.152 351,565
2001 1.625 1.552 514,873
2000 1.640 1.625 396,020
1999 1.591 1.640 8,567
Oppenheimer Variable Account Funds
Oppenheimer Main Street/VA Subaccount ( Service
Shares) (5/04)..................................... 2006 1.127 1.193 --
2005 1.077 1.127 107,951
2004 1.000 1.077 748,994
PBHG Funds
PBHG Growth Subaccount (Advisor Class) (8/96)...... 2006 0.848 0.848 --
2005 0.840 0.848 --
2004 0.791 0.840 --
2003 0.637 0.791 2,431,277
2002 0.926 0.637 1,808,860
2001 1.433 0.926 2,432,300
2000 1.882 1.433 2,636,695
1999 0.951 1.882 56,347
PIMCO Variable Insurance Trust
PIMCO VIT Total Return Subaccount (Administrative
Class) (5/01)...................................... 2006 1.249 1.284 1,534,689
2005 1.231 1.249 1,219,322
2004 1.186 1.231 1,175,142
2003 1.140 1.186 990,096
2002 1.056 1.140 371,672
2001 1.000 1.056 389
</Table>
19
SEPARATE ACCOUNT CHARGES 1.00% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Putnam Variable Trust
Putnam VT International Equity Subaccount (Class
IB) (5/01)......................................... 2006 1.035 1.035 --
2005 1.026 1.035 --
2004 0.892 1.026 --
2003 0.701 0.892 231,264
2002 0.860 0.701 64,485
2001 1.000 0.860 --
Putnam VT Small Cap Value Subaccount (Class IB)
(5/01)............................................. 2006 1.733 2.012 531,966
2005 1.635 1.733 498,361
2004 1.308 1.635 496,849
2003 0.883 1.308 309,635
2002 1.091 0.883 76,958
2001 1.000 1.091 --
Smith Barney Equity Funds
SBEF Social Awareness Subaccount (Class A) (4/98).. 2006 1.183 1.183 --
2005 1.211 1.183 --
2004 1.137 1.211 --
2003 0.932 1.137 708,747
2002 1.111 0.932 667,683
2001 1.261 1.111 599,922
2000 1.254 1.261 515,866
1999 1.173 1.254 212,721
Smith Barney Funds, Inc.
SBF U.S. Government Securities Subaccount (9/96)... 2006 1.536 1.536 --
2005 1.520 1.536 --
2004 1.482 1.520 --
2003 1.460 1.482 --
2002 1.369 1.460 218,830
2001 1.291 1.369 681,576
2000 1.186 1.291 349,074
1999 1.195 1.186 33,314
Smith Barney Investments Funds Inc.
LMPIF Small Cap Value Subaccount (Class A) (5/01).. 2006 1.714 1.890 642,333
2005 1.624 1.714 619,292
2004 1.358 1.624 465,707
2003 0.998 1.358 317,636
2002 1.084 0.998 82,077
2001 1.000 1.084 54
</Table>
20
SEPARATE ACCOUNT CHARGES 1.00% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
The Dreyfus/Laurel Funds, Inc.
Dreyfus Disciplined Stock Subaccount (7/98)........ 2006 0.971 0.971 --
2005 0.955 0.971 --
2004 0.895 0.955 --
2003 0.734 0.895 667,892
2002 0.962 0.734 583,201
2001 1.121 0.962 410,939
2000 1.247 1.121 306,184
1999 1.099 1.247 145,199
The Travelers Series Trust
Travelers AIM Capital Appreciation Subaccount
(5/04)............................................. 2006 1.159 1.236 --
2005 1.076 1.159 2,507,428
2004 1.000 1.076 4,165,272
Travelers Convertible Securities Subaccount
(5/04)............................................. 2006 1.032 1.102 --
2005 1.038 1.032 19,667
2004 1.000 1.038 17,922
Travelers Disciplined Mid Cap Stock Subaccount
(8/98)............................................. 2006 2.438 2.668 --
2005 2.190 2.438 753,909
2004 1.900 2.190 864,889
2003 1.435 1.900 886,291
2002 1.691 1.435 513,993
2001 1.780 1.691 340,454
2000 1.542 1.780 268,770
1999 1.280 1.542 14,431
Travelers Equity Income Subaccount (10/96)......... 2006 1.977 2.081 --
2005 1.911 1.977 744,764
2004 1.757 1.911 893,902
2003 1.353 1.757 694,392
2002 1.587 1.353 463,689
2001 1.717 1.587 484,274
2000 1.589 1.717 522,390
1999 1.575 1.589 193,349
Travelers Federated High Yield Subaccount (11/96).. 2006 1.263 1.298 --
2005 1.244 1.263 180,446
2004 1.138 1.244 228,901
2003 0.939 1.138 232,808
2002 0.915 0.939 266,058
2001 0.906 0.915 255,490
2000 0.997 0.906 99,367
1999 1.000 0.997 --
</Table>
21
SEPARATE ACCOUNT CHARGES 1.00% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Travelers Federated Stock Subaccount (11/96)....... 2006 0.839 0.839 --
2005 0.839 0.839 --
2004 0.839 0.839 --
2003 0.839 0.839 --
2002 1.053 0.839 --
2001 1.046 1.053 132,830
2000 1.018 1.046 156,538
1999 1.000 1.018 --
Travelers Large Cap Subaccount (9/96).............. 2006 1.688 1.743 --
2005 1.568 1.688 1,031,674
2004 1.487 1.568 1,919,126
2003 1.205 1.487 773,478
2002 1.576 1.205 689,569
2001 1.926 1.576 744,327
2000 2.275 1.926 752,657
1999 1.893 2.275 272,037
Travelers Mercury Large Cap Core Subaccount
(6/98)............................................. 2006 1.025 1.090 --
2005 0.924 1.025 279,862
2004 0.805 0.924 350,515
2003 0.671 0.805 275,600
2002 0.906 0.671 254,346
2001 1.180 0.906 202,583
2000 1.262 1.180 139,077
1999 1.037 1.262 19,534
Travelers MFS(R) Mid Cap Growth Subaccount (6/01).. 2006 0.608 0.645 --
2005 0.596 0.608 2,726,395
2004 0.528 0.596 332,898
2003 0.389 0.528 261,367
2002 0.768 0.389 64,614
2001 1.000 0.768 --
Travelers MFS(R) Total Return Subaccount (8/96).... 2006 2.032 2.101 --
2005 1.993 2.032 1,824,673
2004 1.806 1.993 2,499,867
2003 1.565 1.806 2,722,477
2002 1.669 1.565 2,360,269
2001 1.686 1.669 2,216,590
2000 1.460 1.686 1,447,998
1999 1.436 1.460 155,200
</Table>
22
SEPARATE ACCOUNT CHARGES 1.00% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Travelers MFS(R) Value Subaccount (5/04)........... 2006 1.186 1.284 --
2005 1.125 1.186 103,300
2004 1.000 1.125 46,770
Travelers Mondrian International Stock Subaccount
(9/96)............................................. 2006 1.365 1.571 --
2005 1.259 1.365 1,580,619
2004 1.098 1.259 2,279,793
2003 0.863 1.098 1,220,268
2002 1.001 0.863 914,907
2001 1.370 1.001 901,332
2000 1.562 1.370 849,075
1999 1.289 1.562 152,654
Travelers Pioneer Fund Subaccount (5/03)........... 2006 1.409 1.497 --
2005 1.342 1.409 29,224
2004 1.220 1.342 32,067
2003 1.000 1.220 --
Travelers Pioneer Strategic Income Subaccount
(9/96)............................................. 2006 1.604 1.623 --
2005 1.563 1.604 151,172
2004 1.423 1.563 22,216
2003 1.202 1.423 --
2002 1.147 1.202 9,357
2001 1.111 1.147 182,978
2000 1.127 1.111 169,798
1999 1.119 1.127 3,609
Travelers Quality Bond Subaccount (7/97)........... 2006 1.429 1.418 --
2005 1.420 1.429 470,850
2004 1.389 1.420 765,885
2003 1.311 1.389 935,663
2002 1.251 1.311 935,143
2001 1.180 1.251 232,898
2000 1.114 1.180 94,271
1999 1.113 1.114 10,387
Travelers Strategic Equity Subaccount (9/96)....... 2006 1.675 1.751 --
2005 1.658 1.675 743,126
2004 1.519 1.658 1,296,553
2003 1.157 1.519 1,499,423
2002 1.760 1.157 1,236,419
2001 2.052 1.760 1,486,342
2000 2.534 2.052 1,451,075
1999 1.978 2.534 486,271
</Table>
23
SEPARATE ACCOUNT CHARGES 1.00% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Travelers U.S. Government Securities Subaccount
(5/04)............................................. 2006 1.090 1.053 --
2005 1.055 1.090 1,242,315
2004 1.000 1.055 1,503,924
Van Kampen Life Investment Trust
Van Kampen LIT Comstock Subaccount (Class II)
(5/03)............................................. 2006 1.504 1.728 268,474
2005 1.459 1.504 123,915
2004 1.255 1.459 33,600
2003 1.000 1.255 --
Van Kampen LIT Enterprise Subaccount (Class II)
(5/01)............................................. 2006 0.820 0.820 --
2005 0.812 0.820 --
2004 0.790 0.812 --
2003 0.635 0.790 52,540
2002 0.911 0.635 521
2001 1.000 0.911 --
Van Kampen LIT Strategic Growth Subaccount (Class
II) (5/01)......................................... 2006 0.771 0.784 120,652
2005 0.724 0.771 105,805
2004 0.685 0.724 79,019
2003 0.544 0.685 70,868
2002 0.817 0.544 3,418
2001 1.000 0.817 --
Variable Insurance Products Fund
VIP Contrafund(R) Subaccount (Service Class 2)
(6/01)............................................. 2006 1.400 1.544 819,336
2005 1.212 1.400 560,332
2004 1.063 1.212 448,150
2003 0.838 1.063 --
2002 0.936 0.838 --
2001 1.000 0.936 --
VIP Mid Cap Subaccount (Service Class 2) (5/01).... 2006 1.813 2.017 1,175,440
2005 1.551 1.813 1,006,536
2004 1.257 1.551 733,735
2003 0.918 1.257 425,954
2002 1.031 0.918 76,529
2001 1.000 1.031 --
</Table>
24
SEPARATE ACCOUNT CHARGES 1.10%
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Dreyfus A Bonds Plus, Inc. (9/96).................... 2006 1.481 1.481 --
2005 1.467 1.481 --
2004 1.439 1.467 0
2003 1.390 1.439 915,942
2002 1.303 1.390 583,180
2001 1.259 1.303 354,891
2000 1.155 1.259 291,117
1999 1.150 1.155 45,921
Smith Barney Aggressive Growth Subaccount Inc.
(Class A) (10/96).................................. 2006 2.972 2.972 --
2005 2.972 2.972 --
2004 2.909 2.972 --
2003 2.153 2.909 2,575,316
2002 3.237 2.153 1,748,625
2001 3.446 3.237 1,585,468
2000 2.924 3.446 1,180,844
1999 2.003 2.924 --
Templeton Growth Fund Subaccount (Class A) (8/96).. 2006 2.304 2.776 1,261,033
2005 2.154 2.304 1,336,077
2004 1.861 2.154 1,529,113
2003 1.416 1.861 1,797,686
2002 1.582 1.416 1,416,375
2001 1.591 1.582 1,699,998
2000 1.581 1.591 1,770,607
1999 1.266 1.581 232,708
AIM Equity Funds, Inc.
AIM Equity Charter Subaccount (Class A) (10/96).... 2006 1.324 1.324 --
2005 1.322 1.324 --
2004 1.230 1.322 21
2003 1.003 1.230 885,956
2002 1.210 1.003 750,219
2001 1.590 1.210 1,067,937
2000 1.885 1.590 942,790
1999 1.518 1.885 189,484
AIM Equity Constellation Subaccount (Class A)
(10/96)............................................ 2006 1.261 1.261 --
2005 1.270 1.261 --
2004 1.209 1.270 --
2003 0.945 1.209 2,127,277
2002 1.270 0.945 2,387,681
2001 1.681 1.270 2,898,682
2000 1.897 1.681 2,208,084
1999 1.286 1.897 279,584
</Table>
25
SEPARATE ACCOUNT CHARGES 1.10% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
AllianceBernstein Value Funds
AllianceBernstein Growth and Income Subaccount
(Class A) (9/96)................................... 2006 2.151 2.151 --
2005 2.156 2.151 --
2004 1.948 2.156 --
2003 1.495 1.948 1,870,424
2002 2.058 1.495 1,401,071
2001 2.120 2.058 1,694,455
2000 1.886 2.120 1,770,570
1999 1.773 1.886 387,304
AllianceBernstein Variable Products Series Fund, Inc.
AllianceBernstein Growth and Income Subaccount
(Class B) (5/04)................................... 2006 1.116 1.168 --
2005 1.079 1.116 2,384,922
2004 1.000 1.079 3,649,203
AllianceBernstein Large-Cap Growth Subaccount
(Class B) (6/01)................................... 2006 0.889 0.873 --
2005 0.782 0.889 114,706
2004 0.730 0.782 131,800
2003 0.598 0.730 76,865
2002 0.875 0.598 8,683
2001 1.000 0.875 --
American Funds Insurance Series
American Funds Global Growth Subaccount (Class 2)
(5/04)............................................. 2006 1.248 1.487 463,310
2005 1.106 1.248 193,476
2004 1.000 1.106 62,262
American Funds Growth Subaccount (Class 2) (5/04).. 2006 1.251 1.364 1,405,120
2005 1.089 1.251 760,618
2004 1.000 1.089 217,019
American Funds Growth-Income Subaccount (Class 2)
(5/04)............................................. 2006 1.131 1.289 475,253
2005 1.080 1.131 269,969
2004 1.000 1.080 82,310
Capital Appreciation Fund
Capital Appreciation Fund (8/96)................... 2006 2.395 2.374 --
2005 2.049 2.395 2,608,147
2004 1.733 2.049 3,082,118
2003 1.403 1.733 4,063,204
2002 1.893 1.403 3,488,596
2001 2.590 1.893 5,022,551
2000 3.352 2.590 4,913,081
1999 2.439 3.352 991,552
</Table>
26
SEPARATE ACCOUNT CHARGES 1.10% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Delaware VIP Trust
Delaware VIP REIT Subaccount (Standard Class)
(5/03)............................................. 2006 1.746 2.290 --
2005 1.647 1.746 140,767
2004 1.267 1.647 167,762
2003 1.000 1.267 --
Delaware VIP Small Cap Value Subaccount (Standard
Class) (6/98)...................................... 2006 1.063 1.063 --
2005 1.063 1.063 --
2004 1.063 1.063 --
2003 1.063 1.063 --
2002 1.143 1.063 --
2001 1.033 1.143 366,459
2000 0.884 1.033 53,588
1999 0.856 0.884 25,161
Dreyfus Variable Investment Fund
Dreyfus VIF Appreciation Subaccount (Initial
Shares) (7/98)..................................... 2006 1.079 1.243 669,267
2005 1.045 1.079 813,561
2004 1.006 1.045 1,276,258
2003 0.839 1.006 1,909,666
2002 1.019 0.839 1,088,031
2001 1.136 1.019 373,285
2000 1.156 1.136 250,274
1999 1.106 1.156 300,732
Dreyfus VIF Developing Leaders Subaccount (Initial
Shares) (6/98)..................................... 2006 1.406 1.443 1,582,755
2005 1.344 1.406 2,067,013
2004 1.220 1.344 2,667,807
2003 0.937 1.220 2,846,727
2002 1.171 0.937 2,170,988
2001 1.261 1.171 1,427,566
2000 1.126 1.261 668,324
1999 0.893 1.126 235,285
Fidelity Advisor Series I
FASI Advisor Growth Opportunities Subaccount (Class
T) (8/96).......................................... 2006 1.262 1.262 --
2005 1.256 1.262 --
2004 1.187 1.256 --
2003 0.929 1.187 1,333,105
2002 1.211 0.929 1,094,249
2001 1.442 1.211 1,692,302
2000 1.784 1.442 1,971,704
1999 1.739 1.784 244,447
</Table>
27
SEPARATE ACCOUNT CHARGES 1.10% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Franklin Templeton Variable Insurance Products Trust
FTVIPT Franklin Small-Mid Cap Growth Securities
Subaccount (Class 2) (5/01)........................ 2006 1.018 1.094 134,961
2005 0.982 1.018 143,940
2004 0.891 0.982 180,848
2003 0.656 0.891 101,486
2002 0.930 0.656 6,562
2001 1.000 0.930 --
FTVIPT Mutual Shares Securities Subaccount (Class
2) (5/03).......................................... 2006 1.463 1.714 --
2005 1.338 1.463 127,295
2004 1.201 1.338 25,449
2003 1.000 1.201 --
FTVIPT Templeton Developing Markets Securities
Subaccount (Class 2) (5/03)........................ 2006 2.255 2.858 399,870
2005 1.789 2.255 222,669
2004 1.451 1.789 40,530
2003 1.000 1.451 --
FTVIPT Templeton Foreign Securities Subaccount
(Class 2) (5/04)................................... 2006 1.258 1.511 628,465
2005 1.154 1.258 356,966
2004 1.000 1.154 159,465
Janus Aspen Series
Janus Aspen Global Life Sciences Subaccount
(Service Shares) (5/00)............................ 2006 1.022 1.075 --
2005 0.920 1.022 --
2004 0.814 0.920 --
2003 0.652 0.814 477,934
2002 0.936 0.652 249,839
2001 1.137 0.936 131,030
2000 1.000 1.137 2,332
Janus Aspen Global Technology Subaccount (Service
Shares) (5/00)..................................... 2006 0.387 0.413 --
2005 0.351 0.387 --
2004 0.353 0.351 --
2003 0.244 0.353 808,294
2002 0.417 0.244 508,115
2001 0.673 0.417 260,834
2000 1.000 0.673 12,946
</Table>
28
SEPARATE ACCOUNT CHARGES 1.10% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Janus Aspen Growth and Income Subaccount (Service
Shares) (5/00)..................................... 2006 0.841 0.901 --
2005 0.758 0.841 327,665
2004 0.687 0.758 247,140
2003 0.562 0.687 293,527
2002 0.726 0.562 176,685
2001 0.850 0.726 69,130
2000 1.000 0.850 7,330
Janus Aspen Mid Cap Growth Subaccount (Service
Shares) (5/00)..................................... 2006 0.505 0.566 2,028,176
2005 0.455 0.505 1,733,168
2004 0.382 0.455 2,114,765
2003 0.287 0.382 1,373,472
2002 0.403 0.287 1,044,056
2001 0.675 0.403 863,418
2000 1.000 0.675 181,739
Lazard Retirement Series, Inc.
Lazard Retirement Small Cap Subaccount (5/03)...... 2006 1.564 1.763 --
2005 1.521 1.564 60,777
2004 1.338 1.521 2,708
2003 1.000 1.338 --
Legg Mason Partners Investment Funds, Inc.
LMPIF Investment Grade Bond Subaccount (Class A)
(9/96)............................................. 2006 1.786 1.820 521,451
2005 1.773 1.786 681,310
2004 1.684 1.773 895,590
2003 1.618 1.684 1,183,449
2002 1.455 1.618 829,909
2001 1.341 1.455 696,558
2000 1.217 1.341 479,581
1999 1.322 1.217 118,381
Legg Mason Partners Investment Series
LMPIS Growth and Income Subaccount (5/01).......... 2006 1.004 1.117 181,358
2005 0.977 1.004 100,725
2004 0.913 0.977 101,115
2003 0.709 0.913 104,837
2002 0.921 0.709 706
2001 1.000 0.921 --
</Table>
29
SEPARATE ACCOUNT CHARGES 1.10% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
LMPIS Premier Selections All Cap Growth Subaccount
(5/01)............................................. 2006 0.922 0.979 980,369
2005 0.877 0.922 1,092,142
2004 0.861 0.877 1,442,627
2003 0.649 0.861 29,301
2002 0.896 0.649 2,424
2001 1.000 0.896 --
Legg Mason Partners Investment Trust
LMPIT S&P 500 Index Subaccount (Class A) (6/98).... 2006 1.106 1.261 --
2005 1.074 1.106 --
2004 0.985 1.074 --
2003 0.778 0.985 5,044,214
2002 1.015 0.778 2,966,751
2001 1.171 1.015 3,002,439
2000 1.307 1.171 2,564,822
1999 1.157 1.307 299,393
Legg Mason Partners Variable Portfolios V
LMPVPV Small Cap Growth Opportunities Subaccount
(5/01)............................................. 2006 1.159 1.295 254,313
2005 1.117 1.159 279,994
2004 0.977 1.117 243,878
2003 0.696 0.977 126,566
2002 0.946 0.696 61,749
2001 1.000 0.946 --
Legg Mason Partners Variable Portfolios I, Inc.
LMPVPI All Cap Subaccount (Class I) (9/98)......... 2006 1.950 2.278 523,007
2005 1.895 1.950 639,376
2004 1.769 1.895 938,075
2003 1.286 1.769 824,614
2002 1.735 1.286 594,907
2001 1.722 1.735 419,535
2000 1.472 1.722 55,451
1999 1.213 1.472 35,902
LMPVPI Global High Yield Bond Subaccount (Class I)
(7/98)............................................. 2006 1.556 1.703 323,110
2005 1.515 1.556 326,974
2004 1.379 1.515 345,690
2003 1.123 1.379 317,506
2002 1.058 1.123 101,281
2001 1.017 1.058 36,915
2000 1.029 1.017 8,504
1999 0.997 1.029 770
</Table>
30
SEPARATE ACCOUNT CHARGES 1.10% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
LMPVPI Investors Subaccount (Class I) (10/98)...... 2006 1.515 1.772 864,371
2005 1.438 1.515 1,327,780
2004 1.317 1.438 2,058,945
2003 1.006 1.317 861,665
2002 1.322 1.006 537,123
2001 1.395 1.322 62,992
2000 1.224 1.395 17,903
1999 1.140 1.224 19,688
LMPVPI Total Return Subaccount (Class I) (10/98)... 2006 1.285 1.431 823,560
2005 1.257 1.285 847,170
2004 1.169 1.257 882,017
2003 1.020 1.169 935,885
2002 1.107 1.020 626,159
2001 1.128 1.107 13,397
2000 1.057 1.128 4,265
1999 1.071 1.057 13,188
Legg Mason Partners Variable Portfolios II
LMPVPII Appreciation Subaccount (8/98)............. 2006 1.297 1.473 875,665
2005 1.258 1.297 820,628
2004 1.169 1.258 1,198,892
2003 0.949 1.169 1,343,340
2002 1.163 0.949 984,476
2001 1.225 1.163 674,494
2000 1.243 1.225 551,082
1999 1.161 1.243 210,342
LMPVPII Diversified Strategic Income Subaccount
(8/98)............................................. 2006 1.302 1.357 271,655
2005 1.284 1.302 438,551
2004 1.216 1.284 580,475
2003 1.100 1.216 429,191
2002 1.061 1.100 247,424
2001 1.040 1.061 208,362
2000 1.023 1.040 194,811
1999 1.021 1.023 99,796
LMPVPII Equity Index Subaccount (Class II) (5/04).. 2006 1.119 1.274 2,445,805
2005 1.085 1.119 3,095,123
2004 1.000 1.085 4,483,305
</Table>
31
SEPARATE ACCOUNT CHARGES 1.10% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
LMPVPII Fundamental Value Subaccount (5/01)........ 2006 1.009 1.009 --
2005 1.009 1.009 --
2004 0.984 1.009 --
2003 0.718 0.984 372,627
2002 0.922 0.718 86,076
2001 1.000 0.922 787
Legg Mason Partners Variable Portfolios III, Inc.
LMPVPIII Adjustable Rate Income Subaccount (9/03).. 2006 1.013 1.043 134,351
2005 1.001 1.013 36,771
2004 1.000 1.001 5,747
2003 1.000 1.000 --
LMPVPIII Aggressive Growth Subaccount (5/00)....... 2006 1.033 1.112 4,509,444
2005 0.936 1.033 5,498,618
2004 0.861 0.936 7,219,370
2003 0.647 0.861 37,904
2002 0.971 0.647 72,518
2001 1.024 0.971 94,564
2000 1.000 1.024 (11)
LMPVPIII International All Cap Growth Subaccount
(6/98)............................................. 2006 0.732 0.732 --
2005 0.732 0.732 --
2004 0.715 0.732 --
2003 0.567 0.715 1,550,592
2002 0.772 0.567 721,624
2001 1.134 0.772 645,877
2000 1.505 1.134 477,325
1999 0.925 1.505 20,891
LMPVPIII Large Cap Growth Subaccount (10/98)....... 2006 1.640 1.697 856,725
2005 1.576 1.640 1,432,693
2004 1.588 1.576 1,885,181
2003 1.088 1.588 1,611,595
2002 1.462 1.088 1,076,792
2001 1.690 1.462 1,069,589
2000 1.836 1.690 614,164
1999 1.573 1.836 167,112
</Table>
32
SEPARATE ACCOUNT CHARGES 1.10% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
LMPVPIII Large Cap Value Subaccount (7/98)......... 2006 1.032 1.032 --
2005 1.032 1.032 --
2004 1.061 1.032 --
2003 0.841 1.061 967,873
2002 1.140 0.841 584,656
2001 1.255 1.140 449,226
2000 1.121 1.255 154,960
1999 1.161 1.121 61,233
LMPVPIII Money Market Subaccount (6/98)............ 2006 1.150 1.190 6,294,165
2005 1.131 1.150 7,627,058
2004 1.134 1.131 8,671,868
2003 1.139 1.134 9,950,337
2002 1.137 1.139 8,383,779
2001 1.109 1.137 5,595,597
2000 1.057 1.109 4,344,755
1999 1.027 1.057 2,578,959
LMPVPIII Social Awareness Stock Subaccount (5/04).. 2006 1.121 1.194 158,326
2005 1.085 1.121 198,485
2004 1.000 1.085 300,694
Lord Abbett Series Fund, Inc.
Lord Abbett Growth and Income Subaccount (Class VC)
(5/04)............................................. 2006 1.132 1.313 473,811
2005 1.108 1.132 219,236
2004 1.000 1.108 68,112
Lord Abbett Mid-Cap Value Subaccount (Class VC)
(5/04)............................................. 2006 1.244 1.381 319,234
2005 1.163 1.244 338,128
2004 1.000 1.163 161,416
Met Investors Series Trust
MIST Batterymarch Mid-Cap Stock Subaccount (Class
A) (4/06).......................................... 2006 2.646 2.528 402,426
MIST BlackRock High Yield Subaccount (Class A)
(4/06)............................................. 2006 1.288 1.363 167,065
MIST BlackRock Large-Cap Core Subaccount (Class A)
(4/06)............................................. 2006 1.080 1.148 315,570
MIST Dreman Small-Cap Value Subaccount (Class A)
(4/06)............................................. 2006 1.159 1.240 --
MIST Harris Oakmark International Subaccount (Class
A) (4/06) *........................................ 2006 1.550 1.714 1,007,096
MIST Janus Capital Appreciation Subaccount (Class
A) (4/06).......................................... 2006 2.374 2.442 1,749,372
MIST Legg Mason Partners Managed Assets Subaccount
(Class A) (4/06)................................... 2006 1.054 1.118 --
</Table>
33
SEPARATE ACCOUNT CHARGES 1.10% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
MIST Lord Abbett Bond Debenture Subaccount (Class
A) (4/06).......................................... 2006 1.100 1.156 130,494
MIST Lord Abbett Growth and Income Subaccount
(Class B) (4/06)................................... 2006 1.001 1.079 2,947,792
MIST Met/AIM Capital Appreciation Subaccount (Class
A) (4/06).......................................... 2006 1.234 1.223 2,408,970
MIST Met/AIM Small Cap Growth Subaccount (Class A)
(4/06)............................................. 2006 1.163 1.159 --
MIST MFS(R) Value Subaccount (Class A) (4/06)...... 2006 1.281 1.421 326,696
MIST Neuberger Berman Real Estate Subaccount (Class
A) (4/06).......................................... 2006 1.003 1.224 490,036
MIST Pioneer Fund Subaccount (Class A) (4/06)...... 2006 1.493 1.611 27,448
MIST Pioneer Mid-Cap Value Subaccount (Class A)
(4/06)............................................. 2006 1.120 1.183 --
MIST Pioneer Strategic Income Subaccount (Class A)
(4/06)............................................. 2006 1.602 1.665 143,773
MIST Third Avenue Small Cap Value Subaccount (Class
B) (11/06)......................................... 2006 1.763 1.802 79,824
MetLife Investment Funds, Inc.
MetLife Investment Diversified Bond Subaccount
(Class I) (9/00)................................... 2006 1.300 1.342 1,081,464
2005 1.288 1.300 1,168,856
2004 1.245 1.288 1,064,823
2003 1.192 1.245 698,678
2002 1.106 1.192 144,594
2001 1.046 1.106 --
2000 1.000 1.046 --
MetLife Investment International Stock Subaccount
(Class I) (7/00)................................... 2006 0.925 1.158 994,281
2005 0.816 0.925 768,557
2004 0.718 0.816 704,486
2003 0.558 0.718 388,736
2002 0.727 0.558 36,636
2001 0.936 0.727 28,460
2000 1.000 0.936 --
MetLife Investment Large Company Stock Subaccount
(Class I) (7/01)................................... 2006 1.029 1.146 742,101
2005 0.976 1.029 741,048
2004 0.896 0.976 685,118
2003 0.707 0.896 392,291
2002 0.927 0.707 2,195
2001 1.000 0.927 --
</Table>
34
SEPARATE ACCOUNT CHARGES 1.10% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
MetLife Investment Small Company Stock Subaccount
(Class I) (9/00)................................... 2006 1.203 1.352 519,324
2005 1.134 1.203 605,340
2004 0.997 1.134 590,404
2003 0.705 0.997 402,520
2002 0.934 0.705 12,898
2001 0.930 0.934 --
2000 1.000 0.930 --
Metropolitan Series Fund, Inc.
MSF BlackRock Aggressive Growth Subaccount (Class
D) (4/06).......................................... 2006 0.642 0.629 1,407,324
MSF BlackRock Bond Income Subaccount (Class A)
(4/06)............................................. 2006 1.403 1.462 360,607
MSF FI Large Cap Subaccount (Class A) (4/06)....... 2006 1.720 1.749 1,509,739
MSF FI Value Leaders Subaccount (Class D) (4/06)... 2006 2.054 2.114 529,907
MSF MetLife Aggressive Allocation Subaccount
(4/06)............................................. 2006 1.000 1.062 7,941
2005 1.000 1.000 --
MSF MetLife Conservative Allocation Subaccount
(4/06)............................................. 2006 1.000 1.045 --
2005 1.000 1.000 --
MSF MetLife Conservative to Moderate Allocation
Subaccount (4/06).................................. 2006 1.000 1.051 15,608
2005 1.000 1.000 --
MSF MetLife Moderate Allocation Subaccount (4/06).. 2006 1.000 1.056 19,600
2005 1.000 1.000 --
MSF MetLife Moderate to Aggressive Allocation
Subaccount (4/06).................................. 2006 1.000 1.061 44,768
2005 1.000 1.000 --
MSF MFS(R) Total Return Subaccount (Class F)
(4/06)............................................. 2006 2.073 2.223 1,110,138
MSF T. Rowe Price Large Cap Growth Subaccount
(Class B) (4/06)................................... 2006 0.998 1.072 354,808
MSF Western Asset Management U.S. Government
Subaccount (Class A) (4/06) *...................... 2006 1.051 1.091 433,175
</Table>
35
SEPARATE ACCOUNT CHARGES 1.10% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Neuberger Berman Equity Assets
Neuberger Berman Guardian Subaccount (Advisor
Class) (9/96)...................................... 2006 1.457 1.457 --
2005 1.458 1.457 --
2004 1.277 1.458 --
2003 0.958 1.277 192,624
2002 1.311 0.958 248,609
2001 1.356 1.311 426,202
2000 1.405 1.356 715,171
1999 1.376 1.405 24,264
Neuberger Berman Partners Subaccount (Advisor
Class) (8/96)...................................... 2006 1.932 1.932 --
2005 1.792 1.932 --
2004 1.526 1.792 --
2003 1.140 1.526 345,529
2002 1.538 1.140 476,750
2001 1.611 1.538 665,824
2000 1.628 1.611 862,684
1999 1.581 1.628 17,413
Oppenheimer Variable Account Funds
Oppenheimer Main Street/VA Subaccount ( Service
Shares) (5/04)..................................... 2006 1.125 1.191 --
2005 1.076 1.125 630,957
2004 1.000 1.076 452,065
PBHG Funds
PBHG Growth Subaccount (Advisor Class) (8/96)...... 2006 0.838 0.838 --
2005 0.830 0.838 --
2004 0.782 0.830 0
2003 0.631 0.782 2,055,067
2002 0.918 0.631 1,839,698
2001 1.421 0.918 2,467,882
2000 1.868 1.421 2,075,273
1999 0.945 1.868 26,586
PIMCO Variable Insurance Trust
PIMCO VIT Total Return Subaccount (Administrative
Class) (5/01)...................................... 2006 1.243 1.276 1,498,073
2005 1.227 1.243 1,705,402
2004 1.182 1.227 1,877,324
2003 1.138 1.182 1,535,775
2002 1.055 1.138 362,460
2001 1.000 1.055 1,438
</Table>
36
SEPARATE ACCOUNT CHARGES 1.10% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Putnam Variable Trust
Putnam VT International Equity Subaccount (Class
IB) (5/01)......................................... 2006 1.031 1.031 --
2005 1.022 1.031 --
2004 0.889 1.022 --
2003 0.700 0.889 202,234
2002 0.859 0.700 93,906
2001 1.000 0.859 --
Putnam VT Small Cap Value Subaccount (Class IB)
(5/01)............................................. 2006 1.725 2.001 420,402
2005 1.629 1.725 356,437
2004 1.305 1.629 339,555
2003 0.882 1.305 211,461
2002 1.091 0.882 72,251
2001 1.000 1.091 --
Smith Barney Equity Funds
SBEF Social Awareness Subaccount (Class A) (4/98).. 2006 1.173 1.173 --
2005 1.201 1.173 --
2004 1.129 1.201 --
2003 0.927 1.129 359,503
2002 1.106 0.927 375,024
2001 1.256 1.106 401,439
2000 1.250 1.256 442,298
1999 1.170 1.250 176,206
Smith Barney Funds, Inc.
SBF U.S. Government Securities Subaccount (9/96)... 2006 1.517 1.517 --
2005 1.502 1.517 --
2004 1.466 1.502 --
2003 1.446 1.466 --
2002 1.356 1.446 347,916
2001 1.280 1.356 1,648,430
2000 1.178 1.280 938,311
1999 1.188 1.178 232,772
Smith Barney Investments Funds Inc.
LMPIF Small Cap Value Subaccount (Class A) (5/01).. 2006 1.706 1.879 478,170
2005 1.618 1.706 434,125
2004 1.354 1.618 608,451
2003 0.996 1.354 425,701
2002 1.084 0.996 195,103
2001 1.000 1.084 1,306
</Table>
37
SEPARATE ACCOUNT CHARGES 1.10% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
The Dreyfus/Laurel Funds, Inc.
Dreyfus Disciplined Stock Subaccount (7/98)........ 2006 0.963 0.963 --
2005 0.948 0.963 --
2004 0.890 0.948 --
2003 0.730 0.890 484,331
2002 0.958 0.730 414,332
2001 1.117 0.958 465,147
2000 1.244 1.117 348,204
1999 1.097 1.244 264,637
The Travelers Series Trust
Travelers AIM Capital Appreciation Subaccount
(5/04)............................................. 2006 1.157 1.234 --
2005 1.075 1.157 2,968,643
2004 1.000 1.075 3,590,008
Travelers Convertible Securities Subaccount
(5/04)............................................. 2006 1.030 1.100 --
2005 1.038 1.030 4,083
2004 1.000 1.038 3,302
Travelers Disciplined Mid Cap Stock Subaccount
(8/98)............................................. 2006 2.418 2.646 --
2005 2.175 2.418 293,800
2004 1.888 2.175 355,351
2003 1.427 1.888 348,896
2002 1.684 1.427 261,860
2001 1.775 1.684 173,348
2000 1.538 1.775 26,622
1999 1.278 1.538 16,274
Travelers Equity Income Subaccount (10/96)......... 2006 1.952 2.054 --
2005 1.889 1.952 432,862
2004 1.738 1.889 759,987
2003 1.339 1.738 738,683
2002 1.574 1.339 331,029
2001 1.704 1.574 296,266
2000 1.578 1.704 282,791
1999 1.565 1.578 85,202
Travelers Federated High Yield Subaccount (11/96).. 2006 1.254 1.288 --
2005 1.237 1.254 182,877
2004 1.133 1.237 203,245
2003 0.936 1.133 189,083
2002 0.912 0.936 55,422
2001 0.905 0.912 103,108
2000 0.996 0.905 94,119
1999 1.000 0.996 --
</Table>
38
SEPARATE ACCOUNT CHARGES 1.10% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Travelers Federated Stock Subaccount (11/96)....... 2006 0.836 0.836 --
2005 0.836 0.836 --
2004 0.836 0.836 --
2003 0.836 0.836 --
2002 1.050 0.836 --
2001 1.044 1.050 610,285
2000 1.018 1.044 650,318
1999 1.000 1.018 --
Travelers Large Cap Subaccount (9/96).............. 2006 1.666 1.720 --
2005 1.550 1.666 1,590,378
2004 1.471 1.550 1,911,415
2003 1.193 1.471 848,405
2002 1.562 1.193 673,305
2001 1.911 1.562 913,855
2000 2.259 1.911 937,574
1999 1.881 2.259 67,200
Travelers Mercury Large Cap Core Subaccount
(6/98)............................................. 2006 1.016 1.080 --
2005 0.917 1.016 201,752
2004 0.800 0.917 194,334
2003 0.667 0.800 295,319
2002 0.901 0.667 177,328
2001 1.175 0.901 180,896
2000 1.259 1.175 46,596
1999 1.035 1.259 6,776
Travelers MFS(R) Mid Cap Growth Subaccount (6/01).. 2006 0.606 0.642 --
2005 0.594 0.606 2,249,747
2004 0.526 0.594 268,991
2003 0.388 0.526 236,971
2002 0.767 0.388 49,724
2001 1.000 0.767 9,844
Travelers MFS(R) Total Return Subaccount (8/96).... 2006 2.005 2.073 --
2005 1.969 2.005 1,678,168
2004 1.786 1.969 1,947,430
2003 1.549 1.786 1,713,513
2002 1.654 1.549 1,427,843
2001 1.672 1.654 1,820,181
2000 1.449 1.672 1,868,736
1999 1.427 1.449 207,604
</Table>
39
SEPARATE ACCOUNT CHARGES 1.10% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Travelers MFS(R) Value Subaccount (5/04)........... 2006 1.184 1.281 --
2005 1.124 1.184 61,968
2004 1.000 1.124 55,881
Travelers Mondrian International Stock Subaccount
(9/96)............................................. 2006 1.347 1.550 --
2005 1.244 1.347 1,473,661
2004 1.086 1.244 1,847,846
2003 0.854 1.086 771,932
2002 0.992 0.854 377,173
2001 1.359 0.992 627,564
2000 1.552 1.359 767,540
1999 1.281 1.552 103,493
Travelers Pioneer Fund Subaccount (5/03)........... 2006 1.405 1.493 --
2005 1.340 1.405 1,689
2004 1.219 1.340 15,864
2003 1.000 1.219 --
Travelers Pioneer Strategic Income Subaccount
(9/96)............................................. 2006 1.583 1.602 --
2005 1.544 1.583 63,143
2004 1.407 1.544 24,879
2003 1.190 1.407 0
2002 1.136 1.190 0
2001 1.102 1.136 237,214
2000 1.119 1.102 273,736
1999 1.112 1.119 39,222
Travelers Quality Bond Subaccount (7/97)........... 2006 1.413 1.403 --
2005 1.406 1.413 634,782
2004 1.376 1.406 812,584
2003 1.301 1.376 1,052,867
2002 1.243 1.301 1,070,094
2001 1.173 1.243 170,114
2000 1.109 1.173 22,842
1999 1.108 1.109 51,720
Travelers Strategic Equity Subaccount (9/96)....... 2006 1.653 1.727 --
2005 1.638 1.653 1,034,040
2004 1.502 1.638 1,135,094
2003 1.146 1.502 1,579,945
2002 1.744 1.146 1,074,588
2001 2.035 1.744 1,438,442
2000 2.517 2.035 1,420,487
1999 1.966 2.517 238,511
</Table>
40
SEPARATE ACCOUNT CHARGES 1.10% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Travelers U.S. Government Securities Subaccount
(5/04)............................................. 2006 1.088 1.051 --
2005 1.054 1.088 675,839
2004 1.000 1.054 1,223,773
Van Kampen Life Investment Trust
Van Kampen LIT Comstock Subaccount (Class II)
(5/03)............................................. 2006 1.500 1.722 201,920
2005 1.457 1.500 168,513
2004 1.254 1.457 38,298
2003 1.000 1.254 --
Van Kampen LIT Enterprise Subaccount (Class II)
(5/01)............................................. 2006 0.816 0.816 --
2005 0.809 0.816 --
2004 0.788 0.809 --
2003 0.634 0.788 7,035
2002 0.910 0.634 1,409
2001 1.000 0.910 --
Van Kampen LIT Strategic Growth Subaccount (Class
II) (5/01)......................................... 2006 0.768 0.780 86,254
2005 0.721 0.768 153,746
2004 0.683 0.721 63,449
2003 0.544 0.683 99,786
2002 0.816 0.544 12,607
2001 1.000 0.816 --
Variable Insurance Products Fund
VIP Contrafund(R) Subaccount (Service Class 2)
(6/01)............................................. 2006 1.393 1.536 506,418
2005 1.208 1.393 365,063
2004 1.060 1.208 343,169
2003 0.836 1.060 --
2002 0.935 0.836 --
2001 1.000 0.935 --
VIP Mid Cap Subaccount (Service Class 2) (5/01).... 2006 1.804 2.006 1,028,932
2005 1.546 1.804 822,976
2004 1.254 1.546 900,533
2003 0.917 1.254 446,262
2002 1.030 0.917 113,601
2001 1.000 1.030 --
</Table>
41
SEPARATE ACCOUNT CHARGES 1.20%
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Dreyfus A Bonds Plus, Inc. (9/96).................... 2006 1.472 1.472 --
2005 1.459 1.472 --
2004 1.432 1.459 --
2003 1.385 1.432 2,541,283
2002 1.299 1.385 2,917,779
2001 1.257 1.299 2,106,635
2000 1.154 1.257 1,490,998
1999 1.150 1.154 290,627
Smith Barney Aggressive Growth Subaccount Inc.
(Class A) (10/96).................................. 2006 2.956 2.956 --
2005 2.956 2.956 --
2004 2.895 2.956 --
2003 2.145 2.895 4,532,495
2002 3.228 2.145 4,636,219
2001 3.439 3.228 4,487,175
2000 2.922 3.439 3,140,711
1999 2.003 2.922 179,444
Templeton Growth Fund Subaccount (Class A) (8/96).. 2006 2.288 2.754 4,265,798
2005 2.141 2.288 5,056,111
2004 1.852 2.141 4,109,432
2003 1.411 1.852 4,150,097
2002 1.577 1.411 4,215,016
2001 1.588 1.577 4,379,777
2000 1.580 1.588 4,068,453
1999 1.266 1.580 408,207
AIM Equity Funds, Inc.
AIM Equity Charter Subaccount (Class A) (10/96).... 2006 1.316 1.316 --
2005 1.315 1.316 --
2004 1.224 1.315 --
2003 0.999 1.224 3,115,730
2002 1.206 0.999 2,964,128
2001 1.587 1.206 3,047,018
2000 1.883 1.587 2,979,372
1999 1.518 1.883 492,920
AIM Equity Constellation Subaccount (Class A)
(10/96)............................................ 2006 1.253 1.253 --
2005 1.263 1.253 --
2004 1.204 1.263 --
2003 0.942 1.204 6,368,503
2002 1.267 0.942 6,945,580
2001 1.678 1.267 6,830,806
2000 1.895 1.678 5,683,722
1999 1.286 1.895 279,448
</Table>
42
SEPARATE ACCOUNT CHARGES 1.20% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
AllianceBernstein Value Funds
AllianceBernstein Growth and Income Subaccount
(Class A) (9/96)................................... 2006 2.138 2.138 --
2005 2.144 2.138 --
2004 1.939 2.144 --
2003 1.489 1.939 4,504,115
2002 2.053 1.489 4,473,480
2001 2.116 2.053 4,147,975
2000 1.885 2.116 3,183,696
1999 1.773 1.885 348,974
AllianceBernstein Variable Products Series Fund, Inc.
AllianceBernstein Growth and Income Subaccount
(Class B) (5/04)................................... 2006 1.114 1.166 --
2005 1.078 1.114 8,419,713
2004 1.000 1.078 8,118,209
AllianceBernstein Large-Cap Growth Subaccount
(Class B) (6/01)................................... 2006 0.885 0.868 --
2005 0.779 0.885 280,013
2004 0.728 0.779 152,204
2003 0.597 0.728 49,317
2002 0.874 0.597 22,040
2001 1.000 0.874 --
American Funds Insurance Series
American Funds Global Growth Subaccount (Class 2)
(5/04)............................................. 2006 1.246 1.483 867,958
2005 1.106 1.246 495,772
2004 1.000 1.106 65,819
American Funds Growth Subaccount (Class 2) (5/04).. 2006 1.249 1.361 2,718,878
2005 1.088 1.249 2,335,414
2004 1.000 1.088 826,278
American Funds Growth-Income Subaccount (Class 2)
(5/04)............................................. 2006 1.129 1.285 1,174,760
2005 1.080 1.129 848,868
2004 1.000 1.080 178,729
Capital Appreciation Fund
Capital Appreciation Fund (8/96)................... 2006 2.379 2.357 --
2005 2.037 2.379 7,188,629
2004 1.725 2.037 7,410,317
2003 1.397 1.725 9,319,299
2002 1.888 1.397 10,135,127
2001 2.585 1.888 10,311,141
2000 3.349 2.585 9,438,182
1999 2.439 3.349 1,018,473
</Table>
43
SEPARATE ACCOUNT CHARGES 1.20% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Delaware VIP Trust
Delaware VIP REIT Subaccount (Standard Class)
(5/03)............................................. 2006 1.741 2.282 --
2005 1.644 1.741 563,321
2004 1.266 1.644 253,936
2003 1.000 1.266 --
Delaware VIP Small Cap Value Subaccount (Standard
Class) (6/98)...................................... 2006 1.059 1.059 --
2005 1.059 1.059 --
2004 1.059 1.059 --
2003 1.059 1.059 --
2002 1.140 1.059 --
2001 1.031 1.140 919,691
2000 0.883 1.031 244,813
1999 0.856 0.883 66,630
Dreyfus Variable Investment Fund
Dreyfus VIF Appreciation Subaccount (Initial
Shares) (7/98)..................................... 2006 1.071 1.233 2,449,391
2005 1.039 1.071 3,623,348
2004 1.001 1.039 3,281,369
2003 0.836 1.001 4,376,082
2002 1.016 0.836 5,066,873
2001 1.134 1.016 618,497
2000 1.155 1.134 454,697
1999 1.106 1.155 220,601
Dreyfus VIF Developing Leaders Subaccount (Initial
Shares) (6/98)..................................... 2006 1.397 1.432 4,848,204
2005 1.336 1.397 6,052,230
2004 1.214 1.336 6,315,208
2003 0.933 1.214 6,375,801
2002 1.168 0.933 5,747,980
2001 1.259 1.168 3,084,622
2000 1.125 1.259 1,415,241
1999 0.893 1.125 320,042
Fidelity Advisor Series I
FASI Advisor Growth Opportunities Subaccount (Class
T) (8/96).......................................... 2006 1.254 1.254 --
2005 1.249 1.254 --
2004 1.182 1.249 --
2003 0.925 1.182 3,318,895
2002 1.207 0.925 3,696,374
2001 1.440 1.207 3,811,957
2000 1.783 1.440 4,378,662
1999 1.739 1.783 598,183
</Table>
44
SEPARATE ACCOUNT CHARGES 1.20% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Franklin Templeton Variable Insurance Products Trust
FTVIPT Franklin Small-Mid Cap Growth Securities
Subaccount (Class 2) (5/01)........................ 2006 1.013 1.088 659,806
2005 0.978 1.013 796,382
2004 0.888 0.978 396,350
2003 0.655 0.888 248,393
2002 0.930 0.655 103,772
2001 1.000 0.930 --
FTVIPT Mutual Shares Securities Subaccount (Class
2) (5/03).......................................... 2006 1.460 1.707 --
2005 1.336 1.460 295,550
2004 1.201 1.336 25,772
2003 1.000 1.201 --
FTVIPT Templeton Developing Markets Securities
Subaccount (Class 2) (5/03)........................ 2006 2.249 2.847 879,961
2005 1.787 2.249 650,950
2004 1.450 1.787 99,771
2003 1.000 1.450 --
FTVIPT Templeton Foreign Securities Subaccount
(Class 2) (5/04)................................... 2006 1.256 1.507 1,393,677
2005 1.153 1.256 1,280,071
2004 1.000 1.153 530,541
Janus Aspen Series
Janus Aspen Global Life Sciences Subaccount
(Service Shares) (5/00)............................ 2006 1.016 1.067 --
2005 0.915 1.016 --
2004 0.811 0.915 --
2003 0.650 0.811 555,132
2002 0.934 0.650 568,171
2001 1.136 0.934 435,593
2000 1.000 1.136 81,434
Janus Aspen Global Technology Subaccount (Service
Shares) (5/00)..................................... 2006 0.385 0.410 --
2005 0.350 0.385 --
2004 0.352 0.350 --
2003 0.243 0.352 1,515,092
2002 0.416 0.243 1,128,937
2001 0.672 0.416 769,510
2000 1.000 0.672 295,532
</Table>
45
SEPARATE ACCOUNT CHARGES 1.20% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Janus Aspen Growth and Income Subaccount (Service
Shares) (5/00)..................................... 2006 0.836 0.896 --
2005 0.755 0.836 536,216
2004 0.684 0.755 501,797
2003 0.561 0.684 427,089
2002 0.725 0.561 502,599
2001 0.849 0.725 317,315
2000 1.000 0.849 43,530
Janus Aspen Mid Cap Growth Subaccount (Service
Shares) (5/00)..................................... 2006 0.502 0.562 3,117,374
2005 0.453 0.502 4,621,566
2004 0.381 0.453 4,307,621
2003 0.286 0.381 2,734,566
2002 0.403 0.286 2,225,498
2001 0.675 0.403 1,813,289
2000 1.000 0.675 262,623
Lazard Retirement Series, Inc.
Lazard Retirement Small Cap Subaccount (5/03)...... 2006 1.560 1.757 --
2005 1.518 1.560 225,118
2004 1.338 1.518 27,494
2003 1.000 1.338 --
Legg Mason Partners Investment Funds, Inc.
LMPIF Investment Grade Bond Subaccount (Class A)
(9/96)............................................. 2006 1.773 1.806 2,189,826
2005 1.763 1.773 2,887,081
2004 1.676 1.763 2,096,144
2003 1.612 1.676 2,394,064
2002 1.451 1.612 2,700,704
2001 1.338 1.451 1,805,569
2000 1.216 1.338 1,158,655
1999 1.322 1.216 258,920
Legg Mason Partners Investment Series
LMPIS Growth and Income Subaccount (5/01).......... 2006 0.999 1.110 166,387
2005 0.974 0.999 240,286
2004 0.910 0.974 148,283
2003 0.708 0.910 165,483
2002 0.920 0.708 17,898
2001 1.000 0.920 945
</Table>
46
SEPARATE ACCOUNT CHARGES 1.20% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
LMPIS Premier Selections All Cap Growth Subaccount
(5/01)............................................. 2006 0.917 0.973 2,175,821
2005 0.873 0.917 3,037,270
2004 0.859 0.873 3,691,753
2003 0.648 0.859 16,957
2002 0.895 0.648 3,139
2001 1.000 0.895 150
Legg Mason Partners Investment Trust
LMPIT S&P 500 Index Subaccount (Class A) (6/98).... 2006 1.099 1.251 0
2005 1.067 1.099 0
2004 0.980 1.067 0
2003 0.775 0.980 7,733,630
2002 1.012 0.775 7,251,411
2001 1.169 1.012 6,581,186
2000 1.306 1.169 4,676,167
1999 1.157 1.306 800,723
Legg Mason Partners Variable Portfolios V
LMPVPV Small Cap Growth Opportunities Subaccount
(5/01)............................................. 2006 1.154 1.287 720,717
2005 1.113 1.154 755,078
2004 0.975 1.113 487,059
2003 0.695 0.975 285,477
2002 0.946 0.695 72,467
2001 1.000 0.946 118
Legg Mason Partners Variable Portfolios I, Inc.
LMPVPI All Cap Subaccount (Class I) (9/98)......... 2006 1.937 2.260 1,730,108
2005 1.884 1.937 1,952,120
2004 1.760 1.884 1,888,163
2003 1.281 1.760 834,333
2002 1.730 1.281 748,934
2001 1.719 1.730 634,594
2000 1.471 1.719 380,838
1999 1.213 1.471 17,011
LMPVPI Global High Yield Bond Subaccount (Class I)
(7/98)............................................. 2006 1.545 1.689 1,115,249
2005 1.506 1.545 1,378,708
2004 1.372 1.506 1,117,700
2003 1.118 1.372 810,365
2002 1.055 1.118 402,223
2001 1.015 1.055 278,953
2000 1.028 1.015 169,917
1999 0.997 1.028 56,187
</Table>
47
SEPARATE ACCOUNT CHARGES 1.20% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
LMPVPI Investors Subaccount (Class I) (10/98)...... 2006 1.505 1.759 3,480,461
2005 1.430 1.505 4,900,506
2004 1.311 1.430 4,240,037
2003 1.003 1.311 1,939,736
2002 1.319 1.003 1,944,518
2001 1.392 1.319 487,774
2000 1.223 1.392 293,594
1999 1.140 1.223 759
LMPVPI Total Return Subaccount (Class I) (10/98)... 2006 1.276 1.419 2,112,501
2005 1.250 1.276 2,583,391
2004 1.163 1.250 3,224,669
2003 1.016 1.163 4,151,212
2002 1.104 1.016 4,464,294
2001 1.126 1.104 42,730
2000 1.056 1.126 9,621
1999 1.071 1.056 26
Legg Mason Partners Variable Portfolios II
LMPVPII Appreciation Subaccount (8/98)............. 2006 1.288 1.462 3,840,699
2005 1.250 1.288 4,989,250
2004 1.163 1.250 4,129,110
2003 0.945 1.163 3,335,626
2002 1.160 0.945 3,274,067
2001 1.222 1.160 965,109
2000 1.242 1.222 727,075
1999 1.161 1.242 230,647
LMPVPII Diversified Strategic Income Subaccount
(8/98)............................................. 2006 1.293 1.347 390,972
2005 1.276 1.293 770,196
2004 1.210 1.276 697,061
2003 1.096 1.210 1,191,264
2002 1.058 1.096 1,410,538
2001 1.038 1.058 770,223
2000 1.022 1.038 347,767
1999 1.021 1.022 176,973
LMPVPII Equity Index Subaccount (Class II) (5/04).. 2006 1.117 1.271 4,940,212
2005 1.085 1.117 8,117,520
2004 1.000 1.085 7,341,444
</Table>
48
SEPARATE ACCOUNT CHARGES 1.20% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
LMPVPII Fundamental Value Subaccount (5/01)........ 2006 1.005 1.005 --
2005 1.005 1.005 --
2004 0.982 1.005 --
2003 0.717 0.982 1,499,748
2002 0.922 0.717 581,668
2001 1.000 0.922 41,982
Legg Mason Partners Variable Portfolios III, Inc.
LMPVPIII Adjustable Rate Income Subaccount (9/03).. 2006 1.011 1.040 194,793
2005 0.999 1.011 133,365
2004 1.000 0.999 56,663
2003 1.000 1.000 --
LMPVPIII Aggressive Growth Subaccount (5/00)....... 2006 1.028 1.105 18,122,589
2005 0.932 1.028 19,883,127
2004 0.858 0.932 17,421,284
2003 0.645 0.858 1,476,737
2002 0.969 0.645 1,693,697
2001 1.023 0.969 49,299
2000 1.000 1.023 21,092
LMPVPIII International All Cap Growth Subaccount
(6/98)............................................. 2006 0.728 0.728 --
2005 0.728 0.728 --
2004 0.712 0.728 --
2003 0.565 0.712 3,373,399
2002 0.770 0.565 3,634,281
2001 1.132 0.770 1,633,464
2000 1.503 1.132 1,172,043
1999 0.925 1.503 67,643
LMPVPIII Large Cap Growth Subaccount (10/98)....... 2006 1.629 1.684 2,313,422
2005 1.567 1.629 3,006,425
2004 1.580 1.567 3,189,639
2003 1.084 1.580 2,845,760
2002 1.458 1.084 2,545,815
2001 1.687 1.458 2,254,710
2000 1.835 1.687 1,542,537
1999 1.573 1.835 331,287
</Table>
49
SEPARATE ACCOUNT CHARGES 1.20% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
LMPVPIII Large Cap Value Subaccount (7/98)......... 2006 1.027 1.027 --
2005 1.027 1.027 --
2004 1.056 1.027 --
2003 0.837 1.056 2,791,805
2002 1.136 0.837 3,071,115
2001 1.252 1.136 1,112,781
2000 1.121 1.252 473,071
1999 1.161 1.121 105,352
LMPVPIII Money Market Subaccount (6/98)............ 2006 1.143 1.181 19,398,431
2005 1.125 1.143 22,223,914
2004 1.128 1.125 19,783,988
2003 1.134 1.128 19,214,805
2002 1.134 1.134 21,183,466
2001 1.107 1.134 9,030,971
2000 1.056 1.107 6,608,544
1999 1.027 1.056 3,273,236
LMPVPIII Social Awareness Stock Subaccount (5/04).. 2006 1.119 1.190 941,282
2005 1.085 1.119 951,069
2004 1.000 1.085 952,114
Lord Abbett Series Fund, Inc.
Lord Abbett Growth and Income Subaccount (Class VC)
(5/04)............................................. 2006 1.130 1.309 1,283,422
2005 1.108 1.130 936,476
2004 1.000 1.108 353,531
Lord Abbett Mid-Cap Value Subaccount (Class VC)
(5/04)............................................. 2006 1.242 1.378 842,446
2005 1.162 1.242 1,068,892
2004 1.000 1.162 274,086
Met Investors Series Trust
MIST Batterymarch Mid-Cap Stock Subaccount (Class
A) (4/06).......................................... 2006 2.627 2.508 635,313
MIST BlackRock High Yield Subaccount (Class A)
(4/06)............................................. 2006 1.279 1.352 479,739
MIST BlackRock Large-Cap Core Subaccount (Class A)
(4/06)............................................. 2006 1.073 1.139 583,463
MIST Dreman Small-Cap Value Subaccount (Class A)
(4/06)............................................. 2006 1.159 1.238 --
MIST Harris Oakmark International Subaccount (Class
A) (4/06) *........................................ 2006 1.539 1.700 3,707,912
MIST Janus Capital Appreciation Subaccount (Class
A) (4/06).......................................... 2006 2.357 2.423 4,882,564
MIST Legg Mason Partners Managed Assets Subaccount
(Class A) (4/06)................................... 2006 1.053 1.116 --
</Table>
50
SEPARATE ACCOUNT CHARGES 1.20% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
MIST Lord Abbett Bond Debenture Subaccount (Class
A) (4/06).......................................... 2006 1.097 1.153 587,624
MIST Lord Abbett Growth and Income Subaccount
(Class B) (4/06)................................... 2006 1.001 1.079 8,652,586
MIST Met/AIM Capital Appreciation Subaccount (Class
A) (4/06).......................................... 2006 1.231 1.220 5,869,215
MIST Met/AIM Small Cap Growth Subaccount (Class A)
(4/06)............................................. 2006 1.163 1.157 --
MIST MFS(R) Value Subaccount (Class A) (4/06)...... 2006 1.279 1.417 682,895
MIST Neuberger Berman Real Estate Subaccount (Class
A) (4/06).......................................... 2006 1.003 1.223 1,366,730
MIST Pioneer Fund Subaccount (Class A) (4/06)...... 2006 1.489 1.605 56,873
MIST Pioneer Mid-Cap Value Subaccount (Class A)
(4/06)............................................. 2006 1.119 1.181 --
MIST Pioneer Strategic Income Subaccount (Class A)
(4/06)............................................. 2006 1.590 1.652 404,899
MIST Third Avenue Small Cap Value Subaccount (Class
B) (11/06)......................................... 2006 1.757 1.796 292,039
MetLife Investment Funds, Inc.
MetLife Investment Diversified Bond Subaccount
(Class I) (9/00)................................... 2006 1.294 1.333 2,532,392
2005 1.283 1.294 2,132,297
2004 1.240 1.283 1,224,582
2003 1.189 1.240 625,543
2002 1.104 1.189 381,324
2001 1.046 1.104 8,178
2000 1.000 1.046 --
MetLife Investment International Stock Subaccount
(Class I) (7/00)................................... 2006 0.920 1.150 2,124,768
2005 0.812 0.920 1,967,663
2004 0.716 0.812 935,398
2003 0.557 0.716 289,686
2002 0.726 0.557 24,488
2001 0.935 0.726 --
2000 1.000 0.935 --
MetLife Investment Large Company Stock Subaccount
(Class I) (7/01)................................... 2006 1.025 1.140 2,033,614
2005 0.972 1.025 1,662,132
2004 0.894 0.972 818,703
2003 0.706 0.894 225,812
2002 0.926 0.706 44,941
2001 1.000 0.926 --
</Table>
51
SEPARATE ACCOUNT CHARGES 1.20% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
MetLife Investment Small Company Stock Subaccount
(Class I) (9/00)................................... 2006 1.196 1.344 2,176,793
2005 1.129 1.196 2,194,715
2004 0.994 1.129 1,585,352
2003 0.703 0.994 675,882
2002 0.933 0.703 48,082
2001 0.930 0.933 5,570
2000 1.000 0.930 --
Metropolitan Series Fund, Inc.
MSF BlackRock Aggressive Growth Subaccount (Class
D) (4/06).......................................... 2006 0.639 0.625 5,004,583
MSF BlackRock Bond Income Subaccount (Class A)
(4/06)............................................. 2006 1.393 1.451 1,486,616
MSF FI Large Cap Subaccount (Class A) (4/06)....... 2006 1.707 1.735 3,628,587
MSF FI Value Leaders Subaccount (Class D) (4/06)... 2006 2.039 2.098 1,594,139
MSF MetLife Aggressive Allocation Subaccount
(4/06)............................................. 2006 1.000 1.061 40,037
2005 1.000 1.000 --
MSF MetLife Conservative Allocation Subaccount
(4/06)............................................. 2006 1.000 1.044 509
2005 1.000 1.000 --
MSF MetLife Conservative to Moderate Allocation
Subaccount (4/06).................................. 2006 1.000 1.050 1,220
2005 1.000 1.000 --
MSF MetLife Moderate Allocation Subaccount (4/06).. 2006 1.000 1.055 24,806
2005 1.000 1.000 --
MSF MetLife Moderate to Aggressive Allocation
Subaccount (4/06).................................. 2006 1.000 1.060 149,555
2005 1.000 1.000 --
MSF MFS(R) Total Return Subaccount (Class F)
(4/06)............................................. 2006 2.058 2.206 4,985,934
MSF T. Rowe Price Large Cap Growth Subaccount
(Class B) (4/06)................................... 2006 0.998 1.072 731,465
MSF Western Asset Management U.S. Government
Subaccount (Class A) (4/06) *...................... 2006 1.049 1.088 1,962,375
</Table>
52
SEPARATE ACCOUNT CHARGES 1.20% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Neuberger Berman Equity Assets
Neuberger Berman Guardian Subaccount (Advisor
Class) (9/96)...................................... 2006 1.447 1.447 --
2005 1.450 1.447 --
2004 1.271 1.450 --
2003 0.955 1.271 1,395,168
2002 1.307 0.955 1,662,265
2001 1.353 1.307 1,793,652
2000 1.404 1.353 1,783,244
1999 1.376 1.404 6,411
Neuberger Berman Partners Subaccount (Advisor
Class) (8/96)...................................... 2006 1.920 1.920 --
2005 1.781 1.920 --
2004 1.519 1.781 --
2003 1.136 1.519 994,846
2002 1.534 1.136 1,394,622
2001 1.608 1.534 1,671,072
2000 1.627 1.608 1,583,860
1999 1.581 1.627 14,401
Oppenheimer Variable Account Funds
Oppenheimer Main Street/VA Subaccount ( Service
Shares) (5/04)..................................... 2006 1.123 1.189 --
2005 1.075 1.123 1,017,937
2004 1.000 1.075 1,127,890
PBHG Funds
PBHG Growth Subaccount (Advisor Class) (8/96)...... 2006 0.832 0.832 --
2005 0.825 0.832 --
2004 0.778 0.825 --
2003 0.628 0.778 5,360,834
2002 0.915 0.628 6,034,656
2001 1.419 0.915 6,724,697
2000 1.867 1.419 6,144,022
1999 0.945 1.867 20,176
PIMCO Variable Insurance Trust
PIMCO VIT Total Return Subaccount (Administrative
Class) (5/01)...................................... 2006 1.237 1.269 2,913,815
2005 1.222 1.237 3,700,080
2004 1.179 1.222 2,889,770
2003 1.136 1.179 2,008,950
2002 1.054 1.136 1,853,274
2001 1.000 1.054 5,033
</Table>
53
SEPARATE ACCOUNT CHARGES 1.20% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Putnam Variable Trust
Putnam VT International Equity Subaccount (Class
IB) (5/01)......................................... 2006 1.026 1.026 --
2005 1.018 1.026 --
2004 0.887 1.018 --
2003 0.698 0.887 271,039
2002 0.859 0.698 167,789
2001 1.000 0.859 231
Putnam VT Small Cap Value Subaccount (Class IB)
(5/01)............................................. 2006 1.717 1.989 1,162,094
2005 1.623 1.717 1,257,929
2004 1.301 1.623 813,535
2003 0.880 1.301 389,518
2002 1.090 0.880 210,634
2001 1.000 1.090 377
Smith Barney Equity Funds
SBEF Social Awareness Subaccount (Class A) (4/98).. 2006 1.166 1.166 --
2005 1.194 1.166 --
2004 1.123 1.194 --
2003 0.923 1.123 1,116,844
2002 1.103 0.923 1,293,863
2001 1.254 1.103 1,184,167
2000 1.249 1.254 901,418
1999 1.170 1.249 272,082
Smith Barney Funds, Inc.
SBF U.S. Government Securities Subaccount (9/96)... 2006 1.507 1.507 --
2005 1.493 1.507 --
2004 1.459 1.493 --
2003 1.440 1.459 --
2002 1.352 1.440 110,572
2001 1.278 1.352 1,678,511
2000 1.177 1.278 907,094
1999 1.188 1.177 262,026
Smith Barney Investments Funds Inc.
LMPIF Small Cap Value Subaccount (Class A) (5/01).. 2006 1.698 1.869 1,431,951
2005 1.612 1.698 1,517,390
2004 1.351 1.612 1,242,431
2003 0.994 1.351 920,679
2002 1.083 0.994 512,890
2001 1.000 1.083 2,549
</Table>
54
SEPARATE ACCOUNT CHARGES 1.20% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
The Dreyfus/Laurel Funds, Inc.
Dreyfus Disciplined Stock Subaccount (7/98)........ 2006 0.957 0.957 --
2005 0.943 0.957 --
2004 0.885 0.943 0
2003 0.727 0.885 1,040,844
2002 0.955 0.727 943,869
2001 1.115 0.955 914,528
2000 1.243 1.115 658,164
1999 1.097 1.243 226,379
The Travelers Series Trust
Travelers AIM Capital Appreciation Subaccount
(5/04)............................................. 2006 1.155 1.231 --
2005 1.075 1.155 8,956,855
2004 1.000 1.075 9,140,919
Travelers Convertible Securities Subaccount
(5/04)............................................. 2006 1.028 1.097 --
2005 1.037 1.028 130,864
2004 1.000 1.037 46,889
Travelers Disciplined Mid Cap Stock Subaccount
(8/98)............................................. 2006 2.402 2.627 --
2005 2.162 2.402 992,780
2004 1.879 2.162 828,572
2003 1.422 1.879 828,628
2002 1.680 1.422 674,015
2001 1.771 1.680 357,639
2000 1.537 1.771 178,513
1999 1.278 1.537 21,930
Travelers Equity Income Subaccount (10/96)......... 2006 1.938 2.039 --
2005 1.878 1.938 2,002,181
2004 1.729 1.878 1,729,187
2003 1.334 1.729 1,779,381
2002 1.569 1.334 1,242,584
2001 1.701 1.569 1,127,754
2000 1.577 1.701 843,207
1999 1.565 1.577 60,543
Travelers Federated High Yield Subaccount (11/96).. 2006 1.246 1.279 --
2005 1.230 1.246 954,262
2004 1.127 1.230 706,711
2003 0.932 1.127 557,532
2002 0.910 0.932 492,456
2001 0.903 0.910 387,333
2000 0.995 0.903 378,547
1999 1.000 0.995 --
</Table>
55
SEPARATE ACCOUNT CHARGES 1.20% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Travelers Federated Stock Subaccount (11/96)....... 2006 0.833 0.833 --
2005 0.833 0.833 --
2004 0.833 0.833 --
2003 0.833 0.833 --
2002 1.047 0.833 --
2001 1.042 1.047 1,214,971
2000 1.017 1.042 1,190,060
1999 1.000 1.017 --
Travelers Large Cap Subaccount (9/96).............. 2006 1.655 1.707 --
2005 1.541 1.655 2,976,270
2004 1.464 1.541 3,024,412
2003 1.188 1.464 1,360,589
2002 1.558 1.188 1,667,246
2001 1.907 1.558 1,691,326
2000 2.257 1.907 1,578,657
1999 1.881 2.257 190,270
Travelers Mercury Large Cap Core Subaccount
(6/98)............................................. 2006 1.009 1.073 --
2005 0.911 1.009 706,664
2004 0.796 0.911 556,890
2003 0.665 0.796 602,802
2002 0.899 0.665 703,244
2001 1.173 0.899 431,788
2000 1.258 1.173 264,040
1999 1.035 1.258 142,528
Travelers MFS(R) Mid Cap Growth Subaccount (6/01).. 2006 0.603 0.639 --
2005 0.592 0.603 6,955,206
2004 0.525 0.592 613,630
2003 0.388 0.525 364,063
2002 0.767 0.388 82,998
2001 1.000 0.767 2,381
Travelers MFS(R) Total Return Subaccount (8/96).... 2006 1.991 2.058 --
2005 1.958 1.991 6,335,268
2004 1.777 1.958 5,652,348
2003 1.544 1.777 6,095,474
2002 1.649 1.544 6,086,688
2001 1.669 1.649 6,428,601
2000 1.448 1.669 4,655,369
1999 1.427 1.448 849,827
</Table>
56
SEPARATE ACCOUNT CHARGES 1.20% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Travelers MFS(R) Value Subaccount (5/04)........... 2006 1.182 1.279 --
2005 1.124 1.182 352,618
2004 1.000 1.124 91,455
Travelers Mondrian International Stock Subaccount
(9/96)............................................. 2006 1.338 1.539 --
2005 1.236 1.338 3,900,613
2004 1.081 1.236 3,751,477
2003 0.851 1.081 2,320,070
2002 0.989 0.851 2,408,154
2001 1.357 0.989 2,236,912
2000 1.550 1.357 1,864,161
1999 1.281 1.550 161,688
Travelers Pioneer Fund Subaccount (5/03)........... 2006 1.401 1.489 --
2005 1.338 1.401 63,532
2004 1.218 1.338 6,805
2003 1.000 1.218 6,747
Travelers Pioneer Strategic Income Subaccount
(9/96)............................................. 2006 1.572 1.590 --
2005 1.535 1.572 333,790
2004 1.400 1.535 87,518
2003 1.186 1.400 --
2002 1.133 1.186 6,240
2001 1.100 1.133 689,533
2000 1.118 1.100 826,520
1999 1.112 1.118 76,768
Travelers Quality Bond Subaccount (7/97)........... 2006 1.404 1.393 --
2005 1.398 1.404 1,800,862
2004 1.370 1.398 2,281,953
2003 1.296 1.370 2,850,351
2002 1.239 1.296 3,118,073
2001 1.171 1.239 771,072
2000 1.108 1.171 173,177
1999 1.108 1.108 31,935
Travelers Strategic Equity Subaccount (9/96)....... 2006 1.642 1.715 --
2005 1.628 1.642 2,148,959
2004 1.495 1.628 2,188,018
2003 1.141 1.495 2,814,120
2002 1.739 1.141 3,295,413
2001 2.032 1.739 3,695,836
2000 2.515 2.032 3,624,937
1999 1.966 2.515 314,686
</Table>
57
SEPARATE ACCOUNT CHARGES 1.20% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Travelers U.S. Government Securities Subaccount
(5/04)............................................. 2006 1.086 1.049 --
2005 1.054 1.086 2,874,712
2004 1.000 1.054 2,715,024
Van Kampen Life Investment Trust
Van Kampen LIT Comstock Subaccount (Class II)
(5/03)............................................. 2006 1.496 1.715 634,957
2005 1.454 1.496 413,091
2004 1.253 1.454 96,610
2003 1.000 1.253 --
Van Kampen LIT Enterprise Subaccount (Class II)
(5/01)............................................. 2006 0.813 0.813 --
2005 0.806 0.813 --
2004 0.786 0.806 --
2003 0.633 0.786 62,902
2002 0.909 0.633 22,444
2001 1.000 0.909 --
Van Kampen LIT Strategic Growth Subaccount (Class
II) (5/01)......................................... 2006 0.764 0.775 350,483
2005 0.719 0.764 249,686
2004 0.681 0.719 225,373
2003 0.543 0.681 240,030
2002 0.816 0.543 139,337
2001 1.000 0.816 --
Variable Insurance Products Fund
VIP Contrafund(R) Subaccount (Service Class 2)
(6/01)............................................. 2006 1.387 1.527 2,160,030
2005 1.203 1.387 1,744,856
2004 1.058 1.203 1,028,580
2003 0.835 1.058 --
2002 0.935 0.835 --
2001 1.000 0.935 --
VIP Mid Cap Subaccount (Service Class 2) (5/01).... 2006 1.796 1.995 2,717,256
2005 1.540 1.796 3,005,479
2004 1.250 1.540 1,721,989
2003 0.915 1.250 692,210
2002 1.029 0.915 259,423
2001 1.000 1.029 --
</Table>
58
SEPARATE ACCOUNT CHARGES 1.30%
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Dreyfus A Bonds Plus, Inc. (9/96).................... 2006 1.454 1.454 --
2005 1.441 1.454 --
2004 1.416 1.441 3,660,449
2003 1.371 1.416 9,579,793
2002 1.287 1.371 10,333,807
2001 1.247 1.287 6,009,894
2000 1.146 1.247 4,283,670
1999 1.141 1.146 4,784,326
1998 1.125 1.141 3,911,474
1997 1.041 1.125 1,457,617
Smith Barney Aggressive Growth Subaccount Inc.
(Class A) (10/96).................................. 2006 2.923 2.923 --
2005 2.923 2.923 --
2004 2.864 2.923 --
2003 2.124 2.864 13,224,762
2002 3.200 2.124 11,925,850
2001 3.413 3.200 12,516,991
2000 2.902 3.413 8,946,565
1999 1.795 2.902 8,417,798
1998 1.347 1.795 3,401,909
1997 1.063 1.347 921,955
Templeton Growth Fund Subaccount (Class A) (8/96).. 2006 2.258 2.715 21,753,783
2005 2.115 2.258 24,634,141
2004 1.832 2.115 26,624,421
2003 1.397 1.832 25,977,896
2002 1.563 1.397 26,313,876
2001 1.575 1.563 25,951,702
2000 1.568 1.575 25,279,033
1999 1.218 1.568 28,146,398
1998 1.266 1.218 24,242,303
1997 1.103 1.266 11,955,987
AIM Equity Funds, Inc.
AIM Equity Charter Subaccount (Class A) (10/96).... 2006 1.301 1.301 --
2005 1.301 1.301 --
2004 1.213 1.301 4,304,023
2003 0.991 1.213 11,383,223
2002 1.197 0.991 12,065,157
2001 1.577 1.197 12,134,706
2000 1.873 1.577 9,201,807
1999 1.417 1.873 8,290,764
1998 1.132 1.417 3,871,914
1997 1.000 1.132 548,786
</Table>
59
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
AIM Equity Constellation Subaccount (Class A)
(10/96)............................................ 2006 1.239 1.239 --
2005 1.250 1.239 --
2004 1.192 1.250 7,386,211
2003 0.934 1.192 24,715,162
2002 1.257 0.934 25,210,364
2001 1.668 1.257 24,527,242
2000 1.885 1.668 19,640,108
1999 1.322 1.885 18,093,984
1998 1.127 1.322 13,241,465
1997 1.000 1.127 2,210,686
AllianceBernstein Value Funds
AllianceBernstein Growth and Income Subaccount
(Class A) (9/96)................................... 2006 2.111 2.111 --
2005 2.118 2.111 --
2004 1.918 2.118 9,789,674
2003 1.474 1.918 23,006,120
2002 2.034 1.474 22,033,914
2001 2.099 2.034 19,822,914
2000 1.871 2.099 16,274,288
1999 1.711 1.871 18,859,246
1998 1.430 1.711 14,457,240
1997 1.124 1.430 6,444,295
AllianceBernstein Variable Products Series Fund, Inc.
AllianceBernstein Growth and Income Subaccount
(Class B) (5/04)................................... 2006 1.112 1.164 --
2005 1.077 1.112 36,883,407
2004 1.000 1.077 23,250,362
AllianceBernstein Large-Cap Growth Subaccount
(Class B) (6/01)................................... 2006 0.880 0.864 --
2005 0.777 0.880 1,525,982
2004 0.726 0.777 1,314,263
2003 0.596 0.726 1,036,862
2002 0.874 0.596 403,832
2001 1.000 0.874 85,715
American Funds Insurance Series
American Funds Global Growth Subaccount (Class 2)
(5/04)............................................. 2006 1.244 1.479 4,587,546
2005 1.105 1.244 3,061,076
2004 1.000 1.105 374,714
American Funds Growth Subaccount (Class 2) (5/04).. 2006 1.247 1.357 10,628,006
2005 1.087 1.247 6,122,667
2004 1.000 1.087 1,300,381
</Table>
60
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
American Funds Growth-Income Subaccount (Class 2)
(5/04)............................................. 2006 1.127 1.282 7,235,979
2005 1.079 1.127 7,466,608
2004 1.000 1.079 1,086,496
Capital Appreciation Fund
Capital Appreciation Fund (8/96)................... 2006 2.348 2.325 --
2005 2.012 2.348 38,316,442
2004 1.705 2.012 46,134,264
2003 1.383 1.705 50,184,371
2002 1.870 1.383 52,651,414
2001 2.564 1.870 53,265,351
2000 3.325 2.564 47,065,109
1999 2.194 3.325 44,112,412
1998 1.375 2.194 22,072,721
1997 1.104 1.375 9,970,061
Delaware VIP Trust
Delaware VIP REIT Subaccount (Standard Class)
(5/03)............................................. 2006 1.736 2.273 --
2005 1.641 1.736 4,078,473
2004 1.266 1.641 3,248,171
2003 1.000 1.266 693,656
Delaware VIP Small Cap Value Subaccount (Standard
Class) (6/98)...................................... 2006 1.053 1.053 --
2005 1.053 1.053 --
2004 1.053 1.053 --
2003 1.053 1.053 --
2002 1.135 1.053 --
2001 1.028 1.135 2,941,367
2000 0.881 1.028 785,034
1999 0.938 0.881 437,539
1998 1.000 0.938 18,240
Dreyfus Variable Investment Fund
Dreyfus VIF Appreciation Subaccount (Initial
Shares) (7/98)..................................... 2006 1.062 1.221 12,186,134
2005 1.031 1.062 15,118,185
2004 0.994 1.031 18,488,972
2003 0.831 0.994 19,728,314
2002 1.011 0.831 20,226,630
2001 1.130 1.011 3,823,655
2000 1.152 1.130 3,230,839
1999 1.047 1.152 2,297,394
1998 1.000 1.047 576,996
</Table>
61
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Dreyfus VIF Developing Leaders Subaccount (Initial
Shares) (6/98)..................................... 2006 1.385 1.419 15,844,520
2005 1.326 1.385 19,865,885
2004 1.207 1.326 22,471,181
2003 0.928 1.207 21,831,860
2002 1.163 0.928 19,027,838
2001 1.255 1.163 8,123,049
2000 1.122 1.255 3,162,161
1999 0.923 1.122 1,283,426
1998 1.000 0.923 261,315
Fidelity Advisor Series I
FASI Advisor Growth Opportunities Subaccount (Class
T) (8/96).......................................... 2006 1.239 1.239 --
2005 1.234 1.239 --
2004 1.169 1.234 6,228,419
2003 0.916 1.169 19,639,029
2002 1.196 0.916 21,225,450
2001 1.428 1.196 23,625,888
2000 1.770 1.428 22,750,750
1999 1.726 1.770 29,066,628
1998 1.411 1.726 22,326,098
1997 1.112 1.411 10,085,372
Franklin Templeton Variable Insurance Products Trust
FTVIPT Franklin Small-Mid Cap Growth Securities
Subaccount (Class 2) (5/01)........................ 2006 1.008 1.082 2,599,845
2005 0.975 1.008 2,633,975
2004 0.886 0.975 2,884,593
2003 0.654 0.886 2,126,560
2002 0.929 0.654 642,088
2001 1.000 0.929 90,171
FTVIPT Mutual Shares Securities Subaccount (Class
2) (5/03).......................................... 2006 1.456 1.701 --
2005 1.334 1.456 1,527,395
2004 1.200 1.334 609,828
2003 1.000 1.200 298,521
FTVIPT Templeton Developing Markets Securities
Subaccount (Class 2) (5/03)........................ 2006 2.244 2.837 4,154,839
2005 1.784 2.244 3,342,105
2004 1.449 1.784 1,071,414
2003 1.000 1.449 113,150
FTVIPT Templeton Foreign Securities Subaccount
(Class 2) (5/04)................................... 2006 1.253 1.503 5,273,068
2005 1.153 1.253 3,915,005
2004 1.000 1.153 1,492,542
</Table>
62
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Janus Aspen Series
Janus Aspen Global Life Sciences Subaccount
(Service Shares) (5/00)............................ 2006 1.010 1.060 1,657,096
2005 0.911 1.010 1,975,105
2004 0.808 0.911 2,073,259
2003 0.649 0.808 3,428,028
2002 0.933 0.649 2,963,947
2001 1.135 0.933 2,160,760
2000 1.000 1.135 599,867
Janus Aspen Global Technology Subaccount (Service
Shares) (5/00)..................................... 2006 0.383 0.408 3,427,097
2005 0.348 0.383 4,617,331
2004 0.350 0.348 4,798,280
2003 0.242 0.350 9,041,819
2002 0.416 0.242 5,976,033
2001 0.672 0.416 3,792,731
2000 1.000 0.672 775,258
Janus Aspen Growth and Income Subaccount (Service
Shares) (5/00)..................................... 2006 0.832 0.890 --
2005 0.751 0.832 2,980,527
2004 0.682 0.751 3,182,405
2003 0.559 0.682 2,844,258
2002 0.724 0.559 2,115,520
2001 0.849 0.724 1,093,839
2000 1.000 0.849 294,844
Janus Aspen Mid Cap Growth Subaccount (Service
Shares) (5/00)..................................... 2006 0.499 0.558 18,458,976
2005 0.451 0.499 21,940,688
2004 0.379 0.451 14,074,179
2003 0.285 0.379 11,010,350
2002 0.402 0.285 9,766,104
2001 0.674 0.402 7,099,855
2000 1.000 0.674 1,875,615
Lazard Retirement Series, Inc.
Lazard Retirement Small Cap Subaccount (5/03)...... 2006 1.556 1.751 --
2005 1.516 1.556 1,138,203
2004 1.337 1.516 395,371
2003 1.000 1.337 135,455
</Table>
63
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Legg Mason Partners Investment Funds, Inc.
LMPIF Investment Grade Bond Subaccount (Class A)
(9/96)............................................. 2006 1.750 1.781 6,517,632
2005 1.742 1.750 8,590,975
2004 1.657 1.742 9,602,981
2003 1.595 1.657 10,655,170
2002 1.438 1.595 10,335,140
2001 1.328 1.438 6,457,440
2000 1.208 1.328 4,718,344
1999 1.346 1.208 4,685,053
1998 1.259 1.346 2,466,495
1997 1.089 1.259 524,432
Legg Mason Partners Investment Series
LMPIS Growth and Income Subaccount (5/01).......... 2006 0.994 1.104 553,921
2005 0.970 0.994 491,009
2004 0.908 0.970 521,009
2003 0.707 0.908 296,774
2002 0.919 0.707 37,201
2001 1.000 0.919 1,417
LMPIS Premier Selections All Cap Growth Subaccount
(5/01)............................................. 2006 0.913 0.968 7,848,059
2005 0.870 0.913 9,943,374
2004 0.857 0.870 12,881,330
2003 0.646 0.857 142,372
2002 0.895 0.646 14,939
2001 1.000 0.895 --
Legg Mason Partners Investment Trust
LMPIT S&P 500 Index Subaccount (Class A) (6/98).... 2006 1.090 1.239 14,162,746
2005 1.059 1.090 17,968,038
2004 0.974 1.059 19,224,508
2003 0.771 0.974 35,708,341
2002 1.008 0.771 31,397,853
2001 1.165 1.008 24,995,673
2000 1.302 1.165 17,574,260
1999 1.099 1.302 12,598,473
1998 1.000 1.099 1,053,463
Legg Mason Partners Variable Portfolios V
LMPVPV Small Cap Growth Opportunities Subaccount
(5/01)............................................. 2006 1.149 1.280 2,258,192
2005 1.109 1.149 2,324,426
2004 0.972 1.109 2,054,959
2003 0.694 0.972 1,242,791
2002 0.945 0.694 120,431
2001 1.000 0.945 --
</Table>
64
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Legg Mason Partners Variable Portfolios I, Inc.
LMPVPI All Cap Subaccount (Class I) (9/98)......... 2006 1.921 2.240 5,849,786
2005 1.871 1.921 6,618,937
2004 1.750 1.871 7,324,327
2003 1.275 1.750 4,810,781
2002 1.723 1.275 3,350,175
2001 1.713 1.723 2,032,409
2000 1.468 1.713 475,408
1999 1.218 1.468 79,800
1998 1.000 1.218 2,340
LMPVPI Global High Yield Bond Subaccount (Class I)
(7/98)............................................. 2006 1.532 1.673 4,250,443
2005 1.495 1.532 4,744,978
2004 1.363 1.495 4,608,146
2003 1.112 1.363 4,112,328
2002 1.050 1.112 1,775,408
2001 1.012 1.050 916,191
2000 1.025 1.012 580,304
1999 0.984 1.025 304,976
1998 1.000 0.984 153,334
LMPVPI Investors Subaccount (Class I) (10/98)...... 2006 1.493 1.743 10,862,446
2005 1.420 1.493 12,985,232
2004 1.303 1.420 16,511,056
2003 0.998 1.303 6,075,507
2002 1.314 0.998 5,940,876
2001 1.389 1.314 1,730,591
2000 1.221 1.389 741,478
1999 1.108 1.221 89,161
1998 1.000 1.108 64,624
LMPVPI Total Return Subaccount (Class I) (10/98)... 2006 1.266 1.407 7,758,290
2005 1.241 1.266 10,113,092
2004 1.157 1.241 13,221,284
2003 1.011 1.157 13,816,711
2002 1.100 1.011 14,985,953
2001 1.123 1.100 298,502
2000 1.054 1.123 83,016
1999 1.060 1.054 44,172
1998 1.000 1.060 --
</Table>
65
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Legg Mason Partners Variable Portfolios II
LMPVPII Appreciation Subaccount (8/98)............. 2006 1.278 1.448 15,988,942
2005 1.241 1.278 18,272,296
2004 1.156 1.241 10,062,539
2003 0.940 1.156 9,765,333
2002 1.155 0.940 8,760,732
2001 1.218 1.155 1,714,962
2000 1.239 1.218 1,126,981
1999 1.110 1.239 568,097
1998 1.000 1.110 106,347
LMPVPII Diversified Strategic Income Subaccount
(8/98)............................................. 2006 1.283 1.334 1,789,324
2005 1.267 1.283 2,087,820
2004 1.202 1.267 3,198,779
2003 1.090 1.202 3,106,165
2002 1.053 1.090 2,812,164
2001 1.035 1.053 1,111,610
2000 1.019 1.035 738,433
1999 1.015 1.019 430,253
1998 1.000 1.015 30,984
LMPVPII Equity Index Subaccount (Class II) (5/04).. 2006 1.115 1.267 16,157,797
2005 1.084 1.115 18,631,913
2004 1.000 1.084 18,677,512
LMPVPII Fundamental Value Subaccount (5/01)........ 2006 1.002 1.002 --
2005 1.002 1.002 --
2004 0.979 1.002 --
2003 0.715 0.979 2,658,408
2002 0.921 0.715 992,654
2001 1.000 0.921 51,212
Legg Mason Partners Variable Portfolios III, Inc.
LMPVPIII Adjustable Rate Income Subaccount (9/03).. 2006 1.009 1.036 286,123
2005 0.998 1.009 217,008
2004 1.000 0.998 83,089
2003 1.000 1.000 --
LMPVPIII Aggressive Growth Subaccount (5/00)....... 2006 1.022 1.097 45,313,401
2005 0.927 1.022 56,480,312
2004 0.854 0.927 61,232,775
2003 0.643 0.854 15,886,329
2002 0.968 0.643 12,649,662
2001 1.022 0.968 1,714,847
2000 1.000 1.022 403,094
</Table>
66
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
LMPVPIII International All Cap Growth Subaccount
(6/98)............................................. 2006 0.723 0.723 --
2005 0.723 0.723 --
2004 0.707 0.723 --
2003 0.562 0.707 10,900,272
2002 0.766 0.562 11,033,946
2001 1.128 0.766 4,881,229
2000 1.499 1.128 3,332,853
1999 0.906 1.499 866,648
1998 1.000 0.906 170,618
LMPVPIII Large Cap Growth Subaccount (10/98)....... 2006 1.616 1.669 6,380,597
2005 1.556 1.616 7,794,578
2004 1.571 1.556 8,560,550
2003 1.079 1.571 7,652,839
2002 1.452 1.079 4,651,756
2001 1.682 1.452 3,860,184
2000 1.831 1.682 2,239,566
1999 1.418 1.831 675,666
1998 1.000 1.418 18,263
LMPVPIII Large Cap Value Subaccount (7/98)......... 2006 1.020 1.020 --
2005 1.020 1.020 --
2004 1.049 1.020 --
2003 0.833 1.049 7,668,164
2002 1.131 0.833 7,046,409
2001 1.248 1.131 2,641,013
2000 1.118 1.248 1,646,441
1999 1.132 1.118 602,192
1998 1.000 1.132 219
LMPVPIII Money Market Subaccount (6/98)............ 2006 1.133 1.170 56,106,472
2005 1.116 1.133 57,921,096
2004 1.121 1.116 67,262,871
2003 1.128 1.121 68,068,654
2002 1.129 1.128 68,287,116
2001 1.103 1.129 30,533,749
2000 1.053 1.103 26,353,388
1999 1.019 1.053 12,015,447
1998 1.000 1.019 1,171,857
LMPVPIII Social Awareness Stock Subaccount (5/04).. 2006 1.117 1.187 3,360,765
2005 1.084 1.117 4,049,355
2004 1.000 1.084 3,055,613
</Table>
67
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Lord Abbett Series Fund, Inc.
Lord Abbett Growth and Income Subaccount (Class VC)
(5/04)............................................. 2006 1.128 1.306 5,577,051
2005 1.107 1.128 5,215,295
2004 1.000 1.107 329,565
Lord Abbett Mid-Cap Value Subaccount (Class VC)
(5/04)............................................. 2006 1.240 1.374 2,911,819
2005 1.161 1.240 2,999,591
2004 1.000 1.161 975,498
Met Investors Series Trust
MIST Batterymarch Mid-Cap Stock Subaccount (Class
A) (4/06).......................................... 2006 2.605 2.485 3,299,642
MIST BlackRock High Yield Subaccount (Class A)
(4/06)............................................. 2006 1.581 1.670 2,151,530
MIST BlackRock Large-Cap Core Subaccount (Class A)
(4/06)............................................. 2006 1.063 1.128 1,990,654
MIST Dreman Small-Cap Value Subaccount (Class A)
(4/06)............................................. 2006 1.158 1.237 177,946
MIST Harris Oakmark International Subaccount (Class
A) (4/06) *........................................ 2006 1.519 1.677 12,752,604
MIST Janus Capital Appreciation Subaccount (Class
A) (4/06).......................................... 2006 2.325 2.389 28,718,428
MIST Legg Mason Partners Managed Assets Subaccount
(Class A) (4/06)................................... 2006 1.052 1.114 6,594
MIST Lord Abbett Bond Debenture Subaccount (Class
A) (4/06).......................................... 2006 1.095 1.150 960,420
MIST Lord Abbett Growth and Income Subaccount
(Class B) (4/06)................................... 2006 1.001 1.078 40,266,815
MIST Met/AIM Capital Appreciation Subaccount (Class
A) (4/06).......................................... 2006 1.229 1.216 18,754,656
MIST Met/AIM Small Cap Growth Subaccount (Class A)
(4/06)............................................. 2006 1.162 1.156 42,549
MIST MFS(R) Value Subaccount (Class A) (4/06)...... 2006 1.276 1.413 1,979,896
MIST Neuberger Berman Real Estate Subaccount (Class
A) (4/06).......................................... 2006 1.003 1.223 8,899,276
MIST Pioneer Fund Subaccount (Class A) (4/06)...... 2006 1.484 1.599 377,143
MIST Pioneer Mid-Cap Value Subaccount (Class A)
(4/06)............................................. 2006 1.118 1.179 28,017
MIST Pioneer Strategic Income Subaccount (Class A)
(4/06)............................................. 2006 1.569 1.629 3,363,666
MIST Third Avenue Small Cap Value Subaccount (Class
B) (11/06)......................................... 2006 1.751 1.789 1,727,327
</Table>
68
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
MetLife Investment Funds, Inc.
MetLife Investment Diversified Bond Subaccount
(Class I) (9/00)................................... 2006 1.287 1.325 3,405,566
2005 1.277 1.287 3,882,252
2004 1.236 1.277 3,277,375
2003 1.186 1.236 2,125,169
2002 1.103 1.186 962,726
2001 1.046 1.103 1,218
2000 1.000 1.046 --
MetLife Investment International Stock Subaccount
(Class I) (7/00)................................... 2006 0.915 1.143 3,264,356
2005 0.809 0.915 2,592,729
2004 0.713 0.809 2,395,897
2003 0.556 0.713 1,071,835
2002 0.725 0.556 37,582
2001 0.935 0.725 --
2000 1.000 0.935 --
MetLife Investment Large Company Stock Subaccount
(Class I) (7/01)................................... 2006 1.020 1.134 2,650,426
2005 0.969 1.020 2,796,737
2004 0.892 0.969 2,398,922
2003 0.705 0.892 1,201,883
2002 0.926 0.705 29,340
2001 1.000 0.926 --
MetLife Investment Small Company Stock Subaccount
(Class I) (9/00)................................... 2006 1.190 1.335 3,230,006
2005 1.124 1.190 3,793,677
2004 0.991 1.124 3,150,423
2003 0.701 0.991 2,834,102
2002 0.932 0.701 102,283
2001 0.929 0.932 343
2000 1.000 0.929 80
Metropolitan Series Fund, Inc.
MSF BlackRock Aggressive Growth Subaccount (Class
D) (4/06).......................................... 2006 0.635 0.622 26,974,032
MSF BlackRock Bond Income Subaccount (Class A)
(4/06)............................................. 2006 1.377 1.434 5,969,967
MSF FI Large Cap Subaccount (Class A) (4/06)....... 2006 1.685 1.711 19,928,589
MSF FI Value Leaders Subaccount (Class D) (4/06)... 2006 2.013 2.069 8,131,076
MSF MetLife Aggressive Allocation Subaccount
(4/06)............................................. 2006 1.000 1.061 1,958,944
2005 1.000 1.000 --
</Table>
69
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
MSF MetLife Conservative Allocation Subaccount
(4/06)............................................. 2006 1.000 1.044 383,115
2005 1.000 1.000 --
MSF MetLife Conservative to Moderate Allocation
Subaccount (4/06).................................. 2006 1.000 1.049 883,128
2005 1.000 1.000 --
MSF MetLife Moderate Allocation Subaccount (4/06).. 2006 1.000 1.055 3,589,386
2005 1.000 1.000 --
MSF MetLife Moderate to Aggressive Allocation
Subaccount (4/06).................................. 2006 1.000 1.060 5,640,976
2005 1.000 1.000 --
MSF MFS< Total Return Subaccount (Class F) (4/06).. 2006 2.031 2.175 23,285,509
MSF T. Rowe Price Large Cap Growth Subaccount
(Class B) (4/06)................................... 2006 0.998 1.071 4,045,842
MSF Western Asset Management U.S. Government
Subaccount (Class A) (4/06) *...................... 2006 1.046 1.085 10,319,724
Neuberger Berman Equity Assets
Neuberger Berman Guardian Subaccount (Advisor
Class) (9/96)...................................... 2006 1.429 1.429 --
2005 1.432 1.429 --
2004 1.257 1.432 2,804,707
2003 0.945 1.257 6,378,317
2002 1.295 0.945 6,586,699
2001 1.342 1.295 7,459,895
2000 1.394 1.342 7,590,847
1999 1.312 1.394 11,343,558
1998 1.307 1.312 10,791,904
1997 1.131 1.307 6,598,814
Neuberger Berman Partners Subaccount (Advisor
Class) (8/96)...................................... 2006 1.896 1.896 --
2005 1.760 1.896 --
2004 1.502 1.760 2,135,703
2003 1.124 1.502 6,164,700
2002 1.520 1.124 6,279,840
2001 1.595 1.520 6,733,413
2000 1.615 1.595 6,648,736
1999 1.525 1.615 9,071,824
1998 1.464 1.525 8,794,930
1997 1.154 1.464 3,534,334
</Table>
70
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Oppenheimer Variable Account Funds
Oppenheimer Main Street/VA Subaccount ( Service
Shares) (5/04)..................................... 2006 1.122 1.186 --
2005 1.075 1.122 2,995,331
2004 1.000 1.075 3,898,167
PBHG Funds
PBHG Growth Subaccount (Advisor Class) (8/96)...... 2006 0.822 0.822 --
2005 0.815 0.822 --
2004 0.769 0.815 5,275,910
2003 0.622 0.769 21,995,069
2002 0.907 0.622 22,956,249
2001 1.407 0.907 22,903,843
2000 1.853 1.407 20,557,315
1999 0.978 1.853 22,658,535
1998 0.988 0.978 25,839,649
1997 1.037 0.988 18,802,084
PIMCO Variable Insurance Trust
PIMCO VIT Total Return Subaccount (Administrative
Class) (5/01)...................................... 2006 1.231 1.262 10,313,946
2005 1.218 1.231 10,959,074
2004 1.176 1.218 10,453,091
2003 1.134 1.176 8,847,189
2002 1.054 1.134 4,793,231
2001 1.000 1.054 194,302
Putnam Variable Trust
Putnam VT International Equity Subaccount (Class
IB) (5/01)......................................... 2006 1.022 1.022 --
2005 1.015 1.022 --
2004 0.885 1.015 891,970
2003 0.697 0.885 1,797,419
2002 0.858 0.697 844,016
2001 1.000 0.858 90,803
Putnam VT Small Cap Value Subaccount (Class IB)
(5/01)............................................. 2006 1.709 1.978 8,877,921
2005 1.617 1.709 9,127,513
2004 1.298 1.617 8,149,640
2003 0.879 1.298 4,809,173
2002 1.089 0.879 2,810,440
2001 1.000 1.089 392,714
</Table>
71
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Smith Barney Equity Funds
SBEF Social Awareness Subaccount (Class A) (4/98).. 2006 1.156 1.156 --
2005 1.184 1.156 --
2004 1.115 1.184 931,695
2003 0.917 1.115 3,619,106
2002 1.097 0.917 3,185,264
2001 1.248 1.097 2,962,632
2000 1.245 1.248 2,484,507
1999 1.117 1.245 1,938,505
1998 1.000 1.117 266,464
Smith Barney Funds, Inc.
SBF U.S. Government Securities Subaccount (9/96)... 2006 1.488 1.488 --
2005 1.475 1.488 --
2004 1.443 1.475 2,930,599
2003 1.426 1.443 3,414,981
2002 1.340 1.426 4,332,488
2001 1.268 1.340 5,917,791
2000 1.168 1.268 3,922,121
1999 1.186 1.168 4,692,224
1998 1.133 1.186 3,549,926
1997 1.047 1.133 968,687
Smith Barney Investments Funds Inc.
LMPIF Small Cap Value Subaccount (Class A) (5/01).. 2006 1.690 1.858 2,152,662
2005 1.606 1.690 2,379,898
2004 1.347 1.606 2,444,466
2003 0.993 1.347 1,645,223
2002 1.082 0.993 773,364
2001 1.000 1.082 417
The Dreyfus/Laurel Funds, Inc.
Dreyfus Disciplined Stock Subaccount (7/98)........ 2006 0.950 0.950 --
2005 0.936 0.950 --
2004 0.880 0.936 3,877,639
2003 0.723 0.880 5,227,269
2002 0.951 0.723 4,519,118
2001 1.111 0.951 4,042,014
2000 1.240 1.111 2,960,752
1999 1.063 1.240 1,370,168
1998 1.000 1.063 115,757
</Table>
72
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
The Travelers Series Trust
Travelers AIM Capital Appreciation Subaccount
(5/04)............................................. 2006 1.153 1.229 --
2005 1.074 1.153 23,814,110
2004 1.000 1.074 22,907,017
Travelers Convertible Securities Subaccount
(5/04)............................................. 2006 1.027 1.095 --
2005 1.036 1.027 304,578
2004 1.000 1.036 171,110
Travelers Disciplined Mid Cap Stock Subaccount
(8/98)............................................. 2006 2.383 2.605 --
2005 2.147 2.383 3,951,037
2004 1.868 2.147 4,275,658
2003 1.415 1.868 3,989,779
2002 1.673 1.415 2,506,806
2001 1.766 1.673 1,264,713
2000 1.534 1.766 335,858
1999 1.370 1.534 106,494
1998 1.000 1.370 --
Travelers Equity Income Subaccount (10/96)......... 2006 1.914 2.013 --
2005 1.856 1.914 10,972,268
2004 1.711 1.856 12,443,841
2003 1.321 1.711 11,895,464
2002 1.556 1.321 10,863,035
2001 1.688 1.556 10,396,027
2000 1.566 1.688 9,088,446
1999 1.513 1.566 9,885,889
1998 1.364 1.513 7,262,826
1997 1.046 1.364 2,527,544
Travelers Federated High Yield Subaccount (11/96).. 2006 1.540 1.581 --
2005 1.522 1.540 2,050,790
2004 1.397 1.522 2,247,636
2003 1.156 1.397 2,294,040
2002 1.129 1.156 1,952,503
2001 1.122 1.129 1,638,782
2000 1.238 1.122 1,552,498
1999 1.216 1.238 1,875,124
1998 1.177 1.216 1,616,128
1997 1.033 1.177 442,913
</Table>
73
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Travelers Federated Stock Subaccount (11/96)....... 2006 1.311 1.311 --
2005 1.311 1.311 --
2004 1.311 1.311 --
2003 1.311 1.311 --
2002 1.650 1.311 --
2001 1.644 1.650 1,577,232
2000 1.605 1.644 1,435,464
1999 1.544 1.605 2,400,066
1998 1.327 1.544 1,674,655
1997 1.012 1.327 515,989
Travelers Large Cap Subaccount (9/96).............. 2006 1.633 1.685 --
2005 1.522 1.633 13,723,565
2004 1.448 1.522 16,400,665
2003 1.176 1.448 7,013,579
2002 1.544 1.176 6,917,607
2001 1.892 1.544 7,163,479
2000 2.241 1.892 6,391,942
1999 1.756 2.241 6,454,293
1998 1.312 1.756 2,127,944
1997 1.076 1.312 517,092
Travelers Mercury Large Cap Core Subaccount
(6/98)............................................. 2006 1.001 1.063 --
2005 0.905 1.001 2,421,732
2004 0.791 0.905 1,745,962
2003 0.661 0.791 1,571,917
2002 0.895 0.661 1,297,549
2001 1.169 0.895 987,649
2000 1.254 1.169 364,976
1999 1.027 1.254 67,569
1998 1.000 1.027 6,641
Travelers MFS(R) Mid Cap Growth Subaccount (6/01).. 2006 0.600 0.635 --
2005 0.590 0.600 33,812,297
2004 0.524 0.590 3,093,889
2003 0.387 0.524 2,531,702
2002 0.766 0.387 878,342
2001 1.000 0.766 283,584
</Table>
74
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Travelers MFS(R) Total Return Subaccount (8/96).... 2006 1.965 2.031 --
2005 1.934 1.965 28,235,691
2004 1.758 1.934 29,614,993
2003 1.528 1.758 30,142,452
2002 1.634 1.528 27,261,930
2001 1.655 1.634 25,873,312
2000 1.438 1.655 20,937,284
1999 1.419 1.438 25,595,206
1998 1.287 1.419 20,752,382
1997 1.076 1.287 9,739,367
Travelers MFS(R) Value Subaccount (5/04)........... 2006 1.180 1.276 --
2005 1.123 1.180 864,629
2004 1.000 1.123 260,500
Travelers Mondrian International Stock Subaccount
(9/96)............................................. 2006 1.321 1.519 --
2005 1.222 1.321 13,209,353
2004 1.069 1.222 14,800,986
2003 0.842 1.069 7,916,601
2002 0.980 0.842 7,350,273
2001 1.346 0.980 7,215,621
2000 1.539 1.346 5,799,376
1999 1.281 1.539 5,550,017
1998 1.152 1.281 3,257,159
1997 1.077 1.152 891,463
Travelers Pioneer Fund Subaccount (5/03)........... 2006 1.397 1.484 --
2005 1.336 1.397 148,629
2004 1.218 1.336 116,876
2003 1.000 1.218 27,962
Travelers Pioneer Strategic Income Subaccount
(9/96)............................................. 2006 1.552 1.569 --
2005 1.517 1.552 3,067,805
2004 1.385 1.517 1,594,867
2003 1.174 1.385 1,209,653
2002 1.123 1.174 1,092,540
2001 1.092 1.123 4,344,181
2000 1.110 1.092 4,004,979
1999 1.112 1.110 4,879,638
1998 1.119 1.112 4,470,436
1997 1.053 1.119 2,026,456
</Table>
75
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Travelers Quality Bond Subaccount (7/97)........... 2006 1.389 1.377 --
2005 1.384 1.389 7,481,341
2004 1.358 1.384 8,262,855
2003 1.285 1.358 9,739,998
2002 1.231 1.285 10,534,021
2001 1.164 1.231 4,317,284
2000 1.102 1.164 2,195,717
1999 1.105 1.102 2,142,107
1998 1.031 1.105 772,497
1997 1.000 1.031 166,742
Travelers Strategic Equity Subaccount (9/96)....... 2006 1.620 1.692 --
2005 1.609 1.620 10,796,465
2004 1.478 1.609 13,166,495
2003 1.130 1.478 14,831,433
2002 1.724 1.130 14,901,798
2001 2.015 1.724 14,930,422
2000 2.497 2.015 13,487,672
1999 1.912 2.497 13,528,900
1998 1.502 1.912 8,581,291
1997 1.179 1.502 3,124,489
Travelers U.S. Government Securities Subaccount
(5/04)............................................. 2006 1.084 1.046 --
2005 1.053 1.084 13,518,079
2004 1.000 1.053 6,214,298
Van Kampen Life Investment Trust
Van Kampen LIT Comstock Subaccount (Class II)
(5/03)............................................. 2006 1.492 1.709 2,280,050
2005 1.452 1.492 2,172,690
2004 1.253 1.452 909,988
2003 1.000 1.253 296,605
Van Kampen LIT Enterprise Subaccount (Class II)
(5/01)............................................. 2006 0.810 0.810 --
2005 0.803 0.810 --
2004 0.784 0.803 210,094
2003 0.632 0.784 695,515
2002 0.909 0.632 98,698
2001 1.000 0.909 7,557
Van Kampen LIT Strategic Growth Subaccount (Class
II) (5/01)......................................... 2006 0.761 0.771 1,289,357
2005 0.716 0.761 1,410,013
2004 0.679 0.716 1,414,002
2003 0.542 0.679 1,153,763
2002 0.815 0.542 702,896
2001 1.000 0.815 247,162
</Table>
76
SEPARATE ACCOUNT CHARGES 1.30% (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Variable Insurance Products Fund
VIP Contrafund(R) Subaccount (Service Class 2)
(6/01)............................................. 2006 1.381 1.519 10,457,630
2005 1.199 1.381 7,904,103
2004 1.055 1.199 5,195,149
2003 0.834 1.055 2,525,530
2002 0.934 0.834 1,087,642
2001 1.000 0.934 105,479
VIP Mid Cap Subaccount (Service Class 2) (5/01).... 2006 1.788 1.983 13,786,295
2005 1.534 1.788 12,661,665
2004 1.247 1.534 8,927,974
2003 0.914 1.247 4,217,571
2002 1.029 0.914 1,455,893
2001 1.000 1.029 52,373
</Table>
The date next to each funding option name reflects the date money first came
into the funding option through the Separate Account.
Funding options not listed above had no amounts allocated to them or were not
available as of December 31, 2006.
Number of Units Outstanding at End of Year may include units for Contracts
Owners in payout phase, where appropriate.
If an accumulation unit value has no assets and units across all sub-accounts
within the Separate Account, and has had no assets and units for the history
displayed on the Condensed Financial Information in the past, then it may not be
displayed.
Variable Funding Option mergers and substitutions that occurred between January
1, 2005 and December 31, 2006, are displayed below. Please see Appendix
for more information on Variable Funding Option name changes, mergers
and substitutions.
Effective on or about 05/01/06, Capital Appreciation Fund merged into Met
Investors Series Trust-Janus Capital Appreciation Portfolio-Class A and is no
longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust-Disciplined Mid-Cap
Stock Portfolio merged into Met Investors Series Trust-Batterymarch Mid-Cap
Stock Portfolio-Class A and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust-Federated High Yield
Portfolio merged into Met Investors Series Trust-Federated High Yield Portfolio-
Class A and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust-Mondrian
International Stock Portfolio merged into Met Investors Series Trust-Harris
Oakmark International Stock Portfolio-Class A and is no longer available as a
funding option.
Effective on or about 05/01/06, The Travelers Series Trust-Convertible
Securities Portfolio merged into Met Investors Series Trust-Lord Abbett Bond
Debenture Portfolio-Class A and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust-Mercury Large Cap
Core Portfolio merged into Met Investors Series Trust-Mercury Large-Cap Core
Portfolio-Class A and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust-AIM Capital
Appreciation Portfolio merged into Met Investors Series Trust -- Met/AIM Capital
Appreciation Portfolio-Class A and is no longer available as a funding option.
77
Effective on or about 05/01/06, The Travelers Series Trust -- MFS(R) Value
Portfolio merged into Met Investors Series Trust -- MFS(R) Value Portfolio-Class
A and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust-Pioneer Fund
Portfolio merged into Met Investors Series Trust-Pioneer Fund Portfolio-Class A
and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust-Pioneer Strategic
Income Portfolio-Class A merged into Met Investors Series Trust-Pioneer
Strategic Income Portfolio-Class A and is no longer available as a funding
option.
Effective on or about 05/01/06, The Travelers Series Trust-MFS(R) Mid Cap Growth
Portfolio merged into Metropolitan Series Fund, Inc.-BlackRock Aggressive Growth
Portfolio-Class D and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust-Travelers Quality
Bond Portfolio merged into Metropolitan Series Fund, Inc.-BlackRock Bond Income
Portfolio-Class A and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust-Large Cap Portfolio
merged into Metropolitan Series Fund, Inc.-FI Large Cap Portfolio-Class A and is
no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust-Strategic Equity
Portfolio merged into Metropolitan Series Fund, Inc.-FI Large Cap Portfolio-
Class A and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust-Equity Income
Portfolio merged into Metropolitan Series Fund, Inc.-FI Value Leaders Portfolio-
Class D and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust-MFS(R) Total Return
Portfolio merged into Metropolitan Series Fund, Inc.-MFS(R) Total Return
Portfolio-Class F and is no longer available as a funding option.
Effective on or about 05/01/06, The Travelers Series Trust-U.S. Government
Securities Portfolio merged into Metropolitan Series Fund, Inc.-Western Asset
Manager U.S. Government Portfolio-Class A and is no longer available as a
funding option.
Effective on or about 05/01/06 Oppenheimer Variable Account Funds -- Oppenheimer
Main Street Fund/VA-Service Shares was replaced by Met Investors Series Trust-
Lord Abbett Growth and Income Portfolio-Class B and is no longer available as a
funding option.
Effective on or about 05/01/06 Franklin Templeton Variable Insurance Products
Trust -- Mutual Shares Securities Fund-Class 2 Shares was replaced by Met
Investors Series Trust-Lord Abbett Growth and Income Portfolio-Class B and is no
longer available as a funding option.
Effective on or about 05/01/06, AllianceBernstein Variable Products Series Fund,
Inc-AllianceBernstein Large Cap Growth Portfolio-Class B was replaced by
Metropolitan Series Fund, Inc.-T. Rowe Price Large Cap Growth Portfolio-Class B
and is no longer available as a funding option.
Effective on or about 05/01/06 Janus Aspen Series-Janus Aspen Series Growth and
Income Portfolio was replaced by Metropolitan Series Fund, Inc.-T. Rowe Price
Large Cap Growth Portfolio-Class B and is no longer available as a funding
option.
Effective on or about 05/01/06, Delaware VIP Trust-Delaware VIP REIT Series
Standard Class was replaced by Met Investors Series Trust-Neuberger Berman Real
Estate Portfolio-Class A and is no longer available as a funding option.
Effective on or about 11/13/06, Lazard Retirement Series, Inc.-Lazard Small Cap
Portfolio was replaced by the Met Investors Series Trust-Third Avenue Small Cap
Portfolio and is no longer available as a funding option.
78
ANNUAL REPORT
December 31, 2006
MetLife of CT Separate Account QPN
for Variable Annuities
of
MetLife Insurance Company of Connecticut
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Policyholders of
MetLife of CT Separate Account QPN for Variable Annuities
and the Board of Directors of
MetLife Insurance Company of Connecticut:
We have audited the accompanying statement of assets and liabilities of the
Subaccounts (as disclosed in Appendix A) comprising MetLife of CT Separate
Account QPN for Variable Annuities (formerly, The Travelers Separate Account QPN
for Variable Annuities) (the "Separate Account") of MetLife Insurance Company of
Connecticut (formerly, The Travelers Insurance Company) ("MICC") as of December
31, 2006, the related statement of operations for the period in the year then
ended, and the statements of changes in net assets for each of the periods in
the two years then ended. These financial statements are the responsibility of
the Separate Account's management. Our responsibility is to express an opinion
on these financial statements based on our audits. The financial highlights of
the Separate Account included in footnote 5 for the periods in the three years
ended December 31, 2004, were audited by other auditors whose report, dated
March 21, 2005, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Separate Account is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. An audit includes consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Separate Account's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of December 31, 2006, by correspondence with the
custodian. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the Subaccounts
comprising the Separate Account of MICC as of December 31, 2006, the results of
their operations for the period in the year then ended, and the changes in their
net assets for each of the periods in the two years then ended, in conformity
with accounting principles generally accepted in the United States of America.
/s/ DELOITTE & TOUCHE LLP
Certified Public Accountants
Tampa, Florida
March 19, 2007
APPENDIX A
AllianceBernstein Growth and Income Subaccount (Class B)
AllianceBernstein Large-Cap Growth Subaccount (Class B)
American Funds Global Growth Subaccount (Class 2)
American Funds Growth Subaccount (Class 2)
American Funds Growth-Income Subaccount (Class 2)
Capital Appreciation Fund
Delaware VIP REIT Subaccount (Standard Class)
Dreyfus VIF Appreciation Subaccount (Initial Shares)
Dreyfus VIF Developing Leaders Subaccount (Initial Shares)
FTVIPT Franklin Small-Mid Cap Growth Securities Subaccount (Class 2)
FTVIPT Mutual Shares Securities Subaccount (Class 2)
FTVIPT Templeton Developing Markets Securities Subaccount (Class 2)
FTVIPT Templeton Foreign Securities Subaccount (Class 2)
High Yield Bond Trust
Janus Aspen Global Life Sciences Subaccount (Service Shares)
Janus Aspen Global Technology Subaccount (Service Shares)
Janus Aspen Growth and Income Subaccount (Service Shares)
Janus Aspen Mid Cap Growth Subaccount (Service Shares)
Lazard Retirement Small Cap Subaccount
LMPIF Investment Grade Bond Subaccount (Class A)
LMPIF Small Cap Value Subaccount (Class A)
LMPIS Growth and Income Subaccount
LMPIS Premier Selections All Cap Growth Subaccount
LMPIT S&P 500 Index Subaccount (Class A)
LMPVPI All Cap Subaccount (Class I)
LMPVPI Global High Yield Bond Subaccount (Class I)
LMPVPI Investors Subaccount (Class I)
LMPVPI Total Return Subaccount (Class I)
LMPVPII Appreciation Subaccount
LMPVPII Diversified Strategic Income Subaccount
LMPVPII Equity Index Subaccount (Class II)
LMPVPIII Adjustable Rate Income Subaccount
LMPVPIII Aggressive Growth Subaccount
LMPVPIII Large Cap Growth Subaccount
LMPVPIII Money Market Subaccount
LMPVPIII Social Awareness Stock Subaccount
LMPVPV Small Cap Growth Opportunities Subaccount
Lord Abbett Growth and Income Subaccount (Class VC)
Lord Abbett Mid-Cap Value Subaccount (Class VC)
Managed Assets Trust
MetLife Investment Diversified Bond Subaccount (Class I)
MetLife Investment International Stock Subaccount (Class I)
MetLife Investment Large Company Stock Subaccount (Class I)
MetLife Investment Small Company Stock Subaccount (Class I)
MIST Batterymarch Mid-Cap Stock Subaccount (Class A)
MIST BlackRock High Yield Subaccount (Class A)
MIST BlackRock Large-Cap Core Subaccount (Class A)
MIST Dreman Small-Cap Value Subaccount (Class A)
MIST Harris Oakmark International Subaccount (Class A)
MIST Janus Capital Appreciation Subaccount (Class A)
MIST Legg Mason Partners Managed Assets Subaccount (Class A)
MIST Lord Abbett Bond Debenture Subaccount (Class A)
MIST Lord Abbett Growth and Income Subaccount (Class B)
MIST Met/AIM Capital Appreciation Subaccount (Class A)
MIST Met/AIM Small Cap Growth Subaccount (Class A)
MIST MFS(R)Value Subaccount (Class A)
MIST Neuberger Berman Real Estate Subaccount (Class A)
MIST Pioneer Fund Subaccount (Class A)
MIST Pioneer Mid-Cap Value Subaccount (Class A)
MIST Pioneer Strategic Income Subaccount (Class A)
MIST Third Avenue Small Cap Value Subaccount (Class B)
MSF BlackRock Aggressive Growth Subaccount (Class D)
MSF BlackRock Bond Income Subaccount (Class A)
MSF FI Large Cap Subaccount (Class A)
MSF FI Value Leaders Subaccount (Class D)
MSF MetLife Aggressive Allocation Subaccount (Class B)
MSF MetLife Conservative Allocation Subaccount (Class B)
MSF MetLife Conservative to Moderate Allocation Subaccount (Class B)
MSF MetLife Moderate Allocation Subaccount (Class B)
MSF MetLife Moderate to Aggressive Allocation Subaccount (Class B)
MSF MFS(R)Total Return Subaccount (Class F)
MSF T. Rowe Price Large Cap Growth Subaccount (Class B)
MSF Western Asset Management High Yield Bond Subaccount (Class A)
MSF Western Asset Management U.S. Government Subaccount (Class A)
Oppenheimer Main Street/VA Subaccount ( Service Shares)
PIMCO VIT Real Return Subaccount (Administrative Class)
PIMCO VIT Total Return Subaccount (Administrative Class)
Putnam VT Small Cap Value Subaccount (Class IB)
Templeton Growth Fund Subaccount (Class A)
Travelers AIM Capital Appreciation Subaccount
Travelers Convertible Securities Subaccount
Travelers Disciplined Mid Cap Stock Subaccount
Travelers Equity Income Subaccount
Travelers Federated High Yield Subaccount
Travelers Large Cap Subaccount
Travelers Managed Allocation Series: Aggressive Subaccount
Travelers Managed Allocation Series: Conservative Subaccount
Travelers Managed Allocation Series: Moderate Subaccount
Travelers Managed Allocation Series: Moderate-Aggressive Subaccount
Travelers Managed Allocation Series: Moderate-Conservative Subaccount
Travelers Mercury Large Cap Core Subaccount
Travelers MFS(R)Mid Cap Growth Subaccount
Travelers MFS(R)Total Return Subaccount
Travelers MFS(R)Value Subaccount
Travelers Mondrian International Stock Subaccount
Travelers Pioneer Fund Subaccount
Travelers Pioneer Mid Cap Value Subaccount
Travelers Pioneer Strategic Income Subaccount
Travelers Quality Bond Subaccount
Travelers Strategic Equity Subaccount
Travelers Style Focus Series: Small Cap Growth Subaccount
Travelers Style Focus Series: Small Cap Value Subaccount
Travelers U.S. Government Securities Subaccount
Van Kampen LIT Comstock Subaccount (Class II)
Van Kampen LIT Strategic Growth Subaccount (Class II)
VIP Contrafund(R)Subaccount (Service Class 2)
VIP Mid Cap Subaccount (Service Class 2)
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2006
American Funds American American Funds
Templeton Growth Global Growth Funds Growth Growth-Income
Fund Subaccount Subaccount Subaccount Subaccount
(Class A) (Class 2) (Class 2) (Class 2)
--------------- --------------- --------------- ---------------
Assets:
Investments at market value .... $ 169,744,727 $ 22,192,483 $ 54,078,687 $ 34,508,188
--------------- --------------- --------------- ---------------
Total Assets ............... 169,744,727 22,192,483 54,078,687 34,508,188
--------------- --------------- --------------- ---------------
Liabilities:
Payables:
Insurance charges ............ 10,817 1,380 3,372 2,059
Due to MetLife Insurance Company
of Connecticut ............... 92,696 7,148 39,553 11,089
--------------- --------------- --------------- ---------------
Total Liabilities .......... 103,513 8,528 42,925 13,148
--------------- --------------- --------------- ---------------
Net Assets: $ 169,641,214 $ 22,183,955 $ 54,035,762 $ 34,495,040
=============== =============== =============== ===============
The accompanying notes are an integral part of these financial statements.
1
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES -- (Continued)
December 31, 2006
VIF TVIPT FTVIPT
Franklin Templeton
Dreyfus VIF Dreyfus VIF Small-Mid Cap Developing Markets
Appreciation Developing Leaders Growth Securities Securities
Subaccount Subaccount Subaccount Subaccount
(Initial Shares) (Initial Shares) (Class 2) (Class 2)
-------------- -------------- -------------- --------------
Assets:
Investments at market value ......... $ 40,910,332 $ 74,764,727 $ 8,884,267 $ 35,637,819
-------------- -------------- -------------- --------------
Total Assets .................... 40,910,332 74,764,727 8,884,267 35,637,819
-------------- -------------- -------------- --------------
Liabilities:
Payables:
Insurance charges ................. 2,630 4,725 529 2,253
Due to MetLife Insurance Company
of Connecticut .................... 8,640 48,520 7,599 27,093
-------------- -------------- -------------- --------------
Total Liabilities ............... 11,270 53,245 8,128 29,346
-------------- -------------- -------------- --------------
Net Assets: $ 40,899,062 $ 74,711,482 $ 8,876,139 $ 35,608,473
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
2
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES -- (Continued)
December 31, 2006
FTVIPT
Templeton Janus Aspen Janus Aspen Janus Aspen LMPIF Investment LMPIS
Foreign Securities Global Life Sciences Global Technology Mid Cap Growth Grade Bond Growth and
Subaccount Subaccount Subaccount Subaccount Subaccount Income
(Class 2) (Service Shares) (Service Shares) (Service Shares) (Class A) Subaccount
-------------- -------------- -------------- -------------- -------------- --------------
$ 23,410,099 $ 4,560,159 $ 4,040,888 $ 29,548,609 $ 35,543,158 $ 1,941,563
-------------- -------------- -------------- -------------- -------------- --------------
23,410,099 4,560,159 4,040,888 29,548,609 35,543,158 1,941,563
-------------- -------------- -------------- -------------- -------------- --------------
1,486 300 266 1,949 2,299 125
5,432 5,401 5,420 23,908 10,065 68
-------------- -------------- -------------- -------------- -------------- --------------
6,918 5,701 5,686 25,857 12,364 193
-------------- -------------- -------------- -------------- -------------- --------------
$ 23,403,181 $ 4,554,458 $ 4,035,202 $ 29,522,752 $ 35,530,794 $ 1,941,370
============== ============== ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
3
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES -- (Continued)
December 31, 2006
LMPIS LMPIT LMPVPV LMPVPI
Premier Selections S&P 500 Index Small Cap Growth All Cap
All Cap Growth Subaccount Opportunities Subaccount
Subaccount (Class A) Subaccount (Class I)
-------------- -------------- -------------- --------------
Assets:
Investments at market value ......... $ 17,395,256 $ 57,492,315 $ 10,706,665 $ 37,672,390
-------------- -------------- -------------- --------------
Total Assets .................... 17,395,256 57,492,315 10,706,665 37,672,390
-------------- -------------- -------------- --------------
Liabilities:
Payables:
Insurance charges ................. 1,144 3,586 670 2,441
Due to MetLife Insurance Company
of Connecticut .................... 36 46,956 2,536 5,322
-------------- -------------- -------------- --------------
Total Liabilities ............... 1,180 50,542 3,206 7,763
-------------- -------------- -------------- --------------
Net Assets: $ 17,394,076 $ 57,441,773 $ 10,703,459 $ 37,664,627
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
4
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES -- (Continued)
December 31, 2006
LMPVPI Global LMPVPI LMPVPI LMPVPII LMPVPII
High Yield Bond Investors Total Return LMPVPII Diversified Equity Index
Subaccount Subaccount Subaccount Appreciation Strategic Income Subaccount
(Class I) (Class I) (Class I) Subaccount Subaccount (Class II)
-------------- -------------- -------------- -------------- -------------- --------------
$ 23,990,599 $ 58,859,623 $ 30,245,239 $ 70,903,730 $ 6,001,309 $ 65,453,176
-------------- -------------- -------------- -------------- -------------- --------------
23,990,599 58,859,623 30,245,239 70,903,730 6,001,309 65,453,176
-------------- -------------- -------------- -------------- -------------- --------------
1,444 3,804 1,980 4,741 390 4,067
21,986 28,991 3,100 18,024 874 18,663
-------------- -------------- -------------- -------------- -------------- --------------
23,430 32,795 5,080 22,765 1,264 22,730
-------------- -------------- -------------- -------------- -------------- --------------
$ 23,967,169 $ 58,826,828 $ 30,240,159 $ 70,880,965 $ 6,000,045 $ 65,430,446
============== ============== ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
5
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES -- (Continued)
December 31, 2006
LMPVPIII
Adjustable Rate LMPVPIII LMPVPIII LMPVPII
Income Aggressive Growth Large Cap Growth Money Market
Subaccount Subaccount Subaccount Subaccount
-------------- -------------- -------------- --------------
Assets:
Investments at market value ......... $ 1,707,801 $ 147,528,528 $ 34,563,041 $ 217,612,005
-------------- -------------- -------------- --------------
Total Assets .................... 1,707,801 147,528,528 34,563,041 217,612,005
-------------- -------------- -------------- --------------
Liabilities:
Payables:
Insurance charges ................. 102 9,731 2,229 13,534
Due to MetLife Insurance Company
of Connecticut .................... 297 15,531 17,105 59,778
-------------- -------------- -------------- --------------
Total Liabilities ............... 399 25,262 19,334 73,312
-------------- -------------- -------------- --------------
Net Assets: $ 1,707,402 $ 147,503,266 $ 34,543,707 $ 217,538,693
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
6
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES -- (Continued)
December 31, 2006
LMPVPIII Lord Abbett Lord Abbett MIST Batterymarch MIST BlackRock MIST BlackRock
Social Awareness Growth and Income Mid-Cap Value Mid-Cap Stock High Yield Large-Cap Core
Stock Subaccount Subaccount Subaccount Subaccount Subaccount
Subaccount (Class VC) (Class VC) (Class A) (Class A) (Class A)
-------------- -------------- -------------- -------------- -------------- --------------
$ 9,645,212 $ 22,125,651 $ 13,178,133 $ 23,913,230 $ 9,208,521 $ 7,050,731
-------------- -------------- -------------- -------------- -------------- --------------
9,645,212 22,125,651 13,178,133 23,913,230 9,208,521 7,050,731
-------------- -------------- -------------- -------------- -------------- --------------
647 1,384 825 1,572 597 456
1,710 19,333 3,798 7,716 1,171 2,996
-------------- -------------- -------------- -------------- -------------- --------------
2,357 20,717 4,623 9,288 1,768 3,452
-------------- -------------- -------------- -------------- -------------- --------------
$ 9,642,855 $ 22,104,934 $ 13,173,510 $ 23,903,942 $ 9,206,753 $ 7,047,279
============== ============== ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
7
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES -- (Continued)
December 31, 2006
MIST MIST MIST
MIST Dreman Harris Oakmark Janus Capital Legg Mason
Small-Cap Value International Appreciation Partners Managed
Subaccount Subaccount Subaccount Assets Subaccount
(Class A) (Class A) (Class A) (Class A)
-------------- -------------- -------------- --------------
Assets:
Investments at market value ......... $ 681,719 $ 62,707,694 $ 188,294,414 $ 106,183
-------------- -------------- -------------- --------------
Total Assets .................... 681,719 62,707,694 188,294,414 106,183
-------------- -------------- -------------- --------------
Liabilities:
Payables:
Insurance charges ................. 33 3,759 12,027 5
Due to MetLife Insurance Company
of Connecticut .................... 145 37,425 87,606 123
-------------- -------------- -------------- --------------
Total Liabilities ............... 178 41,184 99,633 128
-------------- -------------- -------------- --------------
Net Assets: $ 681,541 $ 62,666,510 $ 188,194,781 $ 106,055
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
8
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES -- (Continued)
December 31, 2006
MIST MIST MIST MIST
Lord Abbett Lord Abbett Met/AIM Capital MIST Met/AIM MIST Neuberger Berman
Bond Debenture Growth and Income Appreciation Small Cap Growth MFS(R) Value Real Estate
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
(Class A) (Class B) (Class A) (Class A) (Class A) (Class A)
-------------- -------------- -------------- -------------- -------------- --------------
$ 3,293,566 $ 130,137,578 $ 66,044,373 $ 337,229 $ 10,600,324 $ 31,764,940
-------------- -------------- -------------- -------------- -------------- --------------
3,293,566 130,137,578 66,044,373 337,229 10,600,324 31,764,940
-------------- -------------- -------------- -------------- -------------- --------------
213 8,076 4,311 18 642 1,998
1,029 42,012 25,070 998 4,227 12,673
-------------- -------------- -------------- -------------- -------------- --------------
1,242 50,088 29,381 1,016 4,869 14,671
-------------- -------------- -------------- -------------- -------------- --------------
$ 3,292,324 $ 130,087,490 $ 66,014,992 $ 336,213 $ 10,595,455 $ 31,750,269
============== ============== ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
9
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES -- (Continued)
December 31, 2006
MIST
MIST MIST Pioneer MIST Pioneer Third Avenue
Pioneer Fund Mid-Cap Value Strategic Income Small Cap Value
Subaccount Subaccount Subaccount Subaccount
(Class A) (Class A) (Class A) (Class B)
-------------- -------------- -------------- --------------
Assets:
Investments at market value ......... $ 1,784,334 $ 144,845 $ 15,578,946 $ 10,570,437
-------------- -------------- -------------- --------------
Total Assets .................... 1,784,334 144,845 15,578,946 10,570,437
-------------- -------------- -------------- --------------
Liabilities:
Payables:
Insurance charges ................. 114 7 962 625
Due to MetLife Insurance Company
of Connecticut .................... 155 1 -- 5,491
-------------- -------------- -------------- --------------
Total Liabilities ................. 269 8 962 6,116
-------------- -------------- -------------- --------------
Net Assets: $ 1,784,065 $ 144,837 $ 15,577,984 $ 10,564,321
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
10
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES -- (Continued)
December 31, 2006
MetLife MetLife MetLife MetLife
Investment Investment Investment Investment MSF BlackRock MSF BlackRock
Diversified Bond International Stock Large Company Small Company Aggressive Growth Bond Income
Subaccount Subaccount Stock Subaccount Stock Subaccount Subaccount Subaccount
(Class I) (Class I) (Class I) (Class I) (Class D) (Class A)
-------------- -------------- -------------- -------------- -------------- --------------
$ 18,420,118 $ 15,563,197 $ 12,772,599 $ 16,256,575 $ 43,701,451 $ 27,077,782
-------------- -------------- -------------- -------------- -------------- --------------
18,420,118 15,563,197 12,772,599 16,256,575 43,701,451 27,077,782
-------------- -------------- -------------- -------------- -------------- --------------
1,210 1,018 839 1,097 2,816 1,663
1,421 1,090 250 1,285 12,620 15,052
-------------- -------------- -------------- -------------- -------------- --------------
2,631 2,108 1,089 2,382 15,436 16,715
-------------- -------------- -------------- -------------- -------------- --------------
$ 18,417,487 $ 15,561,089 $ 12,771,510 $ 16,254,193 $ 43,686,015 $ 27,061,067
============== ============== ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
11
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES -- (Continued)
December 31, 2006
MSF MetLife MSF MetLife
MSF FI MSF FI Aggressive Conservative
Large Cap Value Leaders Allocation Allocation
Subaccount Subaccount Subaccount Subaccount
(Class A) (Class D) (Class B) (Class B)
-------------- -------------- -------------- --------------
Assets:
Investments at market value ......... $ 87,451,370 $ 50,738,075 $ 3,997,921 $ 1,414,576
-------------- -------------- -------------- --------------
Total Assets .................... 87,451,370 50,738,075 3,997,921 1,414,576
-------------- -------------- -------------- --------------
Liabilities:
Payables:
Insurance charges ................. 5,582 3,083 252 89
Due to MetLife Insurance Company
of Connecticut .................... 11,518 10,869 2,943 614
-------------- -------------- -------------- --------------
Total Liabilities ............... 17,100 13,952 3,195 703
-------------- -------------- -------------- --------------
Net Assets: $ 87,434,270 $ 50,724,123 $ 3,994,726 $ 1,413,873
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
12
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES -- (Continued)
December 31, 2006
MSF MetLife MSF MetLife MSF Western
Conservative to MSF MetLife Moderate to MSF MFS(R) MSF T. Rowe Price Asset Management
Moderate Allocation Moderate Allocation Aggressive Allocation Total Return Large Cap Growth High Yield Bond
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
(Class B) (Class B) (Class B) (Class F) (Class B) (Class A)
-------------- -------------- -------------- -------------- -------------- --------------
$ 3,609,524 $ 11,899,070 $ 14,429,976 $ 151,710,923 $ 13,837,599 $ 890,326
-------------- -------------- -------------- -------------- -------------- --------------
3,609,524 11,899,070 14,429,976 151,710,923 13,837,599 890,326
-------------- -------------- -------------- -------------- -------------- --------------
221 739 939 9,554 889 46
4,964 12,544 19,042 51,450 4,426 5,941
-------------- -------------- -------------- -------------- -------------- --------------
5,185 13,283 19,981 61,004 5,315 5,987
-------------- -------------- -------------- -------------- -------------- --------------
$ 3,604,339 $ 11,885,787 $ 14,409,995 $ 151,649,919 $ 13,832,284 $ 884,339
============== ============== ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
13
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES -- (Continued)
December 31, 2006
MSF Western PIMCO VIT PIMCO VIT
Asset Management Real Return Total Return Putnam VT
U.S. Government Subaccount Subaccount Small Cap Value
Subaccount (Administrative (Administrative Subaccount
(Class A) Class) Class) (Class IB)
--------------- --------------- --------------- ---------------
Assets:
Investments at market value .... $ 33,990,996 $ 684,622 $ 50,653,753 $ 54,175,210
--------------- --------------- --------------- ---------------
Total Assets ............... 33,990,996 684,622 50,653,753 54,175,210
--------------- --------------- --------------- ---------------
Liabilities:
Payables:
Insurance charges ............ 1,856 33 3,001 3,293
Due to MetLife Insurance Company
of Connecticut ............... 44,722 1,241 22,205 35,532
--------------- --------------- --------------- ---------------
Total Liabilities .......... 46,578 1,274 25,206 38,825
--------------- --------------- --------------- ---------------
Net Assets: $ 33,944,418 $ 683,348 $ 50,628,547 $ 54,136,385
=============== =============== =============== ===============
The accompanying notes are an integral part of these financial statements.
14
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES -- (Concluded)
December 31, 2006
LMPIF Van Kampen Van Kampen LIT
Small Cap Value LIT Comstock Strategic Growth VIP Contrafund(R) VIP Mid Cap
Subaccount Subaccount Subaccount Subaccount Subaccount
(Class A) (Class II) (Class II) (Service Class 2) (Service Class 2)
--------------- --------------- --------------- --------------- ---------------
$ 14,284,179 $ 11,995,402 $ 4,031,316 $ 51,921,868 $ 84,230,160
--------------- --------------- --------------- --------------- ---------------
14,284,179 11,995,402 4,031,316 51,921,868 84,230,160
--------------- --------------- --------------- --------------- ---------------
917 759 254 3,225 5,179
1,442 6,030 541 49,939 53,073
--------------- --------------- --------------- --------------- ---------------
2,359 6,789 795 53,164 58,252
--------------- --------------- --------------- --------------- ---------------
$ 14,281,820 $ 11,988,613 $ 4,030,521 $ 51,868,704 $ 84,171,908
=============== =============== =============== =============== ===============
The accompanying notes are an integral part of these financial statements.
15
[This page is intentionally left blank]
16
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS
For the year ended December 31, 2006
Templeton AllianceBernstein AllianceBernstein American Funds
Growth Fund Growth and Income Large-Cap Growth Global Growth
Subaccount Subaccount Subaccount Subaccount
(Class A) (Class B) (Class B) (Class 2)
-------------- -------------- -------------- --------------
Investment Income:
Dividends ........................... $ 3,103,403 $ -- $ -- $ 138,936
-------------- -------------- -------------- --------------
Expenses:
Insurance charges ................... 1,883,548 439,728 16,919 186,604
-------------- -------------- -------------- --------------
Net investment income (loss) ...... 1,219,855 (439,728) (16,919) (47,668)
-------------- -------------- -------------- --------------
Realized Gain (Loss) and Unrealized
Gain (Loss) on Investments:
Realized gain distribution ........ 10,657,157 -- -- --
Realized gain (loss) on sale of
investments ..................... 5,261,213 14,092,024 727,848 222,781
-------------- -------------- -------------- --------------
Realized gain (loss) ............ 15,918,370 14,092,024 727,848 222,781
-------------- -------------- -------------- --------------
Change in unrealized gain (loss)
on investments .................. 13,190,180 (8,224,279) (746,248) 2,769,778
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations ......... $ 30,328,405 $ 5,428,017 $ (35,319) $ 2,944,891
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
17
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
American Funds American Funds Delaware
Growth Growth-Income Capital VIP REIT
Subaccount Subaccount Appreciation Subaccount
(Class 2) (Class 2) Fund (Standard Class)
-------------- -------------- -------------- --------------
Investment Income:
Dividends ........................... $ 397,349 $ 489,047 $ -- $ 406,353
-------------- -------------- -------------- --------------
Expenses:
Insurance charges ................... 486,442 303,213 866,644 75,968
-------------- -------------- -------------- --------------
Net investment income (loss) ...... (89,093) 185,834 (866,644) 330,385
-------------- -------------- -------------- --------------
Realized Gain (Loss) and Unrealized
Gain (Loss) on Investments:
Realized gain distribution ........ 261,848 639,867 8,114,496 1,354,852
Realized gain (loss) on sale of
investments ..................... 367,400 202,665 5,582,291 1,553,802
-------------- -------------- -------------- --------------
Realized gain (loss) ............ 629,248 842,532 13,696,787 2,908,654
-------------- -------------- -------------- --------------
Change in unrealized gain (loss)
on investments .................. 3,331,910 2,739,608 (14,938,179) (1,693,742)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations ......... $ 3,872,065 $ 3,767,974 $ (2,108,036) $ 1,545,297
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
18
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
FTVIPT Franklin FTVIPT FTVIPT Templeton
Dreyfus VIF Dreyfus VIF Small-Mid Cap Mutual Shares Developing Markets FTVIPT Templeton
Appreciation Developing Leaders Growth Securities Securities Securities Foreign Securities
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
(Initial Shares) (Initial Shares) (Class 2) (Class 2) (Class 2) (Class 2)
-------------- -------------- -------------- -------------- -------------- --------------
$ 689,435 $ 346,544 $ -- $ -- $ 339,009 $ 242,203
-------------- -------------- -------------- -------------- -------------- --------------
497,286 961,214 98,125 32,265 342,174 227,129
-------------- -------------- -------------- -------------- -------------- --------------
192,149 (614,670) (98,125) (32,265) (3,165) 15,074
-------------- -------------- -------------- -------------- -------------- --------------
-- 7,166,523 -- -- -- --
1,321,208 1,662,219 370,315 1,620,213 907,911 451,849
-------------- -------------- -------------- -------------- -------------- --------------
1,321,208 8,828,742 370,315 1,620,213 907,911 451,849
-------------- -------------- -------------- -------------- -------------- --------------
4,430,629 (6,249,095) 366,334 (955,317) 5,482,222 3,179,625
-------------- -------------- -------------- -------------- -------------- --------------
$ 5,943,986 $ 1,964,977 $ 638,524 $ 632,631 $ 6,386,968 $ 3,646,548
============== ============== ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
19
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
Janus Aspen
Janus Aspen Janus Aspen Growth
Global Life Sciences Global Technology and Income
High Yield Bond Subaccount Subaccount Subaccount
Trust (Service Shares) (Service Shares) (Service Shares)
-------------- -------------- -------------- --------------
Investment Income:
Dividends ........................... $ 21,056 $ -- $ -- $ --
-------------- -------------- -------------- --------------
Expenses:
Insurance charges ................... 599 64,246 49,637 32,686
-------------- -------------- -------------- --------------
Net investment income (loss) ...... 20,457 (64,246) (49,637) (32,686)
-------------- -------------- -------------- --------------
Realized Gain (Loss) and Unrealized
Gain (Loss) on Investments:
Realized gain distribution ........ 1,679 -- -- --
Realized gain (loss) on sale of
investments ..................... (18,455) 366,646 33,322 1,935,459
-------------- -------------- -------------- --------------
Realized gain (loss) ............ (16,776) 366,646 33,322 1,935,459
-------------- -------------- -------------- --------------
Change in unrealized gain (loss)
on investments .................. (229) (24,660) 245,131 (1,330,169)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations ......... $ 3,452 $ 277,740 $ 228,816 $ 572,604
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
20
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
LMPIF
Janus Aspen Lazard Investment LMPIS LMPIT
Mid Cap Growth Retirement Grade Bond LMPIS Growth Premier Selections S&P 500 Index
Subaccount Small Cap Subaccount and Income All Cap Growth Subaccount
(Service Shares) Subaccount (Class A) Subaccount Subaccount (Class A)
-------------- -------------- -------------- -------------- -------------- --------------
$ -- $ -- $ 2,023,311 $ 14,608 $ -- $ 751,815
-------------- -------------- -------------- -------------- -------------- --------------
365,223 74,185 465,033 22,091 231,154 661,445
-------------- -------------- -------------- -------------- -------------- --------------
(365,223) (74,185) 1,558,278 (7,483) (231,154) 90,370
-------------- -------------- -------------- -------------- -------------- --------------
-- 713,144 -- 635 563,894 --
1,385,406 491,756 (541,137) 68,659 842,018 1,454,683
-------------- -------------- -------------- -------------- -------------- --------------
1,385,406 1,204,900 (541,137) 69,294 1,405,912 1,454,683
-------------- -------------- -------------- -------------- -------------- --------------
2,332,200 (199,254) (500,518) 135,485 (44,434) 6,036,129
-------------- -------------- -------------- -------------- -------------- --------------
$ 3,352,383 $ 931,461 $ 516,623 $ 197,296 $ 1,130,324 $ 7,581,182
============== ============== ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
21
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
LMPVPI
LMPVPV LMPVPI Global LMPVPI
Small Cap Growth All Cap High Yield Bond Investors
Opportunities Subaccount Subaccount Subaccount
Subaccount (Class I) (Class I) (Class I)
-------------- -------------- -------------- --------------
Investment Income:
Dividends ........................... $ -- $ 486,937 $ 1,365,085 $ 914,443
-------------- -------------- -------------- --------------
Expenses:
Insurance charges ................... 125,033 440,844 263,961 695,344
-------------- -------------- -------------- --------------
Net investment income (loss) ...... (125,033) 46,093 1,101,124 219,099
-------------- -------------- -------------- --------------
Realized Gain (Loss) and Unrealized
Gain (Loss) on Investments:
Realized gain distribution ........ 714,368 1,319,357 136,490 1,310,656
Realized gain (loss) on sale of
investments ..................... 265,628 1,495,893 305,490 2,862,577
-------------- -------------- -------------- --------------
Realized gain (loss) ............ 979,996 2,815,250 441,980 4,173,233
-------------- -------------- -------------- --------------
Change in unrealized gain (loss)
on investments .................. 85,150 2,905,151 629,275 4,852,509
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations ......... $ 940,113 $ 5,766,494 $ 2,172,379 $ 9,244,841
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
22
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
LMPVPI LMPVPII LMPVPII LMPVPIII LMPVPIII
Total Return LMPVPII Diversified Equity Index Adjustable Rate Aggressive
Subaccount Appreciation Strategic Income Subaccount Income Growth
(Class I) Subaccount Subaccount (Class II) Subaccount Subaccount
-------------- -------------- -------------- -------------- -------------- --------------
$ 619,672 $ 757,038 $ 359,387 $ 845,464 $ 77,120 $ --
-------------- -------------- -------------- -------------- -------------- --------------
387,424 865,419 76,842 752,752 16,442 1,909,884
-------------- -------------- -------------- -------------- -------------- --------------
232,248 (108,381) 282,545 92,712 60,678 (1,909,884)
-------------- -------------- -------------- -------------- -------------- --------------
540,710 1,989,272 -- 795,876 -- 158,772
1,235,292 1,755,563 (43,402) 2,161,189 3,117 8,408,127
-------------- -------------- -------------- -------------- -------------- --------------
1,776,002 3,744,835 (43,402) 2,957,065 3,117 8,566,899
-------------- -------------- -------------- -------------- -------------- --------------
1,390,370 5,282,988 12,157 5,452,209 (20,202) 4,887,597
-------------- -------------- -------------- -------------- -------------- --------------
$ 3,398,620 $ 8,919,442 $ 251,300 $ 8,501,986 $ 43,593 $ 11,544,612
============== ============== ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
23
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
Lord Abbett
LMPVPIII Growth and
LMPVPIII LMPVPIII Social Awareness Income
Large Cap Growth Money Market Stock Subaccount
Subaccount Subaccount Subaccount (Class VC)
-------------- -------------- -------------- --------------
Investment Income:
Dividends ........................... $ 52,997 $ 9,951,555 $ 49,488 $ 263,869
-------------- -------------- -------------- --------------
Expenses:
Insurance charges ................... 441,820 2,520,062 126,010 228,195
-------------- -------------- -------------- --------------
Net investment income (loss) ...... (388,823) 7,431,493 (76,522) 35,674
-------------- -------------- -------------- --------------
Realized Gain (Loss) and Unrealized
Gain (Loss) on Investments:
Realized gain distribution ........ -- -- -- 707,087
Realized gain (loss) on sale of
investments ..................... 992,048 -- 326,666 253,188
-------------- -------------- -------------- --------------
Realized gain (loss) ............ 992,048 -- 326,666 960,275
-------------- -------------- -------------- --------------
Change in unrealized gain (loss)
on investments .................. 387,881 -- 332,550 1,992,354
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations ......... $ 991,106 $ 7,431,493 $ 582,694 $ 2,988,303
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
24
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
MIST
Lord Abbett Batterymarch MIST BlackRock MIST BlackRock MIST Dreman
Mid-Cap Value Mid-Cap Stock High Yield Large-Cap Core Small-Cap Value
Subaccount Managed Assets Subaccount Subaccount Subaccount Subaccount
(Class VC) Trust (Class A) (Class A) (Class A) (Class A)
-------------- -------------- -------------- -------------- -------------- --------------
$ 63,638 $ 2,063 $ -- $ -- $ -- $ 2,697
-------------- -------------- -------------- -------------- -------------- --------------
144,044 282 211,142 72,953 58,348 1,803
-------------- -------------- -------------- -------------- -------------- --------------
(80,406) 1,781 (211,142) (72,953) (58,348) 894
-------------- -------------- -------------- -------------- -------------- --------------
991,554 2,798 -- -- -- 1,558
201,093 (2,698) (474,231) 33,335 28,523 860
-------------- -------------- -------------- -------------- -------------- --------------
1,192,647 100 (474,231) 33,335 28,523 2,418
-------------- -------------- -------------- -------------- -------------- --------------
236,318 (14) (886,497) 546,135 466,627 50,473
-------------- -------------- -------------- -------------- -------------- --------------
$ 1,348,559 $ 1,867 $ (1,571,870) $ 506,517 $ 436,802 $ 53,785
============== ============== ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
25
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
MIST MIST MIST MIST
Harris Oakmark Janus Capital Legg Mason Lord Abbett
International Appreciation Partners Managed Bond Debenture
Subaccount Subaccount Assets Subaccount Subaccount
(Class A) (Class A) (Class A) (Class A)
-------------- -------------- -------------- --------------
Investment Income:
Dividends ........................... $ -- $ -- $ -- $ --
-------------- -------------- -------------- --------------
Expenses:
Insurance charges ................... 424,624 1,521,789 648 16,819
-------------- -------------- -------------- --------------
Net investment income (loss) ...... (424,624) (1,521,789) (648) (16,819)
-------------- -------------- -------------- --------------
Realized Gain (Loss) and Unrealized
Gain (Loss) on Investments:
Realized gain distribution ........ -- -- -- --
Realized gain (loss) on sale of
investments ..................... 133,210 (970,618) 2,123 3,661
-------------- -------------- -------------- --------------
Realized gain (loss) ............ 133,210 (970,618) 2,123 3,661
-------------- -------------- -------------- --------------
Change in unrealized gain (loss)
on investments .................. 6,375,498 6,674,734 3,001 147,827
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations ......... $ 6,084,084 $ 4,182,327 $ 4,476 $ 134,669
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
26
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
MIST MIST Met/AIM MIST
Lord Abbett Capital MIST Met/AIM Neuberger Berman MIST
Growth and Income Appreciation Small Cap Growth MIST MFS(R) Value Real Estate Pioneer Fund
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
(Class B) (Class A) (Class A) (Class A) (Class A) (Class A)
-------------- -------------- -------------- -------------- -------------- --------------
$ -- $ 115,842 $ -- $ 124,989 $ -- $ --
-------------- -------------- -------------- -------------- -------------- --------------
999,449 560,915 1,151 52,211 195,530 9,238
-------------- -------------- -------------- -------------- -------------- --------------
(999,449) (445,073) (1,151) 72,778 (195,530) (9,238)
-------------- -------------- -------------- -------------- -------------- --------------
-- 8,065,739 3,563 420,427 -- --
433,533 (727,693) 6 2,056 215,704 (1,328)
-------------- -------------- -------------- -------------- -------------- --------------
433,533 7,338,046 3,569 422,483 215,704 (1,328)
-------------- -------------- -------------- -------------- -------------- --------------
10,313,768 (8,160,031) 14,686 410,996 5,060,821 104,356
-------------- -------------- -------------- -------------- -------------- --------------
$ 9,747,852 $ (1,267,058) $ 17,104 $ 906,257 $ 5,080,995 $ 93,790
============== ============== ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
27
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
MIST MetLife
MIST Pioneer MIST Pioneer Third Avenue Investment
Mid-Cap Value Strategic Income Small Cap Value Diversified Bond
Subaccount Subaccount Subaccount Subaccount
(Class A) (Class A) (Class B) (Class I)
-------------- -------------- -------------- --------------
Investment Income:
Dividends ........................... $ 322 $ 718,823 $ -- $ 777,213
-------------- -------------- -------------- --------------
Expenses:
Insurance charges ................... 587 112,023 15,996 226,058
-------------- -------------- -------------- --------------
Net investment income (loss) ...... (265) 606,800 (15,996) 551,155
-------------- -------------- -------------- --------------
Realized Gain (Loss) and Unrealized
Gain (Loss) on Investments:
Realized gain distribution ........ 1,998 -- -- --
Realized gain (loss) on sale of
investments ..................... 370 25,262 9,290 (12,318)
-------------- -------------- -------------- --------------
Realized gain (loss) ............ 2,368 25,262 9,290 (12,318)
-------------- -------------- -------------- --------------
Change in unrealized gain (loss)
on investments .................. 9,918 (64,541) 238,308 47,407
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations ......... $ 12,021 $ 567,521 $ 231,602 $ 586,244
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
28
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
MetLife MetLife Investment MetLife Investment
Investment Large Company Small Company MSF BlackRock MSF BlackRock MSF FI
International Stock Stock Stock Aggressive Growth Bond Income Large Cap
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
(Class I) (Class I) (Class I) (Class D) (Class A) (Class A)
-------------- -------------- -------------- -------------- -------------- --------------
$ 241,012 $ 119,083 $ 20,878 $ -- $ -- $ --
-------------- -------------- -------------- -------------- -------------- --------------
149,956 145,646 201,861 365,154 215,353 711,525
-------------- -------------- -------------- -------------- -------------- --------------
91,056 (26,563) (180,983) (365,154) (215,353) (711,525)
-------------- -------------- -------------- -------------- -------------- --------------
-- -- 1,873,647 -- -- --
722,318 370,728 650,343 (566,693) 137,561 (664,442)
-------------- -------------- -------------- -------------- -------------- --------------
722,318 370,728 2,523,990 (566,693) 137,561 (664,442)
-------------- -------------- -------------- -------------- -------------- --------------
2,092,000 982,831 (463,160) (538,433) 1,248,957 2,167,577
-------------- -------------- -------------- -------------- -------------- --------------
$ 2,905,374 $ 1,326,996 $ 1,879,847 $ (1,470,280) $ 1,171,165 $ 791,610
============== ============== ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
29
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
MSF MetLife MSF MetLife MSF MetLife
MSF FI Aggressive Conservative Conservative to
Value Leaders Allocation Allocation Moderate Allocation
Subaccount Subaccount Subaccount Subaccount
(Class D) (Class B) (Class B) (Class B)
-------------- -------------- -------------- --------------
Investment Income:
Dividends ........................... $ -- $ -- $ -- $ --
-------------- -------------- -------------- --------------
Expenses:
Insurance charges ................... 386,133 13,331 6,088 10,596
-------------- -------------- -------------- --------------
Net investment income (loss) ...... (386,133) (13,331) (6,088) (10,596)
-------------- -------------- -------------- --------------
Realized Gain (Loss) and Unrealized
Gain (Loss) on Investments:
Realized gain distribution ........ -- -- -- --
Realized gain (loss) on sale of
investments ..................... (158,035) 1,268 3,234 3,304
-------------- -------------- -------------- --------------
Realized gain (loss) ............ (158,035) 1,268 3,234 3,304
-------------- -------------- -------------- --------------
Change in unrealized gain (loss)
on investments .................. 1,852,818 222,619 45,588 103,258
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations ......... $ 1,308,650 $ 210,556 $ 42,734 $ 95,966
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
30
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
MSF MetLife MSF MetLife MSFMSF Western Asset MSF Western
Moderate Moderate to MSF MFS(R) T. Rowe Price Management Asset Management
Allocation Aggressive Allocation Total Return Large Cap Growth High Yield Bond U.S. Government
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
(Class B) (Class B) (Class F) (Class B) (Class A) (Class A)
-------------- -------------- -------------- -------------- -------------- --------------
$ -- $ -- $ -- $ -- $ -- $ --
-------------- -------------- -------------- -------------- -------------- --------------
49,491 57,820 1,178,961 103,851 4,163 239,824
-------------- -------------- -------------- -------------- -------------- --------------
(49,491) (57,820) (1,178,961) (103,851) (4,163) (239,824)
-------------- -------------- -------------- -------------- -------------- --------------
-- -- -- -- -- --
36,539 (1,339) 661,155 (16,477) 1,959 122,449
-------------- -------------- -------------- -------------- -------------- --------------
36,539 (1,339) 661,155 (16,477) 1,959 122,449
-------------- -------------- -------------- -------------- -------------- --------------
533,289 749,155 11,239,867 1,045,651 54,687 1,425,764
-------------- -------------- -------------- -------------- -------------- --------------
$ 520,337 $ 689,996 $ 10,722,061 $ 925,323 $ 52,483 $ 1,308,389
============== ============== ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
31
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
PIMCO VIT PIMCO VIT
Oppenheimer Real Return Total Return Putnam VT
Main Street/VA Subaccount Subaccount Small Cap Value
Subaccount (Administrative (Administrative Subaccount
(Service Shares) Class) Class) (Class IB)
-------------- -------------- -------------- --------------
Investment Income:
Dividends ........................... $ 86,894 $ 17,066 $ 2,276,393 $ 164,490
-------------- -------------- -------------- --------------
Expenses:
Insurance charges ................... 33,745 3,593 550,332 576,133
-------------- -------------- -------------- --------------
Net investment income (loss) ...... 53,149 13,473 1,726,061 (411,643)
-------------- -------------- -------------- --------------
Realized Gain (Loss) and Unrealized
Gain (Loss) on Investments:
Realized gain distribution ........ -- 16,439 275,623 5,036,720
Realized gain (loss) on sale of
investments ..................... 1,539,962 (209) (175,944) 1,642,236
-------------- -------------- -------------- --------------
Realized gain (loss) ............ 1,539,962 16,230 99,679 6,678,956
-------------- -------------- -------------- --------------
Change in unrealized gain (loss)
on investments .................. (1,080,596) (25,150) (428,357) 1,306,787
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations ......... $ 512,515 $ 4,553 $ 1,397,383 $ 7,574,100
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
32
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
LMPIF Travelers Travelers Travelers Travelers
Small Cap Value AIM Capital Convertible Disciplined Travelers Federated
Subaccount Appreciation Securities Mid Cap Stock Equity Income High Yield
(Class A) Subaccount Subaccount Subaccount Subaccount Subaccount
-------------- -------------- -------------- -------------- -------------- --------------
$ -- $ -- $ 10,015 $ 159,492 $ 743,533 $ 727,558
-------------- -------------- -------------- -------------- -------------- --------------
168,199 316,437 3,593 114,324 205,384 34,939
-------------- -------------- -------------- -------------- -------------- --------------
(168,199) (316,437) 6,422 45,168 538,149 692,619
-------------- -------------- -------------- -------------- -------------- --------------
1,119,352 428,757 15,688 4,758,313 5,677,521 --
549,888 16,164,763 18,304 4,387,717 3,914,579 (568,868)
-------------- -------------- -------------- -------------- -------------- --------------
1,669,240 16,593,520 33,992 9,146,030 9,592,100 (568,868)
-------------- -------------- -------------- -------------- -------------- --------------
(110,994) (10,984,352) 16,626 (6,537,899) (7,275,856) 116,548
-------------- -------------- -------------- -------------- -------------- --------------
$ 1,390,047 $ 5,292,731 $ 57,040 $ 2,653,299 $ 2,854,393 $ 240,299
============== ============== ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
33
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
Travelers Travelers Travelers
Managed Managed Managed
Travelers Allocation Series: Allocation Series: Allocation Series:
Large Cap Aggressive Conservative Moderate
Subaccount Subaccount Subaccount Subaccount
-------------- -------------- -------------- --------------
Investment Income:
Dividends ........................... $ 255,404 $ 9,807 $ 8,022 $ 79,585
-------------- -------------- -------------- --------------
Expenses:
Insurance charges ................... 222,997 1,436 580 6,778
-------------- -------------- -------------- --------------
Net investment income (loss) ...... 32,407 8,371 7,442 72,807
-------------- -------------- -------------- --------------
Realized Gain (Loss) and Unrealized
Gain (Loss) on Investments:
Realized gain distribution ........ 3,125,527 80,760 4,810 215,251
Realized gain (loss) on sale of
investments ..................... 2,030,724 (62,613) (11,729) (189,479)
-------------- -------------- -------------- --------------
Realized gain (loss) ............ 5,156,251 18,147 (6,919) 25,772
-------------- -------------- -------------- --------------
Change in unrealized gain (loss)
on investments .................. (3,329,547) (3,186) (548) (30,023)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations ......... $ 1,859,111 $ 23,332 $ (25) $ 68,556
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
34
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
Travelers Travelers Managed
Managed Allocation Series: Travelers
Allocation Series: Moderate- Mercury Travelers MFS(R) Travelers MFS(R) Travelers
Moderate-Aggressive Conservative Large Cap Core Mid Cap Growth Total Return MFS(R) Value
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
-------------- -------------- -------------- -------------- -------------- --------------
$ 77,111 $ 18,593 $ 16,551 $ -- $ 2,043,120 $ --
-------------- -------------- -------------- -------------- -------------- --------------
9,230 1,636 29,395 205,552 585,345 15,205
-------------- -------------- -------------- -------------- -------------- --------------
67,881 16,957 (12,844) (205,552) 1,457,775 (15,205)
-------------- -------------- -------------- -------------- -------------- --------------
332,868 33,143 241,678 2,874,146 2,217,634 26,338
(271,533) (43,067) 1,068,823 4,207,415 3,349,094 365,598
-------------- -------------- -------------- -------------- -------------- --------------
61,335 (9,924) 1,310,501 7,081,561 5,566,728 391,936
-------------- -------------- -------------- -------------- -------------- --------------
(25,452) (1,972) (834,647) (3,753,671) (1,829,744) (46,260)
-------------- -------------- -------------- -------------- -------------- --------------
$ 103,764 $ 5,061 $ 463,010 $ 3,122,338 $ 5,194,759 $ 330,471
============== ============== ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
35
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
Travelers Travelers Travelers
Mondrian Travelers Pioneer Pioneer
International Stock Pioneer Fund Mid Cap Value Strategic Income
Subaccount Subaccount Subaccount Subaccount
-------------- -------------- -------------- --------------
Investment Income:
Dividends ........................... $ 1,960,877 $ 10,398 $ 1 $ --
-------------- -------------- -------------- --------------
Expenses:
Insurance charges ................... 195,876 3,753 107 47,878
-------------- -------------- -------------- --------------
Net investment income (loss) ...... 1,765,001 6,645 (106) (47,878)
-------------- -------------- -------------- --------------
Realized Gain (Loss) and Unrealized
Gain (Loss) on Investments:
Realized gain distribution ........ 2,204,423 -- -- --
Realized gain (loss) on sale of
investments ..................... 10,556,075 157,438 1,739 (152,868)
-------------- -------------- -------------- --------------
Realized gain (loss) ............ 12,760,498 157,438 1,739 (152,868)
-------------- -------------- -------------- --------------
Change in unrealized gain (loss)
on investments .................. (7,047,824) (104,940) (329) 343,753
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations ......... $ 7,477,675 $ 59,143 $ 1,304 $ 143,007
============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
36
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Continued)
For the year ended December 31, 2006
Travelers Style Travelers Style Travelers Van Kampen
Travelers Travelers Focus Series: Focus Series: U.S. Government LIT Comstock
Quality Bond Strategic Equity Small Cap Growth Small Cap Value Securities Subaccount
Subaccount Subaccount Subaccount Subaccount Subaccount (Class II)
-------------- -------------- -------------- -------------- -------------- --------------
$ 1,820,223 $ 164,752 $ 4 $ 8 $ 2,288,324 $ 127,140
-------------- -------------- -------------- -------------- -------------- --------------
112,728 175,598 121 55 152,515 124,029
-------------- -------------- -------------- -------------- -------------- --------------
1,707,495 (10,846) (117) (47) 2,135,809 3,111
-------------- -------------- -------------- -------------- -------------- --------------
-- 1,806,356 1,308 342 556,786 591,115
(2,275,082) (8,940,502) 2,169 3,240 (2,349,390) 140,109
-------------- -------------- -------------- -------------- -------------- --------------
(2,275,082) (7,134,146) 3,477 3,582 (1,792,604) 731,224
-------------- -------------- -------------- -------------- -------------- --------------
333,150 9,185,790 68 (92) (1,738,491) 776,904
-------------- -------------- -------------- -------------- -------------- --------------
$ (234,437) $ 2,040,798 $ 3,428 $ 3,443 $ (1,395,286) $ 1,511,239
============== ============== ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements.
37
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS -- (Concluded)
For the year ended December 31, 2006
Van Kampen LIT
Strategic Growth VIP Contrafund(R) VIP Mid Cap
Subaccount Subaccount Subaccount
(Class II) (Service Class 2) (Service Class 2)
-------------- -------------- --------------
Investment Income:
Dividends ............................. $ -- $ 452,445 $ 132,790
-------------- -------------- --------------
Expenses:
Insurance charges ..................... 46,325 503,857 892,183
-------------- -------------- --------------
Net investment income (loss) ........ (46,325) (51,412) (759,393)
-------------- -------------- --------------
Realized Gain (Loss) and Unrealized
Gain (Loss) on Investments:
Realized gain distribution .......... -- 4,057,568 8,854,024
Realized gain (loss) on sale of
investments ....................... 92,980 845,083 1,700,525
-------------- -------------- --------------
Realized gain (loss) .............. 92,980 4,902,651 10,554,549
-------------- -------------- --------------
Change in unrealized gain (loss)
on investments .................... 3,045 (461,416) (1,754,004)
-------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations ......... $ 49,700 $ 4,389,823 $ 8,041,152
============== ============== ==============
The accompanying notes are an integral part of these financial statements.
38
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 2006 and 2005
Templeton Growth Fund AllianceBernstein Growth and AllianceBernstein Large-Cap
Subaccount (Class A) Income Subaccount (Class B) Growth Subaccount (Class B)
--------------------------- ---------------------------- ----------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
Operations:
Net investment income (loss) .......... $ 1,219,855 $ 872,168 $ (439,728) $ 212,299 $ (16,919) $ (39,139)
Realized gain (loss) .................. 15,918,370 12,234,167 14,092,024 1,133,050 727,848 76,627
Change in unrealized gain (loss)
on investments ...................... 13,190,180 (2,790,376) (8,224,279) 1,698,240 (746,248) 412,143
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations ......... 30,328,405 10,315,959 5,428,017 3,043,589 (35,319) 449,631
------------ ------------ ------------ ------------ ------------ ------------
Unit Transactions:
Participant purchase payments ......... 26,762,067 28,414,110 7,032,024 19,777,954 428,988 936,322
Participant transfers from other
funding options ..................... 13,077,626 19,229,732 3,287,143 67,255,778 919,769 811,284
Growth rate intra-fund transfers in ... 7,147,849 10,040,683 2,770,566 9,453,051 105,949 174,235
Administrative charges ................ (13,215) (15,440) (154) (10,615) (3) (296)
Contract surrenders ................... (42,884,973) (37,910,604) (11,337,020) (32,032,439) (372,873) (806,916)
Participant transfers to other
funding options ..................... (12,689,339) (15,196,852) (122,397,111) (10,842,217) (4,945,659) (404,761)
Growth rate intra-fund transfers out .. (7,147,849) (10,040,683) (2,770,566) (9,453,051) (105,949) (174,235)
Other receipts/(payments) ............. (74,965) (56,332) (4,896) (76,315) (16,631) --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from unit transactions .. (15,822,799) (5,535,386) (123,420,014) 44,072,146 (3,986,409) 535,633
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets 14,505,606 4,780,573 (117,991,997) 47,115,735 (4,021,728) 985,264
Net Assets:
Beginning of year ..................... 155,135,608 150,355,035 117,991,997 70,876,262 4,021,728 3,036,464
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................... $169,641,214 $155,135,608 $ -- $117,991,997 $ -- $ 4,021,728
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
39
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
American Funds Global Growth American Funds Growth American Funds Growth-Income
Subaccount (Class 2) Subaccount (Class 2) Subaccount (Class 2)
--------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
Operations:
Net investment income (loss) .......... $ (47,668) $ (28,587) $ (89,093) $ (44,415) $ 185,834 $ 75,789
Realized gain (loss) .................. 222,781 49,863 629,248 28,375 842,532 130,262
Change in unrealized gain (loss)
on investments ...................... 2,769,778 1,064,340 3,331,910 3,238,583 2,739,608 783,733
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations ......... 2,944,891 1,085,616 3,872,065 3,222,543 3,767,974 989,784
------------ ------------ ------------ ------------ ------------ ------------
Unit Transactions:
Participant purchase payments ......... 5,459,868 2,356,201 14,527,653 7,404,385 8,252,657 5,705,221
Participant transfers from other
funding options ..................... 8,458,191 7,569,491 18,060,831 15,417,947 11,108,902 14,175,668
Growth rate intra-fund transfers in ... 1,023,509 344,876 2,160,139 1,737,447 1,034,041 799,229
Administrative charges ................ (1,586) (1,336) (2,342) (1,033) (1,881) (1,590)
Contract surrenders ................... (3,129,917) (1,600,261) (8,117,581) (2,420,883) (5,369,814) (3,078,971)
Participant transfers to other
funding options ..................... (1,993,119) (499,834) (3,610,309) (1,432,156) (4,361,493) (1,750,545)
Growth rate intra-fund transfers out .. (1,023,509) (344,876) (2,160,139) (1,737,447) (1,034,041) (799,229)
Other receipts/(payments) ............. (3,802) -- -- -- 1,182 (16,650)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from unit transactions .. 8,789,635 7,824,261 20,858,252 18,968,260 9,629,553 15,033,133
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets 11,734,526 8,909,877 24,730,317 22,190,803 13,397,527 16,022,917
Net Assets:
Beginning of year ..................... 10,449,429 1,539,552 29,305,445 7,114,642 21,097,513 5,074,596
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................... $ 22,183,955 $ 10,449,429 $ 54,035,762 $ 29,305,445 $ 34,495,040 $ 21,097,513
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
40
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
Delaware VIP REIT Subaccount Dreyfus VIF Appreciation Dreyfus VIF Developing Leaders
Capital Appreciation Fund (Standard Class) Subaccount (Initial Shares) Subaccount (Initial Shares)
--------------------------- --------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ (866,644) $ (2,703,634) $ 330,385 $ 83,770 $ 192,149 $ (561,496) $ (614,670) $ (1,065,795)
13,696,787 (1,853,095) 2,908,654 1,215,592 1,321,208 477,652 8,828,742 1,557,986
(14,938,179) 39,075,990 (1,693,742) (198,789) 4,430,629 1,583,593 (6,249,095) 3,464,878
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(2,108,036) 34,519,261 1,545,297 1,100,573 5,943,986 1,499,749 1,964,977 3,957,069
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
10,618,815 31,441,880 2,360,645 5,934,813 6,832,947 8,608,283 15,040,928 18,703,322
10,355,478 20,085,644 2,841,458 11,791,115 2,929,649 3,557,773 4,425,226 6,025,767
5,393,361 12,695,417 631,629 856,948 1,793,914 3,108,682 4,984,232 7,694,460
(348) (29,498) (129) (2,462) (3,598) (5,194) (6,944) (10,291)
(19,614,056) (61,644,163) (2,061,708) (3,223,140) (15,357,918) (14,654,661) (25,802,875) (22,989,690)
(227,754,712) (22,977,933) (23,749,064) (9,377,835) (4,110,334) (5,414,169) (10,990,698) (11,455,405)
(5,393,361) (12,695,417) (631,629) (856,948) (1,793,914) (3,108,682) (4,984,232) (7,694,460)
(29,727) (206,480) (2,751) (6,505) (72,690) (10,315) (46,251) (21,499)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(226,424,550) (33,330,550) (20,611,549) 5,115,986 (9,781,944) (7,918,283) (17,380,614) (9,747,796)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(228,532,586) 1,188,711 (19,066,252) 6,216,559 (3,837,958) (6,418,534) (15,415,637) (5,790,727)
228,532,586 227,343,875 19,066,252 12,849,693 44,737,020 51,155,554 90,127,119 95,917,846
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ -- $228,532,586 $ -- $ 19,066,252 $ 40,899,062 $ 44,737,020 $ 74,711,482 $ 90,127,119
============ ============ ============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
41
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
FTVIPT Franklin Small-Mid Cap FTVIPT Mutual FTVIPT Templeton Developing
Growth Securities Subaccount Shares Securities Markets Securities Subaccount
(Class 2) Subaccount (Class 2) (Class 2)
--------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
Operations:
Net investment income (loss) .......... $ (98,125) $ (87,001) $ (32,265) $ (9,879) $ (3,165) $ 5,575
Realized gain (loss) .................. 370,315 242,205 1,620,213 78,580 907,911 136,190
Change in unrealized gain (loss)
on investments ...................... 366,334 175,855 (955,317) 519,806 5,482,222 2,644,281
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
net assets resulting from
operations ........................ 638,524 331,059 632,631 588,507 6,386,968 2,786,046
------------ ------------ ------------ ------------ ------------ ------------
Unit Transactions:
Participant purchase payments ......... 2,263,286 2,264,563 1,019,329 1,513,448 9,006,023 3,622,201
Participant transfers from other
funding options ..................... 1,153,895 1,264,476 1,708,266 3,600,123 19,941,180 13,307,944
Growth rate intra-fund transfers in ... 502,936 733,440 207,572 347,656 2,161,986 1,114,001
Administrative charges ................ (645) (753) (3) (521) (1,463) (1,035)
Contract surrenders ................... (2,579,409) (1,720,665) (596,992) (945,493) (6,891,364) (1,595,134)
Participant transfers to other
funding options ..................... (1,058,860) (1,137,422) (10,673,720) (505,867) (11,669,511) (3,999,715)
Growth rate intra-fund transfers out .. (502,936) (733,440) (207,572) (347,656) (2,161,987) (1,114,001)
Other receipts/(payments) ............. -- (976) -- 6 (3,193) (5,119)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
net assets resulting from
unit transactions ................. (221,733) 669,223 (8,543,120) 3,661,696 10,381,671 11,329,142
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
net assets ........................ 416,791 1,000,282 (7,910,489) 4,250,203 16,768,639 14,115,188
Net Assets:
Beginning of year ..................... 8,459,348 7,459,066 7,910,489 3,660,286 18,839,834 4,724,646
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................... $ 8,876,139 $ 8,459,348 $ -- $ 7,910,489 $ 35,608,473 $ 18,839,834
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
42
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
FTVIPT Templeton Foreign Janus Aspen Global Life Sciences Janus Aspen Global Technology
Securities Subaccount (Class 2) High Yield Bond Trust Subaccount (Service Shares) Subaccount (Service Shares)
--------------------------- --------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 15,074 $ 4,138 $ 20,457 $ (173) $ (64,246) $ (58,996) $ (49,637) $ (47,418)
451,849 90,323 (16,776) 147 366,646 111,702 33,322 (42,923)
3,179,625 1,041,903 (229) 229 (24,660) 451,294 245,131 490,690
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
3,646,548 1,136,364 3,452 203 277,740 504,000 228,816 400,349
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
5,813,388 3,879,814 47,890 6,378 919,222 965,145 834,801 922,425
5,612,249 8,465,490 238,961 44,124 572,088 554,728 453,912 321,971
1,554,111 1,602,862 -- -- -- -- -- --
(417) (391) -- -- (1,011) (1,175) (851) (1,179)
(5,104,027) (2,765,672) (715) -- (1,727,149) (893,748) (1,075,386) (776,006)
(1,755,192) (1,040,890) (340,315) 22 (728,821) (717,985) (617,335) (445,695)
(1,554,111) (1,602,863) -- -- -- -- -- --
(1,468) (4,448) -- -- 3 (638) (1,846) (121)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
4,564,533 8,533,902 (54,179) 50,524 (965,668) (93,673) (406,705) 21,395
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
8,211,081 9,670,266 (50,727) 50,727 (687,928) 410,327 (177,889) 421,744
15,192,100 5,521,834 50,727 -- 5,242,386 4,832,059 4,213,091 3,791,347
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 23,403,181 $ 15,192,100 $ -- $ 50,727 $ 4,554,458 $ 5,242,386 $ 4,035,202 $ 4,213,091
============ ============ ============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
43
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
Janus Aspen Growth and Income Janus Aspen Mid Cap Growth Lazard Retirement Small Cap
Subaccount (Service Shares) Subaccount (Service Shares) Subaccount
--------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
Operations:
Net investment income (loss) .......... $ (32,686) $ (56,160) $ (365,223) $ (340,955) $ (74,185) $ (39,911)
Realized gain (loss) .................. 1,935,459 173,524 1,385,406 349,998 1,204,900 313,506
Change in unrealized gain (loss)
on investments ...................... (1,330,169) 647,308 2,332,200 3,056,837 (199,254) (105,593)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
net assets resulting from
operations ........................ 572,604 764,672 3,352,383 3,065,880 931,461 168,002
------------ ------------ ------------ ------------ ------------ ------------
Unit Transactions:
Participant purchase payments ......... 821,864 1,600,033 5,427,368 5,816,785 1,748,940 1,224,932
Participant transfers from other
funding options ..................... 998,146 1,413,846 3,055,231 13,067,581 4,102,496 3,160,696
Growth rate intra-fund transfers in ... 128,379 472,957 1,718,644 2,331,031 278,233 177,756
Administrative charges ................ (15) (999) (3,822) (4,652) (379) (377)
Contract surrenders ................... (701,074) (1,733,109) (10,170,730) (7,799,052) (790,304) (522,193)
Participant transfers to other
funding options ..................... (9,470,921) (837,437) (3,284,375) (2,973,160) (11,607,889) (422,884)
Growth rate intra-fund
transfers out ....................... (128,379) (472,958) (1,718,644) (2,331,031) (278,233) (177,756)
Other receipts/(payments) ............. -- (2,161) (11,288) (2,689) -- (10,810)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
net assets resulting from
unit transactions ................. (8,352,000) 440,172 (4,987,616) 8,104,813 (6,547,136) 3,429,364
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
net assets ........................ (7,779,396) 1,204,844 (1,635,233) 11,170,693 (5,615,675) 3,597,366
Net Assets:
Beginning of year ..................... 7,779,396 6,574,552 31,157,985 19,987,292 5,615,675 2,018,309
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................... $ -- $ 7,779,396 $ 29,522,752 $ 31,157,985 $ -- $ 5,615,675
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
44
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
LMPIF Investment Grade Bond LMPIS Growth and Income LMPIS Premier Selections All Cap LMPIT S&P 500 Index
Subaccount (Class A) Subaccount Growth Subaccount Subaccount (Class A)
--------------------------- --------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 1,558,278 $ 1,572,156 $ (7,483) $ (7,149) $ (231,154) $ (246,304) $ 90,370 $ 73,654
(541,137) 533,675 69,294 61,845 1,405,912 498,265 1,454,683 277,402
(500,518) (1,841,702) 135,485 (7,031) (44,434) 761,013 6,036,129 1,423,191
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
516,623 264,129 197,296 47,665 1,130,324 1,012,974 7,581,182 1,774,247
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
8,716,406 10,649,711 590,846 577,276 2,880,772 3,788,802 9,785,226 11,166,768
3,362,043 5,143,617 209,919 243,684 65,656 216,382 4,395,581 7,655,771
2,554,269 5,021,715 243,923 221,570 1,797,315 2,158,063 -- --
(2,198) (3,304) -- -- -- -- (10,165) (13,303)
(14,381,832) (13,049,472) (547,847) (635,615) (6,526,414) (8,485,821) (15,431,934) (11,807,103)
(7,280,755) (5,790,514) (203,283) (205,060) (1,217,124) (983,106) (8,720,949) (10,479,797)
(2,554,269) (5,021,715) (243,922) (221,570) (1,797,315) (2,158,063) -- --
(79,191) (23,665) -- -- -- -- (65,372) (26,652)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(9,665,527) (3,073,627) 49,636 (19,715) (4,797,110) (5,463,743) (10,047,613) (3,504,316)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(9,148,904) (2,809,498) 246,932 27,950 (3,666,786) (4,450,769) (2,466,431) (1,730,069)
44,679,698 47,489,196 1,694,438 1,666,488 21,060,862 25,511,631 59,908,204 61,638,273
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 35,530,794 $ 44,679,698 $ 1,941,370 $ 1,694,438 $ 17,394,076 $ 21,060,862 $ 57,441,773 $ 59,908,204
============ ============ ============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
45
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
LMPVPV Small Cap Growth LMPVPI All Cap Subaccount LMPVPI Global High Yield Bond
Opportunities Subaccount (Class I) Subaccount (Class I)
--------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
Operations:
Net investment income (loss) .......... $ (125,033) $ (97,726) $ 46,093 $ (130,940) $ 1,101,124 $ 1,162,317
Realized gain (loss) .................. 979,996 1,130,570 2,815,250 873,518 441,980 667,739
Change in unrealized gain (loss)
on investments ...................... 85,150 (668,570) 2,905,151 250,576 629,275 (1,187,638)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
net assets resulting from
operations ........................ 940,113 364,274 5,766,494 993,154 2,172,379 642,418
------------ ------------ ------------ ------------ ------------ ------------
Unit Transactions:
Participant purchase payments ......... 3,047,452 2,492,206 6,903,240 8,773,094 5,119,625 5,693,880
Participant transfers from other
funding options ..................... 3,986,001 2,725,333 1,468,681 2,083,700 2,995,785 4,146,904
Growth rate intra-fund transfers in ... 874,248 975,218 2,741,271 3,783,232 1,133,163 1,564,735
Administrative charges ................ (784) (832) (1,709) (2,558) (2,171) (3,009)
Contract surrenders ................... (3,214,712) (2,082,361) (9,914,036) (9,972,391) (7,058,419) (5,697,353)
Participant transfers to other
funding options ..................... (3,382,138) (2,008,857) (3,398,176) (4,063,350) (3,258,278) (3,280,880)
Growth rate intra-fund
transfers out ....................... (874,248) (975,218) (2,741,271) (3,783,232) (1,133,163) (1,564,735)
Other receipts/(payments) ............. (916) (131) (18,679) (25,869) (54,629) (41,208)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
net assets resulting from
unit transactions ................. 434,903 1,125,358 (4,960,679) (3,207,374) (2,258,087) 818,334
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
net assets ........................ 1,375,016 1,489,632 805,815 (2,214,220) (85,708) 1,460,752
Net Assets:
Beginning of year ..................... 9,328,443 7,838,811 36,858,812 39,073,032 24,052,877 22,592,125
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................... $ 10,703,459 $ 9,328,443 $ 37,664,627 $ 36,858,812 $ 23,967,169 $ 24,052,877
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
46
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
LMPVPI Investors Subaccount LMPVPI Total Return LMPVPII Appreciation LMPVPII Diversified Strategic
(Class I) Subaccount (Class I) Subaccount Income Subaccount
--------------------------- --------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 219,099 $ (31,704) $ 232,248 $ 249,927 $ (108,381) $ (241,272) $ 282,545 $ 307,967
4,173,233 1,359,665 1,776,002 908,411 3,744,835 664,977 (43,402) 17,027
4,852,509 1,765,974 1,390,370 (439,893) 5,282,988 1,279,442 12,157 (211,816)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
9,244,841 3,093,935 3,398,620 718,445 8,919,442 1,703,147 251,300 113,178
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
8,274,629 10,298,968 4,457,879 5,994,841 11,523,056 13,368,324 1,277,438 1,713,061
2,094,685 2,257,425 1,383,375 931,656 3,260,596 41,701,033 169,491 828,645
4,251,118 6,446,528 1,874,269 3,826,375 3,227,186 5,418,805 545,223 1,303,461
(3,676) (4,011) (1,343) (1,554) (6,323) (9,004) -- (2)
(18,260,473) (17,088,577) (13,283,989) (12,474,759) (19,277,281) (17,471,647) (2,373,105) (2,416,381)
(3,499,246) (4,897,550) (1,523,685) (1,786,136) (5,708,595) (6,154,143) (496,387) (3,254,967)
(4,251,119) (6,446,528) (1,874,269) (3,826,376) (3,227,186) (5,418,806) (545,223) (1,303,461)
(48,279) (7,512) (827) (10,041) (69,811) (48,051) -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(11,442,361) (9,441,257) (8,968,590) (7,345,994) (10,278,358) 31,386,511 (1,422,563) (3,129,644)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(2,197,520) (6,347,322) (5,569,970) (6,627,549) (1,358,916) 33,089,658 (1,171,263) (3,016,466)
61,024,348 67,371,670 35,810,129 42,437,678 72,239,881 39,150,223 7,171,308 10,187,774
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 58,826,828 $ 61,024,348 $ 30,240,159 $ 35,810,129 $ 70,880,965 $ 72,239,881 $ 6,000,045 $ 7,171,308
============ ============ ============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
47
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
LMPVPII Equity Index LMPVPIII Adjustable Rate LMPVPIII Aggressive Growth
Subaccount (Class II) Income Subaccount Subaccount
--------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
Operations:
Net investment income (loss) .......... $ 92,712 $ 47,406 $ 60,678 $ 20,637 $ (1,909,884) $ (1,973,416)
Realized gain (loss) .................. 2,957,065 1,111,956 3,117 733 8,566,899 3,710,861
Change in unrealized gain (loss)
on investments ...................... 5,452,209 834,782 (20,202) (12,760) 4,887,597 13,995,113
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations ......... 8,501,986 1,994,144 43,593 8,610 11,544,612 15,732,558
------------ ------------ ------------ ------------ ------------ ------------
Unit Transactions:
Participant purchase payments ......... 12,451,770 14,864,330 394,570 296,190 27,493,923 32,857,882
Participant transfers from other
funding options ..................... 2,631,319 12,385,085 855,961 593,911 6,523,914 7,014,556
Growth rate intra-fund transfers in ... 6,100,902 10,202,817 156,018 16,910 13,802,799 21,562,531
Administrative charges ................ (1,819) (3,798) (89) (68) (3,439) (4,639)
Contract surrenders ................... (19,614,058) (19,846,673) (271,157) (100,512) (50,847,932) (45,544,382)
Participant transfers to other
funding options ..................... (5,458,509) (5,879,332) (398,372) (145,853) (12,246,756) (12,295,943)
Growth rate intra-fund transfers out .. (6,100,902) (10,202,817) (156,018) (16,910) (13,802,799) (21,562,531)
Other receipts/(payments) ............. (37,629) (4,925) -- -- (16,927) (28,415)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from unit transactions .. (10,028,926) 1,514,687 580,913 643,668 (29,097,217) (18,000,941)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets (1,526,940) 3,508,831 624,506 652,278 (17,552,605) (2,268,383)
Net Assets:
Beginning of year ..................... 66,957,386 63,448,555 1,082,896 430,618 165,055,871 167,324,254
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................... $ 65,430,446 $ 66,957,386 $ 1,707,402 $ 1,082,896 $147,503,266 $165,055,871
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
48
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
LMPVPIII Large Cap Growth LMPVPIII Money Market LMPVPIII Social Awareness Lord Abbett Growth and Income
Subaccount Subaccount Stock Subaccount Subaccount (Class VC)
--------------------------- --------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ (388,823) $ (448,222) $ 7,431,493 $ 3,637,745 $ (76,522) $ (56,272) $ 35,674 $ (2,534)
992,048 327,704 -- -- 326,666 170,919 960,275 1,003,025
387,881 1,750,106 -- -- 332,550 277,676 1,992,354 (586,930)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
991,106 1,629,588 7,431,493 3,637,745 582,694 392,323 2,988,303 413,561
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
7,888,537 9,898,309 92,634,961 129,772,756 1,839,304 2,209,076 4,614,338 3,784,717
2,257,749 4,587,316 71,980,714 68,000,169 261,412 2,697,799 5,527,943 17,002,419
2,280,657 3,678,114 13,815,387 21,569,420 908,062 1,057,795 692,727 841,575
(3,500) (4,645) (28,587) (42,865) (530) (876) (1,995) (2,171)
(12,334,635) (11,568,119) (76,178,553) (72,082,570) (3,383,129) (2,905,711) (4,857,463) (2,951,157)
(7,214,819) (7,098,943) (97,584,446) (133,123,104) (823,835) (734,910) (3,552,466) (2,620,923)
(2,280,657) (3,678,114) (13,815,387) (21,569,419) (908,062) (1,057,795) (692,727) (841,575)
(9,116) (7,337) (82,889) (88,733) (15,793) -- (17,988) --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(9,415,784) (4,193,419) (9,258,800) (7,564,346) (2,122,571) 1,265,378 1,712,369 15,212,885
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(8,424,678) (2,563,831) (1,827,307) (3,926,601) (1,539,877) 1,657,701 4,700,672 15,626,446
42,968,385 45,532,216 219,366,000 223,292,601 11,182,732 9,525,031 17,404,262 1,777,816
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 34,543,707 $ 42,968,385 $217,538,693 $219,366,000 $ 9,642,855 $ 11,182,732 $ 22,104,934 $ 17,404,262
============ ============ ============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
49
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
Lord Abbett Mid-Cap Value MIST Batterymarch Mid-Cap
Subaccount (Class VC) Managed Assets Trust Stock Subaccount (Class A)
--------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
Operations:
Net investment income (loss) .......... $ (80,406) $ (47,352) $ 1,781 $ (4) $ (211,142) $ --
Realized gain (loss) .................. 1,192,647 765,234 100 -- (474,231) --
Change in unrealized gain (loss)
on investments ...................... 236,318 25,692 (14) 14 (886,497) --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
net assets resulting from
operations ........................ 1,348,559 743,574 1,867 10 (1,571,870) --
------------ ------------ ------------ ------------ ------------ ------------
Unit Transactions:
Participant purchase payments ......... 4,025,384 3,172,572 59,978 1,359 2,816,760 --
Participant transfers from other
funding options ..................... 2,686,805 7,579,939 689 52,161 30,727,977 --
Growth rate intra-fund transfers in ... 878,857 1,090,500 -- -- 332,663 --
Administrative charges ................ (838) (798) -- (2) (2,351) --
Contract surrenders ................... (3,271,351) (1,833,965) (22,075) -- (5,112,496) --
Participant transfers to other
funding options ..................... (3,122,048) (1,647,017) (93,987) -- (2,950,559) --
Growth rate intra-fund
transfers out ....................... (878,857) (1,090,500) -- -- (332,663) --
Other receipts/(payments) ............. -- -- -- -- (3,519) --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
net assets resulting from
unit transactions ................. 317,952 7,270,731 (55,395) 53,518 25,475,812 --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
net assets ........................ 1,666,511 8,014,305 (53,528) 53,528 23,903,942 --
Net Assets:
Beginning of year ..................... 11,506,999 3,492,694 53,528 -- -- --
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................... $ 13,173,510 $ 11,506,999 $ -- $ 53,528 $ 23,903,942 $ --
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
50
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
MIST Harris Oakmark
MIST BlackRock High Yield MIST BlackRock Large-Cap Core MIST Dreman Small-Cap Value International Subaccount
Subaccount (Class A) Subaccount (Class A) Subaccount (Class A) (Class A)
--------------------------- --------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ (72,953) $ -- $ (58,348) $ -- $ 894 $ -- $ (424,624) $ --
33,335 -- 28,523 -- 2,418 -- 133,210 --
546,135 -- 466,627 -- 50,473 -- 6,375,498 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
506,517 -- 436,802 -- 53,785 -- 6,084,084 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
1,207,812 -- 951,769 -- 47,647 -- 5,618,462 --
9,911,690 -- 8,443,675 -- 638,065 -- 65,066,500 --
112,143 -- 109,079 -- -- -- 1,321,473 --
(578) -- (1,373) -- (22) -- (4,045) --
(1,824,112) -- (1,156,492) -- (4,073) -- (10,801,322) --
(590,959) -- (1,627,102) -- (53,861) -- (3,211,225) --
(112,143) -- (109,079) -- -- -- (1,321,473) --
(3,617) -- -- -- -- -- (85,944) --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
8,700,236 -- 6,610,477 -- 627,756 -- 56,582,426 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
9,206,753 -- 7,047,279 -- 681,541 -- 62,666,510 --
-- -- -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 9,206,753 $ -- $ 7,047,279 $ -- $ 681,541 $ -- $ 62,666,510 $ --
============ ============ ============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
51
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
MIST Janus Capital MIST Legg Mason MIST Lord Abbett
Appreciation Partners Managed Assets Bond Debenture
Subaccount (Class A) Subaccount (Class A) Subaccount (Class A)
--------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
Operations:
Net investment income (loss) .......... $ (1,521,789) $ -- $ (648) $ -- $ (16,819) $ --
Realized gain (loss) .................. (970,618) -- 2,123 -- 3,661 --
Change in unrealized gain (loss)
on investments ...................... 6,674,734 -- 3,001 -- 147,827 --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations ......... 4,182,327 -- 4,476 -- 134,669 --
------------ ------------ ------------ ------------ ------------ ------------
Unit Transactions:
Participant purchase payments ......... 16,552,971 -- 38,824 -- 552,915 --
Participant transfers from other funding
options ............................. 219,259,461 -- 180,125 -- 3,304,510 --
Growth rate intra-fund transfers in ... 2,642,955 -- -- -- 104,351 --
Administrative charges ................ (19,275) -- (39) -- (31) --
Contract surrenders ................... (37,372,943) -- (58,152) -- (256,843) --
Participant transfers to other funding
options ............................. (14,078,464) -- (59,179) -- (442,818) --
Growth rate intra-fund transfers out .. (2,642,955) -- -- -- (104,351) --
Other receipts/(payments) ............. (329,296) -- -- -- (78) --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from unit transactions .. 184,012,454 -- 101,579 -- 3,157,655 --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets 188,194,781 -- 106,055 -- 3,292,324 --
Net Assets:
Beginning of year ..................... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................... $188,194,781 $ -- $ 106,055 $ -- $ 3,292,324 $ --
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
52
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
MIST Lord Abbett MIST Met/AIM MIST Met/AIM
Growth and Income Capital Appreciation Small Cap Growth MIST MFS(R) Value
Subaccount (Class B) Subaccount (Class A) Subaccount (Class A) Subaccount (Class A)
--------------------------- --------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ (999,449) $ -- $ (445,073) $ -- $ (1,151) $ -- $ 72,778 $ --
433,533 -- 7,338,046 -- 3,569 -- 422,483 --
10,313,768 -- (8,160,031) -- 14,686 -- 410,996 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
9,747,852 -- (1,267,058) -- 17,104 -- 906,257 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
13,078,366 -- 6,105,232 -- 44,116 -- 1,429,414 --
140,723,192 -- 80,008,292 -- 276,658 -- 10,127,418 --
2,042,326 -- 1,230,436 -- -- -- 190,477 --
(8,129) -- (5,171) -- (8) -- (142) --
(26,061,128) -- (15,531,039) -- (383) -- (1,197,881) --
(7,300,925) -- (3,271,292) -- (1,274) -- (668,723) --
(2,042,326) -- (1,230,436) -- -- -- (190,477) --
(91,738) -- (23,972) -- -- -- (888) --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
120,339,638 -- 67,282,050 -- 319,109 -- 9,689,198 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
130,087,490 -- 66,014,992 -- 336,213 -- 10,595,455 --
-- -- -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$130,087,490 $ -- $ 66,014,992 $ -- $ 336,213 $ -- $ 10,595,455 $ --
============ ============ ============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
53
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
MIST Neuberger Berman MIST Pioneer
Real Estate MIST Pioneer Fund Mid-Cap Value
Subaccount (Class A) Subaccount (Class A) Subaccount (Class A)
--------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
Operations:
Net investment income (loss) .......... $ (195,530) $ -- $ (9,238) $ -- $ (265) $ --
Realized gain (loss) .................. 215,704 -- (1,328) -- 2,368 --
Change in unrealized gain (loss)
on investments ...................... 5,060,821 -- 104,356 -- 9,918 --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations ........................ 5,080,995 -- 93,790 -- 12,021 --
------------ ------------ ------------ ------------ ------------ ------------
Unit Transactions:
Participant purchase payments ......... 4,408,632 -- 206,853 -- 32,715 --
Participant transfers from other
funding options ..................... 30,859,978 -- 1,802,361 -- 111,768 --
Growth rate intra-fund transfers in ... 913,944 -- 32,142 -- -- --
Administrative charges ................ (2,202) -- (47) -- (14) --
Contract surrenders ................... (4,073,087) -- (185,913) -- (8,958) --
Participant transfers to other
funding options ..................... (4,520,644) -- (132,979) -- (2,695) --
Growth rate intra-fund transfers out .. (913,944) -- (32,142) -- -- --
Other receipts/(payments) ............. (3,403) -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from unit
transactions ...................... 26,669,274 -- 1,690,275 -- 132,816 --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets ............................ 31,750,269 -- 1,784,065 -- 144,837 --
Net Assets:
Beginning of year ..................... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................... $ 31,750,269 $ -- $ 1,784,065 $ -- $ 144,837 $ --
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
54
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
MIST Pioneer MIST Third Avenue MetLife Investment MetLife Investment
Strategic Income Small Cap Value Diversified Bond International Stock
Subaccount (Class A) Subaccount (Class B) Subaccount (Class I) Subaccount (Class I)
--------------------------- --------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 606,800 $ -- $ (15,996) $ -- $ 551,155 $ 379,923 $ 91,056 $ 13,356
25,262 -- 9,290 -- (12,318) 22,957 722,318 225,831
(64,541) -- 238,308 -- 47,407 (257,217) 2,092,000 958,988
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
567,521 -- 231,602 -- 586,244 145,663 2,905,374 1,198,175
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
2,270,705 -- 296,087 -- 5,444,542 6,284,606 4,002,617 3,317,127
15,855,888 -- 10,641,947 -- 1,671,621 1,531,925 4,297,369 1,550,735
100,335 -- -- -- 1,761,513 2,621,492 1,491,948 1,313,020
(2,345) -- (494) -- -- -- -- --
(1,896,082) -- (296,263) -- (5,423,100) (3,528,637) (3,576,853) (2,127,729)
(1,156,379) -- (308,558) -- (2,640,503) (993,955) (2,367,010) (1,126,104)
(100,335) -- -- -- (1,761,513) (2,621,492) (1,491,948) (1,313,020)
(61,324) -- -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
15,010,463 -- 10,332,719 -- (947,440) 3,293,939 2,356,123 1,614,029
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
15,577,984 -- 10,564,321 -- (361,196) 3,439,602 5,261,497 2,812,204
-- -- -- -- 18,778,683 15,339,081 10,299,592 7,487,388
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 15,577,984 $ -- $ 10,564,321 $ -- $ 18,417,487 $ 18,778,683 $ 15,561,089 $ 10,299,592
============ ============ ============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
55
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
MetLife Investment MetLife Investment MSF BlackRock
Large Company Stock Small Company Stock Aggressive Growth
Subaccount (Class I) Subaccount (Class I) Subaccount (Class D)
--------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
Operations:
Net investment income (loss) .......... $ (26,563) $ (5,799) $ (180,983) $ (167,066) $ (365,154) $ --
Realized gain (loss) .................. 370,728 130,125 2,523,990 1,059,492 (566,693) --
Change in unrealized gain (loss)
on investments ...................... 982,831 459,145 (463,160) 13,297 (538,433) --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations ........................ 1,326,996 583,471 1,879,847 905,723 (1,470,280) --
------------ ------------ ------------ ------------ ------------ ------------
Unit Transactions:
Participant purchase payments ......... 3,440,944 3,858,017 4,188,560 4,446,570 4,641,457 --
Participant transfers from other
funding options ..................... 454,625 652,694 1,462,995 1,561,823 53,354,267 --
Growth rate intra-fund transfers in ... 1,051,685 1,290,935 1,780,929 2,398,508 793,746 --
Administrative charges ................ -- -- -- -- (3,540) --
Contract surrenders ................... (3,139,387) (1,955,791) (4,849,857) (3,696,091) (9,785,359) --
Participant transfers to other
funding options ..................... (707,480) (489,202) (2,241,999) (1,710,067) (3,053,459) --
Growth rate intra-fund transfers out .. (1,051,686) (1,290,935) (1,780,929) (2,398,508) (793,746) --
Other receipts/(payments) ............. -- -- -- -- 2,929 --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from unit
transactions ...................... 48,701 2,065,718 (1,440,301) 602,235 45,156,295 --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets ............................ 1,375,697 2,649,189 439,546 1,507,958 43,686,015 --
Net Assets:
Beginning of year ..................... 11,395,813 8,746,624 15,814,647 14,306,689 -- --
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................... $ 12,771,510 $ 11,395,813 $ 16,254,193 $ 15,814,647 $ 43,686,015 $ --
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
56
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
MSF BlackRock MSF MetLife
Bond Income MSF FI Large Cap MSF FI Value Leaders Aggressive Allocation
Subaccount (Class A) Subaccount (Class A) Subaccount (Class D) Subaccount (Class B)
--------------------------- --------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ (215,353) $ -- $ (711,525) $ -- $ (386,133) $ -- $ (13,331) $ --
137,561 -- (664,442) -- (158,035) -- 1,268 --
1,248,957 -- 2,167,577 -- 1,852,818 -- 222,619 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
1,171,165 -- 791,610 -- 1,308,650 -- 210,556 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
2,980,935 -- 8,111,491 -- 5,420,865 -- 1,046,289 --
31,209,581 -- 102,377,651 -- 57,269,380 -- 2,875,357 --
398,503 -- 1,544,425 -- 562,011 -- 413 --
(3,211) -- (4,534) -- (5,456) -- (342) --
(5,756,234) -- (19,405,502) -- (9,523,891) -- (75,813) --
(2,518,600) -- (4,365,710) -- (3,639,099) -- (61,321) --
(398,503) -- (1,544,425) -- (562,011) -- (413) --
(22,569) -- (70,736) -- (106,326) -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
25,889,902 -- 86,642,660 -- 49,415,473 -- 3,784,170 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
27,061,067 -- 87,434,270 -- 50,724,123 -- 3,994,726 --
-- -- -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 27,061,067 $ -- $ 87,434,270 $ -- $ 50,724,123 $ -- $ 3,994,726 $ --
============ ============ ============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
57
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
MSF MetLife MSF MetLife Conservative MSF MetLife
Conservative Allocation to Moderate Allocation Moderate Allocation
Subaccount (Class B) Subaccount (Class B) Subaccount (Class B)
--------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
Operations:
Net investment income (loss) .......... $ (6,088) $ -- $ (10,596) $ -- $ (49,491) $ --
Realized gain (loss) .................. 3,234 -- 3,304 -- 36,539 --
Change in unrealized gain (loss)
on investments ...................... 45,588 -- 103,258 -- 533,289 --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations ........................ 42,734 -- 95,966 -- 520,337 --
------------ ------------ ------------ ------------ ------------ ------------
Unit Transactions:
Participant purchase payments ......... 446,483 -- 325,384 -- 1,795,804 --
Participant transfers from other
funding options ..................... 1,088,095 -- 3,485,593 -- 10,866,305 --
Growth rate intra-fund transfers in ... 114 -- -- -- -- --
Administrative charges ................ (60) -- (350) -- (1,245) --
Contract surrenders ................... (90,294) -- (83,254) -- (473,924) --
Participant transfers to other
funding options ..................... (73,085) -- (219,000) -- (821,490) --
Growth rate intra-fund transfers out .. (114) -- -- -- -- --
Other receipts/(payments) ............. -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from unit
transactions ...................... 1,371,139 -- 3,508,373 -- 11,365,450 --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets ............................ 1,413,873 -- 3,604,339 -- 11,885,787 --
Net Assets:
Beginning of year ..................... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................... $ 1,413,873 $ -- $ 3,604,339 $ -- $ 11,885,787 $ --
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
58
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
MSF MetLife Moderate to MSF T. Rowe Price MSF Western Asset Management
Aggressive Allocation MSF MFS(R) Total Return Large Cap Growth High Yield Bond
Subaccount (Class B) Subaccount (Class F) Subaccount (Class B) Subaccount (Class A)
--------------------------- --------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ (57,820) $ -- $ (1,178,961) $ -- $ (103,851) $ -- $ (4,163) $ --
(1,339) -- 661,155 -- (16,477) -- 1,959 --
749,155 -- 11,239,867 -- 1,045,651 -- 54,687 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
689,996 -- 10,722,061 -- 925,323 -- 52,483 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
2,424,796 -- 19,437,502 -- 2,091,913 -- 175,691 --
12,364,570 -- 160,259,088 -- 14,790,795 -- 865,085 --
38,498 -- 5,495,967 -- 358,138 -- -- --
(1,434) -- (11,750) -- (1,127) -- (23) --
(751,455) -- (32,502,313) -- (2,677,849) -- (48,562) --
(316,478) -- (6,113,854) -- (1,277,999) -- (160,335) --
(38,498) -- (5,495,967) -- (358,138) -- -- --
-- -- (140,815) -- (18,772) -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
13,719,999 -- 140,927,858 -- 12,906,961 -- 831,856 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
14,409,995 -- 151,649,919 -- 13,832,284 -- 884,339 --
-- -- -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 14,409,995 $ -- $151,649,919 $ -- $ 13,832,284 $ -- $ 884,339 $ --
============ ============ ============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
59
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
MSF Western Asset Management Oppenheimer Main PIMCO VIT Real Return
U.S. Government Street/VA Subaccount
Subaccount (Class A) Subaccount (Service Shares) (Administrative Class)
--------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
Operations:
Net investment income (loss) .......... $ (239,824) $ -- $ 53,149 $ 7,560 $ 13,473 $ 438
Realized gain (loss) .................. 122,449 -- 1,539,962 222,733 16,230 710
Change in unrealized gain (loss)
on investments ...................... 1,425,764 -- (1,080,596) 164,496 (25,150) (552)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations ........................ 1,308,389 -- 512,515 394,789 4,553 596
------------ ------------ ------------ ------------ ------------ ------------
Unit Transactions:
Participant purchase payments ......... 4,285,002 -- 505,068 1,429,572 80,760 11,890
Participant transfers from other
funding options ..................... 38,867,998 -- 194,894 388,577 584,912 74,107
Growth rate intra-fund transfers in ... 388,130 -- 310,797 1,361,774 -- --
Administrative charges ................ (4,919) -- (1) (8) (36) (3)
Contract surrenders ................... (7,784,045) -- (1,054,800) (3,057,501) (22,535) (16,190)
Participant transfers to other
funding options ..................... (2,706,791) -- (9,103,978) (308,984) (28,991) (5,715)
Growth rate intra-fund transfers out .. (388,130) -- (310,797) (1,361,774) -- --
Other receipts/(payments) ............. (21,216) -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from unit
transactions ...................... 32,636,029 -- (9,458,817) (1,548,344) 614,110 64,089
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets ............................ 33,944,418 -- (8,946,302) (1,153,555) 618,663 64,685
Net Assets:
Beginning of year ..................... -- -- 8,946,302 10,099,857 64,685 --
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................... $ 33,944,418 $ -- $ -- $ 8,946,302 $ 683,348 $ 64,685
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
60
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
PIMCO VIT Total Return Putnam VT
Subaccount Small Cap Value LMPIF Small Cap Value Travelers AIM Capital
(Administrative Class) Subaccount (Class IB) Subaccount (Class A) Appreciation Subaccount
--------------------------- --------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 1,726,061 $ 1,137,742 $ (411,643) $ (418,460) $ (168,199) $ (157,583) $ (316,437) $ (794,861)
99,679 888,212 6,678,956 3,649,800 1,669,240 1,387,847 16,593,520 1,441,869
(428,357) (1,397,720) 1,306,787 (482,935) (110,994) (519,328) (10,984,352) 5,012,815
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
1,397,383 628,234 7,574,100 2,748,405 1,390,047 710,936 5,292,731 5,659,823
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
11,264,637 12,008,276 11,024,198 10,665,254 3,883,059 4,215,054 4,253,666 12,865,536
6,353,742 10,902,266 12,077,144 13,170,884 1,274,516 2,285,174 1,391,305 24,632,156
2,575,183 4,031,115 1,396,564 1,920,909 1,821,677 2,212,393 3,380,637 7,148,794
(3,627) (4,528) (5,734) (6,222) (3) -- (70) (7,729)
(13,558,088) (10,113,419) (12,192,868) (9,085,884) (4,074,153) (4,242,118) (9,299,052) (25,691,355)
(6,113,952) (5,296,999) (11,300,862) (9,993,476) (2,014,277) (1,828,324) (81,966,617) (6,531,699)
(2,575,183) (4,031,115) (1,396,564) (1,920,909) (1,821,677) (2,212,393) (3,380,637) (7,148,794)
(5,360) (27,055) (7,225) (11,306) -- -- -- (24,422)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(2,062,648) 7,468,541 (405,347) 4,739,250 (930,858) 429,786 (85,620,768) 5,242,487
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(665,265) 8,096,775 7,168,753 7,487,655 459,189 1,140,722 (80,328,037) 10,902,310
51,293,812 43,197,037 46,967,632 39,479,977 13,822,631 12,681,909 80,328,037 69,425,727
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 50,628,547 $ 51,293,812 $ 54,136,385 $ 46,967,632 $ 14,281,820 $ 13,822,631 $ -- $ 80,328,037
============ ============ ============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
61
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
Travelers Disciplined
Travelers Convertible Mid Cap Stock Travelers Equity Income
Securities Subaccount Subaccount Subaccount
--------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
Operations:
Net investment income (loss) .......... $ 6,422 $ 12,100 $ 45,168 $ (335,103) $ 538,149 $ (651,762)
Realized gain (loss) .................. 33,992 13,085 9,146,030 1,695,654 9,592,100 1,821,076
Change in unrealized gain (loss)
on investments ...................... 16,626 (21,620) (6,537,899) 1,559,015 (7,275,856) 585,939
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations ........................ 57,040 3,565 2,653,299 2,919,566 2,854,393 1,755,253
------------ ------------ ------------ ------------ ------------ ------------
Unit Transactions:
Participant purchase payments ......... 169,705 235,927 1,750,001 5,173,851 3,461,606 10,371,982
Participant transfers from other
funding options ..................... 366,189 249,482 937,595 3,561,130 3,010,507 7,026,135
Growth rate intra-fund transfers in ... 62,270 25,479 1,646,055 2,110,485 2,075,756 3,308,938
Administrative charges ................ -- (9) (67) (3,222) (292) (7,121)
Contract surrenders ................... (23,866) (51,216) (2,538,071) (7,159,937) (4,727,293) (14,028,970)
Participant transfers to other
funding options ..................... (1,324,895) (83,972) (31,359,971) (3,444,438) (59,439,619) (7,693,169)
Growth rate intra-fund transfers out .. (62,270) (25,479) (1,646,055) (2,110,485) (2,075,756) (3,308,938)
Other receipts/(payments) ............. -- -- (281) (195,864) -- (56,607)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from unit
transactions ...................... (812,867) 350,212 (31,210,794) (2,068,480) (57,695,091) (4,387,750)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets ............................ (755,827) 353,777 (28,557,495) 851,086 (54,840,698) (2,632,497)
Net Assets:
Beginning of year ..................... 755,827 402,050 28,557,495 27,706,409 54,840,698 57,473,195
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................... $ -- $ 755,827 $ -- $ 28,557,495 $ -- $ 54,840,698
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
62
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
Travelers Federated High Travelers Large Cap Travelers Managed Allocation Travelers Managed Allocation
Yield Subaccount Subaccount Series: Aggressive Subaccount Series: Conservative Subaccount
--------------------------- --------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 692,619 $ (110,746) $ 32,407 $ (697,934) $ 8,371 $ (301) $ 7,442 $ (128)
(568,868) (93,929) 5,156,251 (117,554) 18,147 102 (6,919) 383
116,548 323,146 (3,329,547) 4,917,350 (3,186) 3,186 (548) 548
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
240,299 118,471 1,859,111 4,101,862 23,332 2,987 (25) 803
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
780,921 2,086,954 3,319,280 10,149,171 129,786 67,510 94,893 70,818
530,791 1,434,778 939,121 2,132,494 456,884 156,129 72,893 10,000
466,080 1,066,714 2,887,152 5,582,135 -- -- -- --
(29) (752) (97) (2,384) (2) (4) -- --
(1,106,411) (2,431,602) (5,725,293) (16,594,361) (8,174) (713) (910) (37,838)
(9,559,104) (1,496,416) (58,230,143) (3,364,941) (778,557) (49,178) (209,963) (671)
(466,079) (1,066,714) (2,887,152) (5,582,135) -- -- -- --
-- -- 1,356 (9,222) -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(9,353,831) (407,038) (59,695,776) (7,689,243) (200,063) 173,744 (43,087) 42,309
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(9,113,532) (288,567) (57,836,665) (3,587,381) (176,731) 176,731 (43,112) 43,112
9,113,532 9,402,099 57,836,665 61,424,046 176,731 -- 43,112 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ -- $ 9,113,532 $ -- $ 57,836,665 $ -- $ 176,731 $ -- $ 43,112
============ ============ ============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
63
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
Travelers Managed Allocation Travelers Managed Allocation
Travelers Managed Allocation Series: Moderate-Aggressive Series: Moderate-Conservative
Series: Moderate Subaccount Subaccount Subaccount
--------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
Operations:
Net investment income (loss) .......... $ 72,807 $ 1,189 $ 67,881 $ 2,000 $ 16,957 $ 95
Realized gain (loss) .................. 25,772 1,058 61,335 801 (9,924) 47
Change in unrealized gain (loss) on
investments ......................... (30,023) 30,023 (25,452) 25,452 (1,972) 1,972
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations ......... 68,556 32,270 103,764 28,253 5,061 2,114
------------ ------------ ------------ ------------ ------------ ------------
Unit Transactions:
Participant purchase payments ......... 328,523 129,114 473,519 164,154 43,435 9,419
Participant transfers from other funding
options ............................. 1,586,157 1,028,463 2,092,389 1,576,274 500,116 99,418
Growth rate intra-fund transfers in ... -- -- -- -- -- --
Administrative charges ................ -- (157) -- (70) -- (15)
Contract surrenders ................... (31,343) (275) (133,294) (29,678) (1,964) --
Participant transfers to other funding
options ............................. (3,113,985) (27,323) (3,741,953) (533,358) (651,062) (6,522)
Growth rate intra-fund transfers out .. -- -- -- -- -- --
Other receipts/(payments) ............. -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from unit transactions .. (1,230,648) 1,129,822 (1,309,339) 1,177,322 (109,475) 102,300
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets (1,162,092) 1,162,092 (1,205,575) 1,205,575 (104,414) 104,414
Net Assets:
Beginning of year ..................... 1,162,092 -- 1,205,575 -- 104,414 --
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................... $ -- $ 1,162,092 $ -- $ 1,205,575 $ -- $ 104,414
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
64
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
Travelers Mercury Large Travelers MFS(R) Travelers MFS(R) Travelers MFS(R)
Cap Core Subaccount Mid Cap Growth Subaccount Total Return Subaccount Value Subaccount
--------------------------- --------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ (12,844) $ (74,752) $ (205,552) $ (558,633) $ 1,457,775 $ 1,531,825 $ (15,205) $ 11,855
1,310,501 56,003 7,081,561 228,674 5,566,728 8,602,564 391,936 164,096
(834,647) 707,068 (3,753,671) 3,107,755 (1,829,744) (7,390,828) (46,260) (5,290)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
463,010 688,319 3,122,338 2,777,796 5,194,759 2,743,561 330,471 170,661
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
614,671 1,452,616 3,097,141 8,349,344 10,181,014 30,181,507 641,629 1,126,805
437,754 2,303,135 910,364 54,831,817 4,441,253 16,650,743 539,270 2,445,231
336,091 392,402 1,522,775 4,671,918 4,142,869 10,337,596 307,172 310,853
(470) (2,157) (80) (4,954) (182) (13,813) (1) (57)
(512,511) (1,131,294) (5,525,905) (14,334,430) (14,296,160) (36,935,352) (325,129) (494,813)
(8,205,862) (829,068) (54,342,992) (4,187,018) (161,076,357) (12,142,049) (4,902,060) (400,727)
(336,091) (392,402) (1,522,775) (4,671,918) (4,142,869) (10,337,595) (307,172) (310,853)
-- -- (9,169) (27,056) (9,510) (208,665) -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(7,666,418) 1,793,232 (55,870,641) 44,627,703 (160,759,942) (2,467,628) (4,046,291) 2,676,439
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(7,203,408) 2,481,551 (52,748,303) 47,405,499 (155,565,183) 275,933 (3,715,820) 2,847,100
7,203,408 4,721,857 52,748,303 5,342,804 155,565,183 155,289,250 3,715,820 868,720
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ -- $ 7,203,408 $ -- $ 52,748,303 $ -- $155,565,183 $ -- $ 3,715,820
============ ============ ============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
65
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
Travelers Mondrian
International Stock Travelers Pioneer Travelers Pioneer Mid
Subaccount Fund Subaccount Cap Value Subaccount
--------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
Operations:
Net investment income (loss) .......... $ 1,765,001 $ (554,983) $ 6,645 $ (9,608) $ (106) $ (62)
Realized gain (loss) .................. 12,760,498 828,545 157,438 14,924 1,739 577
Change in unrealized gain (loss)
on investments ...................... (7,047,824) 3,646,510 (104,940) 39,100 (329) 329
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations ........................ 7,477,675 3,920,072 59,143 44,416 1,304 844
------------ ------------ ------------ ------------ ------------ ------------
Unit Transactions:
Participant purchase payments ......... 3,126,177 9,146,866 99,944 211,953 7,936 5,283
Participant transfers from other
funding options ..................... 1,513,301 4,961,309 119,867 238,708 4,021 14,184
Growth rate intra-fund transfers in ... 2,510,029 5,455,336 84,707 105,798 -- --
Administrative charges ................ (275) (4,913) (2) (47) (1) (2)
Contract surrenders ................... (4,818,913) (14,517,298) (78,338) (135,583) (277) (68)
Participant transfers to other
funding options ..................... (57,408,850) (4,167,182) (1,130,238) (94,177) (33,225) 1
Growth rate intra-fund transfers out .. (2,510,029) (5,455,336) (84,707) (105,798) -- --
Other receipts/(payments) ............. (14,104) (234,743) -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from unit
transactions ...................... (57,602,664) (4,815,961) (988,767) 220,854 (21,546) 19,398
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets ............................ (50,124,989) (895,889) (929,624) 265,270 (20,242) 20,242
Net Assets:
Beginning of year ..................... 50,124,989 51,020,878 929,624 664,354 20,242 --
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................... $ -- $ 50,124,989 $ -- $ 929,624 $ -- $ 20,242
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
66
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
Travelers Pioneer Strategic Travelers Quality Travelers Strategic Travelers Style Focus Series:
Income Subaccount Bond Subaccount Equity Subaccount Small Cap Growth Subaccount
--------------------------- --------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ (47,878) $ 362,551 $ 1,707,495 $ (377,670) $ (10,846) $ (296,821) $ (117) $ (29)
(152,868) (7,450) (2,275,082) (137,968) (7,134,146) (3,003,315) 3,477 313
343,753 (117,211) 333,150 657,829 9,185,790 3,322,328 68 (69)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
143,007 237,890 (234,437) 142,191 2,040,798 22,192 3,428 215
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
1,285,606 2,531,458 1,790,921 5,868,627 2,370,324 7,644,144 14,455 6,668
1,353,884 6,764,665 1,005,490 3,552,194 427,797 2,430,040 19,971 9,685
236,310 301,938 832,887 2,109,110 1,782,280 3,939,136 -- --
(255) (3,081) (437) (4,780) (78) (3,919) -- (1)
(619,613) (2,038,456) (2,489,534) (8,003,826) (4,517,426) (13,649,508) (30) --
(14,174,790) (1,466,358) (30,890,207) (4,254,946) (45,600,636) (4,717,733) (54,391) --
(236,310) (301,938) (832,887) (2,109,110) (1,782,280) (3,939,136) -- --
-- (11,574) (13,209) (101,862) (13) (44,222) -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(12,155,168) 5,776,654 (30,596,976) (2,944,593) (47,320,032) (8,341,198) (19,995) 16,352
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(12,012,161) 6,014,544 (30,831,413) (2,802,402) (45,279,234) (8,319,006) (16,567) 16,567
12,012,161 5,997,617 30,831,413 33,633,815 45,279,234 53,598,240 16,567 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ -- $ 12,012,161 $ -- $ 30,831,413 $ -- $ 45,279,234 $ -- $ 16,567
============ ============ ============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
67
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Continued)
For the years ended December 31, 2006 and 2005
Travelers Style Focus Series: Travelers U.S. Government Van Kampen LIT Comstock
Small Cap Value Subaccount Securities Subaccount Subaccount (Class II)
--------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
Operations:
Net investment income (loss) ....... $ (47) $ 2 $ 2,135,809 $ (478,787) $ 3,111 $ (32,027)
Realized gain (loss) ............... 3,582 21 (1,792,604) 306,087 731,224 168,087
Change in unrealized gain (loss)
on investments ................... (92) 92 (1,738,491) 1,182,854 776,904 185,128
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations ..................... 3,443 115 (1,395,286) 1,010,154 1,511,239 321,188
------------ ------------ ------------ ------------ ------------ ------------
Unit Transactions:
Participant purchase payments ...... 4,046 1,870 2,767,873 7,797,004 2,699,097 1,958,303
Participant transfers from other
funding options .................. 106,569 67 1,889,254 29,643,684 3,214,163 5,051,524
Growth rate intra-fund transfers in -- -- 885,557 2,989,778 561,975 568,136
Administrative charges ............. -- (1) (85) (9,169) (1,655) (1,793)
Contract surrenders ................ (30) -- (4,072,541) (10,985,110) (1,797,485) (830,454)
Participant transfers to other
funding options .................. (116,079) -- (40,798,571) (5,866,780) (2,625,268) (780,101)
Growth rate intra-fund transfers out -- -- (885,557) (2,989,778) (561,975) (568,136)
Other receipts/(payments) .......... -- -- (4,149) (120,431) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from unit
transactions ................... (5,494) 1,936 (40,218,219) 20,459,198 1,488,852 5,397,479
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets ......................... (2,051) 2,051 (41,613,505) 21,469,352 3,000,091 5,718,667
Net Assets:
Beginning of year .................. 2,051 -- 41,613,505 20,144,153 8,988,522 3,269,855
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................ $ -- $ 2,051 $ -- $ 41,613,505 $ 11,988,613 $ 8,988,522
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
68
METLIFE OF CT SEPARATE ACCOUNT QPN
FOR VARIABLE ANNUITIES
STATEMENTS OF CHANGES IN NET ASSETS -- (Concluded)
For the years ended December 31, 2006 and 2005
Van Kampen LIT
Strategic Growth VIP Contrafund(R) VIP Mid Cap
Subaccount (Class II) Subaccount (Service Class 2) Subaccount (Service Class 2)
--------------------------- --------------------------- ---------------------------
2006 2005 2006 2005 2006 2005
------------ ------------ ------------ ------------ ------------ ------------
$ (46,325) $ (42,830) $ (51,412) $ (267,346) $ (759,393) $ (620,280)
92,980 76,562 4,902,651 474,704 10,554,549 1,683,000
3,045 199,276 (461,416) 3,843,314 (1,754,004) 8,117,726
------------ ------------ ------------ ------------ ------------ ------------
49,700 233,008 4,389,823 4,050,672 8,041,152 9,180,446
------------ ------------ ------------ ------------ ------------ ------------
911,897 912,448 12,463,205 7,013,445 20,292,513 15,650,802
449,584 471,683 16,226,967 12,104,504 18,870,749 20,359,377
225,688 204,268 2,164,783 1,780,258 4,102,346 4,217,914
(639) (851) (3,333) (2,743) (7,091) (7,021)
(721,146) (700,772) (9,930,911) (5,461,811) (18,332,586) (11,335,030)
(588,716) (929,032) (6,189,893) (2,323,927) (12,474,456) (7,801,053)
(225,688) (204,268) (2,164,783) (1,780,258) (4,102,346) (4,217,914)
-- -- (13,501) (4,956) (17,232) (14,357)
------------ ------------ ------------ ------------ ------------ ------------
50,980 (246,524) 12,552,534 11,324,512 8,331,897 16,852,718
------------ ------------ ------------ ------------ ------------ ------------
100,680 (13,516) 16,942,357 15,375,184 16,373,049 26,033,164
3,929,841 3,943,357 34,926,347 19,551,163 67,798,859 41,765,695
------------ ------------ ------------ ------------ ------------ ------------
$ 4,030,521 $ 3,929,841 $ 51,868,704 $ 34,926,347 $ 84,171,908 $ 67,798,859
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
69
NOTES TO FINANCIAL STATEMENTS
1. BUSINESS
MetLife of CT Separate Account QPN for Variable Annuities ("Separate Account
QPN") (formerly, The Travelers Separate Account QPN for Variable Annuities) is a
separate account of MetLife Insurance Company of Connecticut (the "Company")
(formerly, The Travelers Insurance Company), a wholly owned subsidiary of
MetLife, Inc., a Delaware corporation, and is available for funding certain
variable annuity contracts issued by the Company. Separate Account QPN,
established on December 26, 1995, is registered under the Investment Company Act
of 1940, as amended, as a unit investment trust. The products supported by
Separate Account QPN are Unregistered Gold Track, Unregistered Gold Track
Express, Unallocated Group Variable Annuity Contract, Blueprint, Blueprint II
and MetLife Retirement Perspectives (formerly, Travelers Retirement
Perspectives).
Separate Account QPN is divided into Subaccounts, each of which is treated as an
individual separate account for financial reporting purposes. Each Subaccount
invests in shares of the corresponding portfolios, series and funds (with the
same name) of registered investment management companies (collectively, the
"Funds") which are presented below. For convenience, the portfolios, series or
funds are referred to as "portfolios".
American Funds Insurance Series
Dreyfus Variable Investment Fund
Franklin Templeton Variable Insurance Products Trust
Janus Aspen Series
Legg Mason Partners Investment Funds, Inc.
Legg Mason Partners Investment Series
Legg Mason Partners Investment Trust
Legg Mason Partners Variable Portfolios V
Legg Mason Partners Variable Portfolios I, Inc.
Legg Mason Partners Variable Portfolios II
Legg Mason Partners Variable Portfolios III, Inc.
Lord Abbett Series Fund, Inc.
Met Investors Series Trust
MetLife Investment Funds, Inc.
Metropolitan Series Fund, Inc.
PIMCO Variable Insurance Trust
Putnam Variable Trust
Templeton Growth Fund, Inc. - Class A
Van Kampen Life Investment Trust
Variable Insurance Products Fund
Participant purchase payments applied to Separate Account QPN are invested in
one or more Subaccounts in accordance with the selection made by the contract
owner. The following Subaccounts were available for investment as of December
31, 2006 (the share class indicated in parentheses is that of the portfolio in
which the Subaccount invests):
American Funds Global Growth Subaccount (Class 2)
American Funds Growth Subaccount (Class 2)
American Funds Growth-Income Subaccount (Class 2)
Dreyfus VIF Appreciation Subaccount (Initial Shares)
Dreyfus VIF Developing Leaders Subaccount (Initial Shares)
FTVIPT Franklin Small-Mid Cap Growth Securities Subaccount (Class 2)
70
NOTES TO FINANCIAL STATEMENTS -- (Continued)
1. BUSINESS -- (Continued)
FTVIPT Templeton Developing Markets Securities Subaccount (Class 2)
FTVIPT Templeton Foreign Securities Subaccount (Class 2)
Janus Aspen Global Life Sciences Subaccount (Service Shares)
Janus Aspen Global Technology Subaccount (Service Shares)
Janus Aspen Mid Cap Growth Subaccount (Service Shares)
LMPIF Investment Grade Bond Subaccount (Class A)
LMPIF Small Cap Value Subaccount (Class A)
LMPIS Growth and Income Subaccount
LMPIS Premier Selections All Cap Growth Subaccount
LMPIT S&P 500 Index Subaccount (Class A)
LMPVPI All Cap Subaccount (Class I)
LMPVPI Global High Yield Bond Subaccount (Class I)
LMPVPI Investors Subaccount (Class I)
LMPVPI Total Return Subaccount (Class I)
LMPVPII Appreciation Subaccount
LMPVPII Diversified Strategic Income Subaccount
LMPVPII Equity Index Subaccount (Class II)
LMPVPIII Adjustable Rate Income Subaccount
LMPVPIII Aggressive Growth Subaccount
LMPVPIII Large Cap Growth Subaccount
LMPVPIII Money Market Subaccount
LMPVPIII Social Awareness Stock Subaccount
LMPVPV Small Cap Growth Opportunities Subaccount
Lord Abbett Growth and Income Subaccount (Class VC)
Lord Abbett Mid-Cap Value Subaccount (Class VC)
MIST Batterymarch Mid-Cap Stock Subaccount (Class A)
MIST BlackRock High Yield Subaccount (Class A)
MIST BlackRock Large-Cap Core Subaccount (Class A)
MIST Dreman Small-Cap Value Subaccount (Class A)
MIST Harris Oakmark International Subaccount (Class A)
MIST Janus Capital Appreciation Subaccount (Class A)
MIST Legg Mason Partners Managed Assets Subaccount (Class A)
MIST Lord Abbett Bond Debenture Subaccount (Class A)
MIST Lord Abbett Growth and Income Subaccount (Class B)
MIST Met/AIM Capital Appreciation Subaccount (Class A)
MIST Met/AIM Small Cap Growth Subaccount (Class A)
MIST MFS(R)Value Subaccount (Class A)
MIST Neuberger Berman Real Estate Subaccount (Class A)
MIST Pioneer Fund Subaccount (Class A)
MIST Pioneer Mid-Cap Value Subaccount (Class A)
MIST Pioneer Strategic Income Subaccount (Class A)
MIST Third Avenue Small Cap Value Subaccount (Class B)
MetLife Investment Diversified Bond Subaccount (Class I)
MetLife Investment International Stock Subaccount (Class I)
MetLife Investment Large Company Stock Subaccount (Class I)
MetLife Investment Small Company Stock Subaccount (Class I)
MSF BlackRock Aggressive Growth Subaccount (Class D)
MSF BlackRock Bond Income Subaccount (Class A)
MSF BlackRock Money Market Subaccount (Class A)*
71
NOTES TO FINANCIAL STATEMENTS -- (Continued)
1. BUSINESS -- (Continued)
MSF FI Large Cap Subaccount (Class A)
MSF FI Value Leaders Subaccount (Class D)
MSF MetLife Aggressive Allocation Subaccount (Class B)
MSF MetLife Conservative Allocation Subaccount (Class B)
MSF MetLife Conservative to Moderate Allocation Subaccount (Class B)
MSF MetLife Moderate Allocation Subaccount (Class B)
MSF MetLife Moderate to Aggressive Allocation Subaccount (Class B)
MSF MFS(R)Total Return Subaccount (Class F)
MSF T. Rowe Price Large Cap Growth Subaccount (Class B)
MSF Western Asset Management High Yield Bond Subaccount (Class A)
MSF Western Asset Management U.S. Government Subaccount (Class A)
PIMCO VIT Real Return Subaccount (Administrative Class)
PIMCO VIT Total Return Subaccount (Administrative Class)
Putnam VT Small Cap Value Subaccount (Class IB)
Templeton Growth Fund Subaccount (Class A)
Van Kampen LIT Comstock Subaccount (Class II)
Van Kampen LIT Strategic Growth Subaccount (Class II)
VIP Contrafund(R)Subaccount (Service Class 2)
VIP Mid Cap Subaccount (Service Class 2)
* No net assets as of December 31, 2006
The operations of the Subaccounts changed as follows during the years ended
December 31, 2006 and 2005:
For the year ended December 31, 2006:
Name Change:
Old Name New Name
-------- --------
CitiStreet Diversified Bond Subaccount MetLife Investment Diversified Bond Subaccount
CitiStreet International Stock Subaccount MetLife Investment International Stock Subaccount
CitiStreet Large Company Stock Subaccount MetLife Investment Large Company Stock Subaccount
CitiStreet Small Company Stock Subaccount MetLife Investment Small Company Stock Subaccount
Greenwich Street Appreciation Subaccount LMPVPII Appreciation Subaccount
Greenwich Street Diversified Strategic Income Subaccount LMPVPII Diversified Strategic Income Subaccount
Greenwich Street Equity Index Subaccount LMPVPII Equity Index Subaccount
Salomon Brothers Variable All Cap Subaccount LMPVPI All Cap Subaccount
Salomon Brothers Variable High Yield Bond Subaccount LMPVPI High Yield Bond Subaccount
Salomon Brothers Variable Investors Subaccount LMPVPI Investors Subaccount
Salomon Brothers Variable Total Return Subaccount LMPVPI Total Return Subaccount
Smith Barney Investment Grade Bond Subaccount LMPIF Investment Grade Bond Subaccount
Smith Barney Small Cap Value Subaccount LMPIF Small Cap Value Subaccount
Smith Barney Growth and Income Subaccount LMPIS Growth and Income Subaccount
Smith Barney Premier Selections All Cap Growth Subaccount LMPIS Premier Selections All Cap Growth Subaccount
Smith Barney S&P 500 Index Shares Subaccount LMPIT S&P 500 Index Subaccount
SB Adjustable Rate Income Subaccount LMPVPIII Adjustable Rate Income Subaccount
Smith Barney Aggressive Growth Subaccount LMPVPIII Aggressive Growth Subaccount
Smith Barney Large Capitalization Growth Subaccount LMPVPIII Large Cap Growth Subaccount
Smith Barney Money Market Subaccount LMPVPIII Money Market Subaccount
Social Awareness Stock Subaccount LMPVPIII Social Awareness Stock Subaccount
Smith Barney Small Cap Growth Opportunities Subaccount LMPVPV Small Cap Growth Opportunities Subaccount
Van Kampen Emerging Growth Subaccount Van Kampen LIT Strategic Growth Subaccount
Mercury Large Cap Core Subaccount BlackRock Large Cap Core Subaccount
Federated High Yield Subaccount BlackRock High Yield Subaccount
LMPVPI High Yield Bond Subaccount LMPVPI Global High Yield Subaccount
72
NOTES TO FINANCIAL STATEMENTS -- (Continued)
1. BUSINESS -- (Continued)
Mergers:
Old Portfolio New Portfolio
------------- -------------
Capital Appreciation Fund (a) Janus Capital Appreciation Portfolio (b)
High Yield Bond Trust (a) Western Assets Management High Yield Bond Portfolio (b)
Managed Assets Trust (a) Legg Mason Partners Managed Assets Portfolio (b)
Travelers AIM Capital Appreciation Portfolio (a) Met/AIM Capital Appreciation Portfolio (b)
Travelers Convertible Securities Portfolio (a) Lord Abbett Bond Debenture Portfolio (b)
Travelers Disciplined Mid Cap Stock Portfolio (a) Batterymarch Mid Cap Stock Portfolio (b)
Travelers Federated High Yield Portfolio (a) BlackRock High Yield Portfolio (b)
Travelers Mercury Large Cap Core Portfolio (a) BlackRock Large Cap Core Portfolio (b)
Travelers MFS Value Portfolio (a) MFS Value Portfolio (b)
Travelers Mondrian International Stock Portfolio (a) Harris Oakmark International Portfolio (b)
Travelers Pioneer Portfolio (a) Pioneer Fund Portfolio (b)
Travelers Pioneer Mid-Cap Value Portfolio (a) Pioneer Mid-Cap Value Portfolio (b)
Travelers Pioneer Strategic Income Portfolio (a) Pioneer Strategic Income Portfolio (b)
Travelers Style Focus: Small Cap Value Portfolio (a) Dreman Small Cap Value Portfolio (b)
Travelers Equity Income Portfolio (a) FI Value Leaders Portfolio (b)
Travelers Large Cap Portfolio (a) FI Large Cap Portfolio (b)
Travelers Managed Allocation Conservative Portfolio (a) MetLife Conservative Allocation Portfolio (b)
Travelers Managed Allocation Moderate-Conservative MetLife Conservative to Moderate Allocation Portfolio (b)
Portfolio (a)
Travelers Managed Allocation Moderate Portfolio (a) MetLife Moderate Allocation Portfolio (b)
Travelers Managed Allocation Moderate-Aggressive MetLife Moderate to Aggressive Allocation Portfolio (b)
Portfolio (a)
Travelers Managed Allocation Aggressive Portfolio (a) MetLife Aggressive Allocation Portfolio (b)
Travelers MFS Mid Cap Growth Portfolio (a) BlackRock Aggressive Growth Portfolio (b)
Travelers MFS Total Return Portfolio (a) MSF MFS Total Return Portfolio (b)
Travelers Strategic Equity Portfolio (a) FI Large Cap Portfolio (b)
Travelers Quality Bond Portfolio (a) BlackRock Bond Income Portfolio (b)
Travelers U.S. Government Securities Portfolio (a) Western Asset Management U.S. Government Portfolio (b)
(a) For the period January 1, 2006 to April 30, 2006
(b) For the period May 1, 2006 to December 31, 2006
Substitutions:
Old Portfolio New Portfolio
------------- -------------
Delaware VIP REIT Portfolio (c) Neuberger Berman Real Estate Portfolio (c)
Janus Aspen Growth and Income Portfolio (c) T. Rowe Price Large Cap Growth Portfolio (c)
AllianceBernstein Large Cap Growth Portfolio (c) T. Rowe Price Large Cap Growth Portfolio (c)
Mutual Shares Securities Portfolio (c) Lord Abbett Growth and Income Portfolio (c)
Oppenheimer Main Street/VA Portfolio (c) Lord Abbett Growth and Income Portfolio (c)
Lazard Retirement Small Cap Portfolio (e) Third Avenue Small Cap Value Portfolio (f)
AllianceBernstein Growth and Income Portfolio (c) Lord Abbett Growth and Income Portfolio (c)
(c) For the period January 1, 2006 to April 30, 2006
(d) For the period May 1, 2006 to December 31, 2006
(e) For the period January 1, 2006 to November 12, 2006
(f) For the period November 13, 2006 to December 31, 2006
For the year ended December 31, 2005:
Mergers:
Old Portfolio New Portfolio
------------- -------------
AIM Charter Portfolio Greenwich Street Appreciation Portfolio
AIM Constellation Portfolio Travelers AIM Capital Appreciation Portfolio
73
NOTES TO FINANCIAL STATEMENTS -- (Continued)
1. BUSINESS -- (Concluded)
For the year ended December 31, 2005 -- (Continued):
Mergers -- (Continued):
Old Portfolio Name New Portfolio Name
------------------ ------------------
AllianceBernstein Growth & Income Portfolio AllianceBernstein Growth & Income Portfolio
Dreyfus A Bonds Plus Portfolio Travelers U.S. Government Securities Portfolio
Advisor Growth Opportunities Portfolio Appreciation Portfolio
Worldwide Growth Portfolio AFIS Global Growth Portfolio
Neuberger Berman Guardian Portfolio AFIS Growth Income Portfolio
Neuberger Berman Partners Portfolio Lord Abbott Growth & income Portfolio
PBHG Growth Portfolio Janus Aspen Mid Cap Growth Portfolio
Putnam VT International Equity Portfolio FTVIP Templeton Foreign Securities Portfolio
Smith Barney Social Awareness Portfolio Travelers Social Awareness Stock Portfolio
Smith Barney U.S. Government Securities Portfolio Travelers U.S. Government Securities Portfolio
Dreyfus Disciplined Stock Portfolio Greenwich Street Equity Index Portfolio
Travelers MFS(R) Emerging Growth Portfolio Travelers MFS(R) Mid Cap Growth Portfolio
Van Kampen LIT Enterprise Portfolio Travelers Large Cap Portfolio
Dynamic Capital Appreciation Portfolio Salomon Brothers Variable All Cap Portfolio
Travelers Style Focus Series: Small Cap Growth Portfolio Met/AIM Small Cap Growth Subaccount
Additions:
Travelers High Yield Bond Subaccount
Travelers Managed Allocation Aggressive
Travelers Managed Allocation Conservative Subaccount
Travelers Managed Allocation Moderate Subaccount
Travelers Managed Allocation Moderate-Aggressive Subaccount
Travelers Managed Allocation Moderate-Conservative Subaccount
Travelers Managed Assets Subaccount
Travelers Pioneer Mid Cap Value Subaccount
Travelers Real Return Subaccount
Travelers Style Focus Small Cap Growth Subaccount
Travelers Style Focus Small Cap Value Subaccount
Not all funds may be available in all states or to all contract owners.
This report is prepared for the general information of contract owners and is
not an offer of units of Separate Account QPN or shares of Separate Account
QPN's underlying funds. It should not be used in connection with any offer
except in conjunction with the prospectus for Separate Account QPN product(s)
offered by the Company and the prospectuses for the underlying funds, which
collectively contain all pertinent information, including additional information
on charges and expenses.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by Separate Account QPN in the preparation of its financial statements.
Investments are valued daily at the net asset values per share of the underlying
funds. Short-term investments are reported at fair value based on quoted market
prices. Short-term investments, for which there is no reliable quoted market
price, are recorded at amortized cost which approximates fair value. Changes in
fair values are recorded in the Statement of Operations.
Security transactions are recorded on the trade date basis. Realized gains and
losses on the sales of investments are computed on the basis of the average cost
of the investment sold. Income from dividends and realized gain distributions
are recorded on the ex-distribution date.
Included in "other receipts/(payments)" in the Statement of Changes in Net
Assets are primarily contract benefits which have been re-deposited with the
Company and distributions for payouts.
74
NOTES TO FINANCIAL STATEMENTS -- (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES -- (Concluded)
The operations of Separate Account QPN form a part of the total operations of
the Company and are not taxed separately. The Company is taxed as a life
insurance company under the provisions of the Internal Revenue Code of 1986 (the
"Code"). Under existing federal income tax law, no taxes are payable on the
earnings of Separate Account QPN. Separate Account QPN is not taxed as a
"regulated investment company" under Subchapter M of the Code.
Net assets allocated to contracts in the payout period are computed according to
the 1994 Group Annuity Mortality Table. The assumed investment return is 3.0
percent. The mortality risk is fully borne by the Company and may result in
additional amounts being transferred into the variable annuity account by the
Company to cover greater longevity of annuitants than expected. Conversely, if
amounts allocated exceed amounts required, transfers may be made to the Company.
The financial highlights disclosure is comprised of the units, unit values, net
assets, investment income ratio, expense ratios and total returns for each
Subaccount. Since each Subaccount offers multiple contract charges, certain
information is provided in the form of a range. The range information may
reflect varying time periods if assets did not exist with all contract charge
options of the Subaccount for the entire year.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
3. CONTRACT CHARGES
The asset-based charges listed below are deducted, as appropriate, each business
day and are assessed through the calculation of accumulation and/or annuity unit
values:
- Mortality and Expense Risks assumed by the Company ("M&E")
- Administrative fees paid for administrative expenses ("ADM")
The table below displays separate account charges with their associated products
offered in Separate Account QPN for each funding option:
Asset-
based
Charges
--------
Separate Account Charge (1) Product M&E
--------------------------------- -------- ---------
Separate Account Charge 0.15% MetLife Retirement Perspectives (Unregistered) (notes 2-3) 0.15%
Separate Account Charge 0.25% MetLife Retirement Perspectives (Unregistered) (notes 2-3) 0.25%
Separate Account Charge 0.35% MetLife Retirement Perspectives (Unregistered) (notes 2-3) 0.35%
Separate Account Charge 0.45% MetLife Retirement Perspectives (Unregistered) (notes 2-3) 0.45%
Unregistered Gold Track 0.45%
Separate Account Charge 0.60% MetLife Retirement Perspectives (Unregistered) (notes 2-3) 0.60%
Unregistered Gold Track 0.60%
Separate Account Charge 0.80% Blueprint I (notes 2-3) 0.80%
MetLife Retirement Perspectives (Registered) (notes 2-3) 0.80%
Unregistered Gold Track 0.80%
Separate Account Charge 0.85% Blueprint I (notes 2-3) 0.85%
Blueprint II (notes 2-3) 0.85%
Unallocated Group Variable Annuity Contract (notes 2-3) 0.85%
Unregistered Gold Track Express (notes 2-3)0.85%
75
NOTES TO FINANCIAL STATEMENTS -- (Continued)
3. CONTRACT CHARGES -- (Concluded)
Separate Account QPN
Asset-
based
Charges
--------
Separate Account Charge (1) Product M&E
--------------------------------- -------- ---------
Separate Account Charge 1.00% Blueprint I (notes 2-3) 1.00%
Blueprint II (notes 2-3) 1.00%
Unallocated Group Variable Annuity Contract (notes 2-3) 1.00%
Unregistered Gold Track Express (notes 2-3) 1.00%
Separate Account Charge 1.05% Blueprint I (notes 2-3) 1.05%
MetLife Retirement Perspectives (Registered) (notes 2-3) 1.05%
Unregistered Gold Track 1.05%
Separate Account Charge 1.10% Blueprint I (notes 2-3) 1.10%
Blueprint II (notes 2-3) 1.10%
Unallocated Group Variable Annuity Contract (notes 2-3) 1.10%
Unregistered Gold Track Express (notes 2-3) 1.10%
Separate Account Charge 1.20% Blueprint I (notes 2-3) 1.20%
Blueprint II (notes 2-3) 1.20%
Unallocated Group Variable Annuity Contract (notes 2-3) 1.20%
Unregistered Gold Track Express (notes 2-3) 1.20%
Separate Account Charge 1.30% Blueprint I (notes 2-3) 1.30%
Blueprint II (notes 2-3) 1.30%
MetLife Retirement Perspectives (Registered) (notes 2-3) 1.30%
Unallocated Group Variable Annuity Contract (notes 2-3) 1.30%
Unregistered Gold Track 1.30%
Unregistered Gold Track Express (notes 2-3) 1.30%
Separate Account Charge 1.50% Blueprint I (notes 2-3) 1.50%
Blueprint II (notes 2-3) 1.50%
MetLife Retirement Perspectives (Registered) (notes 2-3) 1.50%
Blueprint II (notes 2-3) 1.50%
Unregistered Gold Track 1.50%
Unregistered Gold Track Express (notes 2-3)1.50%
(1) Certain accumulation and annuity unit values may not be available through
certain Subaccounts.
(2) An amount equal to the underlying fund expenses that are in excess of
0.90% is being waived for the Harris Oakmark International Subaccount
(Class A) of the Met Investors Series Trust.
(3) A waiver of 0.15% of the M&E charge applies to the Subaccount investing in
the Western Asset Management U.S. Government Subaccount (Class A) of the
Metropolitan Series Fund, Inc.
For allocated contracts in the accumulation phase, a semi-annual charge of $15
(prorated for partial periods) may be assessed through the redemption of units
and paid to the Company to cover administrative charges.
No sales charge is deducted from participant purchase payments when they are
received. However, as negotiated, the Company may assess a contingent deferred
sales charge for contracts issued prior to May 24, 2005, (up to 5.5% if a
participant's purchase payment is surrendered within five years of its payment
date) or, depending upon the issue date, a surrender charge (up to 5% if a
participant's payment is surrendered within eight years of its payment date).
For a full explanation of product charges and associated product features and
benefits, please refer to your product prospectus.
76
NOTES TO FINANCIAL STATEMENTS -- (Continued)
4. STATEMENT OF INVESTMENTS
As of and for the period ended December 31, 2006
---------------------------------------------------------
INVESTMENTS No. of Market Cost of Proceeds
Shares Value Purchases from Sales
------------ ------------ ------------ ------------
Templeton Growth Fund, Inc. (6.3%)
Templeton Growth Fund Subaccount (Cost $135,182,944)
Total (Cost $135,182,944) 6,615,149 $169,744,727 $ 23,878,156 $ 27,725,411
============ ============ ============ ============
AllianceBernstein Variable Products Series Fund, Inc. (0.0%)
AllianceBernstein Growth and Income Subaccount (Class B) (Cost $0) -- $ -- $ 1,470,279 $125,333,741
AllianceBernstein Large-Cap Growth Subaccount (Class B) (Cost $0) -- -- 891,276 4,894,734
------------ ------------ ------------ ------------
Total (Cost $0) -- $ -- $ 2,361,555 $130,228,475
============ ============ ============ ============
American Funds Insurance Series (4.1%)
American Funds Global Growth Subaccount (Class 2) (Cost $18,222,601) 952,876 $ 22,192,483 $ 10,246,390 $ 1,496,225
American Funds Growth Subaccount (Class 2) (Cost $46,939,176) 843,925 54,078,687 24,248,939 3,175,923
American Funds Growth-Income Subaccount (Class 2) (Cost $30,722,713) 817,923 34,508,188 12,742,014 2,274,282
------------ ------------ ------------ ------------
Total (Cost $95,884,490) 2,614,724 $110,779,358 $ 47,237,343 $ 6,946,430
============ ============ ============ ============
Capital Appreciation Fund (0.0%)
Capital Appreciation Fund
Total (Cost $0) -- $ -- $ 10,477,273 $229,661,428
============ ============ ============ ============
Delaware VIP Trust (0.0%)
Delaware VIP REIT Subaccount (Standard Class)
Total (Cost $0) -- $ -- $ 4,085,289 $ 23,012,211
============ ============ ============ ============
Dreyfus Variable Investment Fund (4.3%)
Dreyfus VIF Appreciation Subaccount (Initial Shares)
(Cost $33,734,380) 961,465 $ 40,910,332 $ 3,015,744 $ 12,595,711
Dreyfus VIF Developing Leaders Subaccount (Initial Shares)
(Cost $68,526,465) 1,778,842 74,764,727 10,729,365
21,507,735
------------ ------------ ------------ ------------
Total (Cost $102,260,845) 2,740,307 $115,675,059 $ 13,745,109 $ 34,103,446
============ ============ ============ ============
Franklin Templeton Variable Insurance Products Trust (2.5%)
FTVIPT Franklin Small-Mid Cap Growth Securities Subaccount (Class 2)
(Cost $7,042,230) 401,458 $ 8,884,267 $ 1,607,430 $ 1,919,414
FTVIPT Mutual Shares Securities Subaccount (Class 2) (Cost $0) -- -- 2,059,343 10,634,961
FTVIPT Templeton Developing Markets Securities Subaccount (Class 2)
(Cost $26,910,178) 2,584,323 35,637,819 16,620,254 6,213,009
FTVIPT Templeton Foreign Securities Subaccount (Class 2)
(Cost $18,474,280) 1,250,539 23,410,099 7,435,487 2,849,445
------------ ------------ ------------ ------------
Total (Cost $52,426,688) 4,236,320 $ 67,932,185 $ 27,722,514 $ 21,616,829
============ ============ ============ ============
High Yield Bond Trust (0.0%)
High Yield Bond Trust
Total (Cost $0) -- $ -- $ 303,482 $ 335,527
============ ============ ============ ============
Janus Aspen Series (1.4%)
Janus Aspen Global Life Sciences Subaccount (Service Shares)
(Cost $3,712,648) 485,123 $ 4,560,159 $ 769,746 $ 1,794,135
Janus Aspen Global Technology Subaccount (Service Shares)
(Cost $3,620,670) 946,344 4,040,888 544,099 994,897
Janus Aspen Growth and Income Subaccount (Service Shares) (Cost $0) -- -- 1,010,534 9,395,472
Janus Aspen Mid Cap Growth Subaccount (Service Shares)
(Cost $ 22,986,094) 917,944 29,548,609 2,891,109 8,219,115
------------ ------------ ------------ ------------
Total (Cost $30,319,412) 2,349,411 $ 38,149,656 $ 5,215,488 $ 20,403,619
============ ============ ============ ============
Lazard Retirement Series, Inc. (0.0%)
Lazard Retirement Small Cap Subaccount
Total (Cost $0) -- $ -- $ 4,966,955 $ 10,875,303
============ ============ ============ ============
Legg Mason Partners Investment Funds, Inc. (1.3%)
LMPIF Investment Grade Bond Subaccount (Class A)
Total (Cost $36,546,274) 2,922,957 $ 35,543,158 $ 4,584,059 $ 12,680,401
============ ============ ============ ============
Legg Mason Partners Investment Series (0.7%)
LMPIS Growth and Income Subaccount (Cost $1,616,417) 176,988 $ 1,941,563 $ 585,646 $ 542,721
LMPIS Premier Selections All Cap Growth Subaccount (Cost $14,992,875) 1,300,094 17,395,256 1,505,649 5,969,530
------------ ------------ ------------ ------------
Total (Cost $16,609,292) 1,477,082 $ 19,336,819 $ 2,091,295 $ 6,512,251
============ ============ ============ ============
Legg Mason Partners Investment Trust (2.1%)
LMPIT S&P 500 Index Subaccount (Class A)
Total (Cost $48,412,654) 4,003,643 $ 57,492,315 $ 3,900,934 $ 13,809,509
============ ============ ============ ============
77
NOTES TO FINANCIAL STATEMENTS -- (Continued)
4. STATEMENT OF INVESTMENTS -- (Continued)
As of and for the period ended
December 31, 2006 - (Continued)
---------------------------------------------------------
INVESTMENTS No. of Market Cost of Proceeds
Shares Value Purchases from Sales
------------ ------------ ------------ ------------
Legg Mason Partners Variable Portfolios V (0.4%)
LMPVPV Small Cap Growth Opportunities Subaccount
Total (Cost $10,020,688) 936,716 $ 10,706,665 $ 4,429,221 $ 3,402,073
============ ============ ============ ============
Legg Mason Partners Variable Portfolios I, Inc. (5.6%)
LMPVPI All Cap Subaccount (Class I) (Cost $29,713,061) 1,929,938 $ 37,672,390 $ 4,150,528 $ 7,739,191
LMPVPI Global High Yield Bond Subaccount (Class I) (Cost $23,028,528) 2,440,549 23,990,599 4,477,367 5,475,141
LMPVPI Investors Subaccount (Class I) (Cost $45,726,662) 3,556,473 58,859,623 5,049,589 14,931,385
LMPVPI Total Return Subaccount (Class I) (Cost $26,318,231) 2,462,967 30,245,239 3,245,026 11,436,744
------------ ------------ ------------ ------------
Total (Cost $124,786,482) 10,389,927 $150,767,851 $ 16,922,510 $ 39,582,461
============ ============ ============ ============
Legg Mason Partners Variable Portfolios II (5.3%)
LMPVPII Appreciation Subaccount (Cost $60,310,470) 2,650,607 $ 70,903,730 $ 6,226,063 $ 14,603,197
LMPVPII Diversified Strategic Income Subaccount (Cost $6,238,341) 672,039 6,001,309 1,027,766 2,166,755
LMPVPII Equity Index Subaccount (Class II) (Cost $53,737,787) 1,917,761 65,453,176 6,173,730 15,293,442
------------ ------------ ------------ ------------
Total (Cost $120,286,598) 5,240,407 $142,358,215 $ 13,427,559 $ 32,063,394
============ ============ ============ ============
Legg Mason Partners Variable Portfolios III, Inc. (15.2%)
LMPVPIII Adjustable Rate Income Subaccount (Cost $1,743,112) 172,854 $ 1,707,801 $ 1,162,110 $ 520,156
LMPVPIII Aggressive Growth Subaccount (Cost $110,920,565) 9,129,241 147,528,528 6,613,801 37,442,335
LMPVPIII Large Cap Growth Subaccount (Cost $30,188,866) 2,191,696 34,563,041 2,428,971 12,215,617
LMPVPIII Money Market Subaccount (Cost $217,612,005) 217,612,005 217,612,005 63,072,360 64,833,342
LMPVPIII Social Awareness Stock Subaccount (Cost $8,190,254) 357,362 9,645,212 903,341 3,100,451
------------ ------------ ------------ ------------
Total (Cost $368,654,802) 229,463,158 $411,056,587 $ 74,180,583 $118,111,901
============ ============ ============ ============
Lord Abbett Series Fund, Inc. (1.3%)
Lord Abbett Growth and Income Subaccount (Class VC)
(Cost $20,608,213) 754,112 $ 22,125,651 $ 6,604,338 $ 4,129,040
Lord Abbett Mid-Cap Value Subaccount (Class VC) (Cost $12,610,162) 605,057 13,178,133 4,460,551 3,227,194
------------ ------------ ------------ ------------
Total (Cost $33,218,375) 1,359,169 $ 35,303,784 $ 11,064,889 $ 7,356,234
============ ============ ============ ============
Managed Assets Trust (0.0%)
Managed Assets Trust
Total (Cost $0) -- $ -- $ 65,350 $ 116,169
============ ============ ============ ============
Met Investors Series Trust (20.7%)
MIST Batterymarch Mid-Cap Stock Subaccount (Class A)
(Cost $24,799,727) 1,230,738 $ 23,913,230 $ 31,055,107 $ 5,781,149
MIST BlackRock High Yield Subaccount (Class A) (Cost $8,662,387) 1,032,345 9,208,521 10,235,517 1,606,465
MIST BlackRock Large-Cap Core Subaccount (Class A) (Cost $6,584,104) 629,530 7,050,731 8,513,147 1,957,566
MIST Dreman Small-Cap Value Subaccount (Class A) (Cost $631,246) 49,508 681,719 706,884 76,498
MIST Harris Oakmark International Subaccount (Class A)
(Cost $56,332,196) 3,295,202 62,707,694 63,580,556 7,381,570
MIST Janus Capital Appreciation Subaccount (Class A)
(Cost $181,619,680) 2,425,224 188,294,414 217,373,842 34,783,544
MIST Legg Mason Partners Managed Assets Subaccount (Class A)
(Cost $103,182) 5,876 106,183 218,582 117,522
MIST Lord Abbett Bond Debenture Subaccount (Class A)
(Cost $3,145,739) 263,275 3,293,566 3,473,693 331,616
MIST Lord Abbett Growth and Income Subaccount (Class B)
(Cost $119,823,810) 4,456,766 130,137,578 139,711,654 20,321,377
MIST Met/AIM Capital Appreciation Subaccount (Class A)
(Cost $74,204,403) 6,098,280 66,044,373 88,652,549 13,720,453
MIST Met/AIM Small Cap Growth Subaccount (Class A) (Cost $322,543) 24,925 337,229 323,281 744
MIST MFS(R) Value Subaccount (Class A) (Cost $10,189,328) 744,405 10,600,324 10,779,561 592,289
MIST Neuberger Berman Real Estate Subaccount (Class A)
(Cost $26,704,119) 1,752,065 31,764,940 29,061,159 2,572,745
MIST Pioneer Fund Subaccount (Class A) (Cost $1,679,978) 121,964 1,784,334 1,906,762 225,456
MIST Pioneer Mid-Cap Value Subaccount (Class A) (Cost $134,926) 12,131 144,845 150,602 16,046
MIST Pioneer Strategic Income Subaccount (Class A) (Cost $15,643,487) 1,646,823 15,578,946 16,804,684 1,186,459
MIST Third Avenue Small Cap Value Subaccount (Class B)
(Cost $10,332,129) 606,799 10,570,437 10,709,944 387,104
------------ ------------ ------------ ------------
Total (Cost $540,912,984) 24,395,856 $562,219,064 $633,257,524 $ 91,058,603
============ ============ ============ ============
78
NOTES TO FINANCIAL STATEMENTS -- (Continued)
4. STATEMENT OF INVESTMENTS -- (Continued)
As of and for the period ended
December 31, 2006 - (Continued)
---------------------------------------------------------
INVESTMENTS No. of Market Cost of Proceeds
Shares Value Purchases from Sales
------------ ------------ ------------ ------------
MetLife Investment Funds, Inc. (2.3%)
MetLife Investment Diversified Bond Subaccount (Class I)
(Cost $18,416,874) 1,575,716 $ 18,420,118 $ 4,012,929 $ 4,407,199
MetLife Investment International Stock Subaccount (Class I)
(Cost $11,288,512) 818,254 15,563,197 5,170,704
2,721,754
MetLife Investment Large Company Stock Subaccount (Class I)
(Cost $10,134,384) 932,306 12,772,599 2,161,485 2,138,635
MetLife Investment Small Company Stock Subaccount (Class I)
(Cost $14,207,257) 1,134,444 16,256,575 4,388,373
4,134,162
------------ ------------ ------------ ------------
Total (Cost $54,047,027) 4,460,720 $ 63,012,489 $ 15,733,491 $ 13,401,750
============ ============ ============ ============
Metropolitan Series Fund, Inc. (16.4%)
MSF BlackRock Aggressive Growth Subaccount (Class D)
(Cost $44,239,884) 1,836,195 $ 43,701,451 $ 53,710,818 $ 8,904,241
MSF BlackRock Bond Income Subaccount (Class A) (Cost $25,828,825) 249,312 27,077,782 31,423,351 5,732,088
MSF FI Large Cap Subaccount (Class A) (Cost $85,283,793) 5,783,821 87,451,370 102,549,534 16,601,299
MSF FI Value Leaders Subaccount (Class D) (Cost $48,885,258) 243,992 50,738,075 57,543,367 8,500,075
MSF MetLife Aggressive Allocation Subaccount (Class B)
(Cost $3,775,301) 326,628 3,997,921 3,849,098 75,064
MSF MetLife Conservative Allocation Subaccount (Class B)
(Cost $1,368,987) 134,210 1,414,576 1,495,525 129,771
MSF MetLife Conservative to Moderate Allocation Subaccount (Class B)
(Cost $3,506,266) 327,543 3,609,524 3,919,874 416,911
MSF MetLife Moderate Allocation Subaccount (Class B)
(Cost $11,365,781) 1,036,504 11,899,070 12,287,486 958,244
MSF MetLife Moderate to Aggressive Allocation Subaccount (Class B)
(Cost $13,680,821) 1,208,541 14,429,976 14,441,336 759,176
MSF MFS(R) Total Return Subaccount (Class F) (Cost $140,471,056) 976,449 151,710,923 162,743,463 22,933,562
MSF T. Rowe Price Large Cap Growth Subaccount (Class B)
(Cost $12,791,948) 910,968 13,837,599 15,172,268 2,363,843
MSF Western Asset Management High Yield Bond Subaccount (Class A)
(Cost $835,639) 86,356 890,326 1,019,708 186,028
MSF Western Asset Management U.S. Government Subaccount (Class A)
(Cost $32,565,231) 2,763,496 33,990,996 38,984,820 6,542,038
------------ ------------ ------------ ------------
Total (Cost $424,598,790) 15,884,015 $444,749,589 $499,140,648 $ 74,102,340
============ ============ ============ ============
Oppenheimer Variable Account Funds (0.0%)
Oppenheimer Main Street/VA Subaccount ( Service Shares)
Total (Cost $0) -- $ -- $ 447,924 $ 9,853,876
============ ============ ============ ============
PIMCO Variable Insurance Trust (1.9%)
PIMCO VIT Real Return Subaccount (Administrative Class)
(Cost $710,324) 57,387 $ 684,622 $ 689,433 $ 44,139
PIMCO VIT Total Return Subaccount (Administrative Class)
(Cost $51,618,261) 5,005,312 50,653,753 9,669,544 9,706,824
------------ ------------ ------------ ------------
Total (Cost $52,328,585) 5,062,699 $ 51,338,375 $ 10,358,977 $ 9,750,963
============ ============ ============ ============
Putnam Variable Trust (2.0%)
Putnam VT Small Cap Value Subaccount (Class IB)
Total (Cost $43,460,118) 2,232,188 $ 54,175,210 $ 13,746,514 $ 9,489,402
============ ============ ============ ============
Legg Mason Partners Investment Funds, Inc.
LMPIF Small Cap Value Subaccount (Class A)
Total (Cost $12,610,169) 605,775 $ 14,284,179 $ 3,443,023 $ 3,420,815
============ ============ ============ ============
The Travelers Series Trust (0.0%)
Travelers AIM Capital Appreciation Subaccount (Cost $0) -- $ -- $ 1,249,732 $ 86,760,813
Travelers Convertible Securities Subaccount (Cost $0) -- -- 448,225 1,239,007
Travelers Disciplined Mid Cap Stock Subaccount (Cost $0) -- -- 5,716,098 32,124,341
Travelers Equity Income Subaccount (Cost $0) -- -- 7,690,083 59,171,208
Travelers Federated High Yield Subaccount (Cost $0) -- -- 1,344,758 10,006,267
Travelers Large Cap Subaccount (Cost $0) -- -- 4,433,008 60,972,719
Travelers Managed Allocation Series: Aggressive Subaccount (Cost $0) -- -- 665,908 776,846
Travelers Managed Allocation Series: Conservative Subaccount
(Cost $0) -- -- 180,113 210,950
Travelers Managed Allocation Series: Moderate Subaccount (Cost $0) -- -- 2,208,302 3,150,927
Travelers Managed Allocation Series: Moderate-Aggressive Subaccount
(Cost $0) -- -- 2,924,791 3,833,419
Travelers Managed Allocation Series: Moderate-Conservative Subaccount
(Cost $0) -- -- 591,769 651,147
Travelers Mercury Large Cap Core Subaccount (Cost $0) -- -- 882,592 8,320,411
79
NOTES TO FINANCIAL STATEMENTS -- (Continued)
4. STATEMENT OF INVESTMENTS -- (Concluded)
As of and for the period ended
December 31, 2006 - (Continued)
---------------------------------------------------------
INVESTMENTS No. of Market Cost of Proceeds
Shares Value Purchases from Sales
------------ ------------ ------------ ------------
The Travelers Series Trust (0.0%) -- (Continued)
Travelers MFS(R) Mid Cap Growth Subaccount (Cost $0) -- $ -- $ 3,570,120 $ 56,773,880
Travelers MFS(R) Total Return Subaccount (Cost $0) -- -- 6,765,566 163,855,051
Travelers MFS(R) Value Subaccount (Cost $0) -- -- 924,878 4,960,148
Travelers Mondrian International Stock Subaccount (Cost $0) -- -- 5,541,491 59,176,307
Travelers Pioneer Fund Subaccount (Cost $0) -- -- 150,895 1,133,047
Travelers Pioneer Mid Cap Value Subaccount (Cost $0) -- -- 11,761 33,414
Travelers Pioneer Strategic Income Subaccount (Cost $0) -- -- 1,487,186 13,690,613
Travelers Quality Bond Subaccount (Cost $0) -- -- 2,629,640 31,520,087
Travelers Strategic Equity Subaccount (Cost $0) -- -- 2,565,421 48,091,406
Travelers Style Focus Series: Small Cap Growth Subaccount (Cost $0) -- -- 35,480 54,285
Travelers Style Focus Series: Small Cap Value Subaccount (Cost $0) -- -- 110,753 115,951
Travelers U.S. Government Securities Subaccount (Cost $0) -- -- 3,741,281 41,268,248
------------ ------------ ------------ ------------
Total (Cost $0) -- $ -- $ 55,869,851 $687,890,492
============ ============ ============ ============
Van Kampen Life Investment Trust (0.6%)
Van Kampen LIT Comstock Subaccount (Class II) (Cost $10,667,855) 816,014 $ 11,995,402 $ 4,395,669 $ 2,306,092
Van Kampen LIT Strategic Growth Subaccount (Class II)
(Cost $3,525,341) 141,251 4,031,316 814,806 809,480
------------ ------------ ------------ ------------
Total (Cost $14,193,196) 957,265 $ 16,026,718 $ 5,210,475 $ 3,115,572
============ ============ ============ ============
Variable Insurance Products Fund (5.1%)
VIP Contrafund(R) Subaccount (Service Class 2) (Cost $45,524,191) 1,668,977 $ 51,921,868 $ 21,206,679 $ 4,595,921
VIP Mid Cap Subaccount (Service Class 2) (Cost $67,763,846) 2,459,275 84,230,160 25,771,195 9,288,526
------------ ------------ ------------ ------------
Total (Cost $113,288,037) 4,128,252 $136,152,028 $ 46,977,874 $ 13,884,447
============ ============ ============ ============
80
NOTES TO FINANCIAL STATEMENTS -- (Continued)
5. FINANCIAL HIGHLIGHTS
Expense Total
Year Unit Value Net Investment(1) Ratio(2) Return(3)
Ended Units Lowest to Assets Income Lowest to Lowest to
Dec 31 (000s) Highest ($) ($000s) Ratio (%) Highest (%) Highest (%)
------ ------ ------------- ------- ------------- ----------- -----------------
Templeton Growth Fund, Inc.
Templeton Growth Fund
Subaccount 2006 61,699 1.853 - 2.965 169,641 1.92 0.15 - 1.50 20.04 - 21.62
2005 67,969 1.525 - 2.445 155,136 1.75 0.15 - 1.50 6.54 - 8.03
2004 70,506 1.413 - 2.271 150,355 1.94 0.15 - 1.50 0.37 - 16.68
2003 68,868 1.211 - 1.950 127,086 2.62 0.25 - 1.50 30.89 - 35.08
2002 65,950 0.914 - 1.474 92,678 2.08 0.25 - 1.50 (10.80) - (7.58)
AllianceBernstein Variable Products
Series Fund, Inc.
AllianceBernstein Growth and Income
Subaccount (Class B) 2006 -- 1.155 - 1.188 -- -- 0.25 - 1.50 4.51 - 5.03
2005 105,822 1.109 - 1.134 117,992 1.36 0.25 - 1.50 2.45 - 6.19
2004 65,745 1.076 - 1.086 70,876 0.76 0.15 - 1.50 4.74 - 10.42
AllianceBernstein Large-Cap Growth
Subaccount (Class B) 2006 -- 0.854 - 1.244 -- -- 0.15 - 1.50 (2.06) - (0.80)
2005 4,541 0.872 - 1.254 4,022 -- 0.15 - 1.50 13.10 - 14.64
2004 3,892 0.771 - 1.094 3,036 -- 0.15 - 1.50 (0.09) - 7.95
2003 2,811 0.723 - 1.006 2,050 -- 0.35 - 1.50 20.91 - 22.85
2002 1,079 0.594 - 0.604 645 -- 0.45 - 1.50 (31.96) - (9.24)
American Funds Insurance Series
American Funds Global Growth
Subaccount (Class 2) 2006 14,934 1.471 - 1.525 22,184 0.85 0.15 - 1.50 18.63 - 20.27
2005 8,379 1.240 - 1.268 10,449 0.73 0.15 - 1.50 12.26 - 13.93
2004 1,392 1.103 - 1.113 1,540 0.13 0.15 - 1.50 5.60 - 14.94
American Funds Growth
Subaccount (Class 2) 2006 39,656 1.350 - 1.399 54,036 0.93 0.15 - 1.50 8.61 - 10.07
2005 23,436 1.243 - 1.271 29,305 0.89 0.15 - 1.50 14.46 - 15.97
2004 6,536 1.086 - 1.096 7,115 0.31 0.15 - 1.50 5.59 - 12.51
American Funds Growth-Income
Subaccount (Class 2) 2006 26,766 1.275 - 1.321 34,495 1.78 0.15 - 1.50 13.54 - 14.97
2005 18,676 1.123 - 1.149 21,098 1.62 0.15 - 1.50 4.27 - 5.70
2004 4,698 1.077 - 1.087 5,075 1.79 0.15 - 1.50 3.92 - 10.76
Capital Appreciation Fund
Capital Appreciation Fund 2006 -- 1.082 - 2.525 -- -- 0.25 - 1.50 (1.04) - (0.55)
2005 96,382 1.088 - 2.542 228,533 -- 0.15 - 1.50 16.42 - 21.30
2004 112,239 0.923 - 2.161 227,344 -- 0.25 - 1.50 17.80 - 19.25
2003 135,026 0.774 - 1.816 228,003 0.05 0.25 - 1.50 22.99 - 31.07
2002 138,762 0.621 - 1.460 190,729 1.60 0.25 - 1.50 (26.16) - (25.27)
Delaware VIP Trust
Delaware VIP REIT Subaccount
(Standard Class) 2006 -- 2.257 - 2.371 -- 2.43 0.15 - 1.50 30.69 - 32.46
2005 10,943 1.727 - 1.790 19,066 1.64 0.15 - 1.50 5.56 - 6.99
2004 7,813 1.636 - 1.673 12,850 1.28 0.15 - 1.50 22.42 - 31.22
2003 1,680 1.264 - 1.275 2,128 -- 0.15 - 1.50 5.13 - 27.50
Dreyfus Variable Investment Fund
Dreyfus VIF Appreciation Subaccount
(Initial Shares) 2006 33,136 1.201 - 1.418 40,899 1.62 0.35 - 1.50 14.82 - 16.13
2005 41,733 1.046 - 1.221 44,737 0.02 0.35 - 1.50 2.75 - 4.00
2004 49,254 1.018 - 1.174 51,156 1.65 0.35 - 1.50 3.56 - 4.63
2003 53,975 0.983 - 1.122 53,997 1.44 0.35 - 1.50 19.30 - 24.81
2002 53,660 0.824 - 0.864 44,822 1.60 0.45 - 1.50 (17.93) - (17.08)
Dreyfus VIF Developing Leaders
Subaccount (Initial Shares) 2006 52,021 1.256 - 1.539 74,711 0.42 0.15 - 1.50 2.27 - 3.64
2005 64,384 1.214 - 1.485 90,127 -- 0.15 - 1.50 4.20 - 5.62
2004 71,724 1.150 - 1.406 95,918 0.20 0.15 - 1.50 (0.21) - 11.11
2003 71,910 1.035 - 1.265 87,113 0.03 0.25 - 1.50 29.67 - 31.35
2002 62,965 0.788 - 0.965 58,610 0.04 0.25 - 1.50 (20.28) - (1.13)
81
NOTES TO FINANCIAL STATEMENTS -- (Continued)
5. FINANCIAL HIGHLIGHTS -- (Continued)
Expense Total
Year Unit Value Net Investment(1) Ratio(2) Return(3)
Ended Units Lowest to Assets Income Lowest to Lowest to
Dec 31 (000s) Highest ($) ($000s) Ratio (%) Highest (%) Highest (%)
------ ------ ------------- ------- ------------- ----------- -----------------
Franklin Templeton Variable Insurance
Products Trust
FTVIPT Franklin Small-Mid Cap Growth
Securities Subaccount (Class 2) 2006 8,105 1.070 - 1.521 8,876 -- 0.15 - 1.50 7.11 - 8.57
2005 8,309 0.999 - 1.401 8,459 -- 0.15 - 1.50 3.20 - 8.60
2004 7,601 0.968 - 1.331 7,459 -- 0.25 - 1.50 9.88 - 11.20
2003 5,233 0.881 - 1.198 4,659 -- 0.25 - 1.50 35.12 - 38.18
2002 1,913 0.652 - 0.665 1,257 0.28 0.25 - 1.50 (29.74) - (21.25)
FTVIPT Mutual Shares Securities
Subaccount (Class 2) 2006 -- 1.689 - 1.774 -- -- 0.15 - 1.50 16.64 - 18.19
2005 5,402 1.448 - 1.501 7,910 0.87 0.15 - 1.50 8.95 - 12.22
2004 2,733 1.329 - 1.360 3,660 0.73 0.15 - 1.50 9.36 - 12.49
2003 1,272 1.198 - 1.209 1,528 0.21 0.15 - 1.50 4.42 - 20.90
FTVIPT Templeton Developing Markets
Securities Subaccount (Class 2) 2006 12,487 2.816 - 2.959 35,608 1.15 0.15 - 1.50 19.06 - 27.93
2005 8,371 2.232 - 2.301 18,840 1.23 0.35 - 1.50 25.53 - 27.79
2004 2,644 1.778 - 1.818 4,725 1.81 0.15 - 1.50 15.86 - 33.31
2003 260 1.447 - 1.460 377 0.25 0.15 - 1.50 5.27 - 46.00
FTVIPT Templeton Foreign Securities
Subaccount (Class 2) 2006 15,517 1.495 - 1.549 23,403 1.23 0.15 - 1.50 19.70 - 21.21
2005 12,093 1.249 - 1.278 15,192 1.19 0.15 - 1.50 7.53 - 10.08
2004 4,787 1.151 - 1.161 5,522 0.95 0.15 - 1.50 7.12 - 17.36
High Yield Bond Trust
High Yield Bond Trust 2006 -- 1.048 - 1.058 -- 1.52 0.45 - 1.50 1.83 - 2.62
2005 49 1.025 - 1.031 51 -- 0.45 - 1.50 (0.58) - 2.60
Janus Aspen Series
Janus Aspen Global Life Sciences
Subaccount (Service Shares) 2006 4,264 1.046 - 1.365 4,554 -- 0.35 - 1.50 4.70 - 5.98
2005 5,164 0.999 - 1.288 5,242 -- 0.35 - 1.50 10.63 - 11.90
2004 5,279 0.903 - 1.151 4,832 -- 0.35 - 1.50 12.59 - 13.85
2003 8,987 0.802 - 1.011 7,289 -- 0.35 - 1.50 24.34 - 25.75
2002 7,508 0.645 - 0.664 4,883 -- 0.45 - 1.50 (30.65) - (29.81)
Janus Aspen Global Technology
Subaccount (Service Shares) 2006 9,814 0.402 - 1.318 4,035 -- 0.35 - 1.50 6.07 - 7.46
2005 10,943 0.379 - 1.227 4,213 -- 0.35 - 1.50 9.86 - 11.14
2004 10,853 0.345 - 1.104 3,791 -- 0.35 - 1.50 (0.86) - 0.27
2003 23,966 0.348 - 1.101 8,431 -- 0.35 - 1.50 44.40 - 47.79
2002 15,337 0.241 - 0.248 3,727 -- 0.45 - 1.50 (41.83) - (41.23)
Janus Aspen Growth and Income
Subaccount (Service Shares) 2006 -- 0.880 - 1.449 -- -- 0.35 - 1.50 6.97 - 7.41
2005 9,290 0.822 - 1.349 7,779 0.38 0.35 - 1.50 10.48 - 11.67
2004 8,698 0.744 - 1.208 6,575 0.41 0.35 - 1.50 9.90 - 11.34
2003 8,272 0.677 - 1.085 5,665 0.50 0.35 - 1.50 21.76 - 22.90
2002 6,496 0.556 - 0.572 3,643 0.68 0.45 - 1.50 (22.99) - (22.07)
Janus Aspen Mid Cap Growth
Subaccount (Service Shares) 2006 52,540 0.551 - 1.693 29,523 -- 0.35 - 1.50 11.76 - 12.94
2005 62,062 0.493 - 1.499 31,158 -- 0.35 - 1.50 10.29 - 11.62
2004 44,028 0.447 - 1.343 19,987 -- 0.35 - 1.50 18.57 - 20.20
2003 33,857 0.377 - 1.119 12,911 -- 0.35 - 1.50 32.75 - 34.98
2002 29,607 0.284 - 0.292 8,473 -- 0.45 - 1.50 (29.18) - (28.43)
Lazard Retirement Series, Inc.
Lazard Retirement Small Cap
Subaccount 2006 -- 1.739 - 1.817 -- -- 0.25 - 1.50 12.34 - 13.58
2005 3,591 1.548 - 1.605 5,616 -- 0.15 - 1.50 2.04 - 3.88
2004 1,327 1.511 - 1.545 2,018 -- 0.15 - 1.50 10.46 - 17.04
2003 673 1.335 - 1.347 902 -- 0.15 - 1.50 3.23 - 34.70
82
NOTES TO FINANCIAL STATEMENTS -- (Continued)
5. FINANCIAL HIGHLIGHTS -- (Continued)
Expense Total
Year Unit Value Net Investment(1) Ratio(2) Return(3)
Ended Units Lowest to Assets Income Lowest to Lowest to
Dec 31 (000s) Highest ($) ($000s) Ratio (%) Highest (%) Highest (%)
------ ------ ------------- ------- ------------- ----------- -----------------
Legg Mason Partners Investment Funds, Inc.
LMPIF Investment Grade Bond
Subaccount (Class A) 2006 19,708 1.343 - 1.944 35,531 5.13 0.15 - 1.50 1.51 - 2.88
2005 25,271 1.308 - 1.895 44,680 4.53 0.15 - 1.50 0.29 - 1.70
2004 27,044 1.289 - 1.869 47,489 4.80 0.15 - 1.50 0.86 - 6.19
2003 32,129 1.215 - 1.763 52,821 4.62 0.25 - 1.50 3.68 - 5.38
2002 30,826 1.200 - 1.683 48,603 5.42 0.25 - 1.50 10.76 - 12.15
Legg Mason Partners Investment Series
LMPIS Growth and Income
Subaccount 2006 1,746 1.092 - 1.136 1,941 0.79 0.80 - 1.50 10.86 - 11.88
2005 1,696 0.985 - 1.018 1,694 0.78 0.80 - 1.50 2.28 - 3.04
2004 1,710 0.963 - 0.995 1,666 1.31 0.60 - 1.50 6.64 - 7.57
2003 1,200 0.903 - 0.925 1,094 1.13 0.60 - 1.50 25.00 - 29.37
2002 185 0.704 - 0.715 131 1.51 0.60 - 1.50 (23.31) - (3.53)
LMPIS Premier Selections All Cap
Growth Subaccount 2006 17,878 0.957 - 0.995 17,394 -- 0.80 - 1.50 5.75 - 6.67
2005 22,954 0.905 - 0.935 21,061 0.11 0.80 - 1.50 4.75 - 5.53
2004 29,203 0.864 - 0.893 25,512 -- 0.60 - 1.50 1.41 - 2.29
2003 402 0.852 - 0.873 346 -- 0.60 - 1.50 32.30 - 33.49
2002 107 0.644 - 0.654 70 0.08 0.60 - 1.50 (27.60) - (4.97)
Legg Mason Partners Investment Trust
LMPIT S&P 500 Index Subaccount
(Class A) 2006 45,751 1.218 - 1.479 57,442 1.29 0.35 - 1.50 13.51 - 14.74
2005 54,349 1.073 - 1.289 59,908 1.28 0.35 - 1.50 2.58 - 3.87
2004 57,705 1.046 - 1.241 61,638 1.13 0.35 - 1.50 8.62 - 9.82
2003 110,919 0.963 - 1.130 108,784 1.20 0.35 - 1.50 26.05 - 32.63
2002 94,835 0.764 - 0.801 73,529 1.03 0.45 - 1.50 (23.60) - (22.83)
Legg Mason Partners Variable
Portfolios V
LMPVPV Small Cap Growth
Opportunities Subaccount 2006 8,289 1.266 - 1.733 10,703 -- 0.35 - 1.50 11.25 - 12.53
2005 8,066 1.138 - 1.540 9,328 -- 0.35 - 1.50 3.36 - 4.55
2004 7,030 1.101 - 1.473 7,839 0.09 0.35 - 1.50 13.86 - 15.17
2003 4,129 0.967 - 1.279 4,028 -- 0.35 - 1.50 39.94 - 41.33
2002 579 0.691 - 0.704 402 -- 0.45 - 1.50 (26.80) - (4.09)
Legg Mason Partners Variable
Portfolios I, Inc.
LMPVPI All Cap Subaccount
(Class I) 2006 16,737 1.313 - 2.403 37,665 1.31 0.25 - 1.50 16.38 - 17.76
2005 19,103 1.115 - 2.044 36,859 0.85 0.25 - 1.50 2.49 - 3.82
2004 20,834 1.074 - 1.973 39,073 0.62 0.25 - 1.50 6.70 - 8.05
2003 13,798 0.994 - 1.830 24,140 0.29 0.25 - 1.50 34.91 - 38.63
2002 10,818 0.717 - 1.322 13,844 0.50 0.25 - 1.50 (26.17) - (23.56)
LMPVPI Global High Yield Bond
Subaccount (Class I) 2006 14,147 1.645 - 1.798 23,967 5.68 0.15 - 1.50 9.01 - 10.42
2005 15,537 1.509 - 1.633 24,053 5.96 0.15 - 1.50 2.24 - 3.71
2004 14,982 1.476 - 1.580 22,592 6.93 0.15 - 1.50 0.07 - 10.80
2003 13,043 1.333 - 1.429 17,895 8.37 0.25 - 1.50 22.41 - 23.88
2002 6,282 1.076 - 1.155 7,008 9.19 0.25 - 1.50 3.16 - 6.75
LMPVPI Investors Subaccount
(Class I) 2006 33,418 1.584 - 1.869 58,827 1.56 0.35 - 1.50 16.51 - 17.86
2005 40,536 1.344 - 1.587 61,024 1.14 0.35 - 1.50 4.92 - 6.16
2004 47,139 1.266 - 1.497 67,372 1.81 0.35 - 1.50 8.76 - 9.99
2003 21,413 1.151 - 1.362 28,073 1.49 0.35 - 1.50 30.30 - 32.91
2002 20,000 0.990 - 1.034 20,057 1.62 0.45 - 1.50 (24.14) - (23.41)
83
NOTES TO FINANCIAL STATEMENTS -- (Continued)
5. FINANCIAL HIGHLIGHTS -- (Continued)
Expense Total
Year Unit Value Net Investment(1) Ratio(2) Return(3)
Ended Units Lowest to Assets Income Lowest to Lowest to
Dec 31 (000s) Highest ($) ($000s) Ratio (%) Highest (%) Highest (%)
------ ------ ------------- ------- ------------- ----------- -----------------
Legg Mason Partners Variable Portfolios I, Inc. -- (Continued)
LMPVPI Total Return Subaccount
(Class I) 2006 21,316 1.384 - 1.509 30,240 1.92 0.15 - 1.50 10.90 - 12.39
2005 28,059 1.248 - 1.347 35,810 1.83 0.15 - 1.50 1.79 - 3.45
2004 33,984 1.226 - 1.309 42,438 1.71 0.35 - 1.50 5.88 - 8.27
2003 40,749 1.145 - 1.209 47,434 1.61 0.45 - 1.50 14.27 - 15.36
2002 43,393 1.002 - 1.048 44,089 2.30 0.45 - 1.50 (8.24) - (7.26)
Legg Mason Partners Variable Portfolios II
LMPVPII Appreciation
Subaccount 2006 48,633 1.424 - 1.555 70,881 1.07 0.35 - 1.50 13.11 - 14.41
2005 56,239 1.259 - 1.361 72,240 0.89 0.35 - 1.50 2.58 - 3.81
2004 31,418 1.225 - 1.311 39,150 1.17 0.45 - 1.50 7.17 - 8.35
2003 29,235 1.143 - 1.210 33,897 0.70 0.45 - 1.50 22.64 - 23.98
2002 26,282 0.932 - 0.976 24,771 2.16 0.45 - 1.50 (18.74) - (17.91)
LMPVPII Diversified Strategic
Income Subaccount 2006 4,454 1.312 - 1.391 6,000 5.57 0.80 - 1.50 3.80 - 4.98
2005 5,546 1,264 - 1,366 7,171 5.02 0.35 - 1.50 1.04 - 3.23
2004 7,990 1.251 - 1.338 10,188 4.76 0.35 - 1.50 5.21 - 6.35
2003 8,460 1.182 - 1.259 10,225 6.25 0.35 - 1.50 9.99 - 11.22
2002 7,980 1.081 - 1.132 8,742 11.81 0.45 - 1.50 3.35 - 4.43
LMPVPII Equity Index Subaccount
(Class II) 2006 51,405 1.261 - 1.303 65,430 1.28 0.25 - 1.50 13.40 - 14.95
2005 59,889 1.112 - 1.135 66,957 1.23 0.25 - 1.50 2.77 - 4.63
2004 58,496 1.082 - 1.092 63,449 1.40 0.15 - 1.50 9.20 - 10.58
Legg Mason Partners Variable
Portfolios III, Inc.
LMPVPIII Adjustable Rate Income
Subaccount 2006 1,636 1.030 - 1.066 1,707 5.25 0.45 - 1.50 2.59 - 3.70
2005 1,072 1.004 - 1.028 1,083 4.17 0.45 - 1.50 0.80 - 1.88
2004 431 9.996 - 1.009 431 2.20 0.45 - 1.50 (0.30) - 0.70
2003 2 0.999 - 1.002 2 0.64 0.45 - 1.50 0.00 - 0.20
LMPVPIII Aggressive Growth
Subaccount 2006 133,530 1.083 - 1.448 147,503 -- 0.25 - 1.50 7.23 - 8.51
2005 160,664 1.010 - 1.336 165,056 -- 0.25 - 1.50 9.90 - 11.37
2004 179,726 0.919 - 1.201 167,324 -- 0.25 - 1.50 6.74 - 9.58
2003 48,943 0.848 - 1.096 41,871 -- 0.35 - 1.50 32.50 - 34.15
2002 41,044 0.640 - 0.817 26,412 -- 0.35 - 1.50 (33.68) - (2.39)
LMPVPIII Large Cap Growth
Subaccount 2006 20,512 1.126 - 1.790 34,544 0.14 0.25 - 1.50 3.08 - 4.36
2005 26,359 1.079 - 1.719 42,968 0.13 0.25 - 1.50 3.64 - 4.96
2004 29,094 1.028 - 1.641 45,532 0.37 0.25 - 1.50 (1.16) - 0.10
2003 23,765 1.027 - 1.642 37,543 0.03 0.25 - 1.50 2.29 - 46.87
2002 15,362 1.070 - 1.118 16,641 0.38 0.45 - 1.50 (25.85) - (25.12)
LMPVPIII Money Market
Subaccount 2006 183,889 1.092 - 1.258 217,539 4.52 0.15 - 1.50 3.05 - 4.55
2005 191,939 1.047 - 1.208 219,366 2.77 0.15 - 1.50 1.27 - 2.62
2004 198,665 1.022 - 1.180 223,293 0.88 0.15 - 1.50 (0.63) - 0.68
2003 212,891 1.017 - 1.175 240,200 0.66 0.25 - 1.50 (0.81) - 0.39
2002 208,557 1.020 - 1.172 236,648 1.24 0.25 - 1.50 (0.27) - 0.89
LMPVPIII Social Awareness
Stock Subaccount 2006 8,107 1.181 - 1.214 9,643 0.48 0.45 - 1.50 6.11 - 7.56
2005 10,000 1.113 - 1.133 11,183 0.72 0.45 - 1.50 2.87 - 6.38
2004 8,785 1.082 - 1.092 9,525 0.77 0.15 - 1.50 9.20 - 10.02
Lord Abbett Series Fund, Inc.
Lord Abbett Growth and Income
Subaccount (Class VC) 2006 16,856 1.299 - 1.347 22,105 1.32 0.15 - 1.50 15.57 - 17.13
2005 15,390 1.124 - 1.150 17,404 1.20 0.15 - 1.50 1.72 - 7.29
2004 1,605 1.105 - 1.115 1,778 1.97 0.15 - 1.50 4.91 - 14.48
84
NOTES TO FINANCIAL STATEMENTS -- (Continued)
5. FINANCIAL HIGHLIGHTS -- (Continued)
Expense Total
Year Unit Value Net Investment(1) Ratio(2) Return(3)
Ended Units Lowest to Assets Income Lowest to Lowest to
Dec 31 (000s) Highest ($) ($000s) Ratio (%) Highest (%) Highest (%)
------ ------ ------------- ------- ------------- ----------- -----------------
Lord Abbett Series Fund, Inc. -- (Continued)
Lord Abbett Mid-Cap Value
Subaccount (Class VC) 2006 9,548 1.367 - 1.417 13,174 0.51 0.15 - 1.50 10.60 - 12.10
2005 9,257 1.236 - 1.264 11,507 0.59 0.15 - 1.50 6.64 - 8.03
2004 3,006 1.159 - 1.170 3,493 0.68 0.15 - 1.50 8.04 - 21.91
Managed Assets Trust
Managed Assets Trust 2006 -- 1.051 - 1.059 -- 2.95 0.45 - 1.50 2.92 - 3.52
2005 53 1.018 - 1.023 54 -- 0.45 - 1.50 1.80 - 3.66
Met Investors Series Trust
MIST Batterymarch Mid-Cap Stock
Subaccount (Class A) 2006 9,543 1.868 - 2.668 23,904 -- 0.15 - 1.50 (4.72) - (3.82)
MIST BlackRock High Yield
Subaccount (Class A) 2006 5,733 1.352 - 1.820 9,207 -- 0.35 - 1.50 5.48 - 6.26
MIST BlackRock Large-Cap Core
Subaccount (Class A) 2006 6,175 1.109 - 1.528 7,047 -- 0.35 - 1.50 5.92 - 6.78
MIST Dreman Small-Cap Value
Subaccount (Class A) 2006 548 1.234 - 1.250 682 0.84 0.45 - 1.50 6.66 - 7.39
MIST Harris Oakmark International
Subaccount (Class A) 2006 37,023 1.455 - 1.927 62,667 -- 0.11 - 1.46 10.27 - 18.95
MIST Janus Capital Appreciation
Subaccount (Class A) 2006 77,759 1.119 - 2.609 188,195 -- 0.25 - 1.50 2.63 - 3.42
MIST Legg Mason Partners Managed
Assets Subaccount (Class A) 2006 94 1.111 - 1.128 106 -- 0.45 - 1.50 5.71 - 10.21
MIST Lord Abbett Bond Debenture
Subaccount (Class A) 2006 2,853 1.144 - 1.180 3,292 -- 0.35 - 1.50 4.86 - 5.73
MIST Lord Abbett Growth and Income
Subaccount (Class B) 2006 120,542 1.077 - 1.086 130,087 -- 0.15 - 1.50 7.59 - 8.49
MIST Met/AIM Capital Appreciation
Subaccount (Class A) 2006 54,124 1.210 - 1.244 66,015 0.17 0.45 - 1.50 (1.14) - (0.48)
MIST Met/AIM Small Cap Growth
Subaccount (Class A) 2006 290 1.153 - 1.168 336 -- 0.45 - 1.50 (0.69) - 0.34
MIST MFS(R) Value Subaccount
(Class A) 2006 7,459 1.406 - 1.457 10,595 1.80 0.15 - 1.50 10.62 - 15.82
MIST Neuberger Berman Real Estate
Subaccount (Class A) 2006 25,944 1.221 - 1.232 31,750 -- 0.15 - 1.50 21.73 - 27.56
MIST Pioneer Fund Subaccount
(Class A) 2006 1,110 1.587 - 1.650 1,784 -- 0.45 - 1.50 7.59 - 8.41
MIST Pioneer Mid-Cap Value
Subaccount (Class A) 2006 122 1.175 - 1.195 145 0.34 0.45 - 1.50 5.29 - 12.14
MIST Pioneer Strategic Income
Subaccount (Class A) 2006 9,453 1.565 - 1.778 15,578 4.95 0.15 - 1.50 3.64 - 4.56
MIST Third Avenue Small Cap Value
Subaccount (Class B) 2006 5,858 1.776 - 1.859 10,564 -- 0.25 - 1.50 2.13 - 2.33
MetLife Investment Funds, Inc.
MetLife Investment Diversified Bond
Subaccount (Class I) 2006 13,815 1.308 - 1.367 18,417 4.11 0.80 - 1.50 2.75 - 3.48
2005 14,518 1.273 - 1.321 18,779 3.41 0.80 - 1.50 0.55 - 1.23
2004 11,962 1.266 - 1.305 15,339 3.56 0.80 - 1.50 3.09 - 3.82
2003 7,942 1.228 - 1.257 9,850 4.67 0.80 - 1.50 3.98 - 4.75
2002 3,125 1.181 - 1.200 3,719 6.07 0.80 - 1.50 4.90 - 8.12
MetLife Investment International Stock
Subaccount (Class I) 2006 13,527 1.128 - 1.180 15,561 1.92 0.80 - 1.50 24.64 - 25.53
2005 11,195 0.905 - 0.940 10,300 1.36 0.80 - 1.50 12.98 - 13.70
2004 9,223 0.801 - 0.827 7,487 1.52 0.80 - 1.50 13.14 - 13.95
2003 4,775 0.708 - 0.726 3,416 0.94 0.80 - 1.50 28.03 - 29.18
2002 250 0.553 - 0.562 140 0.62 0.80 - 1.50 (23.41) - (6.49)
85
NOTES TO FINANCIAL STATEMENTS -- (Continued)
5. FINANCIAL HIGHLIGHTS -- (Continued)
Expense Total
Year Unit Value Net Investment(1) Ratio(2) Return(3)
Ended Units Lowest to Assets Income Lowest to Lowest to
Dec 31 (000s) Highest ($) ($000s) Ratio (%) Highest (%) Highest (%)
------ ------ ------------- ------- ------------- ----------- -----------------
MetLife Investment Funds, Inc. -- (Continued)
MetLife Investment Large Company
Stock Subaccount (Class I) 2006 11,205 1.121 - 1.165 12,772 0.98 0.80 - 1.50 10.88 - 11.70
2005 11,123 1.011 - 1.043 11,396 1.15 0.80 - 1.50 5.09 - 5.79
2004 9,000 0.962 - 0.986 8,747 0.94 0.80 - 1.50 8.33 - 9.19
2003 5,074 0.888 - 0.903 4,536 0.88 0.80 - 1.50 26.32 - 27.18
2002 261 0.703 - 0.710 185 0.83 0.80 - 1.50 (24.00) - 3.65
MetLife Investment Small Company
Stock Subaccount (Class I) 2006 12,124 1.318 - 1.378 16,254 0.13 0.80 - 1.50 11.98 - 12.77
2005 13,243 1.177 - 1.222 15,815 0.11 0.80 - 1.50 5.66 - 6.45
2004 12,709 1.114 - 1.148 14,307 0.12 0.80 - 1.50 13.21 - 14.03
2003 9,307 0.984 - 1.007 9,221 0.08 0.80 - 1.50 40.97 - 41.83
2002 429 0.698 - 0.710 302 0.61 0.80 - 1.50 (24.87) - (6.58)
Metropolitan Series Fund, Inc.
MSF BlackRock Aggressive Growth
Subaccount (Class D) 2006 69,810 0.615 - 1.054 43,686 -- 0.15 - 1.50 (2.23) - (1.49)
MSF BlackRock Bond Income
Subaccount (Class A) 2006 18,564 1.201 - 1.553 27,061 -- 0.35 - 1.50 3.99 - 4.71
MSF FI Large Cap Subaccount
(Class A) 2006 50,995 1.038 - 1.867 87,434 -- 0.15 - 1.50 1.39 - 2.37
MSF FI Value Leaders Subaccount
(Class D) 2006 24,081 1.337 - 2.256 50,724 -- 0.15 - 1.50 2.63 - 3.56
MSF MetLife Aggressive Allocation
Subaccount (Class B) 2006 3,763 1.059 - 1.068 3,995 -- 0.25 - 1.50 2.01 - 14.16
MSF MetLife Conservative Allocation
Subaccount (Class B) 2006 1,353 1.042 - 1.051 1,414 -- 0.25 - 1.50 4.20 - 6.95
MSF MetLife Conservative to Moderate
Allocation Subaccount (Class B) 2006 3,431 1.048 - 1.057 3,604 -- 0.25 - 1.50 4.78 - 7.56
MSF MetLife Moderate Allocation
Subaccount (Class B) 2006 11,258 1.053 - 1.062 11,886 -- 0.25 - 1.50 (0.09) - 10.76
MSF MetLife Moderate to Aggressive
Allocation Subaccount (Class B) 2006 13,590 1.058 - 1.067 14,410 -- 0.25 - 1.50 1.72 - 11.23
MSF MFS(R) Total Return Subaccount
(Class F) 2006 69,247 1.388 - 2.375 151,650 -- 0.15 - 1.50 6.93 - 7.90
MSF T. Rowe Price Large Cap Growth
Subaccount (Class B) 2006 12,906 1.070 - 1.079 13,832 -- 0.15 - 1.50 7.21 - 8.12
MSF Western Asset Management High
Yield Bond Subaccount (Class A) 2006 787 1.114 - 1.133 884 -- 0.45 - 1.50 6.30 - 7.09
MSF Western Asset Management U.S.
Government Subaccount (Class A) 2006 31,156 1.079 - 1.119 33,944 -- 0.00 - 1.35 3.55 - 4.48
Oppenheimer Variable Account Funds
Oppenheimer Main Street/VA Subaccount
(Service Shares) 2006 -- 1.182 - 1.214 -- 0.96 0.15 - 1.50 5.70 - 6.21
2005 7,958 1.118 - 1.143 8,946 1.25 0.15 - 1.50 4.19 - 6.16
2004 9,392 1.073 - 1.083 10,100 -- 0.15 - 1.50 4.25 - 9.55
PIMCO Variable Insurance Trust
PIMCO VIT Real Return Subaccount
(Administrative Class) 2006 693 0.977 - 0.995 683 4.42 0.35 - 1.50 (0.81) - 1.12
2005 66 0.985 - 0.991 65 1.98 0.45 - 1.50 (1.40) - 2.06
PIMCO VIT Total Return Subaccount
(Administrative Class) 2006 39,621 1.248 - 1.340 50,629 4.42 0.15 - 1.50 2.30 - 3.65
2005 41,257 1.220 - 1.293 51,294 3.44 0.15 - 1.50 0.91 - 2.32
2004 35,245 1.197 - 1.265 43,197 1.88 0.15 - 1.50 0.25 - 4.55
2003 35,377 1.145 - 1.210 41,968 2.79 0.25 - 1.50 3.45 - 4.85
2002 19,192 1.131 - 1.154 21,903 4.04 0.25 - 1.50 7.51 - 8.77
86
NOTES TO FINANCIAL STATEMENTS -- (Continued)
5. FINANCIAL HIGHLIGHTS -- (Continued)
Expense Total
Year Unit Value Net Investment(1) Ratio(2) Return(3)
Ended Units Lowest to Assets Income Lowest to Lowest to
Dec 31 (000s) Highest ($) ($000s) Ratio (%) Highest (%) Highest (%)
------ ------ ------------- ------- ------------- ----------- -----------------
PIMCO Variable Insurance Trust -- (Continued)
Putnam VT Small Cap Value
Subaccount (Class IB) 2006 27,047 1.956 - 2.359 54,136 0.32 0.15 - 1.50 15.53 - 17.13
2005 27,235 1.693 - 2.014 46,968 0.17 0.15 - 1.50 5.48 - 6.84
2004 24,237 1.605 - 1.885 39,480 0.32 0.15 - 1.50 (0.26) - 25.92
2003 16,107 1.291 - 1.489 21,032 0.28 0.25 - 1.50 47.37 - 49.33
2002 9,852 0.876 - 0.998 8,692 0.09 0.25 - 1.50 (19.49) - (0.80)
Legg Mason Partners Investment Funds, Inc.
LMPIF Small Cap Value Subaccount
(Class A) 2006 7,632 1.837 - 1.911 14,282 -- 0.80 - 1.50 9.74 - 10.71
2005 8,134 1.674 - 1.730 13,823 -- 0.80 - 1.50 5.02 - 5.75
2004 7,866 1.594 - 1.648 12,682 0.69 0.60 - 1.50 18.96 - 20.12
2003 5,114 1.340 - 1.372 6,908 -- 0.60 - 1.50 35.49 - 36.65
2002 2,411 0.989 - 1.004 2,397 -- 0.60 - 1.50 (15.86) - (7.64)
The Travelers Series Trust
Travelers AIM Capital Appreciation
Subaccount 2006 -- 1.224 - 1.250 -- -- 0.45 - 1.50 6.53 - 6.98
2005 69,563 1.149 - 1.169 80,328 0.21 0.35 - 1.50 7.08 - 8.83
2004 64,595 1.073 - 1.082 69,426 0.14 0.15 - 1.50 8.20 - 9.00
Travelers Convertible Securities
Subaccount 2006 -- 1.091 - 1.116 -- 1.07 0.35 - 1.50 6.62 - 7.17
2005 735 1.023 - 1.046 756 3.27 0.15 - 1.50 (1.16) - 3.88
2004 388 1.035 - 1.044 402 6.32 0.15 - 1.50 1.96 - 4.85
Travelers Disciplined Mid Cap
Stock Subaccount 2006 -- 1.945 - 2.780 -- 0.54 0.15 - 1.50 9.24 - 9.73
2005 11,893 1.774 - 2.536 28,557 -- 0.15 - 1.50 10.75 - 12.23
2004 12,819 1.583 - 2.266 27,706 0.29 0.15 - 1.50 0.06 - 15.97
2003 12,244 1.365 - 1.954 22,986 0.39 0.35 - 1.50 31.81 - 34.22
2002 8,096 1.402 - 1.468 11,522 0.65 0.45 - 1.50 (15.64) - (14.70)
Travelers Equity Income
Subaccount 2006 -- 1.292 - 2.182 -- 1.32 0.15 - 1.50 5.11 - 5.61
2005 28,244 1.224 - 2.069 54,841 -- 0.15 - 1.50 2.90 - 4.28
2004 30,692 1.175 - 1.989 57,473 1.35 0.15 - 1.50 (0.07) - 9.61
2003 29,996 1.072 - 1.819 51,706 1.02 0.25 - 1.50 29.27 - 31.00
2002 25,071 0.819 - 1.393 33,344 1.12 0.25 - 1.50 (15.26) - (13.52)
Travelers Federated High Yield
Subaccount 2006 -- 1.279 - 1.713 -- 8.00 0.35 - 1.50 2.51 - 2.99
2005 6,244 1.246 - 1.665 9,114 -- 0.35 - 1.50 1.07 - 2.15
2004 6,500 1.230 - 1.631 9,402 7.83 0.35 - 1.50 8.71 - 9.98
2003 6,290 1.127 - 1.484 8,394 7.74 0.35 - 1.50 13.20 - 21.84
2002 5,318 0.932 - 1.218 5,908 18.25 0.45 - 1.50 2.15 - 3.31
Travelers Large Cap Subaccount 2006 -- 1.014 - 1.828 -- 0.44 0.15 - 1.50 3.12 - 3.55
2005 35,564 0.980 - 1.767 57,837 -- 0.15 - 1.50 7.08 - 8.58
2004 40,450 0.904 - 1.633 61,424 0.96 0.15 - 1.50 (0.26) - 6.23
2003 21,336 0.851 - 1.540 30,696 0.41 0.25 - 1.50 22.81 - 26.68
2002 20,783 0.684 - 1.241 24,301 0.49 0.25 - 1.50 (23.95) - (21.83)
Travelers Managed Allocation Series:
Aggressive Subaccount 2006 -- 1.120 - 1.130 -- 2.29 0.45 - 1.50 4.06 - 6.54
2005 168 1.053 - 1.057 177 -- 0.80 - 1.50 2.93 - 5.70
Travelers Managed Allocation Series:
Conservative Subaccount 2006 -- 1.023 - 1.032 -- 5.89 0.45 - 1.50 0.19 - 0.59
2005 42 1.018 - 1.023 43 0.54 0.80 - 1.50 0.10 - 2.61
Travelers Managed Allocation Series:
Moderate Subaccount 2006 -- 1.082 - 1.091 -- 4.14 0.45 - 1.50 3.64 - 3.90
2005 1,111 1.044 - 1.050 1,162 0.72 0.45 - 1.50 2.85 - 5.33
87
NOTES TO FINANCIAL STATEMENTS -- (Continued)
5. FINANCIAL HIGHLIGHTS -- (Continued)
Expense Total
Year Unit Value Net Investment(1) Ratio(2) Return(3)
Ended Units Lowest to Assets Income Lowest to Lowest to
Dec 31 (000s) Highest ($) ($000s) Ratio (%) Highest (%) Highest (%)
------ ------ ------------- ------- ------------- ----------- -----------------
The Travelers Series Trust -- (Continued)
Travelers Managed Allocation Series:
Moderate-Aggressive Subaccount 2006 -- 1.113 - 1.124 -- 3.20 0.45 - 1.50 4.31 - 4.75
2005 1,128 1.067 - 1.073 1,206 1.00 0.45 - 1.50 3.28 - 6.90
Travelers Managed Allocation Series:
Moderate-Conservative Subaccount 2006 -- 1.046 - 1.056 -- 4.35 0.45 - 1.50 1.95 - 2.33
2005 102 1.026 - 1.032 104 0.72 0.45 - 1.50 0.29 - 3.51
Travelers Mercury Large Cap Core
Subaccount 2006 -- 1.047 - 1.431 -- 0.22 0.35 - 1.50 6.19 - 6.66
2005 7,131 0.986 - 1.342 7,203 -- 0.35 - 1.50 10.41 - 11.65
2004 5,176 0.893 - 1.202 4,722 0.58 0.35 - 1.50 14.19 - 15.47
2003 4,949 0.782 - 1.041 3,956 0.75 0.35 - 1.50 19.39 - 20.77
2002 4,227 0.655 - 0.687 2,811 0.68 0.45 - 1.50 (26.32) - (25.49)
Travelers MFS(R) Mid Cap Growth
Subaccount 2006 -- 0.629 - 1.070 -- -- 0.15 - 1.50 5.71 - 6.36
2005 87,467 0.595 - 1.006 52,748 -- 0.15 - 1.50 1.54 - 6.68
2004 9,022 0.586 - 0.971 5,343 -- 0.25 - 1.50 12.48 - 13.75
2003 6,780 0.521 - 0.538 3,562 -- 0.25 - 1.50 34.97 - 36.55
2002 2,806 0.386 - 0.394 1,089 -- 0.25 - 1.50 (49.61) - (38.97)
Travelers MFS(R) Total Return
Subaccount 2006 -- 1.287 - 2.205 -- 1.31 0.15 - 1.50 3.27 - 3.73
2005 78,677 1.241 - 2.128 155,565 2.15 0.15 - 1.50 1.42 - 2.78
2004 79,987 1.208 - 2.076 155,289 2.77 0.15 - 1.50 0.15 - 11.13
2003 80,415 1.087 - 1.871 142,035 2.45 0.25 - 1.50 14.78 - 16.26
2002 70,874 0.935 - 1.613 108,685 6.15 0.25 - 1.50 (6.62) - (3.91)
Travelers MFS(R) Value Subaccount 2006 -- 1.271 - 1.303 -- -- 0.25 - 1.50 8.08 - 8.56
2005 3,139 1.176 - 1.201 3,716 1.56 0.25 - 1.50 3.62 - 6.02
2004 773 1.121 - 1.131 869 3.18 0.15 - 1.50 4.83 - 15.65
Travelers Mondrian International
Stock Subaccount 2006 -- 1.309 - 1.716 -- 3.70 0.25 - 1.50 14.97 - 15.43
2005 37,675 1.134 - 1.488 50,125 0.05 0.25 - 1.50 7.82 - 9.25
2004 41,539 1.038 - 1.363 51,021 1.68 0.25 - 1.50 10.10 - 15.46
2003 27,570 0.899 - 1.138 28,595 1.95 0.25 - 1.50 26.68 - 28.25
2002 25,106 0.701 - 0.889 20,557 2.14 0.25 - 1.50 (14.23) - (13.24)
Travelers Pioneer Fund Subaccount 2006 -- 1.475 - 1.522 -- 1.06 0.45 - 1.50 6.12 - 6.59
2005 664 1.390 - 1.441 930 -- 0.15 - 1.50 4.43 - 5.80
2004 496 1.331 - 1.362 664 1.39 0.15 - 1.50 6.10 - 13.62
2003 202 1.216 - 1.227 246 3.75 0.15 - 1.50 6.17 - 22.70
Travelers Pioneer Mid Cap Value
Subaccount 2006 -- 1.116 - 1.127 -- -- 0.45 - 1.50 3.58 - 5.37
2005 19 1.060 - 1.063 20 0.32 1.05 - 1.50 0.47 - 6.30
Travelers Pioneer Strategic Income
Subaccount 2006 -- 1.498 - 1.703 -- -- 0.15 - 1.50 1.05 - 1.48
2005 7,688 1.477 - 1.680 12,012 4.78 0.15 - 1.50 2.08 - 3.54
2004 3,954 1.430 - 1.628 5,998 7.98 0.15 - 1.50 0.21 - 10.60
2003 3,497 1.293 - 1.474 4,865 9.30 0.35 - 1.50 17.44 - 18.97
2002 2,937 1.159 - 1.239 3,461 12.96 0.45 - 1.50 4.32 - 5.45
Travelers Quality Bond Subaccount 2006 -- 1.147 - 1.484 -- 5.95 0.35 - 1.50 (0.88) - (0.43)
2005 21,912 1.152 - 1.492 30,831 -- 0.35 - 1.50 0.07 - 1.34
2004 24,069 1.138 - 1.474 33,634 4.15 0.25 - 1.50 1.79 - 3.10
2003 33,135 1.106 - 1.434 44,198 4.51 0.25 - 1.50 4.05 - 6.72
2002 39,423 1.087 - 1.346 48,779 9.06 0.25 - 1.50 4.26 - 5.53
88
NOTES TO FINANCIAL STATEMENTS -- (Continued)
5. FINANCIAL HIGHLIGHTS -- (Concluded)
Expense Total
Year Unit Value Net Investment(1) Ratio(2) Return(3)
Ended Units Lowest to Assets Income Lowest to Lowest to
Dec 31 (000s) Highest ($) ($000s) Ratio (%) Highest (%) Highest (%)
------ ------ ------------- ------- ------------- ----------- -----------------
The Travelers Series Trust -- (Concluded)
Travelers Strategic Equity Subaccount 2006 -- 1.190 - 1.837 -- 0.36 0.15 - 1.50 4.40 - 4.85
2005 27,630 0.817 - 1.754 45,279 0.57 0.15 - 1.50 0.51 - 6.67
2004 33,065 0.802 - 1.727 53,598 1.28 0.25 - 1.50 8.58 - 9.86
2003 45,419 0.730 - 1.573 61,527 -- 0.25 - 1.50 30.56 - 32.25
2002 42,855 0.552 - 1.192 45,733 0.61 0.25 - 1.50 (34.55) - (33.73)
Travelers Style Focus Series:
Small Cap Growth Subaccount 2006 -- 1.161 - 1.168 -- 0.01 0.45 - 1.50 9.60 - 15.53
2005 16 1.008 - 1.011 17 -- 0.45 - 1.50 0.80 - 6.33
Travelers Style Focus Series:
Small Cap Value Subaccount 2006 -- 1.157 - 1.164 -- 0.04 0.45 - 1.50 2.74 - 15.13
2005 2 1.008 - 1.011 2 0.51 0.45 - 1.50 0.90 - 6.89
Travelers U.S. Government
Securities Subaccount 2006 -- 1.042 - 1.071 -- 5.69 0.15 - 1.50 (3.61) - (3.08)
2005 38,294 1.081 - 1.105 41,614 -- 0.15 - 1.50 2.52 - 4.15
2004 19,115 1.052 - 1.061 20,144 4.40 0.15 - 1.50 1.24 - 7.97
Van Kampen Life Investment Trust
Van Kampen LIT Comstock
Subaccount (Class II) 2006 6,978 1.697 - 1.776 11,989 1.19 0.25 - 1.50 14.35 - 15.93
2005 6,004 1.484 - 1.538 8,989 0.68 0.15 - 1.50 2.56 - 3.92
2004 2,248 1.447 - 1.480 3,270 0.54 0.15 - 1.50 11.93 - 17.27
2003 648 1.251 - 1.262 812 -- 0.15 - 1.50 2.35 - 26.20
Van Kampen LIT Strategic Growth
Subaccount (Class II) 2006 5,179 0.762 - 1.129 4,031 -- 0.25 - 1.50 1.06 - 2.38
2005 5,126 0.754 - 1.104 3,930 0.01 0.25 - 1.50 6.05 - 7.39
2004 5,471 0.711 - 1.029 3,943 -- 0.25 - 1.50 5.18 - 6.44
2003 5,122 0.676 - 0.967 3,498 -- 0.25 - 1.50 25.19 - 26.86
2002 3,460 0.540 - 0.551 1,882 0.04 0.25 - 1.50 (33.66) - (21.73)
Variable Insurance Products Fund
VIP Contrafund(R) Subaccount
(Service Class 2) 2006 33,839 1.502 - 1.935 51,869 1.02 0.15 - 1.50 6.76 - 11.27
2005 25,119 1.368 - 1.739 34,926 0.11 0.15 - 1.50 14.86 - 16.48
2004 16,214 1.191 - 1.493 19,551 0.14 0.15 - 1.50 0.00 - 14.66
2003 7,449 1.049 - 1.078 7,895 0.18 0.45 - 1.50 26.23 - 27.57
2002 3,026 0.831 - 0.845 2,531 0.34 0.45 - 1.50 (10.93) - (10.01)
VIP Mid Cap Subaccount
(Service Class 2) 2006 42,000 1.961 - 2.281 84,172 0.17 0.25 - 1.50 10.73 - 12.27
2005 37,624 1.771 - 2.053 67,799 -- 0.15 - 1.50 16.28 - 17.79
2004 27,045 1.523 - 1.743 41,766 -- 0.15 - 1.50 0.29 - 24.41
2003 13,127 1.240 - 1.394 16,459 0.16 0.25 - 1.50 36.11 - 37.85
2002 4,317 0.911 - 1.012 3,956 0.11 0.25 - 1.50 (13.41) - (0.69)
1 These amounts represent the dividends, excluding distributions of capital
gains, received by the Subaccount from the underlying mutual fund, net of
management fees assessed by the fund manager, divided by the average net
assets. These ratios exclude those expenses, such as mortality and expense
charges, that are assessed against contract owner accounts either through
reductions in the unit values or the redemption of units. The recognition
of investment income by the Subaccount is affected by the timing of the
declaration of dividends by the underlying fund in which the Subaccount
invests.
2 These amounts represent the annualized contract expenses of the separate
account, consisting primarily of mortality and expense charges, for each
period indicated. The ratios include only those expenses that result in a
direct reduction to unit values. Charges made directly to contract owner
accounts through the redemption of units and expenses of the underlying
fund have been excluded.
3 These amounts represent the total return for the period indicated,
including changes in the value of the underlying fund, and expenses
assessed through the reduction of unit values. These ratios do not include
any expenses assessed through the redemption of units. The total return is
calculated for each period indicated or from the effective date through
the end of the reporting period. As the total return is presented as a
range of minimum to maximum values, based on the product grouping
representing the minimum and maximum expense ratio amounts, some
individual contract total returns are not within the ranges presented.
89
NOTES TO FINANCIAL STATEMENTS -- (Continued)
6. Schedules of Accumulation Units
for the years ended December 31, 2006 and 2005
Templeton Growth Fund AllianceBernstein Growth and AllianceBernstein Large-Cap
Subaccount (Class A) Income Subaccount (Class B) Growth Subaccount (Class B)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 67,968,570 70,505,783 105,821,955 65,745,015 4,541,234 3,892,063
Accumulation units purchased and
transferred from other funding options 18,984,740 26,537,332 11,412,704 88,510,368 1,604,514 2,395,698
Accumulation units redeemed and
transferred to other funding options . (25,254,755) (29,074,545) (117,234,659) (48,433,428) (6,145,748) (1,746,527)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 61,698,555 67,968,570 -- 105,821,955 -- 4,541,234
=========== =========== =========== =========== =========== ===========
American Funds Global Growth American Funds Growth American Funds Growth-Income
Subaccount (Class 2) Subaccount (Class 2) Subaccount (Class 2)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 8,379,267 1,391,986 23,436,001 6,536,378 18,676,234 4,697,553
Accumulation units purchased and
transferred from other funding options 11,074,669 9,108,157 26,897,076 21,768,585 17,046,067 19,184,315
Accumulation units redeemed and
transferred to other funding options . (4,519,681) (2,120,876) (10,677,288) (4,868,962) (8,956,663) (5,205,634)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 14,934,255 8,379,267 39,655,789 23,436,001 26,765,638 18,676,234
=========== =========== =========== =========== =========== ===========
Delaware VIP REIT Subaccount Dreyfus VIF Appreciation
Capital Appreciation Fund (Standard Class) Subaccount (Initial Shares)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 96,381,566 112,238,683 10,942,527 7,812,514 41,732,764 49,254,239
Accumulation units purchased and
transferred from other funding options 10,993,551 29,579,465 3,089,538 11,265,057 10,273,576 14,399,194
Accumulation units redeemed and
transferred to other funding options . (107,375,117) (45,436,582) (14,032,065) (8,135,044) (18,870,068) (21,920,669)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... -- 96,381,566 -- 10,942,527 33,136,272 41,732,764
=========== =========== =========== =========== =========== ===========
FTVIPT Franklin Small-Mid Cap FTVIPT
Dreyfus VIF Developing Leaders Growth Securities Mutual Shares Securities
Subaccount (Initial Shares) Subaccount (Class 2) Subaccount (Class 2)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 64,384,290 71,723,763 8,308,672 7,600,794 5,401,637 2,732,858
Accumulation units purchased and
transferred from other funding options 17,172,204 24,439,387 3,692,041 4,451,643 1,927,540 3,967,973
Accumulation units redeemed and
transferred to other funding options . (29,535,282) (31,778,860) (3,895,767) (3,743,765) (7,329,177) (1,299,194)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 52,021,212 64,384,290 8,104,946 8,308,672 -- 5,401,637
=========== =========== =========== =========== =========== ===========
90
NOTES TO FINANCIAL STATEMENTS -- (Continued)
6. Schedules of Accumulation Units
for the years ended December 31, 2006 and 2005 -- (Continued)
FTVIPT Templeton Developing FTVIPT Templeton
Markets Securities Subaccount Foreign Securities
(Class 2) Subaccount (Class 2) High Yield Bond Trust
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 8,370,635 2,643,680 12,092,994 4,787,248 49,395 --
Accumulation units purchased and
transferred from other funding options 12,458,642 9,152,730 9,553,721 11,933,525 274,498 49,399
Accumulation units redeemed and
transferred to other funding options . (8,341,871) (3,425,775) (6,129,471) (4,627,779) (323,893) (4)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 12,487,406 8,370,635 15,517,244 12,092,994 -- 49,395
=========== =========== =========== =========== =========== ===========
Janus Aspen Janus Aspen Janus Aspen
Global Life Sciences Global Technology Growth and Income
Subaccount (Service Shares) Subaccount (Service Shares) Subaccount (Service Shares)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 5,164,500 5,278,679 10,942,634 10,852,881 9,290,365 8,698,001
Accumulation units purchased and
transferred from other funding options 1,368,109 1,594,568 3,223,018 3,575,715 2,202,752 4,520,288
Accumulation units redeemed and
transferred to other funding options . (2,268,693) (1,708,747) (4,352,103) (3,485,962) (11,493,117) (3,927,924)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 4,263,916 5,164,500 9,813,549 10,942,634 -- 9,290,365
=========== =========== =========== =========== =========== ===========
Janus Aspen Lazard LMPIF
Mid Cap Growth Retirement Small Cap Investment Grade Bond
Subaccount (Service Shares) Subaccount Subaccount (Class A)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 62,062,086 44,027,838 3,590,599 1,326,570 25,270,945 27,044,383
Accumulation units purchased and
transferred from other funding options 19,313,818 46,592,471 3,663,974 3,009,631 8,359,439 11,726,958
Accumulation units redeemed and
transferred to other funding options . (28,836,115) (28,558,223) (7,254,573) (745,602) (13,922,668) (13,500,396)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 52,539,789 62,062,086 -- 3,590,599 19,707,716 25,270,945
=========== =========== =========== =========== =========== ===========
LMPIS Growth and Income LMPIS Premier Selections LMPIT S&P 500 Index
Subaccount All Cap Growth Subaccount Subaccount (Class A)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 1,696,283 1,710,433 22,953,918 29,203,185 54,348,738 57,705,370
Accumulation units purchased and
transferred from other funding options 1,008,190 1,081,338 5,038,438 7,120,764 12,266,284 17,464,651
Accumulation units redeemed and
transferred to other funding options . (958,837) (1,095,488) (10,114,279) (13,370,031) (20,863,585) (20,821,283)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 1,745,636 1,696,283 17,878,077 22,953,918 45,751,437 54,348,738
=========== =========== =========== =========== =========== ===========
91
NOTES TO FINANCIAL STATEMENTS -- (Continued)
6. Schedules of Accumulation Units
for the years ended December 31, 2006 and 2005 -- (Continued)
LMPVPV Small Cap Growth LMPVPI All Cap LMPVPI Global High Yield Bond
Opportunities Subaccount Subaccount (Class I) Subaccount (Class I)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 8,066,490 7,029,562 19,102,607 20,834,454 15,536,699 14,981,900
Accumulation units purchased and
transferred from other funding options 6,313,580 5,682,742 5,392,018 7,936,367 5,759,698 7,521,905
Accumulation units redeemed and
transferred to other funding options . (6,091,124) (4,645,814) (7,758,097) (9,668,214) (7,149,895) (6,967,106)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 8,288,946 8,066,490 16,736,528 19,102,607 14,146,502 15,536,699
=========== =========== =========== =========== =========== ===========
LMPVPI Investors LMPVPI Total Return LMPVPII Appreciation
Subaccount (Class I) Subaccount (Class I) Subaccount
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 40,536,080 47,138,614 28,059,430 33,984,102 56,238,722 31,417,682
Accumulation units purchased and
transferred from other funding options 9,100,460 13,332,232 5,797,156 8,701,079 13,369,010 48,049,902
Accumulation units redeemed and
transferred to other funding options . (16,218,235) (19,934,766) (12,540,710) (14,625,751) (20,974,988) (23,228,862)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 33,418,305 40,536,080 21,315,876 28,059,430 48,632,744 56,238,722
=========== =========== =========== =========== =========== ===========
LMPVPII Diversified Strategic LMPVPII Equity Index LMPVPIII Adjustable Rate
Income Subaccount Subaccount (Class II) Income Subaccount
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 5,546,053 7,990,222 59,889,199 58,495,528 1,071,744 430,723
Accumulation units purchased and
transferred from other funding options 1,526,528 2,999,619 18,070,597 34,735,232 1,370,681 902,802
Accumulation units redeemed and
transferred to other funding options . (2,618,773) (5,443,788) (26,554,956) (33,341,561) (806,000) (261,781)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 4,453,808 5,546,053 51,404,840 59,889,199 1,636,425 1,071,744
=========== =========== =========== =========== =========== ===========
LMPVPIII Aggressive LMPVPIII Large Cap LMPVPIII Money Market
Growth Subaccount Growth Subaccount Subaccount
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 160,663,588 179,725,660 26,358,943 29,093,563 191,938,529 198,664,668
Accumulation units purchased and
transferred from other funding options 44,770,966 65,334,218 7,805,737 11,877,065 152,926,863 193,595,156
Accumulation units redeemed and
transferred to other funding options . (71,904,183) (84,396,290) (13,652,332) (14,611,685) (160,975,996) (200,321,295)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 133,530,371 160,663,588 20,512,348 26,358,943 183,889,396 191,938,529
=========== =========== =========== =========== =========== ===========
92
NOTES TO FINANCIAL STATEMENTS -- (Continued)
6. Schedules of Accumulation Units
for the years ended December 31, 2006 and 2005 -- (Continued)
LMPVPIII Lord Abbett Growth Lord Abbett Mid-Cap
Social Awareness and Income Subaccount Value Subaccount
Stock Subaccount (Class VC) (Class VC)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 10,000,216 8,785,453 15,389,506 1,604,786 9,256,533 3,006,143
Accumulation units purchased and
transferred from other funding options 2,660,417 5,575,097 8,891,151 19,639,938 5,954,695 10,100,140
Accumulation units redeemed and
transferred to other funding options . (4,554,051) (4,360,334) (7,424,425) (5,855,218) (5,663,364) (3,849,750)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 8,106,582 10,000,216 16,856,232 15,389,506 9,547,864 9,256,533
=========== =========== =========== =========== =========== ===========
MIST Batterymarch Mid-Cap MIST BlackRock High Yield
Managed Assets Trust Stock Subaccount (Class A) Subaccount (Class A)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 52,536 -- -- -- -- --
Accumulation units purchased and
transferred from other funding options 57,728 52,538 12,999,498 -- 7,460,557 --
Accumulation units redeemed and
transferred to other funding options . (110,264) (2) (3,456,082) -- (1,727,596) --
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... -- 52,536 9,543,416 -- 5,732,961 --
=========== =========== =========== =========== =========== ===========
MIST Dreman MIST Harris Oakmark
MIST BlackRock Large-Cap Small-Cap Value International Subaccount
Core Subaccount (Class A) Subaccount (Class A) (Class A)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... -- -- -- -- -- --
Accumulation units purchased and
transferred from other funding options 8,857,837 -- 599,516 -- 46,920,085 --
Accumulation units redeemed and
transferred to other funding options . (2,682,939) -- (51,235) -- (9,896,793) --
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 6,174,898 -- 548,281 -- 37,023,292 --
=========== =========== =========== =========== =========== ===========
MIST Janus MIST Lord Abbett
Capital Appreciation Managed Assets Subaccount Bond Debenture
Subaccount (Class A) (Class A) Subaccount (Class A)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... -- -- -- -- -- --
Accumulation units purchased and
transferred from other funding options 101,647,235 -- 204,541 -- 3,575,987 --
Accumulation units redeemed and
transferred to other funding options . (23,888,592) -- (110,050) -- (722,570) --
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 77,758,643 -- 94,491 -- 2,853,417 --
=========== =========== =========== =========== =========== ===========
93
NOTES TO FINANCIAL STATEMENTS -- (Continued)
6. Schedules of Accumulation Units
for the years ended December 31, 2006 and 2005 -- (Continued)
MIST Lord Abbett MIST Met/AIM Capital MIST Met/AIM Small Cap
Growth and Income Appreciation Subaccount Growth Subaccount
Subaccount (Class B) (Class A) (Class A)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... -- -- -- -- -- --
Accumulation units purchased and
transferred from other funding options 155,481,453 -- 71,293,103 -- 291,193 --
Accumulation units redeemed and
transferred to other funding options . (34,939,120) -- (17,169,195) -- (1,480) --
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 120,542,333 -- 54,123,908 -- 289,713 --
=========== =========== =========== =========== =========== ===========
MIST MFS(R) MIST MIST
Value Subaccount Neuberger Berman Real Pioneer Fund Subaccount
(Class A) Estate Subaccount (Class A) (Class A)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... -- -- -- --
Accumulation units purchased and
transferred from other funding options 9,025,681 -- 34,521,656 -- 1,344,428 --
Accumulation units redeemed and
transferred to other funding options . (1,566,456) -- (8,577,392) -- (234,221) --
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 7,459,225 -- 25,944,264 -- 1,110,207 --
=========== =========== =========== =========== =========== ===========
MIST Pioneer MIST Pioneer MIST Third Avenue
Mid-Cap Value Strategic Income Small Cap Value
Subaccount (Class A) Subaccount (Class A) Subaccount (Class B)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... -- -- -- -- -- --
Accumulation units purchased and
transferred from other funding options 132,573 -- 11,441,979 -- 6,194,124 --
Accumulation units redeemed and
transferred to other funding options . (10,574) -- (1,988,814) -- (335,650) --
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 121,999 -- 9,453,165 -- 5,858,474 --
=========== =========== =========== =========== =========== ===========
MetLife MetLife Investment MetLife Investment
Investment Diversified International Stock Large Company Stock
Bond Subaccount (Class I) Subaccount (Class I) Subaccount (Class I)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 14,518,046 11,962,248 11,195,349 9,222,921 11,123,230 9,000,426
Accumulation units purchased and
transferred from other funding options 6,860,327 8,122,312 9,477,429 7,472,997 4,669,597 5,915,446
Accumulation units redeemed and
transferred to other funding options . (7,563,246) (5,566,514) (7,146,258) (5,500,569) (4,587,600) (3,792,642)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 13,815,127 14,518,046 13,526,520 11,195,349 11,205,227 11,123,230
=========== =========== =========== =========== =========== ===========
94
NOTES TO FINANCIAL STATEMENTS -- (Continued)
6. Schedules of Accumulation Units
for the years ended December 31, 2006 and 2005 -- (Continued)
MetLife Investment Small MSF BlackRock Aggressive MSF BlackRock
Company Stock Subaccount Growth Subaccount Bond Income Subaccount
(Class I) (Class D) (Class A)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 13,243,375 12,709,206 -- -- -- --
Accumulation units purchased and
transferred from other funding options 5,814,528 7,474,973 92,574,307 -- 24,660,600 --
Accumulation units redeemed and
transferred to other funding options . (6,933,547) (6,940,804) (22,764,247) -- (6,096,752) --
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 12,124,356 13,243,375 69,810,060 -- 18,563,848 --
=========== =========== =========== =========== =========== ===========
MSF FI Large Cap MSF FI Value Leaders MSF MetLife Aggressive
Subaccount (Class A) Subaccount (Class D) Allocation Subaccount (Class B)
-------------------------- -------------------------- -------------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... -- -- -- -- -- --
Accumulation units purchased and
transferred from other funding options 66,666,805 -- 30,989,823 -- 3,902,430 --
Accumulation units redeemed and
transferred to other funding options . (15,671,606) -- (6,908,817) -- (139,634) --
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 50,995,199 -- 24,081,006 -- 3,762,796 --
=========== =========== =========== =========== =========== ===========
MSF MetLife Conservative MSF MetLife Conservative MSF MetLife
Allocation Subaccount to Moderate Allocation Moderate Allocation
(Class B) Subaccount (Class B) Subaccount (Class B)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... -- -- -- -- -- --
Accumulation units purchased and
transferred from other funding options 1,513,513 -- 3,732,343 -- 12,500,394 --
Accumulation units redeemed and
transferred to other funding options . (160,268) -- (301,574) -- (1,242,860) --
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 1,353,245 -- 3,430,769 -- 11,257,534 --
=========== =========== =========== =========== =========== ===========
MSF MetLife Moderate
to Aggressive Allocation MSF MFS(R) Total Return MSF T. Rowe Price Large Cap
Subaccount (Class B) Subaccount (Class F) Growth Subaccount (Class B)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... -- -- -- -- -- --
Accumulation units purchased and
transferred from other funding options 14,694,351 -- 90,266,459 -- 17,284,219 --
Accumulation units redeemed and
transferred to other funding options . (1,104,808) -- (21,019,389) -- (4,378,592) --
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 13,589,543 -- 69,247,070 -- 12,905,627 --
=========== =========== =========== =========== =========== ===========
95
NOTES TO FINANCIAL STATEMENTS -- (Continued)
6. Schedules of Accumulation Units
for the years ended December 31, 2006 and 2005 -- (Continued)
MSF Western Asset MSF Western Asset Oppenheimer Main
Management High Yield Management U.S. Street/VA
Bond Subaccount Government Subaccount Subaccount
(Class A) (Class A) (Service Shares)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... -- -- -- -- 7,958,285 9,392,056
Accumulation units purchased and
transferred from other funding options 983,424 -- 41,379,043 -- 863,581 2,979,915
Accumulation units redeemed and
transferred to other funding options . (196,726) -- (10,222,797) -- (8,821,866) (4,413,686)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 786,698 -- 31,156,246 -- -- 7,958,285
=========== =========== =========== =========== =========== ===========
PIMCO VIT PIMCO VIT Putnam VT
Real Return Subaccount Total Return Subaccount Small Cap Value
(Administrative Class) (Administrative Class) Subaccount (Class IB)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 65,512 -- 41,257,201 35,244,824 27,234,892 24,237,104
Accumulation units purchased and
transferred from other funding options 680,122 87,745 16,185,435 21,830,193 13,114,036 15,824,796
Accumulation units redeemed and
transferred to other funding options . (52,404) (22,233) (17,821,442) (15,817,816) (13,301,543) (12,827,008)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 693,230 65,512 39,621,194 41,257,201 27,047,385 27,234,892
=========== =========== =========== =========== =========== ===========
LMPIF Small Cap Value Travelers AIM Capital Travelers Convertible Securities
Subaccount (Class A) Appreciation Subaccount Subaccount
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 8,133,940 7,865,509 69,563,096 64,595,330 735,071 387,737
Accumulation units purchased and
transferred from other funding options 3,903,022 5,446,854 7,411,297 41,657,435 553,732 507,129
Accumulation units redeemed and
transferred to other funding options . (4,405,164) (5,178,423) (76,974,393) (36,689,669) (1,288,803) (159,795)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... 7,631,798 8,133,940 -- 69,563,096 -- 735,071
=========== =========== =========== =========== =========== ===========
Travelers Disciplined Mid Cap Travelers Equity Income Travelers Federated High Yield
Stock Subaccount Subaccount Subaccount
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 11,893,108 12,819,367 28,244,211 30,691,593 6,243,547 6,500,360
Accumulation units purchased and
transferred from other funding options 1,699,504 4,859,094 4,191,932 10,997,621 1,214,957 3,286,174
Accumulation units redeemed and
transferred to other funding options . (13,592,612) (5,785,353) (32,436,143) (13,445,003) (7,458,504) (3,542,987)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... -- 11,893,108 -- 28,244,211 -- 6,243,547
=========== =========== =========== =========== =========== ===========
96
NOTES TO FINANCIAL STATEMENTS -- (Continued)
6. Schedules of Accumulation Units
for the years ended December 31, 2006 and 2005 -- (Continued)
Travelers Travelers
Travelers Managed Allocation Series: Managed Allocation Series:
Large Cap Subaccount Aggressive Subaccount Conservative Subaccount
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 35,563,634 40,449,569 167,544 -- 42,321 --
Accumulation units purchased and
transferred from other funding options 4,225,120 11,765,793 533,885 216,838 163,543 80,586
Accumulation units redeemed and
transferred to other funding options . (39,788,754) (16,651,728) (701,429) (49,294) (205,864) (38,265)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... -- 35,563,634 -- 167,544 -- 42,321
=========== =========== =========== =========== =========== ===========
Travelers Travelers Managed Allocation Travelers Managed Allocation
Managed Allocation Series: Series: Moderate-Aggressive Series: Moderate-Conservative
Moderate Subaccount Subaccount Subaccount
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 1,110,569 -- 1,128,108 -- 101,590 --
Accumulation units purchased and
transferred from other funding options 1,788,290 1,136,986 2,347,273 1,678,196 521,091 107,946
Accumulation units redeemed and
transferred to other funding options . (2,898,859) (26,417) (3,475,381) (550,088) (622,681) (6,356)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... -- 1,110,569 -- 1,128,108 -- 101,590
=========== =========== =========== =========== =========== ===========
Travelers Travelers Travelers
Mercury Large Cap MFS(R) Mid Cap MFS(R) Total Return
Core Subaccount Growth Subaccount Subaccount
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 7,130,964 5,176,406 87,466,980 9,021,519 78,677,052 79,987,409
Accumulation units purchased and
transferred from other funding options 1,304,765 4,435,984 8,739,583 119,111,010 9,226,815 29,222,929
Accumulation units redeemed and
transferred to other funding options . (8,435,729) (2,481,426) (96,206,563) (40,665,549) (87,903,867) (30,533,286)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... -- 7,130,964 -- 87,466,980 -- 78,677,052
=========== =========== =========== =========== =========== ===========
Travelers Travelers Travelers
MFS(R) Value Mondrian International Pioneer Fund
Subaccount Stock Subaccount Subaccount
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 3,139,246 772,976 37,675,055 41,538,574 663,528 496,365
Accumulation units purchased and
transferred from other funding options 1,200,997 3,416,430 4,987,346 15,637,315 208,001 415,569
Accumulation units redeemed and
transferred to other funding options . (4,340,243) (1,050,160) (42,662,401) (19,500,834) (871,529) (248,406)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... -- 3,139,246 -- 37,675,055 -- 663,528
=========== =========== =========== =========== =========== ===========
97
NOTES TO FINANCIAL STATEMENTS -- (Concluded)
6. Schedules of Accumulation Units
for the years ended December 31, 2006 and 2005 -- (Concluded)
Travelers Pioneer Travelers Pioneer Travelers
Mid Cap Value Strategic Income Quality Bond
Subaccount Subaccount Subaccount
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 19,078 -- 7,687,815 3,954,168 21,911,681 24,069,393
Accumulation units purchased and
transferred from other funding options 10,908 19,157 1,818,121 6,195,791 2,573,870 8,176,945
Accumulation units redeemed and
transferred to other funding options . (29,986) (79) (9,505,936) (2,462,144) (24,485,551) (10,334,657)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... -- 19,078 -- 7,687,815 -- 21,911,681
=========== =========== =========== =========== =========== ===========
Travelers Travelers Travelers
Strategic Equity Style Focus Series: Style Focus Series:
Subaccount Small Cap Growth Subaccount Small Cap Value Subaccount
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 27,630,348 33,065,411 16,435 -- 2,034 --
Accumulation units purchased and
transferred from other funding options 2,665,109 8,966,642 30,380 16,436 97,868 2,036
Accumulation units redeemed and
transferred to other funding options . (30,295,457) (14,401,705) (46,815) (1) (99,902) (2)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... -- 27,630,348 -- 16,435 -- 2,034
=========== =========== =========== =========== =========== ===========
Travelers U.S. Government Van Kampen LIT Comstock Van Kampen LIT Strategic
Securities Subaccount Subaccount (Class II) Growth Subaccount (Class II)
-------------------------- -------------------------- --------------------------
2006 2005 2006 2005 2006 2005
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units beginning of year ... 38,294,208 19,114,837 6,004,260 2,247,650 5,125,536 5,470,588
Accumulation units purchased and
transferred from other funding options 5,186,153 37,731,554 4,114,016 5,265,316 2,057,489 2,210,533
Accumulation units redeemed and
transferred to other funding options . (43,480,361) (18,552,183) (3,140,477) (1,508,706) (2,003,594) (2,555,585)
----------- ----------- ----------- ----------- ----------- -----------
Accumulation units end of year ......... -- 38,294,208 6,977,799 6,004,260 5,179,431 5,125,536
=========== =========== =========== =========== =========== ===========
VIP Contrafund(R) Subaccount VIP Mid Cap Subaccount
(Service Class 2) (Service Class 2)
---------------------------- --------------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Accumulation units beginning of year ... 25,118,920 16,214,233 37,623,791 27,044,633
Accumulation units purchased and
transferred from other funding options 21,262,535 16,418,666 22,435,943 24,940,185
Accumulation units redeemed and
transferred to other funding options . (12,542,914) (7,513,979) (18,059,401) (14,361,027)
----------- ----------- ----------- -----------
Accumulation units end of year ......... 33,838,541 25,118,920 42,000,333 37,623,791
=========== =========== =========== ===========
98
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
MetLife Insurance Company of Connecticut:
We have audited the accompanying consolidated balance sheets of MetLife
Insurance Company of Connecticut ("MetLife Connecticut") (formerly known as "The
Travelers Insurance Company") and its subsidiaries (collectively the "Company")
as of December 31, 2006 and 2005, and the related consolidated statements of
income, stockholders' equity, and cash flows for each of the three years in the
period ended December 31, 2006. Our audits also included the financial statement
schedules listed in the Index to Consolidated Financial Statements and
Schedules. These consolidated financial statements and financial statement
schedules are the responsibility of the Company's management. Our responsibility
is to express an opinion on the consolidated financial statements and financial
statement schedules based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements, assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of MetLife Insurance Company of
Connecticut and its subsidiaries as of December 31, 2006 and 2005, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2006, in conformity with accounting principles
generally accepted in the United States of America. Also, in our opinion, such
financial statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
As described in Notes 1 and 3 to the consolidated financials statements, on
October 11, 2006, MetLife Connecticut entered into a Transfer Agreement with
MetLife Investors Group, Inc. ("MLIG"), both subsidiaries of MetLife, Inc.
("MetLife"), pursuant to which MetLife Connecticut acquired all of the stock of
MetLife Investors USA Insurance Company ("MLI-USA") from MLIG. As the
transaction was between entities under common control, the transaction was
recorded and accounted for in a manner similar to a pooling-of-interests from
July 1, 2005 (the "Acquisition Date"); further, as MLI-USA has been controlled
by MetLife for longer than MetLife Connecticut, all amounts reported for periods
prior to the Acquisition Date are those of MLI-USA.
/S/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
New York, New York
March 30, 2007
F-1
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2006 AND 2005
(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)
<Table>
<Caption>
2006 2005
-------- --------
ASSETS
Investments:
Fixed maturity securities available-for-sale, at estimated
fair value (amortized cost: $48,406 and $53,231,
respectively)............................................. $ 47,846 $ 52,589
Trading securities, at fair value (cost: $0 and $457,
respectively)............................................. -- 452
Equity securities available-for-sale, at estimated fair value
(cost: $777 and $424, respectively)....................... 795 421
Mortgage and consumer loans.................................. 3,595 2,543
Policy loans................................................. 918 916
Real estate and real estate joint ventures held-for-
investment................................................ 173 91
Real estate held-for-sale.................................... 7 5
Other limited partnership interests.......................... 1,082 1,252
Short-term investments....................................... 777 1,769
Other invested assets........................................ 1,241 1,057
-------- --------
Total investments......................................... 56,434 61,095
Cash and cash equivalents...................................... 649 571
Accrued investment income...................................... 597 602
Premiums and other receivables................................. 8,410 7,008
Deferred policy acquisition costs and value of business
acquired..................................................... 5,111 4,914
Current income tax recoverable................................. 94 48
Deferred income tax assets..................................... 1,007 1,120
Goodwill....................................................... 953 924
Other assets................................................... 765 442
Separate account assets........................................ 50,067 44,524
-------- --------
Total assets.............................................. $124,087 $121,248
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Future policy benefits....................................... $ 19,654 $ 18,344
Policyholder account balances................................ 35,099 37,840
Other policyholder funds..................................... 1,513 1,293
Long-term debt -- affiliated................................. 435 435
Payables for collateral under securities loaned and other
transactions.............................................. 9,155 9,737
Other liabilities............................................ 749 1,642
Separate account liabilities................................. 50,067 44,524
-------- --------
Total liabilities......................................... 116,672 113,815
-------- --------
CONTINGENCIES, COMMITMENTS AND GUARANTEES (NOTE 12)
Stockholders' Equity:
Common stock, par value $2.50 per share; 40,000,000 shares
authorized; 34,595,317 shares issued and outstanding at
December 31, 2006 and 2005................................ 86 86
Additional paid-in capital................................... 7,123 7,180
Retained earnings............................................ 520 581
Accumulated other comprehensive income (loss)................ (314) (414)
-------- --------
Total stockholders' equity................................ 7,415 7,433
-------- --------
Total liabilities and stockholders' equity................ $124,087 $121,248
======== ========
</Table>
See accompanying notes to consolidated financial statements.
F-2
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(IN MILLIONS)
<Table>
<Caption>
2006 2005 2004
------ ------ ----
REVENUES
Premiums................................................... $ 308 $ 281 $ 9
Universal life and investment-type product policy fees..... 1,268 862 159
Net investment income...................................... 2,839 1,438 207
Other revenues............................................. 212 132 26
Net investment gains (losses).............................. (521) (198) (9)
------ ------ ----
Total revenues........................................... 4,106 2,515 392
------ ------ ----
EXPENSES
Policyholder benefits and claims........................... 792 570 18
Interest credited to policyholder account balances......... 1,316 720 153
Other expenses............................................. 1,173 678 179
------ ------ ----
Total expenses........................................... 3,281 1,968 350
------ ------ ----
Income before provision for income tax..................... 825 547 42
Provision for income tax................................... 228 156 17
------ ------ ----
Income before cumulative effect of a change in accounting,
net of income tax........................................ 597 391 25
Cumulative effect of a change in accounting, net of income
tax...................................................... -- -- 2
------ ------ ----
Net income................................................. $ 597 $ 391 $ 27
====== ====== ====
</Table>
See accompanying notes to consolidated financial statements.
F-3
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(IN MILLIONS)
<Table>
<Caption>
ACCUMULATED OTHER
COMPREHENSIVE INCOME (LOSS)
---------------------------
NET FOREIGN
ADDITIONAL UNREALIZED CURRENCY
COMMON PAID-IN RETAINED INVESTMENT TRANSLATION
STOCK CAPITAL EARNINGS GAINS (LOSSES) ADJUSTMENT TOTAL
------ ---------- -------- -------------- ----------- ------
BALANCE AT JANUARY 1, 2004 (NOTE 3)....... $11 $ 171 $ 163 $ 32 $-- $ 377
Capital contribution from MetLife
Investors Group, Inc. .................. 300 300
Comprehensive income (loss):
Net income.............................. 27 27
Other comprehensive income (loss):
Unrealized gains (losses) on
derivative instruments, net of
income tax......................... (2) (2)
------
Other comprehensive income (loss).... (2)
------
Comprehensive income (loss)............. 25
--- ------ ----- ----- --- ------
BALANCE AT DECEMBER 31, 2004.............. 11 471 190 30 -- 702
MetLife Insurance Company of Connecticut's
common stock purchased by MetLife, Inc.
(Notes 2 and 3)......................... 75 6,709 6,784
Comprehensive income (loss):
Net income.............................. 391 391
Other comprehensive income (loss):
Unrealized gains (losses) on
derivative instruments, net of
income tax......................... (1) (1)
Unrealized investment gains (losses),
net of related offsets and income
tax................................ (445) (445)
Foreign currency translation
adjustments........................ 2 2
------
Other comprehensive income (loss).... (444)
------
Comprehensive income (loss)............. (53)
--- ------ ----- ----- --- ------
BALANCE AT DECEMBER 31, 2005.............. 86 7,180 581 (416) 2 7,433
Revisions of purchase price pushed down to
MetLife Insurance Company of
Connecticut's net assets acquired (Note
2)...................................... 40 40
Dividend paid to MetLife, Inc. ........... (259) (658) (917)
Capital contribution of intangible assets
from MetLife, Inc., net of income tax
(Notes 8 and 14)........................ 162 162
Comprehensive income (loss):
Net income.............................. 597 597
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................................ 107 107
Foreign currency translation
adjustments, net of income tax.... (2) (2)
------
Other comprehensive income (loss).... 100
------
Comprehensive income (loss)............. 697
--- ------ ----- ----- --- ------
BALANCE AT DECEMBER 31, 2006.............. $86 $7,123 $ 520 $(314) $-- $7,415
=== ====== ===== ===== === ======
</Table>
See accompanying notes to consolidated financial statements.
F-4
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(IN MILLIONS)
<Table>
<Caption>
2006 2005 2004
-------- -------- -------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income.................................................... $ 597 $ 391 $ 27
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization expenses................... 6 4 --
Amortization of premiums and accretion of discounts
associated with investments, net....................... 74 112 21
(Gains) losses from sales of investments and businesses,
net.................................................... 521 198 9
Equity earnings of real estate joint ventures and other
limited partnership interests.......................... (83) (19) --
Interest credited to policyholder account balances....... 1,316 720 153
Universal life and investment-type product policy fees... (1,268) (862) (159)
Change in accrued investment income...................... 2 (68) --
Change in premiums and other receivables................. (509) (415) (1,108)
Change in deferred policy acquisition costs, net......... (234) (211) (165)
Change in insurance-related liabilities.................. 234 812 17
Change in trading securities............................. (43) 103 --
Change in income tax payable............................. 156 298 --
Change in income tax recoverable......................... -- -- (29)
Change in other assets................................... 586 574 140
Change in other liabilities.............................. (351) (876) (106)
Other, net............................................... -- 2 --
-------- -------- -------
Net cash provided by (used in) operating activities........... 1,004 763 (1,200)
-------- -------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Sales, maturities and repayments of:
Fixed maturity securities................................ 27,706 24,008 1,521
Equity securities........................................ 218 221 2
Mortgage and consumer loans.............................. 1,034 748 72
Real estate and real estate joint ventures............... 126 65 --
Other limited partnership interests...................... 762 173 --
Purchases of:
Fixed maturity securities................................ (23,840) (32,850) (1,482)
Equity securities........................................ (109) -- --
Mortgage and consumer loans.............................. (2,092) (500) (42)
Real estate and real estate joint ventures............... (56) (13) --
Other limited partnership interests...................... (343) (330) --
Net change in policy loans.................................. (2) 3 --
Net change in short-term investments........................ 991 599 7
Net change in other invested assets......................... (316) 233 1
Other, net.................................................. 1 3 --
-------- -------- -------
Net cash provided by (used in) investing activities........... 4,080 (7,640) 79
-------- -------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholder account balances:
Deposits................................................. 8,185 11,230 4,541
Withdrawals.............................................. (11,637) (12,369) (3,898)
Net change in payables for collateral under securities
loaned and other transactions............................ (582) 7,675 122
Long-term debt issued....................................... -- 400 --
Dividends on common stock................................... (917) -- --
Capital contribution from MetLife Investors Group, Inc. .... -- -- 300
Contribution of MetLife Insurance Company of Connecticut
from MetLife, Inc., net of cash received of $0, $443 and
$0, respectively......................................... -- 443 --
Other, net.................................................. (55) (75) --
-------- -------- -------
Net cash (used in) provided by financing activities........... (5,006) 7,304 1,065
-------- -------- -------
Change in cash and cash equivalents........................... 78 427 (56)
Cash and cash equivalents, beginning of year.................. 571 144 200
-------- -------- -------
CASH AND CASH EQUIVALENTS, END OF YEAR........................ $ 649 $ 571 $ 144
======== ======== =======
Supplemental disclosures of cash flow information:
Net cash paid during the year for:
Interest................................................. $ 31 $ 18 $ 2
======== ======== =======
Income tax............................................... $ 81 $ 87 $ (2)
======== ======== =======
Non-cash transactions during the year:
Net assets of MetLife Insurance Company of Connecticut
acquired by MetLife, Inc. and contributed to MLI-USA
net of cash received of $443 million................... $ -- $ 6,341 $ --
======== ======== =======
Contribution of other intangible assets, net of deferred
income tax............................................. $ 162 $ -- $ --
======== ======== =======
Contribution of goodwill from MetLife, Inc. ............. $ 29 $ -- $ --
======== ======== =======
</Table>
- --------
See Note 2 for further discussion of the net assets of MetLife Insurance Company
of Connecticut acquired by MetLife, Inc. and contributed to MLI-USA.
See Note 19 for non-cash reinsurance transactions.
See accompanying notes to consolidated financial statements.
F-5
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
BUSINESS
"MICC" or the "Company" refers to MetLife Insurance Company of Connecticut
(formerly, The Travelers Insurance Company), a Connecticut corporation
incorporated in 1863 ("MetLife Connecticut"), and its subsidiaries, including
MetLife Life and Annuity Company of Connecticut ("MLAC", formerly The Travelers
Life and Annuity Company) and MetLife Investors USA Insurance Company ("MLI-
USA"). The Company is a subsidiary of MetLife, Inc. ("MetLife"). The Company
offers individual annuities, individual life insurance, and institutional
protection and asset accumulation products.
On July 1, 2005 (the "Acquisition Date"), MetLife Connecticut became a
wholly-owned subsidiary of MetLife. MetLife Connecticut, together with
substantially all of Citigroup Inc.'s ("Citigroup") international insurance
businesses, excluding Primerica Life Insurance Company and its subsidiaries
("Primerica") (collectively, "Travelers"), were acquired by MetLife from
Citigroup (the "Acquisition") for $12.1 billion. See Note 2 for further
information on the Acquisition.
On October 11, 2006, MetLife transferred MLI-USA to MetLife Connecticut.
See Note 3.
On February 14, 2006, a Certificate of Amendment was filed with the State
of Connecticut Office of the Secretary of the State changing the name of The
Travelers Insurance Company to MetLife Insurance Company of Connecticut,
effective May 1, 2006.
Since the Company is a member of a controlled group of affiliated
companies, its results may not be indicative of those of a stand-alone entity.
BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
(i) MLI-USA and effective July 1, 2005, MetLife Connecticut and its subsidiaries
(See Notes 2 and 3); (ii) partnerships and joint ventures in which the Company
has control; and (iii) variable interest entities ("VIEs") for which the Company
is deemed to be the primary beneficiary. Intercompany accounts and transactions
have been eliminated.
The Company uses the equity method of accounting for investments in equity
securities in which it has more than a 20% interest and for real estate joint
ventures and other limited partnership interests in which it has more than a
minor equity interest or more than a minor influence over the joint ventures and
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 real
estate joint ventures and other limited partnership interests in which it has a
minor equity investment and virtually no influence over the joint ventures and
partnership's operations.
Minority interest related to consolidated entities included in other
liabilities was $43 million and $180 million at December 31, 2006 and 2005,
respectively. At December 31, 2005, the Company was the majority owner of
Tribeca Citigroup Investments Ltd. ("Tribeca") and consolidated the fund within
its consolidated financial statements. During the second quarter of 2006, the
Company's ownership interests in Tribeca declined to a position whereby Tribeca
is no longer consolidated. See Note 4 for further information.
Certain amounts in the prior year periods' consolidated financial
statements have been reclassified to conform with the 2006 presentation.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America ("GAAP") requires
management to adopt accounting policies and make estimates and
F-6
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
assumptions that affect amounts reported in the consolidated financial
statements. The most critical estimates include those used in determining:
<Table>
(i) the fair value of investments in the absence of quoted market
values;
(ii) investment impairments;
(iii) the recognition of income on certain investments;
(iv) the application of the consolidation rules to certain
investments;
(v) the fair value of and accounting for derivatives;
(vi) the capitalization and amortization of deferred policy
acquisition costs ("DAC") and the establishment and amortization
of value of business acquired ("VOBA");
(vii) the measurement of goodwill and related impairment, if any;
(viii) the liability for future policyholder benefits;
(ix) accounting for income taxes and the valuation of deferred income
tax assets;
(x) accounting for reinsurance transactions; and
(xi) the liability for litigation and regulatory matters.
</Table>
A description of such critical estimates is incorporated within the
discussion of the related accounting policies which follow. The application of
purchase accounting requires the use of estimation techniques in determining the
fair value of the assets acquired and liabilities assumed -- the most
significant of which relate to the aforementioned critical estimates. In
applying these policies, management makes subjective and complex judgments that
frequently require estimates about matters that are inherently uncertain. Many
of these policies, estimates and related judgments are common in the insurance
and financial services industries; others are specific to the Company's
businesses and operations. Actual results could differ from these estimates.
Investments
The Company's principal investments are in fixed maturity and equity
securities, mortgage and consumer loans, policy loans, real estate, real estate
joint ventures and other limited partnerships, short-term investments and other
invested assets. The accounting policies related to each are as follows:
Fixed Maturity and Equity Securities. The Company's fixed maturity
and equity securities are classified as available-for-sale, except for
trading securities, and are reported at their estimated fair value.
Unrealized investment gains and losses on these securities are recorded as
a separate component of other comprehensive income or loss, net of
policyholder related amounts and deferred income taxes. All security
transactions are recorded on a trade date basis. Investment gains and
losses on sales of securities are determined on a specific identification
basis.
Interest income on fixed maturity securities is recorded when earned
using an effective yield method giving effect to amortization of premiums
and accretion of discounts. Dividends on equity securities are recorded
when declared. These dividends and interest income are recorded as part of
net investment income.
Included within fixed maturity securities are loan-backed securities
including mortgage-backed and asset-backed securities. Amortization of the
premium or discount from the purchase of these securities considers the
estimated timing and amount of prepayments of the underlying loans. Actual
prepayment experience is periodically reviewed and effective yields are
recalculated when differences arise between the prepayments originally
anticipated and the actual prepayments received and currently anticipated.
Prepayment assumptions for single class and multi-class mortgage-backed and
asset-backed securities are obtained from broker-dealer survey values or
internal estimates. For credit-sensitive mortgage-backed and asset-backed
securities and certain prepayment-sensitive securities, the effective yield
is recalculated on a prospective basis.
F-7
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
For all other mortgage-backed and asset-backed securities, the effective
yield is recalculated on a retrospective basis.
The cost of fixed maturity and equity securities is adjusted for
impairments in value deemed to be other-than-temporary in the period in
which the determination is made. These impairments are included within net
investment gains (losses) and the cost basis of the fixed maturity and
equity securities is reduced accordingly. The Company does not change the
revised cost basis for subsequent recoveries in value.
The assessment of whether impairments have occurred is based on
management's case-by-case evaluation of the underlying reasons for the
decline in fair value. The Company's review of its fixed maturity and
equity securities for impairments includes an analysis of the total gross
unrealized losses by three categories of securities: (i) securities where
the estimated fair value had declined and remained below cost or amortized
cost by less than 20%; (ii) securities where the estimated fair value had
declined and remained below cost or amortized cost by 20% or more for less
than six months; and (iii) securities where the estimated fair value had
declined and remained below cost or amortized cost by 20% or more for six
months or greater.
Additionally, management considers a wide range of factors about the
security issuer and uses its best judgment in evaluating the cause of the
decline in the estimated fair value of the security and in assessing the
prospects for near-term recovery. Inherent in management's evaluation of
the security are assumptions and estimates about the operations of the
issuer and its future earnings potential. Considerations used by the
Company in the impairment evaluation process include, but are not limited
to: (i) the length of time and the extent to which the market value has
been below cost or amortized cost; (ii) the potential for impairments of
securities when the issuer is experiencing significant financial
difficulties; (iii) the potential for impairments in an entire industry
sector or sub-sector; (iv) the potential for impairments in certain
economically depressed geographic locations; (v) the potential for
impairments of securities where the issuer, series of issuers or industry
has suffered a catastrophic type of loss or has exhausted natural
resources; (vi) the Company's ability and intent to hold the security for a
period of time sufficient to allow for the recovery of its value to an
amount equal to or greater than cost or amortized cost (See also Note 4);
(vii) unfavorable changes in forecasted cash flows on asset-backed
securities; and (viii) other subjective factors, including concentrations
and information obtained from regulators and rating agencies.
Trading Securities. The Company's trading securities portfolio,
principally consisting of fixed maturity and equity securities, supports
investment strategies that involve the active and frequent purchase and
sale of securities and the execution of short sale agreements and supports
asset and liability matching strategies for certain insurance products.
Trading securities and short sale agreement liabilities are recorded at
fair value with subsequent changes in fair value recognized in net
investment income. Related dividends and investment income are also
included in net investment income. Beginning in the second quarter of 2006,
the Company no longer holds a trading securities portfolio. (See also Note
4)
Securities Lending. Securities loaned transactions are treated as
financing arrangements and are recorded at the amount of cash received. The
Company obtains collateral in an amount equal to 102% of the fair value of
the securities loaned. The Company monitors the market value of the
securities loaned on a daily basis with additional collateral obtained as
necessary. Substantially all of the Company's securities loaned
transactions are with large brokerage firms. Income and expenses associated
with securities loaned transactions are reported as investment income and
investment expense, respectively, within net investment income.
Mortgage and Consumer Loans. Mortgage and consumer loans are stated
at unpaid principal balance, adjusted for any unamortized premium or
discount, deferred fees or expenses, net of valuation allowances. Interest
income is accrued on the principal amount of the loan based on the loan's
contractual interest rate. Amortization of premiums and discounts is
recorded using the effective yield method. Interest income,
F-8
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
amortization of premiums and discounts, and prepayment fees are reported in
net investment income. Loans are considered to be impaired when it is
probable that, based upon current information and events, the Company will
be unable to collect all amounts due under the contractual terms of the
loan agreement. Valuation allowances are established for 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 value
of the loan's collateral if the loan is in the process of foreclosure or
otherwise collateral dependent, or the loan's market value if the loan is
being sold. The Company also establishes allowances for loan losses when a
loss contingency exists for pools of loans with similar characteristics,
such as mortgage loans based on similar property types or loan to value
risk factors. A loss contingency exists when the likelihood that a future
event will occur is probable based on past events. Interest income earned
on impaired loans is accrued on the principal amount of the loan based on
the loan's contractual interest rate. However, interest ceases to be
accrued for loans on which interest is generally more than 60 days past due
and/or where the collection of interest is not considered probable. Cash
receipts on such impaired loans are recorded as a reduction of the recorded
investment. Gains and losses from the sale of loans and changes in
valuation allowances are reported in net investment gains (losses).
Policy Loans. Policy loans are stated at unpaid principal balances.
Interest income on such loans is recorded as earned using the contractually
agreed upon interest rate. Generally, interest is capitalized on the
policy's anniversary date.
Real Estate. Real estate held-for-investment, including related
improvements, is stated at cost less accumulated depreciation. Depreciation
is provided on a straight-line basis over the estimated useful life of the
asset (typically 20 to 55 years). Rental income is recognized on a
straight-line basis over the term of the respective leases. The Company
classifies a property as held-for-sale if it commits to a plan to sell a
property within one year and actively markets the property in its current
condition for a price that is reasonable in comparison to its fair value.
The Company classifies the results of operations and the gain or loss on
sale of a property that either has been disposed of or classified as held-
for-sale as discontinued operations, if the ongoing operations of the
property will be eliminated from the ongoing operations of the Company and
if the Company will not have any significant continuing involvement in the
operations of the property after the sale. Real estate held-for-sale is
stated at the lower of depreciated cost or fair value less expected
disposition costs. Real estate is not depreciated while it is classified as
held-for-sale. The Company periodically reviews its properties held-for-
investment for impairment and tests properties for recoverability whenever
events or changes in circumstances indicate the carrying amount of the
asset may not be recoverable and the carrying value of the property exceeds
its fair value. Properties whose carrying values are greater than their
undiscounted cash flows are written down to their fair value, with the
impairment loss included in net investment gains (losses). Impairment
losses are based upon the estimated fair value of real estate, which is
generally computed using the present value of expected future cash flows
from the real estate discounted at a rate commensurate with the underlying
risks. Real estate acquired upon foreclosure of commercial and agricultural
mortgage loans is recorded at the lower of estimated fair value or the
carrying value of the mortgage loan at the date of foreclosure.
Real Estate Joint Ventures and Other Limited Partnership
Interests. The Company uses the equity method of accounting for
investments in real estate joint ventures and other limited partnership
interests in which it has more than a minor equity interest or more than a
minor influence over the joint ventures and 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 real estate joint
ventures and other limited partnership interests in which it has a minor
equity investment and virtually no influence over the joint ventures and
the partnership's operations. In addition to the investees performing
regular evaluations for the impairment of underlying investments, the
Company routinely evaluates its investments in real estate joint ventures
and limited partnerships for impairments. For its cost method investments,
it follows an impairment analysis which
F-9
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
is similar to the process followed for its fixed maturity and equity
securities as described previously. For equity method investees, the
Company considers financial and other information provided by the investee,
other known information and inherent risks in the underlying investments,
as well as future capital commitments, in determining whether an impairment
has occurred. When an other-than-temporary impairment is deemed to have
occurred, the Company records a realized capital loss within net investment
gains (losses) to record the investment at its fair value.
Short-term Investments. Short-term investments include investments
with remaining maturities of one year or less, but greater than three
months, at the time of acquisition and are stated at amortized cost, which
approximates fair value.
Other Invested Assets. Other invested assets consist primarily of
stand-alone derivatives with positive fair values.
Estimates and Uncertainties. The Company's investments are exposed to
three primary sources of risk: credit, interest rate and market valuation.
The financial statement risks, stemming from such investment risks, are
those associated with the recognition of impairments, the recognition of
income on certain investments and the determination of fair values.
The determination of the amount of allowances and impairments, as
applicable, are described above by investment type. The determination of
such allowances and impairments is highly subjective and is based upon the
Company's periodic evaluation and assessment of known and inherent risks
associated with the respective asset class. Such evaluations and
assessments are revised as conditions change and new information becomes
available. Management updates its evaluations regularly and reflects
changes in allowances and impairments in operations as such evaluations are
revised.
The recognition of income on certain investments (e.g. loan-backed
securities including mortgage-backed and asset-backed securities, certain
investment transactions, trading securities, etc.) is dependent upon market
conditions, which could result in prepayments and changes in amounts to be
earned.
The fair values of publicly held fixed maturity securities and
publicly held equity securities are based on quoted market prices or
estimates from independent pricing services. However, in cases where quoted
market prices are not available, such as for private fixed maturity
securities, fair values are estimated using present value or valuation
techniques. The determination of fair values is based on: (i) valuation
methodologies; (ii) securities the Company deems to be comparable; and
(iii) assumptions deemed appropriate given the circumstances. The fair
value estimates are made at a specific point in time, based on available
market information and judgments about financial instruments, including
estimates of the timing and amounts of expected future cash flows and the
credit standing of the issuer or counterparty. Factors considered in
estimating fair value include: coupon rate, maturity, estimated duration,
call provisions, sinking fund requirements, credit rating, industry sector
of the issuer, and quoted market prices of comparable securities. The use
of different methodologies and assumptions may have a material effect on
the estimated fair value amounts.
Additionally, when the Company enters into certain real estate joint
ventures and other limited partnerships for which the Company may be deemed
to be the primary beneficiary under Financial Accounting Standards Board
("FASB") Interpretation ("FIN") No. 46(r), Consolidation of Variable
Interest Entities -- An Interpretation of ARB No. 51, it may be required to
consolidate such investments. The accounting rules for the determination of
the primary beneficiary are complex and require evaluation of the
contractual rights and obligations associated with each party involved in
the entity, an estimate of the entity's expected losses and expected
residual returns and the allocation of such estimates to each party.
F-10
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The use of different methodologies and assumptions as to the timing
and amount of impairments, recognition of income and the determination of
the fair value of investments may have a material effect on the amounts
presented within the consolidated financial statements.
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 the over-the-counter market.
The Company uses a variety of derivatives, including swaps, forwards, futures
and option contracts, to manage the risk associated with variability in cash
flows or changes in fair values related to the Company's financial instruments.
The Company also uses derivative instruments to hedge its currency exposure
associated with net investments in certain foreign operations. To a lesser
extent, the Company uses credit derivatives 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
sheet either as assets within other invested assets or as liabilities within
other liabilities at fair value as determined by quoted market prices or through
the use of pricing models. The determination of fair value, when quoted market
values are not available, is based on valuation methodologies and assumptions
deemed appropriate under the circumstances. Derivative valuations can be
affected by changes in interest rates, foreign currency exchange rates,
financial indices, credit spreads, market volatility, and liquidity. Values can
also be affected by changes in estimates and assumptions used in pricing models.
Such assumptions include estimates of volatility, interest rates, foreign
currency exchange rates, other financial indices and credit ratings. Essential
to the analysis of the fair value is a risk of counterparty default. The use of
different assumptions may have a material effect on the estimated derivative
fair value amounts as well as the amount of reported net income.
If a derivative is not designated as an accounting hedge or its use in
managing risk does not qualify for hedge accounting pursuant to Statement of
Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS 133") as amended, changes in the fair
value of the derivative are reported in net investment gains (losses). The
fluctuations in 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 fair value of a recognized asset or
liability or an unrecognized firm commitment ("fair value hedge"); (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"); or (iii)
a hedge of a net investment in a foreign operation. 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 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 and measurement of
hedge effectiveness are also subject to interpretation and estimation, and
different interpretations or estimates may have a material effect on the amount
reported in net income.
The accounting for derivatives is complex and interpretations of the
primary accounting standards continue to evolve in practice. Judgment is applied
in determining the availability and application of hedge accounting designations
and the appropriate accounting treatment under these accounting standards. If it
was determined that hedge accounting designations were not appropriately
applied, reported net income could be materially affected.
F-11
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Differences in judgment as to the availability and application of hedge
accounting designations and the appropriate accounting treatment may result in a
differing impact on the consolidated financial statements of the Company from
that previously reported.
Under a fair value hedge, changes in the fair value of the hedging
derivative, including amounts measured as ineffectiveness, and changes in the
fair value of the hedged item related to the designated risk being hedged, are
reported within net investment gains (losses). The fair values of the hedging
derivatives are exclusive of any accruals that are separately reported in the
consolidated statement of income within interest income or interest expense to
match the location of the hedged item.
Under a cash flow hedge, changes in the 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
income when the Company's earnings are affected by the variability in cash flows
of the hedged item. Changes in the fair value of the hedging instrument measured
as ineffectiveness are reported within net investment gains (losses). The fair
values of the hedging derivatives are exclusive of any accruals that are
separately reported in the consolidated statement of income within interest
income or interest expense to match the location of the hedged item.
In a hedge of a net investment in a foreign operation, changes in the fair
value of the hedging derivative that are measured as effective are reported
within other comprehensive income (loss) consistent with the translation
adjustment for the hedged net investment in the foreign operation. Changes in
the fair value of the hedging instrument measured as ineffectiveness are
reported within net investment gains (losses).
The Company discontinues hedge accounting prospectively when: (i) it is
determined that the derivative is no longer highly effective in offsetting
changes in the 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; (iv) a hedged firm commitment no
longer meets the definition of a firm commitment; or (v) 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 fair value or
cash flows of a hedged item, the derivative continues to be carried on the
consolidated balance sheet at its fair value, with changes in 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 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 fair value of derivatives recorded
in other comprehensive income (loss) related to discontinued cash flow hedges
are released into the consolidated statement of income 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 by the end of the specified time period
or the hedged item no longer meets the definition of a firm commitment, the
derivative continues to be carried on the consolidated balance sheet at its fair
value, with changes in fair value recognized currently in net investment gains
(losses). Any asset or liability associated with a recognized firm commitment is
derecognized from the consolidated balance sheet, and recorded currently in net
investment gains (losses). Deferred gains and losses of a derivative recorded in
other comprehensive income (loss) pursuant to the cash flow hedge of a
forecasted transaction are recognized immediately in net investment gains
(losses).
In all other situations in which hedge accounting is discontinued, the
derivative is carried at its fair value on the consolidated balance sheet, with
changes in its fair value recognized in the current period as net investment
gains (losses).
F-12
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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 under SFAS 133. If the instrument would not be accounted for in its
entirety at 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 on the consolidated balance sheet at fair value with the
host contract and changes in their fair value are reported currently 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 fair value, with changes in 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 fair value, with changes in 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 fair value in the
consolidated financial statements and that their related changes in fair value
could materially affect reported net income.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an
original or remaining maturity of three months or less at the date of purchase
to be cash equivalents.
Property, Equipment, Leasehold Improvements and Computer Software
Property, equipment and leasehold improvements, which are included in other
assets, are stated at cost, less accumulated depreciation and amortization.
Depreciation is determined using either the straight-line or sum-of-the-years-
digits method over the estimated useful lives of the assets, as appropriate.
Estimated lives generally range from five to ten years for leasehold
improvements and three to seven years for all other property and equipment.
Computer software, which is included in other assets, is stated at cost,
less accumulated amortization. Purchased software costs, as well as internal and
external costs incurred to develop internal-use computer software during the
application development stage, are capitalized. Such costs are amortized
generally over a four-year period using the straight-line method. The cost basis
of computer software was $52 million and $2 million at December 31, 2006 and
2005, respectively. Accumulated amortization was $3 million at December 31, 2006
and the computer software was fully amortized at December 31, 2005. Related
amortization expense was $3 million and $1 million for the years ended December
31, 2006 and 2005, respectively. There was no amortization expense for the year
ended December 31, 2004.
Deferred Policy Acquisition Costs and Value of Business Acquired
The Company incurs significant costs in connection with acquiring new and
renewal insurance business. Costs that vary with and relate to the production of
new business are deferred as DAC. Such costs consist principally of commissions
and agency and policy issue expenses. VOBA is an intangible asset that 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 business in-
force at the acquisition date. VOBA is based on actuarially determined
projections, by each block of business, of future policy and contract charges,
premiums, mortality and morbidity, separate account performance, surrenders,
operating expenses, investment returns and other factors. Actual experience on
the purchased business may vary from these projections. The recovery of DAC and
VOBA is dependent upon the future profitability of the related business. DAC and
VOBA are aggregated in the financial statements for reporting purposes.
DAC related to internally replaced contracts are generally expensed at the
date of replacement.
F-13
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DAC and VOBA on life insurance or investment-type contracts are amortized
in proportion to gross premiums or gross profits, depending on the type of
contract as described below.
The Company amortizes DAC and VOBA related to non-participating traditional
contracts (term insurance and non-participating whole life insurance) over the
entire premium paying period in proportion to the present value of actual
historic and expected future gross premiums. The present value of expected
premiums is based upon the premium requirement of each policy and assumptions
for mortality, morbidity, persistency, and investment returns at policy
issuance, or policy acquisition as it relates to VOBA, that include provisions
for adverse deviation and are consistent with the assumptions used to calculate
future policyholder benefit liabilities. These assumptions are not revised after
policy issuance or acquisition unless the DAC or VOBA balance is deemed to be
unrecoverable from future expected profits. Absent a premium deficiency,
variability in amortization after policy issuance or acquisition is caused only
by variability in premium volumes.
The Company amortizes DAC and VOBA related to fixed and variable universal
life contracts and fixed and variable deferred annuity contracts over the
estimated lives of the contracts in proportion to actual and expected future
gross profits. The amortization includes interest based on rates in effect at
inception or acquisition of the contracts. The amount of future gross profits is
dependent principally upon returns in excess of the amounts credited to
policyholders, mortality, persistency, interest crediting rates, expenses to
administer the business, creditworthiness of reinsurance counterparties, the
effect of any hedges used, and certain economic variables, such as inflation. Of
these factors, the Company anticipates that investment returns, expenses, and
persistency are reasonably likely to impact significantly the rate of DAC and
VOBA amortization. Each reporting period, the Company updates the estimated
gross profits with the actual gross profits for that period. When the actual
gross profits change from previously estimated gross profits, the cumulative DAC
and VOBA amortization is re-estimated and adjusted by a cumulative charge or
credit to current operations. When actual gross profits exceed those previously
estimated, the DAC and VOBA amortization will increase, resulting in a current
period charge to earnings. The opposite result occurs when the actual gross
profits are below the previously estimated gross profits. Each reporting period,
the Company also updates the actual amount of business remaining in-force, which
impacts expected future gross profits.
Separate account rates of return on variable universal life contracts and
variable deferred annuity contracts affect in-force account balances on such
contracts each reporting period. Returns that are higher than the Company's
long-term expectation produce higher account balances, which increases the
Company's future fee expectations and decreases future benefit payment
expectations on minimum death benefit guarantees, resulting in higher expected
future gross profits. The opposite result occurs when returns are lower than the
Company's long-term expectation. The Company's practice to determine the impact
of gross profits resulting from returns on separate accounts assumes that long-
term appreciation in equity markets is not changed by short-term market
fluctuations, but is only changed when sustained interim deviations are
expected. The Company monitors these changes and only changes the assumption
when its long-term expectation changes.
The Company also reviews periodically other long-term assumptions
underlying the projections of estimated gross profits. These include investment
returns, policyholder dividend scales, interest crediting rates, mortality,
persistency, and expenses to administer business. Management annually updates
assumptions used in the calculation of estimated gross profits which may have
significantly changed. If the update of assumptions causes expected future gross
profits to increase, DAC and VOBA amortization will decrease, resulting in a
current period increase to earnings. The opposite result occurs when the
assumption update causes expected future gross profits to decrease.
Sales Inducements
The Company has two different types of sales inducements which are included
in other assets: (i) the policyholder receives a bonus whereby the
policyholder's initial account balance is increased by an amount equal to
F-14
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
a specified percentage of the customer's deposit; and (ii) the policyholder
receives a higher interest rate using a dollar cost averaging method than would
have been received based on the normal general account interest rate credited.
The Company defers sales inducements and amortizes them over the life of the
policy using the same methodology and assumptions used to amortize DAC.
Goodwill
Goodwill is the excess of cost over the fair value of net assets acquired.
Goodwill is not amortized but is tested for impairment at least annually or more
frequently if events or circumstances, such as adverse changes in the business
climate, indicate that there may be justification for conducting an interim
test. Impairment testing is performed using the fair value approach, which
requires the use of estimates and judgment, at the "reporting unit" level. A
reporting unit is the operating segment or a business one level below the
operating segment, if discrete financial information is prepared and regularly
reviewed by management at that level. For purposes of goodwill impairment
testing, goodwill within Corporate & Other is allocated to reporting units
within the Company's business segments. If the carrying value of a reporting
unit's goodwill exceeds its fair value, the excess is recognized as an
impairment and recorded as a charge against net income. The fair values of the
reporting units are determined using a market multiple and a discounted cash
flow model. The critical estimates necessary in determining fair value are
projected earnings, comparative market multiples and the discount rate.
Liability for Future Policy Benefits and Policyholder Account Balances
The Company establishes liabilities for amounts payable under insurance
policies, including traditional life insurance, traditional annuities and non-
medical health insurance. Generally, amounts are payable over an extended period
of time and related liabilities are calculated as the present value of future
expected benefits to be paid reduced by the present value of future expected
premiums. Such liabilities are established based on methods and underlying
assumptions in accordance with GAAP and applicable actuarial standards.
Principal assumptions used in the establishment of liabilities for future policy
benefits are mortality, morbidity, policy lapse, renewal, retirement, investment
returns, inflation, expenses and other contingent events as appropriate to the
respective product type. Utilizing these assumptions, liabilities are
established on a block of business basis.
Future policy benefit liabilities for non-participating traditional life
insurance policies are equal to the aggregate of the present value of future
benefit payments and related expenses less the present value of future net
premiums. Assumptions as to mortality and persistency are based upon the
Company's experience when the basis of the liability is established. Interest
rates for future policy benefit liabilities on non-participating traditional
life insurance range from 4% to 7%.
Future policy benefit liabilities for individual and group traditional
fixed annuities after annuitization are equal to the present value of expected
future payments. Interest rates used in establishing such liabilities range from
3% to 9%.
Future policy benefit liabilities for non-medical health insurance are
calculated using the net level premium method and assumptions as to future
morbidity, withdrawals and interest, which provide a margin for adverse
deviation. The interest rate used in establishing such liabilities is 4%.
Future policy benefit liabilities for disabled lives are estimated using
the present value of benefits method and experience assumptions as to claim
terminations, expenses and interest. The interest rate used in establishing such
liabilities is 4%.
Liabilities for unpaid claims and claim expenses for the Company's workers'
compensation business are included in future policyholder benefits and are
estimated based upon the Company's historical experience and other actuarial
assumptions that consider the effects of current developments, anticipated
trends and risk
F-15
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
management programs, reduced for anticipated subrogation. The effects of changes
in such estimated liabilities are included in the results of operations in the
period in which the changes occur.
The Company establishes future policy benefit liabilities for minimum death
and income benefit guarantees relating to certain annuity contracts and
secondary guarantees relating to certain life policies as follows:
- Annuity guaranteed death benefit ("GMDB") liabilities are determined by
estimating the expected value of death benefits in excess of the
projected account balance and recognizing the excess ratably over the
accumulation period based on total expected assessments. The Company
regularly evaluates estimates used and adjusts the additional liability
balance, with a related charge or credit to benefit expense, if actual
experience or other evidence suggests that earlier assumptions should be
revised. The assumptions used in estimating the GMDB liabilities are
consistent with those used for amortizing DAC, and are thus subject to
the same variability and risk. The assumptions of investment performance
and volatility are consistent with the historical experience of the
Standard & Poor's 500 Index ("S&P"). The benefits used in calculating the
liabilities are based on the average benefits payable over a range of
scenarios.
- Guaranteed income benefit ("GMIB") liabilities are determined by
estimating the expected value of the income benefits in excess of the
projected account balance at any future date of annuitization and
recognizing the excess ratably over the accumulation period based on
total expected assessments. The Company regularly evaluates estimates
used and adjusts the additional liability balance, with a related charge
or credit to benefit expense, if actual experience or other evidence
suggests that earlier assumptions should be revised. The assumptions used
for estimating the GMIB liabilities are consistent with those used for
estimating the GMDB liabilities. In addition, the calculation of
guaranteed annuitization benefit liabilities incorporates an assumption
for the percentage of the potential annuitizations that may be elected by
the contractholder.
- Liabilities for universal and variable life secondary guarantees are
determined by estimating the expected value of death benefits payable
when the account balance is projected to be zero and recognizing those
benefits ratably over the accumulation period based on total expected
assessments. The Company regularly evaluates estimates used and adjusts
the additional liability balances, with a related charge or credit to
benefit expense, if actual experience or other evidence suggests that
earlier assumptions should be revised. The assumptions used in estimating
the secondary and paid up guarantee liabilities are consistent with those
used for amortizing DAC, and are thus subject to the same variability and
risk. The assumptions of investment performance and volatility for
variable products are consistent with historical S&P experience. The
benefits used in calculating the liabilities are based on the average
benefits payable over a range of scenarios.
The Company establishes policyholder account balances ("PAB") for
guaranteed minimum benefit riders relating to certain variable annuity products
as follows:
- Guaranteed minimum withdrawal benefit riders ("GMWB") guarantee the
contractholder a return of their purchase payment via partial
withdrawals, even if the account value is reduced to zero, provided that
the contractholder's cumulative withdrawals in a contract year do not
exceed a certain limit. The initial guaranteed withdrawal amount is equal
to the initial benefit base as defined in the contract (typically, the
initial purchase payments plus applicable bonus amounts). The GMWB is an
embedded derivative, which is measured at fair value separately from the
host variable annuity product.
- Guaranteed minimum accumulation benefit riders ("GMAB") provide the
contractholder, after a specified period of time determined at the time
of issuance of the variable annuity contract, with a minimum accumulation
of their purchase payments even if the account value is reduced to zero.
The initial guaranteed accumulation amount is equal to the initial
benefit base as defined in the contract (typically, the initial
F-16
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
purchase payments plus applicable bonus amounts). The GMAB is also an
embedded derivative, which is measured at fair value separately from the
host variable annuity product.
- For both GMWB and GMAB, the initial benefit base is increased by
additional purchase payments made within a certain time period and
decreases by benefits paid and/or withdrawal amounts. After a specified
period of time, the benefit base may also increase as a result of an
optional reset as defined in the contract.
- The fair values of the GMWB and GMAB riders are calculated based on
actuarial and capital market assumptions related to the projected cash
flows, including benefits and related contract charges, over the lives of
the contracts, incorporating expectations concerning policyholder
behavior. In measuring the fair value of GMWBs and GMABs, the Company
attributes a portion of the fees collected from the policyholder equal to
the present value of expected future guaranteed minimum withdrawal and
accumulation benefits (at inception). The changes in fair value are
reported in net investment gains (losses). Any additional fees represent
"excess" fees and are reported in universal life and investment-type
product policy fees. These riders may be more costly than expected in
volatile or declining markets, causing an increase in liabilities for
future policy benefits, negatively affecting net income.
The Company issues both GMWBs and GMABs directly and assumes risk relating
to GMWBs and GMABs issued by an affiliate through a financing agreement. Some of
the risks associated with GMWBs and GMABs directly written and assumed were
transferred to a different affiliate through another financing agreement and
included in premiums and other receivables.
The Company periodically reviews its estimates of actuarial liabilities for
future policy benefits and compares them with its actual experience. Differences
between actual experience and the assumptions used in pricing these policies,
guarantees and riders and in the establishment of the related liabilities result
in variances in profit and could result in losses. The effects of changes in
such estimated liabilities are included in the results of operations in the
period in which the changes occur.
PABs relate to investment-type contracts and universal life-type policies.
Investment-type contracts principally include traditional individual fixed
annuities in the accumulation phase and non-variable group annuity contracts.
PABs are equal to: (i) policy account values, which consist of an accumulation
of gross premium payments; (ii) credited interest, ranging from 0.5% to 12%,
less expenses, mortality charges, and withdrawals; and (iii) fair value purchase
accounting adjustments relating to the Acquisition.
Other Policyholder Funds
Other policyholder funds include policy and contract claims and unearned
revenue liabilities.
The liability for policy and contract claims generally relates to incurred
but not reported death, disability, and long-term care claims as well as claims
which have been reported but not yet settled. The liability for these claims is
based on the Company's estimated ultimate cost of settling all claims. The
Company derives estimates for the development of incurred but not reported
claims principally from actuarial analyses of historical patterns of claims and
claims development for each line of business. The methods used to determine
these estimates are continually reviewed. Adjustments resulting from this
continuous review process and differences between estimates and payments for
claims are recognized in policyholder benefits and claims expense in the period
in which the estimates are changed or payments are made.
The unearned revenue liability relates to universal life-type and
investment-type products and represents policy charges for services to be
provided in future periods. The charges are deferred as unearned revenue and
amortized using the product's estimated gross profits, similar to DAC. Such
amortization is recorded in universal life and investment-type product policy
fees.
F-17
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Recognition of Insurance Revenue and Related Benefits
Premiums related to traditional life and annuity policies with life
contingencies are recognized as revenues when due from policyholders.
Policyholder benefits and expenses are provided against such revenues to
recognize profits over the estimated lives of the policies. When premiums are
due over a significantly shorter period than the period over which benefits are
provided, any excess profit is deferred and recognized into operations in a
constant relationship to insurance in-force or, for annuities, the amount of
expected future policy benefit payments. Premiums related to non-medical health
and disability contracts are recognized on a pro rata basis over the applicable
contract term.
Deposits related to universal life-type and investment-type products are
credited to PABs. Revenues from such contracts consist of amounts assessed
against PABs for mortality, policy administration and surrender charges and are
recorded in universal life and investment-type product policy fees in the period
in which services are provided. Amounts that are charged to operations include
interest credited and benefit claims incurred in excess of related PABs.
Premiums related to workers' compensation contracts are recognized as
revenue on a pro rata basis over the applicable contract term.
Premiums, policy fees, policyholder benefits and expenses are presented net
of reinsurance.
Other Revenues
Other revenues include advisory fees, broker-dealer commissions and fees
and administrative service fees. Such fees and commissions are recognized in the
period in which services are performed.
Income Taxes
The Company and its includable life insurance subsidiaries file a
consolidated U.S. federal income tax return in accordance with the provisions of
the Internal Revenue Code of 1986, as amended ("Code"). Non-includable
subsidiaries file either a separate individual corporate tax return or a
separate consolidated tax return. Prior to the transfer of MLI-USA to MetLife
Connecticut, MLI-USA joined MetLife's includable affiliates in filing a federal
income tax return. MLI-USA joined MetLife Connecticut's includable affiliates as
of October 11, 2006.
The Company's accounting for income taxes represents management's best
estimate of various events and transactions.
Deferred income tax assets and liabilities resulting from temporary
differences between the financial reporting and tax bases of assets and
liabilities are measured at the balance sheet date using enacted tax rates
expected to apply to taxable income in the years the temporary differences are
expected to reverse.
For U.S. federal income tax purposes, an election in 2005 under Internal
Revenue Code Section 338 was made by the Company's parent, MetLife. As a result
of this election, the tax basis in the acquired assets and liabilities was
adjusted as of the Acquisition Date and the related deferred income tax asset
established for the taxable difference from the book basis.
The realization of deferred income tax assets depends upon the existence of
sufficient taxable income within the carryback or carryforward periods under the
tax law in the applicable tax jurisdiction. Valuation allowances are established
when management determines, based on available information, that it is more
likely than not that deferred income tax assets will not be realized.
Significant judgment is required in determining whether valuation
F-18
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
allowances should be established as well as the amount of such allowances. When
making such determination, consideration is given to, among other things, the
following:
<Table>
(i) future taxable income exclusive of reversing temporary differences
and carryforwards;
(ii) future reversals of existing taxable temporary differences;
(iii) taxable income in prior carryback years; and
(iv) tax planning strategies.
</Table>
The Company may be required to change its provision for income taxes in
certain circumstances. Examples of such circumstances include when the ultimate
deductibility of certain items is challenged by taxing authorities or when
estimates used in determining valuation allowances on deferred income tax assets
significantly change or when receipt of new information indicates the need for
adjustment in valuation allowances. Additionally, future events such as changes
in tax legislation could have an impact on the provision for income tax and the
effective tax rate. Any such changes could significantly affect the amounts
reported in the consolidated financial statements in the year these changes
occur.
The Company classifies interest recognized as interest expense and
penalties recognized as a component of income tax.
Reinsurance
The Company enters into reinsurance transactions as both a provider and a
purchaser of reinsurance for its insurance products.
For each of its reinsurance contracts, the Company determines if the
contract provides indemnification against loss or liability relating to
insurance risk in accordance with applicable accounting standards. The Company
reviews all contractual features, particularly those that may limit the amount
of insurance risk to which the reinsurer is subject or features that delay the
timely reimbursement of claims.
For reinsurance of existing in-force blocks of long-duration contracts that
transfer significant insurance risk, the difference, if any, between the amounts
paid (received), and the liabilities ceded (assumed) related to the underlying
contracts is considered the net cost of reinsurance at the inception of the
contract. The net cost of reinsurance is recorded as an adjustment to DAC and
recognized as a component of other expenses on a basis consistent with the way
the acquisition costs on the underlying reinsured contracts would be recognized.
Subsequent amounts paid (received) on the reinsurance of in-force blocks, as
well as amounts paid (received) related to new business, are recorded as ceded
(assumed) premiums and ceded (assumed) future policy benefit liabilities are
established.
The assumptions used to account for long-duration reinsurance contracts are
consistent with those used for the underlying contracts. Ceded policyholder and
contract related liabilities, other than those currently due, are reported gross
on the balance sheet.
Amounts currently recoverable under reinsurance contracts are included in
premiums and other receivables and amounts currently payable are included in
other liabilities. Such assets and liabilities relating to reinsurance contracts
with the same reinsurer may be recorded net on the balance sheet, if a right of
offset exists within the reinsurance contract.
Premiums, fees and policyholder benefits and claims include amounts assumed
under reinsurance contracts and are net of reinsurance ceded.
If the Company determines that a reinsurance contract does not expose the
reinsurer to a reasonable possibility of a significant loss from insurance risk,
the Company records the contract as a deposit, net of related expenses. Deposits
received are included in other liabilities and deposits made are included within
other assets. As amounts
F-19
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
are paid or received, consistent with the underlying contracts, the deposit
assets or liabilities are adjusted. Interest on such deposits is recorded as
other revenue or other expenses, as appropriate. Periodically, the Company
evaluates the adequacy of the expected payments or recoveries and adjusts the
deposit asset or liability through other revenue or other expenses, as
appropriate.
Amounts received from reinsurers for policy administration are reported in
other revenues.
Accounting for reinsurance requires extensive use of assumptions and
estimates, particularly related to the future performance of the underlying
business and the potential impact of counterparty credit risks. The Company
periodically reviews actual and anticipated experience compared to the
aforementioned assumptions used to establish assets and liabilities relating to
ceded and assumed reinsurance and evaluates the financial strength of
counterparties to its reinsurance agreements using criteria similar to that
evaluated in the security impairment process discussed previously.
Separate Accounts
Separate accounts are established in conformity with insurance laws and are
generally not chargeable with liabilities that arise from any other business of
the Company. Separate account assets are subject to general account claims only
to the extent the value of such assets exceeds the separate account liabilities.
The Company reports separately, as assets and liabilities, investments held in
separate accounts and liabilities of the separate accounts if (i) such separate
accounts are legally recognized; (ii) assets supporting the contract liabilities
are legally insulated from the Company's general account liabilities; (iii)
investments are directed by the contractholder; and (iv) all investment
performance, net of contract fees and assessments, is passed through to the
contractholder. The Company reports separate account assets meeting such
criteria at their fair value. Investment performance (including investment
income, net investment gains (losses) and changes in unrealized gains (losses))
and the corresponding amounts credited to contractholders of such separate
accounts are offset within the same line in the consolidated statements of
income.
The Company's revenues reflect fees charged to the separate accounts,
including mortality charges, risk charges, policy administration fees,
investment management fees and surrender charges. Separate accounts not meeting
the above criteria are combined on a line-by-line basis with the Company's
general account assets, liabilities, revenues and expenses.
Employee Benefit Plans
Eligible employees, sales representatives and retirees of the Company are
provided pension, postretirement and postemployment benefits under plans
sponsored and administered by Metropolitan Life Insurance Company ("Metropolitan
Life"), an affiliate of the Company. The Company's obligation and expense
related to these benefits is limited to the amount of associated expense
allocated from Metropolitan Life.
Foreign Currency
Balance sheet accounts are translated at the exchange rates in effect at
each year-end and income and expense accounts are translated at the average
rates of exchange prevailing during the year. Translation adjustments are
charged or credited directly to other comprehensive income or loss. Gains and
losses from foreign currency transactions are reported as net investment gains
(losses) in the period in which they occur.
Discontinued Operations
The results of operations of a component of the Company that either has
been disposed of or is classified as held-for-sale are reported in discontinued
operations if the operations and cash flows of the component have been or will
be eliminated from the ongoing operations of the Company as a result of the
disposal transaction and the
F-20
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Company will not have any significant continuing involvement in the operations
of the component after the disposal transaction.
Litigation Contingencies
The Company is a party to a number of legal actions and regulatory
investigations. Given the inherent unpredictability of these matters, it is
difficult to estimate the impact on the Company's consolidated financial
position. Liabilities are established when it is probable that a loss has been
incurred and the amount of the loss can be reasonably estimated. On a quarterly
and annual basis, the Company reviews relevant information with respect to
liabilities for litigation, regulatory investigations and litigation-related
contingencies to be reflected in the Company's consolidated financial
statements. It is possible that an adverse outcome in certain of the Company's
litigation and regulatory investigations, or the use of different assumptions in
the determination of amounts recorded could have a material effect upon the
Company's consolidated net income or cash flows in particular quarterly or
annual periods.
ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS
Derivative Financial Instruments
The Company has adopted guidance relating to derivative financial
instruments as follows:
- Effective January 1, 2006, the Company adopted prospectively SFAS No.
155, Accounting for Certain Hybrid Instruments ("SFAS 155"). SFAS 155
amends SFAS No. 133 and SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities ("SFAS
140"). SFAS 155 allows financial instruments that have embedded
derivatives to be accounted for as a whole, eliminating the need to
bifurcate the derivative from its host, if the holder elects to account
for the whole instrument on a fair value basis. In addition, among other
changes, SFAS 155:
<Table>
(i) clarifies which interest-only strips and principal-only strips are
not subject to the requirements of SFAS 133;
(ii) establishes a requirement to evaluate interests in securitized
financial assets to identify interests that are freestanding
derivatives or that are hybrid financial instruments that contain an
embedded derivative requiring bifurcation;
(iii) clarifies that concentrations of credit risk in the form of
subordination are not embedded derivatives; and
(iv) amends SFAS 140 to eliminate the prohibition on a qualifying
special-purpose entity ("QSPE") from holding a derivative financial
instrument that pertains to a beneficial interest other than another
derivative financial interest.
</Table>
The adoption of SFAS 155 did not have a material impact on the Company's
consolidated financial statements.
- Effective October 1, 2006, the Company adopted SFAS 133 Implementation
Issue No. B40, Embedded Derivatives: Application of Paragraph 13(b) to
Securitized Interests in Prepayable Financial Assets ("Issue B40"). Issue
B40 clarifies that a securitized interest in prepayable financial assets
is not subject to the conditions in paragraph 13(b) of SFAS 133, if it
meets both of the following criteria: (i) the right to accelerate the
settlement if the securitized interest cannot be controlled by the
investor; and (ii) the securitized interest itself does not contain an
embedded derivative (including an interest rate-related derivative) for
which bifurcation would be required other than an embedded derivative
that results solely from the embedded call options in the underlying
financial assets. The adoption of Issue B40 did not have a material
impact on the Company's consolidated financial statements.
F-21
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
- Effective January 1, 2006, the Company adopted prospectively SFAS 133
Implementation Issue No. B38, Embedded Derivatives: Evaluation of Net
Settlement with Respect to the Settlement of a Debt Instrument through
Exercise of an Embedded Put Option or Call Option ("Issue B38") and SFAS
133 Implementation Issue No. B39, Embedded Derivatives: Application of
Paragraph 13(b) to Call Options That Are Exercisable Only by the Debtor
("Issue B39"). Issue B38 clarifies that the potential settlement of a
debtor's obligation to a creditor occurring upon exercise of a put or
call option meets the net settlement criteria of SFAS 133. Issue B39
clarifies that an embedded call option, in which the underlying is an
interest rate or interest rate index, that can accelerate the settlement
of a debt host financial instrument should not be bifurcated and fair
valued if the right to accelerate the settlement can be exercised only by
the debtor (issuer/borrower) and the investor will recover substantially
all of its initial net investment. The adoption of Issues B38 and B39 did
not have a material impact on the Company's consolidated financial
statements.
Other Pronouncements
Effective November 15, 2006, the Company adopted U.S. Securities and
Exchange Commission ("SEC") Staff Accounting Bulletin ("SAB") No. 108,
Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements ("SAB 108"). SAB 108 provides
guidance on how prior year misstatements should be considered when quantifying
misstatements in current year financial statements for purposes of assessing
materiality. SAB 108 requires that registrants quantify errors using both a
balance sheet and income statement approach and evaluate whether either approach
results in quantifying a misstatement that, when relevant quantitative and
qualitative factors are considered, is material. SAB 108 permits companies to
initially apply its provisions by either restating prior financial statements or
recording a cumulative effect adjustment to the carrying values of assets and
liabilities as of January 1, 2006 with an offsetting adjustment to retained
earnings for errors that were previously deemed immaterial but are material
under the guidance in SAB 108. The adoption of SAB 108 did not have a material
impact on the Company's consolidated financial statements.
Effective January 1, 2006, the Company adopted SFAS No. 154, Accounting
Changes and Error Corrections, a replacement of APB Opinion No. 20 and FASB
Statement No. 3 ("SFAS 154"). SFAS 154 requires retrospective application to
prior periods' financial statements for a voluntary change in accounting
principle unless it is deemed impracticable. It also requires that a change in
the method of depreciation, amortization, or depletion for long-lived, non-
financial assets be accounted for as a change in accounting estimate rather than
a change in accounting principle. The adoption of SFAS 154 did not have a
material impact on the Company's consolidated financial statements.
In June 2005, the Emerging Issues Task Force ("EITF") reached consensus on
Issue No. 04-5, Determining Whether a General Partner, or the General Partners
as a Group, Controls a Limited Partnership or Similar Entity When the Limited
Partners Have Certain Rights ("EITF 04-5"). EITF 04-5 provides a framework for
determining whether a general partner controls and should consolidate a limited
partnership or a similar entity in light of certain rights held by the limited
partners. The consensus also provides additional guidance on substantive rights.
EITF 04-5 was effective after June 29, 2005 for all newly formed partnerships
and for any pre-existing limited partnerships that modified their partnership
agreements after that date. For all other limited partnerships, EITF 04-5
required adoption by January 1, 2006 through a cumulative effect of a change in
accounting principle recorded in opening equity or applied retrospectively by
adjusting prior period financial statements. The adoption of the provisions of
EITF 04-5 did not have a material impact on the Company's consolidated financial
statements.
Effective November 9, 2005, the Company prospectively adopted the guidance
in FASB Staff Position ("FSP") No. FAS 140-2, Clarification of the Application
of Paragraphs 40(b) and 40(c) of FAS 140 ("FSP 140-2"). FSP 140-2 clarified
certain criteria relating to derivatives and beneficial interests when
considering whether an entity qualifies as a QSPE. Under FSP 140-2, the criteria
must only be met at the date the QSPE issues beneficial interests or when a
derivative financial instrument needs to be replaced upon the occurrence of a
specified event
F-22
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
outside the control of the transferor. The adoption of FSP 140-2 did not have a
material impact on the Company's consolidated financial statements.
Effective July 1, 2005, the Company adopted SFAS No. 153, Exchanges of
Nonmonetary Assets, an amendment of APB Opinion No. 29 ("SFAS 153"). SFAS 153
amended prior guidance to eliminate the exception for nonmonetary exchanges of
similar productive assets and replaced it with a general exception for exchanges
of nonmonetary assets that do not have commercial substance. A nonmonetary
exchange has commercial substance if the future cash flows of the entity are
expected to change significantly as a result of the exchange. The provisions of
SFAS 153 were required to be applied prospectively for fiscal periods beginning
after June 15, 2005. The adoption of SFAS 153 did not have a material impact on
the Company's consolidated financial statements.
In June 2005, the FASB completed its review of EITF Issue No. 03-1, The
Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments ("EITF 03-1"). EITF 03-1 provides accounting guidance regarding the
determination of when an impairment of debt and marketable equity securities and
investments accounted for under the cost method should be considered other-than-
temporary and recognized in income. EITF 03-1 also requires certain quantitative
and qualitative disclosures for debt and marketable equity securities classified
as available-for-sale or held-to-maturity under SFAS No. 115, Accounting for
Certain Investments in Debt and Equity Securities, that are impaired at the
balance sheet date but for which an other-than-temporary impairment has not been
recognized. The FASB decided not to provide additional guidance on the meaning
of other-than-temporary impairment but has issued FSP Nos. FAS 115-1 and FAS
124-1, The Meaning of Other-Than-Temporary Impairment and its Application to
Certain Investments ("FSP 115-1"), which nullifies the accounting guidance on
the determination of whether an investment is other-than-temporarily impaired as
set forth in EITF 03-1. As required by FSP 115-1, the Company adopted this
guidance on a prospective basis, which had no material impact on the Company's
consolidated financial statements, and has provided the required disclosures.
Effective July 1, 2004, the Company adopted EITF Issue No. 03-16,
Accounting for Investments in Limited Liability Companies ("EITF 03-16"). EITF
03-16 provides guidance regarding whether a limited liability company should be
viewed as similar to a corporation or similar to a partnership for purposes of
determining whether a noncontrolling investment should be accounted for using
the cost method or the equity method of accounting. EITF 03-16 did not have a
material impact on the Company's consolidated financial statements.
Effective January 1, 2004, the Company adopted Statement of Position
("SOP") 03-1, Accounting and Reporting by Insurance Enterprises for Certain
Nontraditional Long Duration Contracts and for Separate Accounts ("SOP 03-1"),
as interpreted by a Technical Practice Aid ("TPA"), issued by the American
Institute of Certified Public Accountants ("AICPA") and FSP No. 97-1, Situations
in Which Paragraphs 17(b) and 20 of FASB Statement No. 97, Accounting and
Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for
Realized Gains and Losses from the Sale of Investments, Permit or Require
Accrual of an Unearned Revenue Liability ("FSP 97-1"). SOP 03-1 provides
guidance on: (i) the classification and valuation of long-duration contract
liabilities; (ii) the accounting for sales inducements; and (iii) separate
account presentation and valuation. As a result of the adoption of SOP 03-1,
effective January 1, 2004, the Company decreased the liability for future
policyholder benefits for changes in the methodology relating to various
guaranteed death and annuitization benefits and for determining liabilities for
certain universal life insurance contracts by $2 million, which was reported as
a cumulative effect of a change in accounting. This amount is net of
corresponding changes in DAC, including unearned revenue liability, under
certain variable annuity and life contracts and income tax. The application of
SOP 03-1 increased the Company's 2004 net income by $3 million, including the
cumulative effect of the adoption.
FUTURE ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities ("SFAS 159"). SFAS 159 permits all
entities the option to measure most financial instruments and certain
F-23
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
other items at fair value at specified election dates and to report related
unrealized gains and losses in earnings. The fair value option will generally be
applied on an instrument-by-instrument basis and is generally an irrevocable
election. SFAS 159 is effective for fiscal years beginning after November 15,
2007. The Company is evaluating which eligible financial instruments, if any, it
will elect to account for at fair value under SFAS 159 and the related impact on
the Company's consolidated financial statements.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements
("SFAS 157"). SFAS 157 defines fair value, establishes a framework for measuring
fair value in GAAP and requires enhanced disclosures about fair value
measurements. SFAS 157 does not require any new fair value measurements. The
pronouncement is effective for fiscal years beginning after November 15, 2007.
The guidance in SFAS 157 will be applied prospectively with the exception of:
(i) block discounts of financial instruments; and (ii) certain financial and
hybrid instruments measured at initial recognition under SFAS 133 which is to be
applied retrospectively as of the beginning of initial adoption (a limited form
of retrospective application). The Company is currently evaluating the impact of
SFAS 157 on the Company's consolidated financial statements. Implementation of
SFAS 157 will require additional disclosures in the Company's consolidated
financial statements.
In June 2006, the FASB issued FIN No. 48, Accounting for Uncertainty in
Income Taxes -- an interpretation of FASB Statement No. 109 ("FIN 48"). FIN 48
clarifies the accounting for uncertainty in income tax recognized in a company's
financial statements. FIN 48 requires companies to determine whether it is "more
likely than not" that a tax position will be sustained upon examination by the
appropriate taxing authorities before any part of the benefit can be recorded in
the financial statements. It also provides guidance on the recognition,
measurement and classification of income tax uncertainties, along with any
related interest and penalties. Previously recorded income tax benefits that no
longer meet this standard are required to be charged to earnings in the period
that such determination is made. FIN 48 will also require significant additional
disclosures. FIN 48 is effective for fiscal years beginning after December 15,
2006. Based upon the Company's evaluation work completed to date, the Company
expects to recognize a reduction to the January 1, 2007 balance of retained
earnings of less than $1 million.
In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of
Financial Assets -- an amendment of FASB Statement No. 140 ("SFAS 156"). Among
other requirements, SFAS 156 requires an entity to recognize a servicing asset
or servicing liability each time it undertakes an obligation to service a
financial asset by entering into a servicing contract in certain situations.
SFAS 156 will be applied prospectively and is effective for fiscal years
beginning after September 15, 2006. The Company does not expect SFAS 156 to have
a material impact on the Company's consolidated financial statements.
In September 2005, the AICPA issued SOP 05-1, Accounting by Insurance
Enterprises for Deferred Acquisition Costs in Connection With Modifications or
Exchanges of Insurance Contracts ("SOP 05-1"). SOP 05-1 provides guidance on
accounting by insurance enterprises for DAC on internal replacements of
insurance and investment contracts other than those specifically described in
SFAS No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long-
Duration Contracts and for Realized Gains and Losses from the Sale of
Investments. SOP 05-1 defines an internal replacement as a modification in
product benefits, features, rights, or coverages that occurs by the exchange of
a contract for a new contract, or by amendment, endorsement, or rider to a
contract, or by the election of a feature or coverage within a contract. It is
effective for internal replacements occurring in fiscal years beginning after
December 15, 2006.
In addition, in February 2007, related TPAs were issued by the AICPA to
provide further clarification of SOP 05-1. The TPAs are effective concurrently
with the adoption of the SOP. Based on the Company's interpretation of SOP 05-1
and related TPAs, the adoption of SOP 05-1 will result in a reduction to DAC and
VOBA relating primarily to the Company's group life and health insurance
contracts that contain certain rate reset provisions. The Company estimates that
the adoption of SOP 05-1 as of January 1, 2007 will result in a cumulative
effect adjustment of between $75 million and $95 million, net of income tax,
which will be recorded as a reduction
F-24
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
to retained earnings. In addition, the Company estimates that accelerated DAC
and VOBA amortization will reduce 2007 net income by approximately $5 million to
$15 million, net of income tax.
2. ACQUISITION OF METLIFE INSURANCE COMPANY OF CONNECTICUT BY METLIFE, INC.
FROM CITIGROUP INC.
On the Acquisition Date, MetLife Connecticut became a subsidiary of
MetLife. MetLife Connecticut, together with substantially all of Citigroup
Inc.'s international insurance businesses, excluding Primerica Life Insurance
Company and its subsidiaries, were acquired by MetLife from Citigroup for $12.1
billion. Prior to the Acquisition, MetLife Connecticut was a subsidiary of
Citigroup Insurance Holding Company ("CIHC"). Primerica was distributed via
dividend from MetLife Connecticut to CIHC on June 30, 2005 in contemplation of
the Acquisition. The total consideration paid by MetLife for the purchase
consisted of $11.0 billion in cash and 22,436,617 shares of MetLife's common
stock with a market value of $1.0 billion to Citigroup and $100 million in other
transaction costs.
In accordance with FASB SFAS No. 141, Business Combinations, and SFAS No.
142, Goodwill and Other Intangible Assets, the Acquisition was accounted for by
MetLife using the purchase method of accounting, which requires that the assets
and liabilities of MetLife Connecticut be identified and measured at their fair
value as of the acquisition date.
Final Purchase Price Allocation and Goodwill
The purchase price paid by MetLife has been allocated to the assets
acquired and liabilities assumed using management's best estimate of their fair
values as of the Acquisition Date. The computation of the purchase price and the
allocation of the purchase price to the net assets acquired based upon their
respective fair values as of July 1, 2005, and the resulting goodwill, as
revised, are presented below.
Based upon MetLife's method of allocating the purchase price to the
entities acquired, the purchase price attributed to MetLife Connecticut
increased by $40 million. The increase in purchase price was a result of
additional consideration paid in 2006 by MetLife to Citigroup of $115 million
and an increase in transaction costs of $3 million, offset by a $4 million
reduction in restructuring costs for a total purchase price increase of $114
million.
The allocation of purchase price was updated as a result of the additional
purchase price attributed to MetLife Connecticut of $40 million, an increase of
$15 million in the value of the future policy benefit liabilities and other
policyholder funds resulting from the finalization of the evaluation of the
Travelers underwriting criteria, an increase in securities of $24 million
resulting from the finalization of the determination of the fair value of such
securities, an increase in other liabilities of $2 million due to the receipt of
additional information, all resulting in a net impact of the aforementioned
adjustments increasing deferred income tax assets by $4 million. Goodwill
increased by $29 million as a consequence of such revisions to the purchase
price and the purchase price allocation.
F-25
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<Table>
<Caption>
AS OF JULY 1, 2005
-------------------
(IN MILLIONS)
TOTAL PURCHASE PRICE PAID BY METLIFE...................... $12,084
Purchase price attributed to other affiliates........... 5,260
-------
Purchase price attributed to MetLife Connecticut........ 6,824
NET ASSETS OF METLIFE CONNECTICUT ACQUIRED PRIOR TO
PURCHASE ACCOUNTING ADJUSTMENTS......................... $8,207
ADJUSTMENTS TO REFLECT ASSETS ACQUIRED AT FAIR VALUE:
Fixed maturity securities available-for-sale............ (2)
Mortgage loans on real estate........................... 72
Real estate and real estate joint ventures held-for-
investment........................................... 39
Other limited partnership interests..................... 48
Other invested assets................................... (36)
Premiums and other receivables.......................... 1,001
Elimination of historical deferred policy acquisition
costs................................................ (3,052)
Value of business acquired.............................. 3,490
Value of distribution agreements and customer
relationships acquired............................... 73
Net deferred income tax asset........................... 1,751
Elimination of historical goodwill...................... (196)
Other assets............................................ (11)
ADJUSTMENTS TO REFLECT LIABILITIES ASSUMED AT FAIR VALUE:
Future policy benefits.................................. (3,766)
Policyholder account balances........................... (1,870)
Other liabilities....................................... 191
------
NET FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES
ASSUMED................................................. 5,939
-------
GOODWILL RESULTING FROM THE ACQUISITION ATTRIBUTED TO
METLIFE CONNECTICUT..................................... $ 885
=======
</Table>
Goodwill resulting from the Acquisition has been allocated to the Company's
segments, as well as Corporate & Other, as follows:
<Table>
<Caption>
AS OF JULY 1, 2005
------------------
(IN MILLIONS)
Institutional.................................................... $312
Individual....................................................... 163
Corporate & Other................................................ 410
----
TOTAL.......................................................... $885
====
</Table>
The entire amount of goodwill is expected to be deductible for income tax
purposes.
F-26
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONDENSED STATEMENT OF NET ASSETS ACQUIRED
The condensed statement of net assets acquired reflects the fair value of
MetLife Connecticut's net assets as follows:
<Table>
<Caption>
AS OF JULY 1, 2005
------------------
(IN MILLIONS)
ASSETS
Fixed maturity securities available-for-sale................... $41,210
Trading securities............................................. 555
Equity securities available-for-sale........................... 641
Mortgage loans on real estate.................................. 2,363
Policy loans................................................... 884
Real estate and real estate joint ventures held-for-
investment.................................................. 126
Other limited partnership interests............................ 1,120
Short-term investments......................................... 2,225
Other invested assets.......................................... 1,205
-------
Total investments........................................... 50,329
Cash and cash equivalents...................................... 443
Accrued investment income...................................... 494
Premiums and other receivables................................. 4,688
Value of business acquired..................................... 3,490
Goodwill....................................................... 885
Other intangible assets........................................ 73
Deferred income tax asset...................................... 1,178
Other assets................................................... 730
Separate account assets........................................ 30,427
-------
Total assets acquired....................................... 92,737
-------
LIABILITIES:
Future policy benefits......................................... 17,565
Policyholder account balances.................................. 34,251
Other policyholder funds....................................... 115
Current income tax............................................. 36
Other liabilities.............................................. 3,519
Separate account liabilities................................... 30,427
-------
Total liabilities assumed................................... 85,913
-------
Net assets acquired......................................... $ 6,824
=======
</Table>
Other Intangible Assets
VOBA reflects the estimated fair value of in-force contracts acquired and
represents the portion of the purchase price that is allocated to the value of
the right to receive future cash flows from the life insurance and annuity
contracts in-force at the Acquisition Date. VOBA is based on actuarially
determined projections, by each block of
F-27
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
business, of future policy and contract charges, premiums, mortality and
morbidity, separate account performance, surrenders, operating expenses,
investment returns and other factors. Actual experience on the purchased
business may vary from these projections. If estimated gross profits or premiums
differ from expectations, the amortization of VOBA is adjusted to reflect actual
experience.
The value of the other identifiable intangibles reflects the estimated fair
value of MetLife Connecticut's distribution agreements and customer
relationships acquired at July 1, 2005 and will be amortized in relation to the
expected economic benefits of the agreements. If actual experience under the
distribution agreements or with customer relationships differs from
expectations, the amortization of these intangibles will be adjusted to reflect
actual experience. See Notes 8 and 14 for additional information on the value of
distribution agreements ("VODA") acquired from Citigroup.
The use of discount rates was necessary to establish the fair value of
VOBA, as well as the other identifiable intangible assets. In selecting the
appropriate discount rates, management considered its weighted average cost of
capital, as well as the weighted average cost of capital required by market
participants. A discount rate of 11.5% was used to value these intangible
assets.
The fair values of business acquired, distribution agreements and customer
relationships acquired are as follows:
<Table>
<Caption>
WEIGHTED AVERAGE
AS OF JULY 1, 2005 AMORTIZATION PERIOD
------------------ -------------------
(IN MILLIONS) (IN YEARS)
Value of business acquired.......................... $3,490 16
Value of distribution agreements and customer
relationships acquired............................ 73 16
------
Total value of intangible assets acquired,
excluding goodwill............................. $3,563 16
======
</Table>
3. CONTRIBUTION OF METLIFE CONNECTICUT FROM METLIFE, INC.
On October 11, 2006, MetLife Connecticut and MetLife Investors Group, Inc.
("MLIG"), both subsidiaries of MetLife, entered into a Transfer Agreement
("Transfer Agreement"), pursuant to which MetLife Connecticut agreed to acquire
all of the outstanding stock of MLI-USA from MLIG in exchange for shares of
MetLife Connecticut's common stock. To effectuate the exchange of shares,
MetLife returned 10,000,000 shares just prior to the closing of the transaction
and retained 30,000,000 shares representing 100% of the then issued and
outstanding shares of MetLife Connecticut. MetLife Connecticut issued 4,595,317
new shares to MLIG in exchange for all of the outstanding common stock of MLI-
USA. After the closing of the transaction, 34,595,317 shares of MetLife
Connecticut's common stock are outstanding, of which MLIG holds 4,595,317
shares, with the remaining shares held by MetLife.
In connection with the Transfer Agreement on October 11, 2006, MLIG
transferred to MetLife Connecticut certain assets and liabilities, including
goodwill, VOBA and deferred income tax liabilities, which remain outstanding
from MetLife's acquisition of MLIG on October 30, 1997. The assets and
liabilities have been included in the financial data of the Company for all
periods presented.
The transfer of MLI-USA to MetLife Connecticut was a transaction between
entities under common control. Since MLI-USA was the original entity under
common control, for financial statement reporting purposes, MLI-USA is
considered the accounting acquirer of MetLife Connecticut. Accordingly, all
financial data included in these financial statements periods prior to July 1,
2005 is that of MLI-USA. For periods subsequent to July 1, 2005, MetLife
Connecticut has been combined with MLI-USA in a manner similar to a pooling of
interests. Information
F-28
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
regarding the consolidated statements of income of the Company for the years
ended December 31, 2006 and 2005 is as follows:
<Table>
<Caption>
UNAUDITED
------------------
THREE MONTHS ENDED YEAR ENDED
UNAUDITED DECEMBER 31, 2006 DECEMBER 31, 2006
-------------------------------------------------------------- ------------------ -----------------
NINE MONTHS ENDED SEPTEMBER 30, 2006
--------------------------------------------------------------
ASSETS AND LIABILITIES
OUTSTANDING
FROM METLIFE'S
ACQUISITION CONSOLIDATED
MICC HISTORICAL MLI-USA OF MLIG COMPANY CONSOLIDATED COMPANY
--------------- ------- ---------------------- ------------ -------------------------------------
(IN MILLIONS)
Total revenues......... $2,509 $623 $-- $3,132 $974 $4,106
Total expenses......... $1,905 $486 $-- $2,391 $890 $3,281
------ ---- --- ------ ---- ------
Income before provision
for income tax....... 604 137 -- 741 $ 84 825
Provision for income
tax.................. 177 35 -- 212 $ 16 228
------ ---- --- ------ ---- ------
Net income............. $ 427 $102 $-- $ 529 $ 68 $ 597
====== ==== === ====== ==== ======
</Table>
<Table>
<Caption>
YEAR ENDED DECEMBER 31, 2005
-----------------------------------------------
ASSETS AND LIABILITIES
SIX MONTHS ENDED OUTSTANDING
DECEMBER 31, 2005 FROM METLIFE'S
----------------- ACQUISITION CONSOLIDATED
MICC HISTORICAL MLI-USA OF MLIG COMPANY
----------------- ------- ---------------------- ------------
(IN MILLIONS)
Total revenues..................... $1,749 $766 $-- $2,515
Total expenses..................... $1,410 $561 $(3) $1,968
------ ---- --- ------
Income before provision for income
tax.............................. 339 205 3 547
Provision for income tax........... 98 57 1 156
------ ---- --- ------
Net income......................... $ 241 $148 $ 2 $ 391
====== ==== === ======
</Table>
The par value of the common stock presented in the statement of
stockholders' equity for periods prior to the Acquisition Date has been adjusted
to reflect the par value of the MetLife Connecticut shares issued to MLIG in
exchange for MLI-USA's common stock. Information regarding the adjustments to
stockholders' equity is as follows:
<Table>
<Caption>
ACCUMULATED
OTHER
COMPREHENSIVE
INCOME
----------------
ADDITIONAL NET UNREALIZED
COMMON PAID IN RETAINED INVESTMENT GAINS
STOCK CAPITAL EARNINGS (LOSSES) TOTAL
------ ---------- -------- ---------------- -----
Balance of MLI-USA's equity at January 1,
2004 $ 2 $ 98 $163 $39 $302
Issuance of MetLife Connecticut's common
stock to MLIG 11 (1) (11) -- -- --
Elimination of MLI-USA's common stock (2) (2) 2 -- -- --
Assets and liabilities outstanding from
MetLife's acquisition of MLIG -- 82 -- (7) 75
--- ---- ---- --- ----
Balance of MICC's equity at January 1, 2004 $11 $171 $163 $32 $377
=== ==== ==== === ====
</Table>
F-29
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
- --------
(1) Represents the issuance of 4,595,317 shares of MetLife Connecticut's
common stock, at $2.50 par value, by MetLife Connecticut to MLIG in
exchange for all the outstanding common stock of MLI-USA, for a total
adjustment of $11 million.
(2) Represents the elimination of MLI-USA's common stock of $2 million.
The par value of the MetLife Connecticut common stock purchased by MetLife has
been adjusted to reflect the return of the MetLife Connecticut common stock by
MetLife in connection with the transfer of MetLife Connecticut to MLI-USA as
follows:
<Table>
<Caption>
ACCUMULATED
OTHER
COMPREHENSIVE
INCOME
----------------
ADDITIONAL NET UNREALIZED
COMMON PAID IN RETAINED INVESTMENT GAINS
STOCK CAPITAL EARNINGS (LOSSES) TOTAL
------ ---------- -------- ---------------- ------
MetLife Connecticut's common stock
purchased by MetLife in the Acquisition
on July 1, 2005 $100 $6,684 $-- $-- $6,784
Return of MetLife Connecticut's common
stock from MetLife (25) (1) 25 -- -- --
---- ------ --- --- ------
MetLife Connecticut's common stock
purchased by MetLife on July 1, 2005, as
adjusted $ 75 $6,709 $-- $-- $6,784
==== ====== === === ======
</Table>
- --------
(1) Represents the return of 10,000,000 shares of MetLife Connecticut's
common stock, at $2.50 par value, by MetLife to MetLife Connecticut in
anticipation of the acquisition of MLI-USA by MetLife Connecticut, for a
total adjustment of $25 million.
The following unaudited pro forma condensed consolidated financial
information presents the results of operations for the Company assuming the
MetLife Connecticut acquisition had been effected as of January 1, 2005. This
unaudited pro forma information does not necessarily represent what the
Company's actual results of operations would have been if the acquisition had
occurred as of the date indicated or what such results would be for any future
periods.
<Table>
<Caption>
UNAUDITED
------------------------------------
YEAR ENDED SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 2005 JUNE 30, 2005 DECEMBER 31, 2005
----------------- ---------------- -----------------
CONSOLIDATED PRO FORMA PRO FORMA
MICC
COMPANY HISTORICAL MICC
----------------- ---------------- -----------------
(IN MILLIONS)
Total revenues $2,515 $2,324 $4,839
Total expenses $1,968 $1,523 $3,491
------ ------ ------
Income before provision for income tax 547 801 1,348
Provision for income tax 156 226 382
------ ------ ------
Net income $ 391 $ 575 $ 966
====== ====== ======
</Table>
F-30
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
4. INVESTMENTS
FIXED MATURITY AND EQUITY SECURITIES AVAILABLE-FOR-SALE
The following tables present the cost or amortized cost, gross unrealized
gain and loss, and estimated fair value of the Company's fixed maturity and
equity securities, the percentage that each sector represents by the total fixed
maturity securities holdings and by the total equity securities holdings at:
<Table>
<Caption>
DECEMBER 31, 2006
----------------------------------------------
GROSS
COST OR UNREALIZED
AMORTIZED ------------- ESTIMATED % OF
COST GAIN LOSS FAIR VALUE TOTAL
--------- ---- ---- ---------- -----
(IN MILLIONS)
U.S. corporate securities.................... $17,331 $101 $424 $17,008 35.5%
Residential mortgage-backed securities....... 11,951 40 78 11,913 24.9
Foreign corporate securities................. 5,563 64 128 5,499 11.5
U.S. Treasury/agency securities.............. 5,455 7 126 5,336 11.2
Commercial mortgage-backed securities........ 3,353 19 47 3,325 6.9
Asset-backed securities...................... 3,158 14 10 3,162 6.6
State and political subdivision securities... 1,062 6 38 1,030 2.2
Foreign government securities................ 533 45 5 573 1.2
------- ---- ---- ------- -----
Total fixed maturity securities............ $48,406 $296 $856 $47,846 100.0%
======= ==== ==== ======= =====
Non-redeemable preferred stock............... $ 671 $ 22 $ 9 $ 684 86.0%
Common stock................................. 106 6 1 111 14.0
------- ---- ---- ------- -----
Total equity securities.................... $ 777 $ 28 $ 10 $ 795 100.0%
======= ==== ==== ======= =====
</Table>
<Table>
<Caption>
DECEMBER 31, 2005
----------------------------------------------
GROSS
COST OR UNREALIZED
AMORTIZED ------------- ESTIMATED % OF
COST GAIN LOSS FAIR VALUE TOTAL
--------- ---- ---- ---------- -----
(IN MILLIONS)
U.S. corporate securities.................... $18,416 $ 96 $415 $18,097 34.3%
Residential mortgage-backed securities....... 12,398 17 131 12,284 23.4
Foreign corporate securities................. 5,733 50 143 5,640 10.7
U.S. Treasury/agency securities.............. 6,448 24 61 6,411 12.2
Commercial mortgage-backed securities........ 5,157 12 82 5,087 9.7
Asset-backed securities...................... 3,899 10 16 3,893 7.4
State and political subdivision securities... 633 -- 25 608 1.2
Foreign government securities................ 547 25 3 569 1.1
------- ---- ---- ------- -----
Total fixed maturity securities............ $53,231 $234 $876 $52,589 100.0%
======= ==== ==== ======= =====
Non-redeemable preferred stock............... $ 327 $ 1 $ 5 $ 323 76.7%
Common stock................................. 97 4 3 98 23.3
------- ---- ---- ------- -----
Total equity securities.................... $ 424 $ 5 $ 8 $ 421 100.0%
======= ==== ==== ======= =====
</Table>
F-31
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The Company held foreign currency derivatives with notional amounts of $472
million and $275 million to hedge the exchange rate risk associated with foreign
denominated fixed maturity securities at December 31, 2006 and 2005,
respectively.
Excluding investments in U.S. Treasury securities and obligations of U.S.
government corporations and agencies, the Company is not exposed to any
significant concentration of credit risk in its fixed maturity securities
portfolio.
The Company held fixed maturity securities at estimated fair values that
were below investment grade or not rated by an independent rating agency that
totaled $3.2 billion and $3.3 billion at December 31, 2006 and 2005,
respectively. These securities had a net unrealized gain (loss) of $51 million
and ($33) million at December 31, 2006 and 2005, respectively. Non-income
producing fixed maturity securities were $6 million and $3 million at December
31, 2006 and 2005, respectively. Unrealized gains (losses) associated with non-
income producing fixed maturity securities were $1 million and ($5) million at
December 31, 2006 and 2005, respectively.
The cost or amortized cost and estimated fair value of fixed maturity
securities, by contractual maturity date (excluding scheduled sinking funds),
are shown below:
<Table>
<Caption>
DECEMBER 31,
-----------------------------------------------
2006 2005
---------------------- ----------------------
COST OR COST OR
AMORTIZED ESTIMATED AMORTIZED ESTIMATED
COST FAIR VALUE COST FAIR VALUE
--------- ---------- --------- ----------
(IN MILLIONS)
Due in one year or less....................... $ 1,620 $ 1,616 $ 1,411 $ 1,405
Due after one year through five years......... 9,843 9,733 10,594 10,490
Due after five years through ten years........ 7,331 7,226 9,556 9,382
Due after ten years........................... 11,150 10,871 10,216 10,048
------- ------- ------- -------
Subtotal.................................... 29,944 29,446 31,777 31,325
Mortgage-backed and asset-backed securities... 18,462 18,400 21,454 21,264
------- ------- ------- -------
Total fixed maturity securities............. $48,406 $47,846 $53,231 $52,589
======= ======= ======= =======
</Table>
Fixed maturity securities not due at a single maturity date have been
included in the above table in the year of final contractual maturity. Actual
maturities may differ from contractual maturities due to the exercise of
prepayment options.
Sales or disposals of fixed maturity and equity securities classified as
available-for-sale are as follows:
<Table>
<Caption>
YEARS ENDED DECEMBER 31,
-----------------------------------------
2006 2005 2004
------------ -------------- ---------
(IN MILLIONS)
Proceeds........................................ $ 23,901 $ 22,241 $ 473
Gross investment gains.......................... $ 73 $ 48 $ 6
Gross investment losses......................... $ (519) $ (347) $(10)
</Table>
F-32
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
UNREALIZED LOSS FOR FIXED MATURITY AND EQUITY SECURITIES AVAILABLE-FOR-SALE
The following tables present the estimated fair values and gross unrealized
loss of the Company's fixed maturity securities (aggregated by sector) and
equity securities in an unrealized loss position, aggregated by length of time
that the securities have been in a continuous unrealized loss position at:
<Table>
<Caption>
DECEMBER 31, 2006
----------------------------------------------------------------------
EQUAL TO OR GREATER
LESS THAN 12 MONTHS THAN 12 MONTHS TOTAL
---------------------- ---------------------- ----------------------
GROSS GROSS GROSS
ESTIMATED UNREALIZED ESTIMATED UNREALIZED ESTIMATED UNREALIZED
FAIR VALUE LOSS FAIR VALUE LOSS FAIR VALUE LOSS
---------- ---------- ---------- ---------- ---------- ----------
(IN MILLIONS, EXCEPT NUMBER OF SECURITIES)
U.S. corporate securities........... $ 4,895 $104 $ 7,543 $320 $12,438 $424
Residential mortgage-backed
securities........................ 4,113 20 3,381 58 7,494 78
Foreign corporate securities........ 1,381 29 2,547 99 3,928 128
U.S. Treasury/agency securities..... 2,995 48 1,005 78 4,000 126
Commercial mortgage-backed
securities........................ 852 6 1,394 41 2,246 47
Asset-backed securities............. 965 3 327 7 1,292 10
State and political subdivision
securities........................ 29 2 414 36 443 38
Foreign government securities....... 51 1 92 4 143 5
------- ---- ------- ---- ------- ----
Total fixed maturity securities..... $15,281 $213 $16,703 $643 $31,984 $856
======= ==== ======= ==== ======= ====
Equity securities................... $ 149 $ 3 $ 188 $ 7 $ 337 $ 10
======= ==== ======= ==== ======= ====
Total number of securities in an
unrealized loss position.......... 1,955 2,318 4,273
======= ======= =======
</Table>
<Table>
<Caption>
DECEMBER 31, 2005
---------------------------------------------------------------------
EQUAL TO OR
LESS THAN 12 GREATER
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)
U.S. corporate securities......... $14,412 $413 $ 40 $ 2 $14,452 $415
Residential mortgage-backed
securities...................... 9,142 129 61 2 9,203 131
Foreign corporate securities...... 4,409 142 23 1 4,432 143
U.S. Treasury/agency securities... 4,171 61 -- -- 4,171 61
Commercial mortgage-backed
securities...................... 4,040 82 5 -- 4,045 82
Asset-backed securities........... 1,890 16 11 -- 1,901 16
State and political subdivision
securities...................... 550 25 -- -- 550 25
Foreign government securities..... 155 3 2 -- 157 3
------- ---- ---- --- ------- ----
Total fixed maturity securities... $38,769 $871 $142 $ 5 $38,911 $876
======= ==== ==== === ======= ====
Equity securities................. $ 214 $ 8 $ -- $-- $ 214 $ 8
======= ==== ==== === ======= ====
Total number of securities in an
unrealized loss position........ 5,061 47 5,108
======= ==== =======
</Table>
F-33
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AGING OF GROSS UNREALIZED LOSS FOR FIXED MATURITY AND EQUITY SECURITIES
AVAILABLE-FOR-SALE
The following tables present the cost or amortized cost, gross unrealized
loss and number of securities for fixed maturity securities 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:
<Table>
<Caption>
DECEMBER 31, 2006
---------------------------------------------------
GROSS
COST OR UNREALIZED NUMBER OF
AMORTIZED COST LOSSES SECURITIES
---------------- -------------- -----------------
LESS LESS LESS
THAN 20% OR THAN 20% OR THAN 20% OR
20% MORE 20% MORE 20% MORE
------- ------ ------ ------ ------ ---------
(IN MILLIONS, EXCEPT NUMBER OF SECURITIES)
Less than six months............... $12,922 $ 9 $150 $ 4 1,537 15
Six months or greater but less than
nine months...................... 568 -- 6 -- 78 1
Nine months or greater but less
than twelve months............... 2,134 14 52 4 323 1
Twelve months or greater........... 17,540 -- 650 -- 2,318 --
------- --- ---- --- ----- --
Total............................ $33,164 $23 $858 $ 8 4,256 17
======= === ==== === ===== ==
</Table>
<Table>
<Caption>
DECEMBER 31, 2005
---------------------------------------------------
COST OR GROSS
AMORITIZED UNREALIZED NUMBER OF
COST LOSSES SECURITIES
---------------- -------------- -----------------
LESS LESS LESS
THAN 20% OR THAN 20% OR THAN 20% OR
20% MORE 20% MORE 20% MORE
------- ------ ------ ------ ------ ---------
(IN MILLIONS, EXCEPT NUMBER OF SECURITIES)
Less than six months............... $39,461 $81 $844 $30 4,960 50
Six months or greater but less than
nine months...................... 204 -- 2 -- 16 --
Nine months or greater but less
than twelve months............... 116 -- 3 -- 35 --
Twelve months or greater........... 147 -- 5 -- 47 --
------- --- ---- --- ----- --
Total............................ $39,928 $81 $854 $30 5,058 50
======= === ==== === ===== ==
</Table>
At December 31, 2006, $858 million of unrealized losses related to
securities with an unrealized loss position of less than 20% of cost or
amortized cost, which represented 3% of the cost or amortized cost of such
securities. At December 31, 2005, $854 million of unrealized losses related to
securities with an unrealized loss position of less than 20% of cost or
amortized cost, which represented 2% of the cost or amortized cost of such
securities.
At December 31, 2006, $8 million of unrealized losses related to securities
with an unrealized loss position of 20% or more of cost or amortized cost, which
represented 35% of the cost or amortized cost of such securities. Of such
unrealized losses of $8 million, $4 million related to securities that were in
an unrealized loss position for a period of less than six months. At December
31, 2005, $30 million of unrealized losses related to securities with an
unrealized loss position of 20% or more of cost or amortized cost, which
represented 37% of the cost or amortized cost of such securities. Of such
unrealized losses of $30 million, all related to securities that were in an
unrealized loss position for a period of less than six months.
The Company held two fixed maturity securities and equity securities each
with a gross unrealized loss at December 31, 2006 of greater than $10 million.
These securities represented 3%, or $25 million in the aggregate, of the gross
unrealized loss on fixed maturity and equity securities.
F-34
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
At December 31, 2006 and 2005, the Company had $866 million and $884
million, respectively, of gross unrealized loss related to its fixed maturity
and equity securities. These securities are concentrated, calculated as a
percentage of gross unrealized loss, as follows:
<Table>
<Caption>
DECEMBER
31,
-----------
2006 2005
---- ----
SECTOR:
U.S. corporate securities........................................ 49% 47%
Residential mortgage-backed securities........................... 9 15
Foreign corporate securities..................................... 15 16
U.S. Treasury/agency securities.................................. 15 7
Commercial mortgage-backed securities............................ 5 9
Other............................................................ 7 6
--- ---
Total......................................................... 100% 100%
=== ===
INDUSTRY:
Industrial....................................................... 26% 25%
Finance.......................................................... 18 17
Government....................................................... 15 7
Mortgage-backed.................................................. 14 24
Utility.......................................................... 10 6
Other............................................................ 17 21
--- ---
Total......................................................... 100% 100%
=== ===
</Table>
As described more fully in Note 1, the Company performs a regular
evaluation, on a security-by-security basis, of its investment holdings in
accordance with its impairment policy in order to evaluate whether such
securities are other-than-temporarily impaired. One of the criteria which the
Company considers in its other-than-temporary impairment analysis is its intent
and ability to hold securities for a period of time sufficient to allow for the
recovery of their value to an amount equal to or greater than cost or amortized
cost. The Company's intent and ability to hold securities considers broad
portfolio management objectives such as asset/liability duration management,
issuer and industry segment exposures, interest rate views and the overall total
return focus. In following these portfolio management objectives, changes in
facts and circumstances that were present in past reporting periods may trigger
a decision to sell securities that were held in prior reporting periods.
Decisions to sell are based on current conditions or the Company's need to shift
the portfolio to maintain its portfolio management objectives including
liquidity needs or duration targets on asset/liability managed portfolios. The
Company attempts to anticipate these types of changes and if a sale decision has
been made on an impaired security and that security is not expected to recover
prior to the expected time of sale, the security will be deemed other-than-
temporarily impaired in the period that the sale decision was made and an other-
than-temporary impairment loss will be recognized.
Based upon the Company's current evaluation of the securities in accordance
with its impairment policy, the cause of the decline being principally
attributable to the general rise in rates during the holding period, and the
Company's current intent and ability to hold the fixed maturity and equity
securities with unrealized losses for a period of time sufficient for them to
recover, the Company has concluded that the aforementioned securities are not
other-than-temporarily impaired.
F-35
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SECURITIES LENDING
The Company participates in a securities lending program whereby blocks of
securities, which are included in fixed maturity and equity securities, are
loaned to third parties, primarily major brokerage firms. The Company requires a
minimum of 102% of the fair value of the loaned securities to be separately
maintained as collateral for the loans. Securities with a cost or amortized cost
of $8.8 billion and $9.4 billion and an estimated fair value of $8.6 billion and
$9.3 billion were on loan under the program at December 31, 2006 and 2005,
respectively. Securities loaned under such transactions may be sold or repledged
by the transferee. The Company was liable for cash collateral under its control
of $8.9 billion and $9.6 billion at December 31, 2006 and 2005, respectively.
Security collateral of $83 million and $174 million on deposit from customers in
connection with the securities lending transactions at December 31, 2006 and
2005, respectively, may not be sold or repledged and is not reflected in the
consolidated financial statements.
ASSETS ON DEPOSIT
The Company had investment assets on deposit with regulatory agencies with
a fair market value of $20 million and $25 million at December 31, 2006 and
2005, respectively, consisting primarily of fixed maturity and equity
securities.
MORTGAGE AND CONSUMER LOANS
Mortgage and consumer loans are categorized as follows:
<Table>
<Caption>
DECEMBER 31,
-----------------------------------
2006 2005
---------------- ----------------
AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ -------
(IN MILLIONS)
Commercial mortgage loans........................... $2,095 58% $1,173 46%
Agricultural mortgage loans......................... 1,460 41 1,300 51
Consumer loans...................................... 46 1 79 3
------ --- ------ ---
Subtotal.......................................... 3,601 100% 2,552 100%
=== ===
Less: Valuation allowances.......................... 6 9
------ ------
Mortgage and consumer loans......................... $3,595 $2,543
====== ======
</Table>
Mortgage loans are collateralized by properties located in the United
States. At December 31, 2006, 27%, 8% and 7% of the value of the Company's
mortgage and consumer loans were located in California, Texas and New York,
respectively. Generally, the Company, as the lender, only loans up to 75% of the
purchase price of the underlying real estate.
Information regarding loan valuation allowances for mortgage and consumer
loans is as follows:
<Table>
<Caption>
YEARS ENDED DECEMBER 31,
------------------------
2006 2005 2004
---- ---- ----
(IN MILLIONS)
Balance at January 1,....................................... $ 9 $ 1 $ 1
Additions................................................... 3 8 --
Deductions.................................................. (6) -- --
--- --- ---
Balance at December 31,..................................... $ 6 $ 9 $ 1
=== === ===
</Table>
F-36
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
A portion of the Company's mortgage and consumer loans was impaired and
consists of the following:
<Table>
<Caption>
DECEMBER 31,
-------------------------------
2006 2005
-------------- --------------
(IN MILLIONS)
Impaired loans with valuation allowances.................. $-- $ 2
Impaired loans without valuation allowances............... 8 14
--- ---
Subtotal................................................ 8 16
Less: Valuation allowances on impaired loans.............. -- 1
--- ---
Impaired loans.......................................... $ 8 $15
=== ===
</Table>
Mortgage and consumer loans with scheduled payments of 90 days or more past
due on which interest is still accruing had an amortized cost of $6 million and
$13 million at December 31, 2006 and 2005, respectively. There were no mortgage
and consumer loans on which interest is no longer accrued at both December 31,
2006 and 2005. There were no mortgage and consumer loans in foreclosure at both
December 31, 2006 and 2005.
REAL ESTATE AND REAL ESTATE JOINT VENTURES
Real estate and real estate joint ventures consisted of the following:
<Table>
<Caption>
DECEMBER 31,
-------------------------------
2006 2005
-------------- --------------
(IN MILLIONS)
Real estate............................................... $ 37 $36
Accumulated depreciation.................................. (1) --
---- ---
Net real estate........................................... 36 36
Real estate joint ventures................................ 144 60
---- ---
Real estate and real estate joint ventures................ $180 $96
==== ===
</Table>
The components of real estate and real estate joint ventures are as
follows:
<Table>
<Caption>
DECEMBER
31,
-----------
2006 2005
---- ----
(IN
MILLIONS)
Real estate and real estate joint ventures held-for-investment..... $173 $91
Real estate held-for-sale.......................................... 7 5
---- ---
Real estate and real estate joint ventures......................... $180 $96
==== ===
</Table>
Related depreciation expense was insignificant for all periods presented.
There were no non-income producing real estate and real estate joint
ventures at December 31, 2006. The carrying value of non-income producing real
estate and real estate joint ventures was $3 million at December 31, 2005.
F-37
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Real estate and real estate joint ventures were categorized as follows:
<Table>
<Caption>
DECEMBER 31,
-----------------------------------
2006 2005
---------------- ----------------
AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ -------
(IN MILLIONS)
Office.............................................. $ 46 26% $53 55%
Apartments.......................................... -- -- 1 1
Retail.............................................. 12 7 -- --
Real estate investment funds........................ 93 52 -- --
Land................................................ 1 -- 3 3
Agriculture......................................... 28 15 31 32
Industrial.......................................... -- -- 8 9
---- --- --- ---
Total............................................. $180 100% $96 100%
==== === === ===
</Table>
The Company's real estate holdings are primarily located in the United
States. At December 31, 2006, 72%, 7% and 6% of the Company's real estate
holdings were located in New York, Florida and Texas, respectively.
NET INVESTMENT INCOME
The components of net investment income are as follows:
<Table>
<Caption>
YEARS ENDED DECEMBER
31,
----------------------
2006 2005 2004
------ ------ ----
(IN MILLIONS)
Fixed maturity securities.................................. $2,719 $1,377 $176
Equity securities.......................................... 17 6 --
Mortgage and consumer loans................................ 182 113 34
Policy loans............................................... 52 26 2
Real estate and real estate joint ventures................. 29 2 --
Other limited partnership interests........................ 238 33 --
Cash, cash equivalents and short-term investments.......... 137 71 6
Other...................................................... 8 -- --
------ ------ ----
Total investment income.................................. 3,382 1,628 218
Less: Investment expenses.................................. 543 190 11
------ ------ ----
Net investment income.................................... $2,839 $1,438 $207
====== ====== ====
</Table>
For the years ended December 31, 2006, 2005 and 2004, affiliated investment
income of $29 million, $10 million and $4 million, respectively, related to
short-term investments, is included in the table above.
F-38
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NET INVESTMENT GAINS (LOSSES)
The components of net investment gains (losses) are as follows:
<Table>
<Caption>
YEARS ENDED DECEMBER
31,
--------------------
2006 2005 2004
----- ----- ----
(IN MILLIONS)
Fixed maturity securities................................... $(497) $(300) $(5)
Equity securities........................................... 10 1 --
Mortgage and consumer loans................................. 7 (9) --
Real estate and real estate joint ventures.................. 64 7 --
Other limited partnership interests......................... (1) (1) --
Sales of businesses......................................... -- 2 --
Derivatives................................................. 177 (2) (4)
Other....................................................... (281) 104 --
----- ----- ---
Net investment gains (losses)............................. $(521) $(198) $(9)
===== ===== ===
</Table>
For the years ended December 31, 2006, 2005 and 2004, affiliated investment
gains (losses) of ($87) million, ($25) million and ($4) million, respectively,
are included in the table above.
The Company periodically disposes of fixed maturity and equity securities
at a loss. Generally, such losses are insignificant in amount or in relation to
the cost basis of the investment, are attributable to declines in fair value
occurring in the period of the disposition or are as a result of management's
decision to sell securities based on current conditions or the Company's need to
shift the portfolio to maintain its portfolio management objectives.
Losses from fixed maturity and equity securities deemed other-than-
temporarily impaired, included within net investment gains (losses), were $41
million, $0 and $1 million for the years ended December 31, 2006, 2005 and 2004,
respectively.
NET UNREALIZED INVESTMENT GAINS (LOSSES)
The components of net unrealized investment gains (losses), included in
accumulated other comprehensive income (loss), are as follows:
<Table>
<Caption>
YEARS ENDED DECEMBER
31,
--------------------
2006 2005 2004
----- ----- ----
(IN MILLIONS)
Fixed maturity securities................................... $(566) $(639) $ 97
Equity securities........................................... 17 (4) --
Derivatives................................................. (9) (2) (4)
Other....................................................... 7 (19) --
----- ----- ----
Subtotal.................................................. (551) (664) 93
----- ----- ----
Amounts allocated from:
Future policy benefit loss recognition.................... -- (78) --
DAC and VOBA.............................................. 66 102 (47)
----- ----- ----
Subtotal.................................................. 66 24 (47)
Deferred income tax......................................... 171 224 (16)
----- ----- ----
Subtotal.................................................. 237 248 (63)
----- ----- ----
Net unrealized investment gains (losses)............... $(314) $(416) $ 30
===== ===== ====
</Table>
F-39
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The changes in net unrealized investment gains (losses) are as follows:
<Table>
<Caption>
YEARS ENDED DECEMBER
31,
--------------------
2006 2005 2004
----- ----- ----
(IN MILLIONS)
Balance, January 1,......................................... $(416) $ 30 $ 32
Unrealized investment gains (losses) during the year........ 113 (756) (14)
Unrealized investment gains (losses) relating to:
Future policy benefit gain (loss) recognition............. 78 (78) --
DAC and VOBA.............................................. (36) 148 10
Deferred income tax....................................... (53) 240 2
----- ----- ----
Balance, December 31,....................................... $(314) $(416) $ 30
===== ===== ====
Net change in unrealized investment gains (losses).......... $ 102 $(446) $ (2)
===== ===== ====
</Table>
TRADING SECURITIES
MetLife Connecticut was the majority owner of Tribeca on the Acquisition
Date. Tribeca was a feeder fund investment structure whereby the feeder fund
invests substantially all of its assets in the master fund, Tribeca Global
Convertible Instruments, Ltd. The primary investment objective of the master
fund is to achieve enhanced risk-adjusted return by investing in domestic and
foreign equities and equity-related securities utilizing such strategies as
convertible securities arbitrage. At December 31, 2005, the Company was the
majority owner of Tribeca and consolidated the fund within its consolidated
financial statements. At December 31, 2005, the Company held $452 million of
trading securities and $190 million of the short sale agreements associated with
the trading securities portfolio, which are included within other liabilities.
Net investment income related to the trading activities of Tribeca, which
included interest and dividends earned and net realized and unrealized gains
(losses), was $12 million and $6 million for the years ended December 31, 2006
and 2005, respectively.
During the second quarter of 2006, the Company's ownership interests in
Tribeca declined to a position whereby Tribeca is no longer consolidated and, as
of June 30, 2006, is accounted for under the equity method of accounting. The
equity method investment at December 31, 2006 of $82 million was included in
other limited partnership interests. Net investment income related to the
Company's equity method investment in Tribeca was $9 million for the six months
ended December 31, 2006.
F-40
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
VARIABLE INTEREST ENTITIES
The following table presents the total assets of and maximum exposure to
loss relating to VIEs for which the Company has concluded that it holds
significant variable interests but it is not the primary beneficiary and which
have not been consolidated:
<Table>
<Caption>
DECEMBER 31, 2006
------------------------
MAXIMUM
TOTAL EXPOSURE TO
ASSETS (1) LOSS (2)
---------- -----------
(IN MILLIONS)
Asset-backed securitizations................................. $ 866 $ 39
Real estate joint ventures(3)................................ 944 63
Other limited partnership interests(4)....................... 2,629 193
Other investments(5)......................................... 14,839 485
------- ----
Total...................................................... $19,278 $780
======= ====
</Table>
- --------
(1) The assets of the asset-backed securitizations are reflected at fair
value at December 31, 2006. The assets of the real estate joint ventures,
other limited partnership interests and other investments are reflected
at the carrying amounts at which such assets would have been reflected on
the Company's balance sheet had the Company consolidated the VIE from the
date of its initial investment in the entity.
(2) The maximum exposure to loss of the asset-backed securitizations is equal
to the carrying amounts of participation. The maximum exposure to loss
relating to real estate joint ventures, other limited partnership
interests and other investments is equal to the carrying amounts plus any
unfunded commitments, reduced by amounts guaranteed by other partners.
(3) Real estate joint ventures include partnerships and other ventures which
engage in the acquisition, development, management and disposal of real
estate investments.
(4) Other limited partnership interests include partnerships established for
the purpose of investing in public and private debt and equity
securities, as well as limited partnerships.
(5) Other investments include securities that are not asset-backed
securitizations.
F-41
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
5. DERIVATIVE FINANCIAL INSTRUMENTS
TYPES OF DERIVATIVE FINANCIAL INSTRUMENTS
The following table presents the notional amounts and current market or
fair value of derivative financial instruments held at:
<Table>
<Caption>
DECEMBER 31, 2006 DECEMBER 31, 2005
--------------------------------- ---------------------------------
CURRENT MARKET CURRENT MARKET
OR FAIR VALUE OR FAIR VALUE
NOTIONAL --------------------- NOTIONAL ---------------------
AMOUNT ASSETS LIABILITIES AMOUNT ASSETS LIABILITIES
-------- ------ ----------- -------- ------ -----------
(IN MILLIONS)
Interest rate swaps......... $ 8,841 $ 431 $ 70 $ 6,623 $ 356 $ 52
Interest rate floors........ 9,021 71 -- 2,000 26 --
Interest rate caps.......... 6,715 6 -- 3,020 18 --
Financial futures........... 602 6 1 228 2 2
Foreign currency swaps...... 2,723 580 66 3,110 429 76
Foreign currency forwards... 124 1 -- 488 18 2
Options..................... -- 80 7 -- 165 3
Financial forwards.......... 900 -- 15 -- -- 2
Credit default swaps........ 1,231 1 5 987 2 2
------- ------ ---- ------- ------ ----
Total..................... $30,157 $1,176 $164 $16,456 $1,016 $139
======= ====== ==== ======= ====== ====
</Table>
The above table does not include notional values for equity futures, equity
financial forwards and equity options. At December 31, 2006 and 2005, the
Company owned 290 and 587 equity futures contracts, respectively. Market values
of equity futures are included in financial futures in the preceding table. At
December 31, 2006 and 2005, the Company owned 85,500 and 75,500 equity financial
forwards, respectively. Market values of equity financial forwards are included
in financial forwards in the preceding table. At December 31, 2006 and 2005, the
Company owned 1,022,900 and 1,420,650 equity options, respectively. Market
values of equity options are included in options in the preceding table.
The following table presents the notional amounts of derivative financial
instruments by maturity at December 31, 2006:
<Table>
<Caption>
REMAINING LIFE
-----------------------------------------------------------------------------------------
AFTER ONE YEAR AFTER FIVE YEARS
ONE YEAR OR LESS THROUGH FIVE YEARS THROUGH TEN YEARS AFTER TEN YEARS TOTAL
---------------- ------------------ ----------------- --------------- -------
(IN MILLIONS)
Interest rate swaps.............. $ 980 $ 5,570 $ 1,699 $ 592 $ 8,841
Interest rate floors............. -- 551 8,470 -- 9,021
Interest rate caps............... -- 6,715 -- -- 6,715
Financial futures................ 602 -- -- -- 602
Foreign currency swaps........... 67 1,588 996 72 2,723
Foreign currency forwards........ 124 -- -- -- 124
Financial forwards............... -- -- -- 900 900
Credit default swaps............. 30 1,186 15 -- 1,231
------ ------- ------- ------ -------
Total.......................... $1,803 $15,610 $11,180 $1,564 $30,157
====== ======= ======= ====== =======
</Table>
F-42
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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 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.
Interest rate caps and floors are used by the Company 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 exchange-traded interest rate (Treasury and swap) and 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 interest
rate and 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 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 value of interest rate
futures is substantially impacted by changes in interest rates and they can be
used to modify or hedge existing interest rate risk.
Exchange-traded equity futures are used primarily to hedge liabilities
embedded in certain variable annuity products offered by the Company.
Foreign currency derivatives, including foreign currency swaps, foreign
currency forwards and currency option contracts, 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. The Company
also uses foreign currency forwards to hedge the foreign currency risk
associated with certain of its net investments in foreign operations.
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 forward exchange rate 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.
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 enters into currency option contracts that give it the right,
but not the obligation, to sell the foreign currency amount in exchange for a
functional currency amount within a limited time at a contracted price. The
contracts may also be net settled in cash, based on differentials in the foreign
exchange rate and the strike price. Currency option contracts are included in
options in the preceding table.
F-43
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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. Equity index options are included
in options in the preceding table.
The Company enters into financial 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.
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 financial forwards in the
preceding table.
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 insure 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.
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 usually a U.S.
Treasury or Agency security.
HEDGING
The following table presents the notional amounts and fair value of
derivatives by type of hedge designation at:
<Table>
<Caption>
DECEMBER 31, 2006 DECEMBER 31, 2005
------------------------------- -------------------------------
FAIR VALUE FAIR VALUE
NOTIONAL -------------------- NOTIONAL --------------------
AMOUNT ASSETS LIABILITIES AMOUNT ASSETS LIABILITIES
-------- ------ ----------- -------- ------ -----------
(IN MILLIONS)
Fair value......................... $ 69 $ -- $ 1 $ 71 $ -- $ --
Cash flow.......................... 455 42 -- 442 2 4
Non-qualifying..................... 29,633 1,134 163 15,943 1,014 135
------- ------ ---- ------- ------ ----
Total............................ $30,157 $1,176 $164 $16,456 $1,016 $139
======= ====== ==== ======= ====== ====
</Table>
The following table presents the settlement payments recorded in income for
the:
<Table>
<Caption>
YEARS ENDED DECEMBER
31,
-----------------------
2006 2005 2004
---- ---- ----
(IN MILLIONS)
Qualifying hedges:
Interest credited to policyholder account balances........ $(9) $(1) $--
Non-qualifying hedges:
Net investment gains (losses)............................. 73 (8) --
--- --- ---
Total..................................................... $64 $(9) $--
=== === ===
</Table>
F-44
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FAIR VALUE HEDGES
The Company designates and accounts for the following as fair value hedges
when they have met the requirements of SFAS 133: (i) interest rate swaps to
convert fixed rate investments to floating rate investments; (ii) foreign
currency swaps to hedge the foreign currency fair value exposure of foreign
currency denominated investments and liabilities; and (iii) interest rate
futures to hedge against changes in value of fixed rate securities.
The Company recognized net investment gains (losses) representing the
ineffective portion of all fair value hedges as follows:
<Table>
<Caption>
YEARS ENDED DECEMBER 31,
------------------------
2006 2005 2004
---- ---- ----
(IN MILLIONS)
Changes in the fair value of derivatives.................... $(1) $-- $(1)
Changes in the fair value of the items hedged............... 2 -- 1
--- --- ---
Net ineffectiveness of fair value hedging activities........ $ 1 $-- $--
=== === ===
</Table>
All components of each derivative's gain or loss were included in the
assessment of hedge ineffectiveness. There were no instances in which the
Company discontinued fair value hedge accounting due to a hedged firm commitment
no longer qualifying as a fair value hedge.
CASH FLOW HEDGES
The Company designates and accounts for the following as cash flow hedges,
when they have met the requirements of SFAS 133: (i) interest rate swaps to
convert floating rate investments to fixed rate investments; (ii) interest rate
swaps to convert floating rate liabilities into fixed rate liabilities; and
(iii) foreign currency swaps to hedge the foreign currency cash flow exposure of
foreign currency denominated investments and liabilities.
For the year ended December 31, 2006, the Company recognized no net
investment gains (losses) as the ineffective portion of all cash flow hedges.
For the years ended December 31, 2005 and 2004, the Company recognized
insignificant net investment gains (losses), which represent the ineffective
portion of all cash flow hedges. All components of each derivative's gain or
loss were included in the assessment of hedge ineffectiveness. For the years
ended December 31, 2006, 2005 and 2004, 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 in the additional time
period permitted by SFAS 133. There were no hedged forecasted transactions,
other than the receipt or payment of variable interest payments for the years
ended December 31, 2006, 2005 and 2004.
The following table presents the components of other comprehensive income
(loss), before income tax, related to cash flow hedges:
<Table>
<Caption>
YEARS ENDED DECEMBER 31,
------------------------
2006 2005 2004
---- ---- ----
(IN MILLIONS)
Balance at January 1,....................................... $(2) $(4) $(2)
Gains (losses) deferred in other comprehensive income (loss)
on the effective portion of cash flow hedges.............. (7) 2 (2)
--- --- ---
Balance at December 31,..................................... $(9) $(2) $(4)
=== === ===
</Table>
At December 31, 2006, $19 million of the deferred net gain on derivatives
accumulated in other comprehensive income (loss) are expected to be reclassified
to earnings during the year ending December 31, 2007.
F-45
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NON-QUALIFYING DERIVATIVES AND DERIVATIVES FOR PURPOSES OTHER THAN HEDGING
The Company enters into the following derivatives that do not qualify for
hedge accounting under SFAS 133 or for purposes other than hedging: (i) interest
rate swaps, purchased caps and floors, and interest rate futures to economically
hedge its exposure to interest rate volatility; (ii) foreign currency forwards,
swaps and option contracts to economically hedge its exposure to adverse
movements in exchange rates; (iii) credit default swaps to minimize its exposure
to adverse movements in credit; (iv) equity futures, equity index options and
equity variance swaps to economically hedge liabilities embedded in certain
variable annuity products; (v) credit default swaps to synthetically create
investments; and (vi) basis swaps to better match the cash flows of assets and
related liabilities.
For the years ended December 31, 2006, 2005 and 2004, the Company
recognized as net investment gains (losses), excluding embedded derivatives,
changes in fair value of $16 million, ($37) million and ($6) million,
respectively, related to derivatives that do not qualify for hedge accounting.
EMBEDDED DERIVATIVES
The Company has certain embedded derivatives which are required to be
separated from their host contracts and accounted for as derivatives. These host
contracts include guaranteed minimum withdrawal contracts and guaranteed minimum
accumulation contracts. The fair value of the Company's embedded derivative
assets was $40 million and $0 at December 31, 2006 and 2005, respectively. The
fair value of the Company's embedded derivative liabilities was $3 million and
$40 million at December 31, 2006 and 2005, respectively. The amounts recorded
and included in net investment gains (losses) for the years ended December 31,
2006 and 2005 were gains of $80 million and $41 million, respectively. There
were no amounts recorded and included in net investment gains (losses) for the
year ended December 31, 2004.
CREDIT RISK
The Company may be exposed to credit-related losses in the event of
nonperformance by counterparties to derivative financial instruments. Generally,
the current credit exposure of the Company's derivative contracts is limited to
the fair value at the reporting date. The credit exposure of the Company's
derivative transactions is represented by the fair value of contracts with a net
positive fair value at the reporting date.
The Company manages its credit risk related to over-the-counter derivatives
by entering into transactions with creditworthy counterparties, maintaining
collateral arrangements and through the use of master agreements that provide
for a single net payment to be made by one counterparty to another at each due
date and upon termination. Because exchange traded futures are effected through
regulated exchanges, and positions are marked to market on a daily basis, the
Company has minimal exposure to credit related losses in the event of
nonperformance by counterparties to such derivative instruments.
The Company enters into various collateral arrangements, which require both
the pledging and accepting of collateral in connection with its derivative
instruments. As of December 31, 2006 and 2005, the Company was obligated to
return cash collateral under its control of $273 million and $145 million,
respectively. This unrestricted cash collateral is included in cash and cash
equivalents and the obligation to return it is included in payables for
collateral under securities loaned and other transactions in the consolidated
balance sheets. As of December 31, 2006 and 2005, the Company had also accepted
collateral consisting of various securities with a fair market value of $410
million and $427 million, respectively, which are held in separate custodial
accounts. The Company is permitted by contract to sell or repledge this
collateral, but as of December 31, 2006 and 2005, none of the collateral had
been sold or repledged.
In addition, the Company has exchange traded futures, which require the
pledging of collateral. As of December 31, 2006 and 2005, the Company pledged
collateral of $25 million and $22 million, respectively, which
F-46
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
is included in fixed maturity securities. The counterparties are permitted by
contract to sell or repledge this collateral.
6. DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED
Information regarding DAC and VOBA is as follows:
<Table>
<Caption>
DAC VOBA TOTAL
------ ------ ------
(IN MILLIONS)
Balance at January 1, 2004................................ $ 502 $ -- $ 502
Capitalizations......................................... 281 -- 281
------ ------ ------
Subtotal............................................. 783 -- 783
Less: Amortization related to:
Net investment gains (losses)........................ (2) -- (2)
Unrealized investment gains (losses)................. (10) -- (10)
Other expenses....................................... 117 -- 117
------ ------ ------
Total amortization................................. 105 -- 105
------ ------ ------
Balance at December 31, 2004.............................. 678 -- 678
Contribution of MetLife Connecticut from MetLife (Note
2)...................................................... -- 3,490 3,490
Capitalizations......................................... 886 -- 886
------ ------ ------
Subtotal............................................. 1,564 3,490 5,054
Less: Amortization related to:
Net investment gains (losses)........................ -- (26) (26)
Unrealized investment gains (losses)................. (41) (107) (148)
Other expenses....................................... 109 205 314
------ ------ ------
Total amortization................................. 68 72 140
------ ------ ------
Balance at December 31, 2005.............................. 1,496 3,418 4,914
Capitalizations......................................... 721 -- 721
------ ------ ------
Subtotal............................................. 2,217 3,418 5,635
Less: Amortization related to:
Net investment gains (losses)........................ (16) (68) (84)
Unrealized investment gains (losses)................. (10) 46 36
Other expenses....................................... 252 320 572
------ ------ ------
Total amortization................................. 226 298 524
------ ------ ------
Balance at December 31, 2006.............................. $1,991 $3,120 $5,111
====== ====== ======
</Table>
The estimated future amortization expense allocated to other expenses for
the next five years for VOBA is $358 million in 2007, $333 million in 2008, $312
million in 2009, $283 million in 2010 and $253 million in 2011.
Amortization of VOBA and DAC is related to (i) investment gains and losses
and the impact of such gains and losses on the amount of the amortization; (ii)
unrealized investment gains and losses to provide information regarding the
amount that would have been amortized if such gains and losses had been
recognized; and (iii) other expenses to provide amounts related to the gross
margins or profits originating from transactions other than investment gains and
losses.
F-47
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
7. GOODWILL
Goodwill is the excess of cost over the fair value of net assets acquired.
Information regarding goodwill is as follows:
<Table>
<Caption>
DECEMBER
31,
-----------
2006 2005
---- ----
(IN
MILLIONS)
Balance at January 1,............................................. $924 $ 68
Contribution of MetLife Connecticut from MetLife (Note 2)......... 29 856
---- ----
Balance at December 31,........................................... $953 $924
==== ====
</Table>
8. INSURANCE
VALUE OF DISTRIBUTION AGREEMENTS AND CUSTOMER RELATIONSHIPS ACQUIRED
Information regarding VODA and the value of customer relationships acquired
("VOCRA"), which are reported in other assets, is as follows:
<Table>
<Caption>
YEARS ENDED DECEMBER
31,
----------------------
2006 2005 2004
---- ---- ----
(IN MILLIONS)
Balance at January 1,........................................ $ 72 $-- $--
Contribution of MetLife Connecticut from MetLife (Note 2).... -- 73 --
Contribution of VODA from MetLife............................ 167 -- --
Amortization................................................. (2) (1) --
---- --- ---
Balance at December 31,...................................... $237 $72 $--
==== === ===
</Table>
The estimated future amortization expense allocated to other expenses for
the next five years for VODA and VOCRA is $5 million in 2007, $7 million in
2008, $9 million in 2009, $11 million in 2010 and $11 million in 2011.
On September 30, 2006, MLI-USA received a capital contribution from MetLife
of $162 million in the form of intangible assets related to VODA of $167
million, net of deferred income tax of $5 million, for which MLI-USA receives
the benefit. The VODA originated through MetLife's acquisition of Travelers and
is reported within other assets in the amount of $166 million at December 31,
2006.
The value of the other identifiable intangibles as discussed above reflects
the estimated fair value of the Citigroup/Travelers distribution agreement
acquired at July 1, 2005 and will be amortized in relation to the expected
economic benefits of the agreement. The weighted average amortization period of
the other intangible assets is 16 years. If actual experience under the
distribution agreements differs from expectations, the amortization of these
intangibles will be adjusted to reflect actual experience.
The use of discount rates was necessary to establish the fair value of the
other identifiable intangible assets. In selecting the appropriate discount
rates, management considered its weighted average cost of capital as well as the
weighted average cost of capital required by market participants. A discount
rate of 11.5% was used to value these intangible assets.
F-48
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SALES INDUCEMENTS
Information regarding deferred sales inducements, which are reported in
other assets, is as follows:
<Table>
<Caption>
YEARS ENDED DECEMBER
31,
----------------------
2006 2005 2004
---- ---- ----
(IN MILLIONS)
Balance at January 1,...................................... $218 $143 $ 94
Capitalization............................................. 129 83 65
Amortization............................................... (17) (8) (16)
---- ---- ----
Balance at December 31,.................................... $330 $218 $143
==== ==== ====
</Table>
SEPARATE ACCOUNTS
Separate account assets and liabilities at December 31, 2006, include pass-
through separate accounts totaling $50.1 billion for which the policyholder
assumes all investment risk. Separate account assets and liabilities at December
31, 2005, included two categories of account types: pass-through separate
accounts totaling $43.6 billion and separate accounts with a minimum return or
account value for which the Company contractually guarantees either a minimum
return or account value to the policyholder which totaled $943 million. The
average interest rates credited on these contracts were 4.5% at December 31,
2005.
Fees charged to the separate accounts by the Company (including mortality
charges, policy administration fees and surrender charges) are reflected in the
Company's revenues as universal life and investment-type product policy fees and
totaled $800 million, $467 million and $155 million for the years ended December
31, 2006, 2005 and 2004, respectively.
For the years ended December 31, 2006, 2005 and 2004, there were no
investment gains (losses) on transfers of assets from the general account to the
separate accounts.
OBLIGATIONS UNDER GUARANTEED INTEREST CONTRACT PROGRAM
The Company issues fixed and floating rate obligations under its guaranteed
interest contract ("GIC") program which are denominated in either U.S. dollars
or foreign currencies. During the year ended December 31, 2006, there were no
new issuances in such obligations and there were repayments of $1.1 billion.
During the years ended December 31, 2005 and 2004, there were no new issuances
or repayments of such obligations. Accordingly, at December 31, 2006 and 2005,
GICs outstanding, which are included in PABs, were $4.6 billion and $5.3
billion, respectively. During the years ended December 31, 2006, 2005 and 2004,
interest credited on the contracts, which are included in interest credited to
PABs, was $163 million, $80 million and $0, respectively.
F-49
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
LIABILITIES FOR UNPAID CLAIMS AND CLAIM EXPENSES
Information regarding the liabilities for unpaid claims and claim expenses
relating to group accident and non-medical health policies and contracts, which
are reported in future policyholder benefits, is as follows:
<Table>
<Caption>
YEARS ENDED DECEMBER 31,
-------------------------
2006 2005
----------- -----------
(IN MILLIONS)
Balance at January 1,.......................... $ 512 $ --
Less: Reinsurance recoverables............... (373) --
----------- -----------
Net balance January 1,......................... 139 --
----------- -----------
Contribution of MetLife Connecticut by MetLife
(Note 2)..................................... -- 137
Incurred related to:
Current year................................. 29 19
Prior years.................................. 4 (3)
----------- -----------
33 16
----------- -----------
Paid related to:
Current year................................. (2) (1)
Prior years.................................. (22) (13)
----------- -----------
(24) (14)
----------- -----------
Net balance at December 31,.................... 148 139
Add: Reinsurance recoverables................ 403 373
----------- -----------
Balance at December 31,........................ $ 551 $ 512
=========== ===========
</Table>
There were no liabilities for unpaid claims and claims expenses for the
year ended December 31, 2004.
Claims and claim adjustment expenses associated with prior periods
increased by $4 million for the year ended December 31, 2006, and decreased by
$3 million for the year ended December 31, 2005. There were no claims and claim
adjustment expenses associated with prior periods for the year ended December
31, 2004. In all periods presented, the change was due to differences between
actual benefit periods and expected benefit periods for long-term care and
disability contracts.
GUARANTEES
The Company issues annuity contracts which may include contractual
guarantees to the contractholder for: (i) return of no less than total deposits
made to the contract less any partial withdrawals ("return of net deposits");
and (ii) the highest contract value on a specified anniversary date minus any
withdrawals following the contract anniversary, or total deposits made to the
contract less any partial withdrawals plus a minimum return ("anniversary
contract value" or "minimum return").
The Company also issues universal and variable life contracts where the
Company contractually guarantees to the contractholder a secondary guarantee.
F-50
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Information regarding the types of guarantees relating to annuity contracts
and universal and variable life contracts is as follows:
<Table>
<Caption>
AT DECEMBER 31,
---------------------------------------------------------------------------
2006 2005
---------------------------------- ----------------------------------
IN THE AT IN THE AT
EVENT OF DEATH ANNUITIZATION EVENT OF DEATH ANNUITIZATION
-------------- ------------- -------------- -------------
(IN MILLIONS)
ANNUITY CONTRACTS(1)
RETURN OF NET DEPOSITS
Separate account value........ $ 8,213 N/A $ 5,537 N/A
Net amount at risk(2)......... $ --(3) N/A $ --(3) N/A
Average attained age of
contractholders............ 61 years N/A 61 years N/A
ANNIVERSARY CONTRACT VALUE OR
MINIMUM RETURN
Separate account value........ $ 44,036 $ 13,179 $ 40,744 $ 10,081
Net amount at risk(2)......... $ 1,422(3) $ 30(4) $ 934(3) $ 38(4)
Average attained age of
contractholders............ 58 years 60 years 60 years 60 years
</Table>
<Table>
<Caption>
AT DECEMBER 31,
---------------------------
2006 2005
---------- ----------
SECONDARY SECONDARY
GUARANTEES GUARANTEES
---------- ----------
(IN MILLIONS)
UNIVERSAL AND VARIABLE LIFE CONTRACTS(1)
Account value (general and separate account)........... $ 3,262 $ 2,849
Net amount at risk(2).................................. $ 48,630(3) $ 44,943(3)
Average attained age of policyholders.................. 57 years 56 years
</Table>
- --------
(1) The Company's annuity and life contracts with guarantees may offer more
than one type of guarantee in each contract. Therefore, the amounts
listed above may not be mutually exclusive.
(2) The net amount at risk is based on the direct amount at risk (excluding
reinsurance).
(3) The net amount at risk for guarantees of amounts in the event of death is
defined as the current guaranteed minimum death benefit in excess of the
current account balance at the balance sheet date.
(4) The net amount at risk for guarantees of amounts at annuitization is
defined as the present value of the minimum guaranteed annuity payments
available to the contractholder determined in accordance with the terms
of the contract in excess of the current account balance.
F-51
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Information regarding the liabilities for guarantees (excluding base policy
liabilities) relating to annuity and universal and variable life contracts is as
follows:
<Table>
<Caption>
ANNUITY UNIVERSAL AND VARIABLE
CONTRACTS LIFE CONTRACTS
-------------- ----------------------
GUARANTEED SECONDARY
DEATH BENEFITS GUARANTEES TOTAL
-------------- ---------------------- -----
(IN MILLIONS)
Balance at January 1, 2004...................... $-- $-- $--
Incurred guaranteed benefits.................... -- -- --
Paid guaranteed benefits........................ -- -- --
--- --- ---
Balance at December 31, 2004.................... -- -- --
Incurred guaranteed benefits.................... 3 9 12
Paid guaranteed benefits........................ -- -- --
--- --- ---
Balance at December 31, 2005.................... 3 9 12
Incurred guaranteed benefits.................... -- 22 22
Paid guaranteed benefits........................ (3) -- (3)
--- --- ---
Balance at December 31, 2006.................... $-- $31 $31
=== === ===
</Table>
MLI-USA had guaranteed death and annuitization benefit liabilities on its
annuity contracts of $38 million and $28 million at December 31, 2006 and 2005,
respectively. MLI-USA reinsures 100% of this liability with an affiliate and has
a corresponding recoverable from affiliated reinsurers related to such guarantee
liabilities.
Account balances of contracts with insurance guarantees are invested in
separate account asset classes as follows:
<Table>
<Caption>
DECEMBER 31,
-----------------
2006 2005
------- -------
(IN MILLIONS)
Mutual Fund Groupings
Equity...................................................... $37,992 $30,480
Bond........................................................ 2,831 2,952
Balanced.................................................... 2,790 3,273
Money Market................................................ 949 791
Specialty................................................... 460 684
------- -------
Total.................................................... $45,022 $38,180
======= =======
</Table>
9. REINSURANCE
The Company's life insurance operations participate in reinsurance
activities in order to limit losses, minimize exposure to large risks, and
provide additional capacity for future growth. The Company has historically
reinsured the mortality risk on new individual life insurance policies primarily
on an excess of retention basis or a quota share basis. The Company has
reinsured up to 90% of the mortality risk for all new individual life insurance
policies. This practice was initiated by the Company for different products
starting at various points in time between 1997 and 2004. On a case by case
basis, the Company may retain up to $5 million per life on single life
individual policies and reinsure 100% of amounts in excess of the Company's
retention limits. The Company evaluates its reinsurance programs routinely and
may increase or decrease its retention at any time. Placement of reinsurance is
done primarily on an automatic basis and also on a facultative basis for risks
with specific characteristics.
F-52
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
In addition to reinsuring mortality risk, as described above, the Company
reinsures other mortality and non-mortality risks, and specific coverages. The
Company routinely reinsures certain classes of risks in order to limit its
exposure to particular travel, avocation and lifestyle hazards. The Company has
exposure to catastrophes, which could contribute to significant fluctuations in
the Company's results of operations. The Company uses excess of retention and
quota share reinsurance arrangements to provide greater diversification of risk
and minimize exposure to larger risks.
The Company reinsures its business through a diversified group of
reinsurers. No single unaffiliated reinsurer has a material obligation to the
Company nor is the Company's business substantially dependent upon any
reinsurance contracts. The Company is contingently liable with respect to ceded
reinsurance should any reinsurer be unable to meet its obligations under these
agreements.
MICC's workers' compensation business is reinsured through a 100% quota-
share agreement with The Travelers Indemnity Company, an insurance subsidiary of
The Travelers Companies, Inc.
Effective July 1, 2000, MetLife Connecticut reinsured 90% of its individual
long-term care insurance business with Genworth Life Insurance Company ("GLIC,"
formerly known as General Electric Capital Assurance Company), and its
subsidiary, in the form of indemnity reinsurance agreements. In accordance with
the terms of the reinsurance agreement, GLIC will effect assumption and novation
of the reinsured contracts, to the extent permitted by law, no later than July
1, 2008. Effective June 30, 2005, MetLife Connecticut entered into an agreement
with CIHC to effectively transfer the remaining results from the long-term care
block of business from MetLife Connecticut to CIHC. Under the terms of this
agreement, any gains remaining are payable to CIHC and any losses remaining are
reimbursable from CIHC. MetLife Connecticut does, however, retain limited
investment exposure related to the reinsured contracts. Citigroup
unconditionally guarantees the performance of its subsidiary, CIHC.
The Company reinsures the new production of fixed annuities and the riders
containing benefit guarantees related to variable annuities to affiliated and
non-affiliated reinsurers. The Company reinsures its risk associated with the
secondary death benefit guarantee rider on certain universal life contracts to
an affiliate. See Note 19.
The amounts in the consolidated statements of income are presented net of
reinsurance ceded. Information regarding the effect of reinsurance is as
follows:
<Table>
<Caption>
YEARS ENDED DECEMBER
31,
--------------------
2006 2005 2004
----- ----- ----
(IN MILLIONS)
Direct premiums........................................ $ 599 $ 413 $13
Reinsurance assumed.................................... 21 38 --
Reinsurance ceded...................................... (312) (170) (4)
----- ----- ---
Net premiums........................................... $ 308 $ 281 $ 9
===== ===== ===
Reinsurance recoverables netted against policyholder
benefits and claims.................................. $ 635 $ 560 $(1)
===== ===== ===
</Table>
Reinsurance recoverables, included in premiums and other receivables, were
$4.6 billion and $4.3 billion at December 31, 2006 and 2005, respectively,
including $3.0 billion and $2.8 billion at December 31, 2006 and 2005,
respectively, relating to reinsurance on the runoff of long-term care business
and $1.3 billion and $1.4 billion at December 31, 2006 and 2005, respectively,
relating to reinsurance on the runoff of workers compensation business.
Reinsurance and ceded commissions payables, included in other liabilities were
$99 million and $64 million at December 31, 2006 and 2005, respectively.
For the year ended December 31, 2006, both reinsurance ceded and assumed
include affiliated transactions of $21 million. For the year ended December 31,
2005, reinsurance ceded and assumed include affiliated transactions
F-53
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
of $12 million and $38 million, respectively. For the year ended December 31,
2004, both reinsurance ceded and assumed include affiliated transactions of $1
million.
10. LONG-TERM DEBT -- AFFILIATED
Long-term debt outstanding is as follows:
<Table>
<Caption>
DECEMBER
31,
-----------
2006 2005
---- ----
(IN
MILLIONS)
Surplus notes, interest rate 7.349%, due 2035..................... $400 $400
Surplus notes, interest rate 5%, due upon request................. 25 25
Surplus notes, interest rate LIBOR plus 0.75%, due upon request... 10 10
---- ----
Total long-term debt -- affiliated.............................. $435 $435
==== ====
</Table>
Payments of interest and principal on these surplus notes, which are
subordinate to all other debt, may be made only with the prior approval of the
Delaware Insurance Commissioner.
MetLife is the holder of a surplus note issued by MLI-USA in the amount of
$400 million at December 31, 2006 and 2005.
MLIG is the holder of two surplus notes issued by MLI-USA in the amounts of
$25 million and $10 million at both December 31, 2006 and 2005. These surplus
notes may be redeemed, in whole or in part, at the election of the Company at
any time, subject to the prior approval of the Delaware Insurance Commissioner.
The aggregate maturities of long-term debt as of December 31, 2006 are $400
million in 2035, and $35 million payable upon request and regulatory approval.
Interest expense related to the Company's indebtedness, included in other
expenses, was $31 million, $25 million and $2 million for the years ended
December 31, 2006, 2005 and 2004, respectively.
11. INCOME TAX
The provision for income tax from continuing operations is as follows:
<Table>
<Caption>
YEARS ENDED
DECEMBER 31,
------------------
2006 2005 2004
---- ---- ----
(IN MILLIONS)
Current:
Federal.............................................. $ 18 $ (3) $(91)
State................................................ -- (2) 4
---- ---- ----
Subtotal.......................................... 18 (5) (87)
---- ---- ----
Deferred:
Federal.............................................. 212 162 100
State................................................ (2) (1) 4
---- ---- ----
Subtotal.......................................... 210 161 104
---- ---- ----
Provision for income tax............................... $228 $156 $ 17
==== ==== ====
</Table>
F-54
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The reconciliation of the income tax provision at the U.S. statutory rate
to the provision for income tax as reported for continuing operations is as
follows:
<Table>
<Caption>
YEARS ENDED
DECEMBER 31,
------------------
2006 2005 2004
---- ---- ----
(IN MILLIONS)
Tax provision at U.S. statutory rate................... $288 $191 $15
Tax effect of:
Tax-exempt investment income......................... (62) (27) (3)
Prior year tax....................................... (9) (9) (1)
Foreign operations, net of foreign income tax........ 12 -- --
State tax, net of federal benefit.................... -- 2 6
Other, net........................................... (1) (1) --
---- ---- ----
Provision for income tax............................... $228 $156 $ 17
==== ==== ====
</Table>
Deferred income tax represents the tax effect of the differences between
the book and tax basis of assets and liabilities. Net deferred income tax assets
and liabilities consisted of the following:
<Table>
<Caption>
DECEMBER 31,
-----------------
2006 2005
------- -------
(IN MILLIONS)
Deferred income tax assets:
Benefit, reinsurance and other reserves...................... $ 2,238 $ 2,346
Net unrealized investment losses............................. 171 224
Capital loss carryforwards................................... 155 92
Investments.................................................. 63 --
Operating lease reserves..................................... 13 13
Net operating loss carryforwards............................. 10 --
Employee benefits............................................ 3 3
Litigation-related........................................... 1 --
Other........................................................ 20 25
------- -------
2,674 2,703
Less: Valuation allowance.................................... 4 --
------- -------
2,670 2,703
------- -------
Deferred income tax liabilities:
DAC and VOBA................................................. (1,663) (1,558)
Investments.................................................. -- (25)
------- -------
(1,663) (1,583)
------- -------
Net deferred income tax asset.................................. $ 1,007 $ 1,120
======= =======
</Table>
At December 31, 2006, the Company has a net deferred income tax asset. If
the Company determines that any of its deferred income tax assets will not
result in future tax benefits, a valuation allowance must be established for the
portion of these assets that are not expected to be realized. Based
predominantly upon a review of the Company's anticipated future taxable income,
but also including all other available evidence, both positive and negative, the
F-55
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Company's management concluded that it is "more likely than not" that the net
deferred income tax assets will be realized.
Domestic net operating loss carryforwards amount to $15 million at December
31, 2006 and will expire beginning in 2025. Foreign net operating loss
carryforwards amount to $35 million at December 31, 2006 with an expiration
period of infinity. Capital loss carryforwards amount to $443 million at
December 31, 2006 and will expire beginning in 2010.
The Company has recorded a valuation allowance related to tax benefits of
certain foreign net operating loss carryforwards. The valuation allowance
reflects management's assessment, based on available information, that it is
more likely than not that the deferred income tax asset for certain foreign net
operating loss carryforwards will not be realized. The tax benefit will be
recognized when management believes that it is more likely than not that these
deferred income tax assets are realizable. In 2006, the Company recorded a $4
million deferred income tax valuation allowance related to certain foreign net
operating loss carryforwards.
The Company will file a consolidated tax return with its includable life
insurance subsidiaries. Non-includable subsidiaries file either a separate
individual corporate tax return or a separate consolidated tax return. Under the
Tax Allocation Agreement, the federal income tax will be allocated between the
companies on a separate return basis and adjusted for credits and other amounts
required by the Tax Allocation Agreement.
12. CONTINGENCIES, COMMITMENTS AND GUARANTEES
CONTINGENCIES
LITIGATION
The Company is a defendant in a number of litigation matters. In some of
the matters, large and/or indeterminate amounts, including punitive and treble
damages, are sought. Modern pleading practice in the United States permits
considerable variation in the assertion of monetary damages or other relief.
Jurisdictions may permit claimants not to specify the monetary damages sought or
may permit claimants to state only that the amount sought is sufficient to
invoke the jurisdiction of the trial court. In addition, jurisdictions may
permit plaintiffs to allege monetary damages in amounts well exceeding
reasonably possible verdicts in the jurisdiction for similar matters. This
variability in pleadings, together with the actual experience of the Company in
litigating or resolving through settlement numerous claims over an extended
period of time, demonstrate to management that the monetary relief which may be
specified in a lawsuit or claim bears little relevance to its merits or
disposition value. Thus, unless stated below, the specific monetary relief
sought is not noted.
Due to the vagaries of litigation, the outcome of a litigation matter and
the amount or range of potential loss at particular points in time may normally
be inherently impossible to ascertain with any degree of certainty. Inherent
uncertainties can include how fact finders will view individually and in their
totality documentary evidence, the credibility and effectiveness of witnesses'
testimony, and how trial and appellate courts will apply the law in the context
of the pleadings or evidence presented, whether by motion practice, or at trial
or on appeal. Disposition valuations are also subject to the uncertainty of how
opposing parties and their counsel will themselves view the relevant evidence
and applicable law.
On a quarterly and yearly basis, the Company reviews relevant information
with respect to liabilities for litigation and contingencies to be reflected in
the Company's consolidated financial statements. The review includes senior
legal and financial personnel. Unless stated below, estimates of possible
additional losses or ranges of loss for particular matters cannot in the
ordinary course be made with a reasonable degree of certainty. Liabilities are
established when it is probable that a loss has been incurred and the amount of
the loss can be reasonably estimated. Liabilities have been established for a
number of the matters noted below. It is possible that some of the
F-56
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
matters could require the Company to pay damages or make other expenditures or
establish accruals in amounts that could not be estimated as of December 31,
2006.
Macomber, et al. v. Travelers Property Casualty Corp., et al. (Conn. Super.
Ct., Hartford, filed April 7, 1999). An amended putative class action complaint
was filed against MLAC, Travelers Equity Sales, Inc. and certain former
affiliates. The amended complaint alleges Travelers Property Casualty
Corporation, a former MLAC affiliate, purchased structured settlement annuities
from MLAC and spent less on the purchase of those structured settlement
annuities than agreed with claimants, and that commissions paid to brokers for
the structured settlement annuities, including an affiliate of MLAC, were paid
in part to Travelers Property Casualty Corporation. On May 26, 2004, the
Connecticut Superior Court certified a nationwide class action involving the
following claims against MLAC: violation of the Connecticut Unfair Trade
Practice Statute, unjust enrichment, and civil conspiracy. On June 15, 2004, the
defendants appealed the class certification order. In March 2006, the
Connecticut Supreme Court reversed the trial court's certification of a class.
Plaintiff may seek to file another motion for class certification. Defendants
have moved for summary judgment.
A former registered representative of Tower Square Securities, Inc. ("Tower
Square"), a broker-dealer subsidiary of MICC, is alleged to have defrauded
individuals by diverting funds for his personal use. In June 2005, the SEC
issued a formal order of investigation with respect to Tower Square and served
Tower Square with a subpoena. The Securities and Business Investments Division
of the Connecticut Department of Banking and NASD are also reviewing this
matter. On April 18, 2006, the Connecticut Department of Banking issued a notice
to Tower Square asking it to demonstrate its prior compliance with applicable
Connecticut securities laws and regulations. In the context of the above, a
number of NASD arbitration matters and litigation matters were commenced in 2005
and 2006 against Tower Square. It is reasonably possible that other actions will
be brought regarding this matter. Tower Square intends to fully cooperate with
the SEC, NASD and the Connecticut Department of Banking, as appropriate, with
respect to the matters described above.
Regulatory bodies have contacted the Company and have requested information
relating to various regulatory issues regarding mutual funds and variable
insurance products, including the marketing of such products. The Company
believes that many of these inquiries are similar to those made to many
financial services companies as part of industry-wide investigations by various
regulatory agencies. The Company is fully cooperating with regard to these
information requests and investigations. The Company at the present time is not
aware of any systemic problems with respect to such matters that may have a
material adverse effect on the Company's consolidated financial position.
In addition, the Company is a defendant or co-defendant in various other
litigation matters in the normal course of business. These may include civil
actions, arbitration proceedings and other matters arising in the normal course
of business out of activities as an insurance company, a broker and dealer in
securities or otherwise. Further, state insurance regulatory authorities and
other federal and state authorities may make inquiries and conduct
investigations concerning the Company's compliance with applicable insurance and
other laws and regulations.
In the opinion of the Company's management, the ultimate resolution of
these legal and regulatory proceedings would not be likely to have a material
adverse effect on the Company's consolidated financial position or liquidity,
but, if involving monetary liability, may be material to the Company's operating
results for any particular period.
INSOLVENCY ASSESSMENTS
Most of the jurisdictions in which the Company is admitted to transact
business require life insurers doing business within the jurisdiction to
participate in guaranty associations, which are organized to pay contractual
benefits owed pursuant to insurance policies issued by impaired, insolvent or
failed life insurers. These associations levy assessments, up to prescribed
limits, on all member insurers in a particular state on the basis of the
F-57
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
proportionate share of the premiums written by member insurers in the lines of
business in which the impaired, insolvent or failed insurer engaged. Some states
permit member insurers to recover assessments paid through full or partial
premium tax offsets. Assets and liabilities held for insolvency assessments are
as follows:
<Table>
<Caption>
DECEMBER
31,
-----------
2006 2005
---- ----
(IN
MILLIONS)
Other Assets:
Premium tax offset for future undiscounted assessments........... $ 9 $ 9
Premium tax offsets currently available for paid assessments..... 1 2
--- ---
$10 $11
=== ===
Liability:
Insolvency assessments........................................... $19 $19
=== ===
</Table>
Assessments levied against the Company were less than $1 million for each
of the years ended December 31, 2006, 2005 and 2004.
COMMITMENTS
LEASES
The Company, as lessee, has entered into lease agreements for office space.
Future sublease income is projected to be insignificant. Future minimum rental
income and minimum gross rental payments relating to these lease agreements are
as follows:
<Table>
<Caption>
RENTAL GROSS RENTAL
INCOME PAYMENTS
------ ------------
(IN MILLIONS)
2007......................................................... $ 1 $15
2008......................................................... $ 1 $15
2009......................................................... $ 1 $ 8
2010......................................................... $ 1 $ 6
2011......................................................... $-- $ 6
</Table>
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 $616 million
and $715 million at December 31, 2006 and 2005, 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 $665 million and $339 million at
December 31, 2006 and 2005, respectively.
COMMITMENTS TO FUND BANK CREDIT FACILITIES
The Company commits to lend funds under bank credit facilities. The amount
of these unfunded commitments was $173 million at December 31, 2006. The Company
did not have any unfunded commitments related to bank credit facilities at
December 31, 2005.
F-58
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
OTHER COMMITMENTS
MICC is a member of the Federal Home Loan Bank of Boston ("FHLB of Boston")
and holds $70 million of common stock of the FHLB of Boston, which is included
in equity securities on the Company's consolidated balance sheets. MICC has also
entered into several funding agreements with the FHLB of Boston whereby MICC has
issued such funding agreements in exchange for cash and for which the FHLB of
Boston has been granted a blanket lien on certain MICC assets, including
residential mortgages, mortgage-backed securities, obligations of or guaranteed
by the United States, state and municipal obligations and corporate debt, to
collateralize MICC's obligations under the funding agreements. MICC maintains
control over these pledged assets, and may use, commingle, encumber or dispose
of any portion of the collateral as long as there is no event of default and the
remaining qualified collateral is sufficient to satisfy the collateral
maintenance level. The funding agreements and the related security agreement
represented by this blanket lien provide that upon any event of default by MICC,
the FHLB of Boston's recovery is limited to the amount of MICC's liability to
the FHLB of Boston. The amount of the Company's liability for funding agreements
with the FHLB of Boston was $926 million and $1.1 billion at December 31, 2006
and 2005, respectively, which is included in PABs.
GUARANTEES
In the normal course of its business, the Company has provided certain
indemnities, guarantees and commitments to third parties pursuant to which it
may be required to make payments now or in the future. In the context of
acquisition, disposition, investment and other transactions, the Company has
provided indemnities and guarantees, including those related to tax,
environmental and other specific liabilities, and other indemnities and
guarantees that are triggered by, among other things, breaches of
representations, warranties or covenants provided by the Company. In addition,
in the normal course of business, the Company provides indemnifications to
counterparties in contracts with triggers similar to the foregoing, as well as
for certain other liabilities, such as third party lawsuits. These obligations
are often subject to time limitations that vary in duration, including
contractual limitations and those that arise by operation of law, such as
applicable statutes of limitation. In some cases, the maximum potential
obligation under the indemnities and guarantees is subject to a contractual
limitation, such as in the case of MetLife International Insurance Company, Ltd.
("MLII," formerly, Citicorp International Life Insurance Company, Ltd.), an
affiliate, discussed below, while in other cases such limitations are not
specified or applicable. Since certain of these obligations are not subject to
limitations, the Company does not believe that it is possible to determine the
maximum potential amount that could become due under these guarantees in the
future.
The Company has provided a guarantee on behalf of MLII. This guarantee is
triggered if MLII cannot pay claims because of insolvency, liquidation or
rehabilitation. The agreement was terminated as of December 31, 2004, but
termination does not affect policies previously guaranteed. Life insurance
coverage in-force under this guarantee was $444 million and $447 million at
December 31, 2006 and 2005, respectively. The Company does not hold any
collateral related to this guarantee.
In addition, the Company indemnifies its directors and officers as provided
in its charters and by-laws. Also, the Company indemnifies its agents for
liabilities incurred as a result of their representation of the Company's
interests. Since these indemnities are generally not subject to limitation with
respect to duration or amount, the Company does not believe that it is possible
to determine the maximum potential amount that could become due under these
indemnities in the future.
In connection with synthetically created investment transactions, the
Company writes credit default swap obligations requiring payment of principal
due in exchange for the referenced credit obligation, depending on the nature or
occurrence of specified credit events for the referenced entities. In the event
of a specified credit event, the Company's maximum amount at risk, assuming the
value of the referenced credits becomes worthless, was $54 million at December
31, 2006. The credit default swaps expire at various times during the next two
years.
F-59
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
13. EMPLOYEE BENEFIT PLANS
Subsequent to the Acquisition, the Company became a participating affiliate
in qualified and non-qualified, noncontributory defined benefit pension and
other postretirement plans sponsored by Metropolitan Life. Employees were
credited with prior service recognized by Citigroup, solely (with regard to
pension purposes) for the purpose of determining eligibility and vesting under
the Metropolitan Life Retirement Plan for United States Employees ("Plan"), a
noncontributory qualified defined benefit pension plan, with respect to benefits
earned under the Plan subsequent to the Acquisition Date. Net periodic expense
related to these plans is based on the employee population as of the valuation
date at the beginning of the year. Pension expense of $8 million related to the
Metropolitan Life plans was allocated to the Company for the year ended December
31, 2006. There were no expenses allocated to the Company for the six months
ended December 31, 2005.
14. EQUITY
COMMON STOCK
The Company has 40,000,000 authorized shares of common stock, 34,595,317
shares of which are outstanding as of December 31, 2006. Of such outstanding
shares, 30,000,000 shares are owned directly by MetLife and the remaining shares
are owned by MLIG. The par value of the common stock presented in the statement
of stockholders' equity prior to the Acquisition Date has been adjusted to
reflect the par value of MetLife Connecticut's shares issued to MLIG in exchange
for MLI-USA's outstanding common stock. See Note 3.
DIVIDEND RESTRICTIONS
The table below sets forth the dividends permitted to be paid to MetLife
without insurance regulatory approval and actual dividends paid to MetLife:
<Table>
<Caption>
2007
-------------
2005 2006
------- -----------------------
PERMITTED W/O PERMITTED W/O
COMPANY PAID(1) PAID(1) APPROVAL (2) APPROVAL(3)
- ------- ------- ------- ------------- -------------
(IN MILLIONS)
MetLife Insurance Company of Connecticut...... $-- $917(4) $-- $690
</Table>
- --------
(1) Includes amounts paid including those requiring regulatory approval.
(2) Reflects dividend amounts paid during the relevant year without prior
regulatory approval.
(3) Reflects dividend amounts that may be paid during 2007 without prior
regulatory approval. If paid before a specified date during 2007, some or
all of such dividend amounts may require regulatory approval.
(4) Includes a return of capital of $259 million.
Under Connecticut State Insurance Law, MetLife Connecticut is permitted,
without prior insurance regulatory clearance, to pay stockholder dividends to
its parent as long as the amount of such dividends, when aggregated with all
other dividends in the preceding 12 months, does not exceed the greater of (i)
10% of its surplus to policyholders as of the end of the immediately preceding
calendar year; or (ii) its statutory net gain from operations for the
immediately preceding calendar year. MetLife Connecticut will be permitted to
pay a cash dividend in excess of the greater of such two amounts only if it
files notice of its declaration of such a dividend and the amount thereof with
the Connecticut Commissioner of Insurance ("Connecticut Commissioner") and the
Connecticut Commissioner does not disapprove the payment within 30 days after
notice. In addition, any dividend that exceeds earned surplus (unassigned funds,
reduced by 25% of unrealized appreciation in value or revaluation of assets or
unrealized profits on investments) as of the last filed annual statutory
statement requires insurance regulatory approval. Under Connecticut State
Insurance Law, the Connecticut Commissioner has broad discretion in determining
whether the financial condition of a stock life insurance company would support
the payment of such dividends to its stockholders. The Connecticut State
Insurance Law requires prior approval for any dividends for a period of two
years following a change in control. As a result of the
F-60
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Acquisition on July 1, 2005, under Connecticut State Insurance Law, all dividend
payments by MetLife Connecticut through June 30, 2007 require prior approval of
the Connecticut Commissioner.
DIVIDEND RESTRICTIONS OF SUBSIDIARIES
MLAC is regulated under Connecticut State Insurance Law as described above.
As a result of the acquisition on July 1, 2005, under Connecticut State
Insurance Law all dividend payments by MLAC through June 30, 2007 to the Company
require prior approval of the Connecticut Commissioner. MLAC did not pay any
dividends in 2006.Since MLAC's statutory unassigned funds surplus is negative,
MLAC cannot pay any dividends without prior approval of the Commissioner.
Under Delaware State Insurance Law, MLI-USA is permitted, without prior
insurance regulatory clearance, to pay a stockholder dividend to its parent as
long as the amount of the dividend when aggregated with all other dividends in
the preceding 12 months does not exceed the greater of (i) 10% of its surplus to
policyholders as of the end of the immediately preceding calendar year; or (ii)
its statutory net gain from operations for the immediately preceding calendar
year (excluding realized capital gains). MLI-USA will be permitted to pay a cash
dividend to MetLife Connecticut in excess of the greater of such two amounts
only if it files notice of the declaration of such a dividend and the amount
thereof with the Delaware Commissioner of Insurance ("Delaware Commissioner")
and the Delaware Commissioner does not disapprove the distribution within 30
days of its filing. In addition, any dividend that exceeds earned surplus
(defined as unassigned funds) as of the last filed annual statutory statement
requires insurance regulatory approval. Under Delaware State Insurance Law, the
Delaware Commissioner has broad discretion in determining whether the financial
condition of a stock life insurance company would support the payment of such
dividends to its stockholders. MLI-USA did not pay dividends for the year ended
December 31, 2006. Since MLI-USA's statutory unassigned funds surplus is
negative, MLI-USA cannot pay any dividends without prior approval of the
Delaware Commissioner.
CAPITAL CONTRIBUTIONS
On September 30, 2006, MLI-USA received a capital contribution from MetLife
of $162 million in the form of intangible assets related to VODA, and the
associated deferred income tax liability, which is more fully described in Note
8.
See also Note 3 for information related to the change in the reporting
entity.
MLI-USA received a cash contribution of $300 million from MLIG during the
year ended December 31, 2004.
STATUTORY EQUITY AND INCOME
Each insurance company's state of domicile imposes minimum risk-based
capital ("RBC") requirements that were developed by the National Association of
Insurance Commissioners ("NAIC"). The formulas for determining the amount of RBC
specify various weighting factors that are applied to financial balances or
various levels of activity based on the perceived degree of risk. Regulatory
compliance is determined by a ratio of total adjusted capital, as defined by the
NAIC, to authorized control level RBC, as defined by the NAIC. Companies below
specific trigger points or ratios are classified within certain levels, each of
which requires specified corrective action. The Company and its insurance
subsidiaries each exceeded the minimum RBC requirements for all periods
presented herein.
The NAIC adopted the Codification of Statutory Accounting Principles
("Codification") in 2001. Codification was intended to standardize regulatory
accounting and reporting to state insurance departments. However, statutory
accounting principles continue to be established by individual state laws and
permitted practices. The Connecticut Insurance Department and the Delaware
Insurance Department have adopted Codification with certain modifications for
the preparation of statutory financial statements of insurance companies in
Connecticut and
F-61
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Delaware, respectively. Modifications by the various state insurance departments
may impact the effect of Codification on the statutory capital and surplus of
MetLife Connecticut and each of its insurance subsidiaries.
Statutory accounting principles differ from GAAP primarily by charging
policy acquisition costs to expense as incurred, establishing future policy
benefit liabilities using different actuarial assumptions, reporting surplus
notes as surplus instead of debt and valuing securities on a different basis.
In addition, certain assets are not admitted under statutory accounting
principles and are charged directly to surplus. The most significant assets not
admitted by the Company is the net deferred income tax assets resulting from
temporary differences between statutory accounting principles basis and tax
basis not expected to reverse and become recoverable within a year.
Further, statutory accounting principles do not give recognition to
purchase accounting adjustments made as a result of the Acquisition.
Statutory net income of MetLife Connecticut, a Connecticut domiciled
insurer, was $749 million, $1.0 billion and $975 million for the years ended
December 31, 2006, 2005 and 2004, respectively. Statutory capital and surplus,
as filed with the Connecticut Insurance Department, was $4.1 billion and $4.0
billion at December 31, 2006 and 2005, respectively.
Statutory net income (loss) of MLAC, a Connecticut domiciled insurer, was
$107 million, ($97) million and ($211) million for the years ended December 31,
2006, 2005 and 2004, respectively. Statutory capital and surplus, as filed with
the Connecticut Insurance Department, was $740 million and $765 million at
December 31, 2006 and 2005, respectively.
Statutory net income (loss) of MLI-USA, a Delaware domiciled insurer, was
($116) million, ($227) million and ($201) million for the years ended December
31, 2006, 2005 and 2004, respectively. Statutory capital and surplus, as filed
with the Delaware Insurance Department, was $575 million and $555 million at
December 31, 2006 and 2005, respectively.
OTHER COMPREHENSIVE INCOME (LOSS)
The following table sets forth the reclassification adjustments required
for the years ended December 31, 2006, 2005 and 2004, in other comprehensive
income (loss) that are included as part of net income for the current year that
have been reported as a part of other comprehensive income (loss) in the current
or prior year:
<Table>
<Caption>
YEARS ENDED DECEMBER
31,
----------------------
2006 2005 2004
----- ------- ----
(IN MILLIONS)
Holding gains (losses) on investments arising during the
year...................................................... $(434) $(1,148) $(37)
Income tax effect of holding gains (losses)................. 147 402 14
Reclassification adjustments:
Recognized holding (gains) losses included in current year
income................................................. 487 295 2
Amortization of premiums and accretion of discounts
associated with investments............................ 60 96 21
Income tax effect......................................... (186) (137) (8)
Allocation of holding losses on investments relating to
other policyholder amounts................................ 42 71 10
Income tax effect of allocation of holding losses to other
policyholder amounts...................................... (14) (25) (4)
----- ------- ----
Net unrealized investment gains (losses).................... 102 (446) (2)
----- ------- ----
Foreign currency translation adjustment..................... (2) 2 --
----- ------- ----
Other comprehensive income (loss)...................... $ 100 $ (444) $ (2)
===== ======= ====
</Table>
F-62
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
15. OTHER EXPENSES
Information on other expenses is as follows:
<Table>
<Caption>
YEARS ENDED DECEMBER 31,
------------------------------
2006 2005 2004
------ ------------- -----
(IN MILLIONS)
Compensation............................................ $ 211 $ 100 $ --
Commissions............................................. 712 931 237
Interest and debt issue costs........................... 31 25 2
Amortization of DAC and VOBA............................ 488 288 115
Capitalization of DAC................................... (721) (886) (281)
Rent, net of sublease income............................ 11 7 --
Minority interest....................................... 26 1 --
Insurance tax........................................... 42 10 3
Other................................................... 373 202 103
------ ----- -----
Total other expenses.................................. $1,173 $ 678 $ 179
====== ===== =====
</Table>
16. BUSINESS SEGMENT INFORMATION
Prior to the acquisition of MetLife Connecticut by MetLife, MLI-USA
operated as a single segment. On the Acquisition Date, MetLife reorganized the
Company's operations into two operating segments, Individual and Institutional,
as well as Corporate & Other, so as to more closely align the acquired business
with the manner in which MetLife manages its existing businesses. Individual
offers a wide variety of protection and asset accumulation products, including
life insurance, annuities and mutual funds. Institutional offers a broad range
of group insurance and retirement & savings products and services, including
group life insurance and other insurance products and services. These segments
are managed separately because they either provide different products and
services, require different strategies or have different technology
requirements. Corporate & Other contains the excess capital not allocated to the
business segments, various start-up entities and run-off business, the Company's
ancillary international operations, interest expense related to the majority of
the Company's outstanding debt, expenses associated with certain legal
proceedings and the elimination of intersegment transactions.
Economic capital is an internally developed risk capital model, the purpose
of which is to measure the risk in the business and to provide a basis upon
which capital is deployed. The economic capital model accounts for the unique
and specific nature of the risks inherent in the Company's businesses. As a part
of the economic capital process, a portion of net investment income is credited
to the segments based on the level of allocated equity.
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.
Subsequent to the Acquisition Date, the Company allocates equity to each segment
based upon the economic capital model used by MetLife that allows MetLife and
the Company to effectively manage its capital. The Company evaluates the
performance of each segment based upon net income excluding net investment gains
(losses), net of income tax, and adjustments related to net investment gains
(losses), net of income tax.
F-63
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Set forth in the tables below is certain financial information with respect
to the Company's segments, as well as Corporate & Other, for the years ended
December 31, 2006 and 2005.
<Table>
<Caption>
CORPORATE &
FOR THE YEAR ENDED DECEMBER 31, 2006 INDIVIDUAL INSTITUTIONAL OTHER TOTAL
- ------------------------------------ ---------- ------------- ----------- --------
(IN MILLIONS)
STATEMENT OF INCOME:
Premiums......................................... $ 218 $ 65 $ 25 $ 308
Universal life and investment-type product policy
fees........................................... 1,244 24 -- 1,268
Net investment income............................ 985 1,449 405 2,839
Other revenues................................... 195 15 2 212
Net investment gains (losses).................... (194) (282) (45) (521)
Policyholder benefits and claims................. 315 450 27 792
Interest credited to policyholder account
balances....................................... 669 647 -- 1,316
Other expenses................................... 1,045 16 112 1,173
------- ------- ------- --------
Income before provision for income tax........... 419 158 248 825
Provision for income tax......................... 145 55 28 228
------- ------- ------- --------
Net income....................................... $ 274 $ 103 $ 220 $ 597
======= ======= ======= ========
BALANCE SHEET:
Total assets..................................... $76,897 $35,982 $11,208 $124,087
DAC and VOBA..................................... $ 4,946 $ 165 $ -- $ 5,111
Goodwill......................................... $ 234 $ 312 $ 407 $ 953
Separate account assets.......................... $47,566 $ 2,501 $ -- $ 50,067
Policyholder liabilities......................... $24,429 $27,391 $ 4,446 $ 56,266
Separate account liabilities..................... $47,566 $ 2,501 $ -- $ 50,067
</Table>
F-64
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<Table>
<Caption>
CORPORATE &
FOR THE YEAR ENDED DECEMBER 31, 2005(1) INDIVIDUAL INSTITUTIONAL OTHER TOTAL
- --------------------------------------- ---------- ------------- ----------- --------
(IN MILLIONS)
STATEMENT OF INCOME:
Premiums......................................... $ 152 $ 116 $ 13 $ 281
Universal life and investment-type product policy
fees........................................... 845 17 -- 862
Net investment income............................ 530 712 196 1,438
Other revenues................................... 121 10 1 132
Net investment gains (losses).................... (113) (87) 2 (198)
Policyholder benefits and claims................. 224 324 22 570
Interest credited to policyholder account
balances....................................... 417 303 -- 720
Other expenses................................... 640 30 8 678
------- ------- ------- --------
Income before provision for income tax........... 254 111 182 547
Provision for income tax......................... 53 38 65 156
------- ------- ------- --------
Net income....................................... $ 201 $ 73 $ 117 $ 391
======= ======= ======= ========
BALANCE SHEET:
Total assets..................................... $71,385 $38,072 $11,791 $121,248
DAC and VOBA..................................... $ 4,753 $ 161 $ -- $ 4,914
Goodwill......................................... $ 227 $ 305 $ 392 $ 924
Separate account assets.......................... $41,347 $ 3,177 $ -- $ 44,524
Policyholder liabilities......................... $24,855 $28,340 $ 4,282 $ 57,477
Separate account liabilities..................... $41,347 $ 3,177 $ -- $ 44,524
</Table>
- --------
(1) Includes six months of results for MetLife Connecticut and its
subsidiaries and twelve months of results for MLI-USA.
Net investment income and net investment gains (losses) are based upon the
actual results of each segment's specifically identifiable asset portfolio
adjusted for allocated equity. Other costs are allocated to each of the segments
based upon: (i) a review of the nature of such costs; (ii) time studies
analyzing the amount of employee compensation costs incurred by each segment;
and (iii) cost estimates included in the Company's product pricing.
Revenues derived from any customer did not exceed 10% of consolidated
revenues for the years ended December 31, 2006, 2005 and 2004. Substantially all
of the Company's revenues originated in the United States.
17. DISCONTINUED OPERATIONS
REAL ESTATE
The Company actively manages its real estate portfolio with the objective
of maximizing earnings through selective acquisitions and dispositions. Income
related to real estate classified as held-for-sale or sold is presented in
discontinued operations. These assets are carried at the lower of depreciated
cost or fair value less expected disposition costs.
In the Institutional segment, the Company had $1 million of investment
income and $1 million of investment expense related to discontinued operations
resulting in no change to net investment income for the year ended December 31,
2006. The Company had no investment income or expense related to discontinued
operations for the years ended December 31, 2005 and 2004.
F-65
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The carrying value of real estate related to discontinued operations was $7
million and $5 million at December 31, 2006 and 2005, respectively.
18. FAIR VALUE INFORMATION
The estimated fair value of financial instruments have been determined by
using available market information and the valuation methodologies described
below. Considerable judgment is often required in interpreting market data to
develop estimates of fair value. Accordingly, the estimates presented herein may
not necessarily be indicative of amounts that could be realized in a current
market exchange. The use of different assumptions or valuation methodologies may
have a material effect on the estimated fair value amounts.
Amounts related to the Company's financial instruments are as follows:
<Table>
<Caption>
NOTIONAL CARRYING ESTIMATED
AMOUNT VALUE FAIR VALUE
DECEMBER 31, 2006 -------- -------- ----------
(IN MILLIONS)
Assets:
Fixed maturity securities............................ $47,846 $47,846
Equity securities.................................... $ 795 $ 795
Mortgage and consumer loans.......................... $ 3,595 $ 3,547
Policy loans......................................... $ 918 $ 918
Short-term investments............................... $ 777 $ 777
Cash and cash equivalents............................ $ 649 $ 649
Accrued investment income............................ $ 597 $ 597
Mortgage loan commitments............................ $665 $ -- $ 1
Commitments to fund bank credit facilities........... $173 $ -- $ --
Liabilities:
Policyholder account balances........................ $29,780 $28,028
Long-term debt -- affiliated......................... $ 435 $ 425
Payables for collateral under securities loaned and
other transactions................................ $ 9,155 $ 9,155
</Table>
<Table>
<Caption>
NOTIONAL CARRYING ESTIMATED
AMOUNT VALUE FAIR VALUE
DECEMBER 31, 2005 -------- -------- ----------
(IN MILLIONS)
Assets:
Fixed maturity securities............................ $52,589 $52,589
Trading Securities................................... $ 452 $ 452
Equity securities.................................... $ 421 $ 421
Mortgage and consumer loans.......................... $ 2,543 $ 2,553
Policy loans......................................... $ 916 $ 916
Short-term investments............................... $ 1,769 $ 1,769
Cash and cash equivalents............................ $ 571 $ 571
Accrued investment income............................ $ 602 $ 602
Mortgage loan commitments............................ $339 $ -- $ (2)
Liabilities:
Policyholder account balances........................ $32,877 $31,621
Long-term debt -- affiliated......................... $ 435 $ 443
Payables for collateral under securities loaned and
other transactions................................ $ 9,737 $ 9,737
</Table>
F-66
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The methods and assumptions used to estimate the fair value of financial
instruments are summarized as follows:
FIXED MATURITY SECURITIES, TRADING SECURITIES AND EQUITY SECURITIES
The fair values of publicly held fixed maturity securities and publicly
held equity securities are based on quoted market prices or estimates from
independent pricing services. However, in cases where quoted market prices are
not available, such as for private fixed maturity securities, fair values are
estimated using present value or valuation techniques. The determination of fair
values is based on: (i) valuation methodologies; (ii) securities the Company
deems to be comparable; and (iii) assumptions deemed appropriate given the
circumstances. The fair value estimates are based on available market
information and judgments about financial instruments, including estimates of
the timing and amounts of expected future cash flows and the credit standing of
the issuer or counterparty. Factors considered in estimating fair value include:
coupon rate, maturity, estimated duration, call provisions, sinking fund
requirements, credit rating, industry sector of the issuer, and quoted market
prices of comparable securities.
MORTGAGE AND CONSUMER LOANS, MORTGAGE LOAN COMMITMENTS AND COMMITMENTS TO FUND
BANK CREDIT FACILITIES
Fair values for mortgage and consumer loans are estimated by discounting
expected future cash flows, using current interest rates for similar loans with
similar credit risk. For mortgage loan commitments and commitments to fund bank
credit facilities, the estimated fair value is the net premium or discount of
the commitments.
POLICY LOANS
The carrying values for policy loans approximate fair value.
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
The carrying values for cash and cash equivalents and short-term
investments approximated fair values due to the short-term maturities of these
instruments.
ACCRUED INVESTMENT INCOME
The carrying value for accrued investment income approximates fair value.
POLICYHOLDER ACCOUNT BALANCES
The fair value of PABs which have final contractual maturities are
estimated by discounting expected future cash flows based upon interest rates
currently being offered for similar contracts with maturities consistent with
those remaining for the agreements being valued. The fair value of PABs without
final contractual maturities are assumed to equal their current net surrender
value.
LONG-TERM DEBT
The fair values of long-term debt are determined by discounting expected
future cash flows using risk rates currently available for debt with similar
terms and remaining maturities.
PAYABLES FOR COLLATERAL UNDER SECURITIES LOANED AND OTHER TRANSACTIONS
The carrying value for payables for collateral under securities loaned and
other transactions approximate fair value.
F-67
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DERIVATIVE FINANCIAL INSTRUMENTS
The fair value of derivative financial instruments, including financial
futures, financial forwards, interest rate, credit default and foreign currency
swaps, foreign currency forwards, caps, floors, and options are based upon
quotations obtained from dealers or other reliable sources. See Note 5 for
derivative fair value disclosures.
19. RELATED PARTY TRANSACTIONS
SERVICE AGREEMENTS
The Company has entered into a Master Service Agreement with Metropolitan
Life who provides administrative, accounting, legal and similar services to the
Company. Metropolitan Life charged the Company $167 million, $15 million and $14
million, included in other expenses, for services performed under the Master
Service Agreement for the years ended December 31, 2006, 2005 and 2004,
respectively.
The Company entered into a Service Agreement with MetLife Group, Inc.
("MetLife Group"), a wholly-owned subsidiary of MetLife, under which MetLife
Group provides personnel services, as needed, to support the activities of the
Company. MetLife Group charged the Company $154 million, $49 million and $43
million, included in other expenses, for services performed under the Service
Agreement for the years ended December 31, 2006, 2005 and 2004, respectively.
The Company has entered into various agreements with other affiliates for
services necessary to conduct its activities. Typical services provided under
these agreements include management, policy administrative functions, investment
advice and distribution services. Expenses and fees incurred with affiliates
related to these agreements, recorded in other expenses, were $190 million, $48
million and $52 million for the years ended December 31, 2006, 2005 and 2004,
respectively.
In 2005, MLI-USA entered into Broker-Dealer Wholesale Sales Agreements with
several affiliates ("Distributors"), in which the Distributors agree to sell, on
MLI-USA's behalf, fixed rate insurance products through authorized retailers.
MLI-USA agrees to compensate the Distributors for the sale and servicing of such
insurance products in accordance with the terms of the agreements. The
Distributors charged MLI-USA $65 million, included in other expenses, for the
year ended December 31, 2006. MLI-USA did not incur any such expenses for the
years ended December 31, 2005 and 2004.
The Company had payables from affiliates of $9 million and $3 million at
December 31, 2006 and 2005, respectively, excluding affiliated reinsurance
balances discussed below.
INVESTMENT TRANSACTIONS
As of December 31, 2006 and 2005, the Company held $581 million and $346
million, respectively, of its total invested assets in the MetLife Money Market
Pool and the MetLife Intermediate Income Pool which are affiliated partnerships.
These amounts are included in short-term investments.
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, are as follows:
<Table>
<Caption>
YEARS ENDED
DECEMBER 31,
------------------
2006 2005 2004
---- ---- ----
(IN MILLIONS)
Fair market value of assets transferred to affiliates........ $164 $ 79 $320
Amortized cost of assets transferred to affiliates........... $164 $ 78 $324
Net investment gains (losses) recognized on transfers........ $ -- $ 1 $ (4)
Fair market value of assets transferred from affiliates...... $ 89 $830 $ --
</Table>
F-68
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
REINSURANCE TRANSACTIONS
As of December 1, 2006, the Company acquired a block of structured
settlement business from Texas Life Insurance Company ("Texas Life"), a wholly-
owned subsidiary of MetLife, through an assumptive reinsurance agreement. This
transaction increased future policyholder benefits of the Company by $1.3
billion and decreased deferred income tax liabilities by $142 million. A
receivable at December 31, 2006 was held by the Company of $1.2 billion, related
to premiums and other consideration which is expected to be paid by Texas Life
during the first quarter of 2007.
The Company also has reinsurance agreements with MetLife and certain of its
subsidiaries, including Metropolitan Life, Reinsurance Group of America,
Incorporated, MetLife Reinsurance Company of South Carolina, Exeter Reassurance
Company, Ltd., General American Life Insurance Company ("GALIC"), and Mitsui
Sumitomo MetLife Insurance Co., Ltd. As of December 31, 2006, the Company had
reinsurance related assets and liabilities from these agreements totaling $2.8
billion and $1.2 billion, respectively. Prior-year comparable assets and
liabilities were $2.5 billion and $1.2 billion, respectively.
Effective January 1, 2005, MLI-USA entered into a reinsurance agreement to
assume an in-force block of business from GALIC. This agreement covered certain
term and universal life policies issued by GALIC on and after January 1, 2000
through December 31, 2004. This agreement also covers certain term and universal
life policies issued on or after January 1, 2005. Under this agreement GALIC
transferred $797 million of liabilities and $411 million in assets to MLI-USA
related to the policies in-force as of December 31, 2004. MLI-USA also paid and
deferred 100% of a ceding commission to GALIC of $386 million resulting in no
gain or loss on the transfer of the in-force business as of January 1, 2005.
The following tables reflect related party reinsurance information:
<Table>
<Caption>
YEARS ENDED
DECEMBER 31,
-------------------
2006 2005 2004
---- ----- ----
(IN MILLIONS)
Assumed premiums....................................... $ 21 $ 37 $--
Assumed fees, included in universal life and
investment-type product policy fees.................. 65 194 --
Assumed fees, included in net investment gains
(losses)............................................. -- 6 --
Assumed benefits, included in policyholder benefits and
claims............................................... 11 32 --
Assumed benefits, included in interest credited to
policyholder account balances........................ 49 42 --
Assumed fees, included in other expenses............... 39 543 --
Assumed deferred acquisition costs, included in other
expenses............................................. 19 (432) --
---- ----- ---
Total assumed........................................ $204 $ 422 $--
==== ===== ===
Ceded premiums......................................... $ 21 $ 12 $ 1
Ceded fees, included in universal life and investment-
type product policy fees............................. 130 93 37
Ceded fees, included in other revenues................. 68 55 12
Ceded benefits, included in policyholder benefits and
claims............................................... 86 92 19
Ceded fees, included in other expenses................. 64 97 --
Ceded deferred acquisition costs, included in other
expenses............................................. 13 85 --
Ceded derivative gains (loss), included in net
investment gains (losses)............................ (31) 5 --
---- ----- ---
Total ceded.......................................... $351 $ 439 $69
==== ===== ===
</Table>
F-69
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<Table>
<Caption>
DECEMBER 31,
---------------
2006 2005
------ ------
(IN MILLIONS)
Reinsurance recoverables, included in premiums and other
receivables................................................... $2,359 $2,079
Reinsurance recoverables, included in other assets.............. $ 89 $ 88
Assumed (ceded) deferred acquisition costs, included in DAC..... $ 306 $ 342
Assumed liabilities, included in other liabilities.............. $ 8 $ 24
Ceded balances payable, included in other liabilities........... $ 55 $ 140
Derivative liabilities, included in policyholder account
balances...................................................... $ (57) $ (23)
Assumed liabilities, included in future policy benefits......... $ 26 $ 23
Assumed liabilities, included in other policyholder funds....... $1,182 $1,001
</Table>
20. SUBSEQUENT EVENT
On March 27, 2007, the Company entered into a secured demand note with
MetLife Securities, Inc. ("MSI") under which the Company agreed to fund MSI with
up to $60 million of cash upon MSI's request. In connection with this agreement,
the Company transferred securities with a fair value of $71 million to an MSI
custody account to secure the note.
F-70
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
SCHEDULE I
CONSOLIDATED SUMMARY OF INVESTMENTS --
OTHER THAN INVESTMENTS IN RELATED PARTIES
DECEMBER 31, 2006
(IN MILLIONS)
<Table>
<Caption>
AMOUNT AT
COST OR ESTIMATED WHICH SHOWN ON
AMORTIZED COST(1) FAIR VALUE BALANCE SHEET
----------------- ---------- --------------
TYPE OF INVESTMENTS
Fixed Maturity Securities:
Bonds:
U.S. Treasury/agency securities.......... $ 5,455 $ 5,336 $ 5,336
State and political subdivision
securities............................. 1,062 1,030 1,030
Foreign government securities............ 533 573 573
Public utilities......................... 2,274 2,233 2,233
All other corporate bonds................ 19,390 19,057 19,057
Mortgage-backed and other asset-backed
securities............................... 18,462 18,400 18,400
Redeemable preferred stock.................. 1,230 1,217 1,217
------- ------- -------
Total fixed maturity securities.......... 48,406 47,846 47,846
------- ------- -------
Equity Securities:
Common stock:
Banks, trust and insurance companies..... 1 1 1
Industrial, miscellaneous and all other.. 105 110 110
Non-redeemable preferred stock.............. 671 684 684
------- ------- -------
Total equity securities.................. 777 795 795
------- ------- -------
Mortgage and consumer loans................... 3,595 3,595
Policy loans.................................. 918 918
Real estate and real estate joint ventures.... 180 180
Other limited partnership interests........... 1,082 1,082
Short-term investments........................ 777 777
Other invested assets......................... 1,241 1,241
------- -------
Total investments........................ $56,976 $56,434
======= =======
</Table>
- --------
(1) Cost for fixed maturity securities and mortgage and consumer loans
represents original cost reduced by repayments, net valuation allowances
and writedowns from other-than-temporary declines in value and adjusted
for amortization of premiums or accretion of discount; for equity
securities, cost represents original cost reduced by writedowns from
other-than-temporary declines in value; for real estate, cost represents
original cost reduced by writedowns and adjusted for valuation allowances
and depreciation; cost for real estate joint ventures and other limited
partnership interests represents original cost reduced for other-than-
temporary impairments or original cost adjusted for equity in earnings
and distributions.
F-71
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
SCHEDULE II
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
DECEMBER 31, 2006 AND 2005
(IN MILLIONS)
<Table>
<Caption>
2006 2005
------- -------
CONDENSED BALANCE SHEETS
ASSETS
Investments:
Fixed maturity securities available-for-sale, at estimated
fair value (amortized cost: $38,293 and $42,526,
respectively)............................................ $37,794 $41,947
Equity securities available-for-sale, at estimated fair
value (cost: $703 and $418, respectively)................ 719 415
Mortgage and consumer loans................................. 2,822 1,837
Policy loans................................................ 825 843
Real estate and real estate joint ventures held-for-
investment............................................... 143 71
Real estate held-for-sale................................... 7 --
Other limited partnership interests......................... 884 1,106
Short-term investments...................................... 186 1,219
Investment in subsidiaries.................................. 3,499 3,187
Other invested assets....................................... 893 698
------- -------
Total investments........................................ 47,772 51,323
Cash and cash equivalents..................................... 291 331
Accrued investment income..................................... 473 474
Premiums and other receivables................................ 6,128 4,706
Deferred policy acquisition costs and value of business
acquired.................................................... 1,849 1,924
Current income tax recoverable................................ -- 56
Deferred income tax assets.................................... 1,281 1,113
Goodwill...................................................... 646 612
Other assets.................................................. 129 102
Separate account assets....................................... 19,205 19,058
------- -------
Total assets............................................. $77,774 $79,699
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Future policy benefits...................................... $17,613 $16,337
Policyholder account balances............................... 24,764 27,298
Other policyholder funds.................................... 213 219
Current income taxes payable................................ 46 --
Payables for collateral under securities loaned and other
transactions............................................. 8,152 8,620
Other liabilities........................................... 366 734
Separate account liabilities................................ 19,205 19,058
------- -------
Total liabilities........................................ 70,359 72,266
------- -------
STOCKHOLDERS' EQUITY:
Common stock, par value $2.50 per share; 40,000,000 shares
authorized; 34,595,317 shares issued and outstanding at
December 31, 2006 and 2005.................................. 86 86
Additional paid-in capital.................................... 7,123 7,180
Retained earnings............................................. 520 581
Accumulated other comprehensive income (loss)................. (314) (414)
------- -------
Total stockholders' equity............................... 7,415 7,433
------- -------
Total liabilities and stockholders' equity............... $77,774 $79,699
======= =======
</Table>
See accompanying notes to condensed financial information.
F-72
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
SCHEDULE II
CONDENSED FINANCIAL INFORMATION OF REGISTRANT -- (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
(IN MILLIONS)
<Table>
<Caption>
YEARS ENDED DECEMBER
31,
--------------------
2006 2005
------ ------
CONDENSED STATEMENTS OF INCOME
REVENUES
Premiums..................................................... $ 176 $ 206
Universal life and investment-type product policy fees....... 381 185
Net investment income........................................ 2,167 1,044
Equity in earnings of subsidiaries........................... 277 225
Other revenues............................................... 42 32
Net investment gains (losses)................................ (397) (159)
------ ------
Total revenues............................................. 2,646 1,533
------ ------
EXPENSES
Policyholder benefits and claims............................. 599 433
Interest credited to policyholder account balances........... 926 429
Other expenses............................................... 388 195
------ ------
Total expenses............................................. 1,913 1,057
------ ------
Income before provision for income tax....................... 733 476
Provision for income tax..................................... 136 85
------ ------
Net income................................................... $ 597 $ 391
====== ======
</Table>
See accompanying notes to condensed financial information.
F-73
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
SCHEDULE II
CONDENSED FINANCIAL INFORMATION OF REGISTRANT -- (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
(IN MILLIONS)
<Table>
<Caption>
YEARS ENDED DECEMBER
31,
-----------------------
2006 2005
-------- --------
CONDENSED STATEMENT OF CASH FLOWS
Net cash provided by operating activities.................. $ 899 $ 2,000
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Sales, maturities and repayments of:
Fixed maturity securities............................. 22,406 18,453
Equity securities..................................... 218 181
Mortgage and consumer loans........................... 878 687
Real estate and real estate joint ventures............ 127 44
Other limited partnership interests................... 537 152
Purchases of:
Fixed maturity securities............................. (19,021) (26,517)
Equity securities..................................... (62) --
Mortgage and consumer loans........................... (1,870) (460)
Real estate and real estate joint ventures............ (53) --
Other limited partnership interests................... (295) (233)
Net change in policy loans............................... 18 5
Net change in short-term investments..................... 1,033 633
Net change in other invested assets...................... (129) (728)
Other, net............................................... (1) 17
-------- --------
Net cash provided by (used in) investing activities........ $ 3,786 $ (7,766)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholder account balances:
Deposits.............................................. $ 1,633 $ 7,075
Withdrawals........................................... (4,936) (8,682)
Net change in payables for collateral under securities
loaned and other transactions......................... (468) 7,458
Dividends on common stock................................ (917) --
Other, net............................................... (37) (61)
-------- --------
Net cash (used in) provided by financing activities........ (4,725) 5,790
-------- --------
Change in cash and cash equivalents........................ (40) 24
Cash and cash equivalents, beginning of period............. 331 307
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD................... $ 291 $ 331
======== ========
Supplemental disclosures of cash flow information:
Net cash paid during the year for:
Income tax............................................ $ 88 $ 51
======== ========
Non-cash transactions during the period:
Contribution of other intangible assets, net of income
tax................................................. $ 162 $ --
Contribution of goodwill from MetLife, Inc. .......... $ 32 $ --
======== ========
</Table>
F-74
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
SCHEDULE II
NOTES TO CONDENSED FINANCIAL INFORMATION OF REGISTRANT
1. SUMMARY OF ACCOUNTING POLICIES
BUSINESS
"MICC" or the "Company" refers to MetLife Insurance Company of Connecticut
(formerly, The Travelers Insurance Company), a Connecticut corporation
incorporated in 1863 ("MetLife Connecticut"), and its subsidiaries, including
MetLife Life and Annuity Company of Connecticut ("MLAC," formerly The Travelers
Life and Annuity Company) and MetLife Investors USA Insurance Company ("MLI-
USA"). The Company is a subsidiary of MetLife, Inc. ("MetLife"). The Company
offers individual annuities, individual life insurance, and institutional
protection and asset accumulation products.
On July 1, 2005 (the "Acquisition Date"), MetLife Connecticut became a
wholly-owned subsidiary of MetLife. MetLife Connecticut, together with
substantially all of Citigroup Inc.'s ("Citigroup") international insurance
businesses, excluding Primerica Life Insurance Company and its subsidiaries
("Primerica") (collectively, "Travelers"), were acquired by MetLife from
Citigroup (the "Acquisition") for $12.1 billion. See Note 2 of the consolidated
financial statements for further information on the Acquisition.
On October 11, 2006, MetLife Connecticut and MetLife Investors Group, Inc.
("MLIG"), both subsidiaries of MetLife, entered into a Transfer Agreement
("Transfer Agreement"), pursuant to which MetLife Connecticut agreed to acquire
all of the outstanding stock of MLI-USA from MLIG in exchange for shares of
MetLife Connecticut's common stock. To effectuate the exchange of shares,
MetLife returned 10,000,000 shares just prior to the closing of the transaction
and retained 30,000,000 shares representing 100% of the issued and outstanding
shares of MetLife Connecticut. MetLife Connecticut issued 4,595,317 new shares
to MLIG in exchange for all of the outstanding common stock of MLI-USA. After
the closing of the transaction, 34,595,317 shares of MetLife Connecticut's
common stock are outstanding, of which MLIG holds 4,595,317 shares, with the
remaining shares held by MetLife.
The transfer of MLI-USA to MetLife Connecticut was a transaction between
entities under common control. Since MLI-USA was the original entity under
common control, for financial statement reporting purposes, MLI-USA is
considered the accounting acquirer of MetLife Connecticut. Accordingly,
financial information of the registrant has been provided for periods subsequent
to the Acquisition Date only.
BASIS OF PRESENTATION
The condensed financial information of MetLife Connecticut should be read
in conjunction with the Consolidated Financial Statements of MICC and the notes
thereto (the "Consolidated Financial Statements"). These condensed
nonconsolidated financial statements reflect the results of operations,
financial condition and cash flows for MetLife Connecticut. Investments in
subsidiaries are accounted for using the equity method of accounting prescribed
by Accounting Principles Board ("APB") Opinion No. 18, The Equity Method of
Accounting for Investments in Common Stock. The condensed statement of income
and statement of cash flows for the year ended December 31, 2005 included herein
reflect the full year of operating results for MLI-USA in equity in earnings of
subsidiaries.
MetLife Connecticut's financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America
("GAAP") except as stated above which requires management to make certain
estimates and assumptions. The most important of these estimates and assumptions
relate to fair value measurements, the accounting for goodwill and identifiable
intangible assets and the provision for potential losses that may arise from
litigation and regulatory proceedings and tax audits, which may affect the
amounts reported in the condensed financial statements and accompanying notes.
Actual results could differ materially from these estimates.
For information on the following, refer to the indicated Notes to the
Consolidated Financial Statements of MICC:
- Business, Basis of Presentation and Summary of Significant Accounting
Policies (Note 1)
- Acquisition of MetLife Insurance Company of Connecticut by MetLife, Inc.
from Citigroup Inc. (Note 2)
F-75
- Contingencies, Commitments and Guarantees (Note 12)
- Equity (Note 14)
2. SUPPORT AGREEMENT
MetLife Connecticut entered into a net worth maintenance agreement with its
indirect subsidiary, MetLife Europe Limited, an Irish company ("MetLife
Europe"), in connection with MetLife Europe's formation. Under the agreement,
MetLife Connecticut has agreed, without limitation as to amount, to cause
MetLife Europe to have a minimum capital and surplus of the greater of EUR 14
million or an amount sufficient to provide solvency cover equal to 200% of the
minimum solvency cover required by applicable law and regulation, as interpreted
by the Irish Financial Services Regulatory Authority or any successor body,
during MetLife Europe's first three years of operation and 150% thereafter, and
liquidity necessary to enable it to meet its current obligations on a timely
basis. At December 31, 2006, the capital and surplus of MetLife Europe was in
excess of the minimum capital and surplus amount referenced above.
F-76
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
SCHEDULE III
CONSOLIDATED SUPPLEMENTARY INSURANCE INFORMATION
AS OF DECEMBER 31, 2006, 2005 AND 2004
(IN MILLIONS)
<Table>
<Caption>
DAC FUTURE POLICY POLICYHOLDER
AND BENEFITS AND OTHER ACCOUNT UNEARNED
SEGMENT VOBA POLICYHOLDER FUNDS BALANCES REVENUE(1)
- ------- ------ ------------------ ------------ ----------
2006
Individual................................ $4,946 $ 3,769 $20,660 $260
Institutional............................. 165 12,895 14,496 3
Corporate & Other......................... -- 4,503 (57) --
------ ------- ------- ----
$5,111 $21,167 $35,099 $263
====== ======= ======= ====
2005
Individual................................ $4,753 $ 3,452 $21,403 $141
Institutional............................. 161 11,880 16,460 1
Corporate & Other......................... -- 4,305 (23) --
------ ------- ------- ----
$4,914 $19,637 $37,840 $142
====== ======= ======= ====
2004(2)................................... $ 678 $ 149 $ 4,591 $ 6
====== ======= ======= ====
</Table>
- --------
(1) Amounts are included within the future policy benefits and other
policyholder funds column.
(2) Prior to the Acquisition of MetLife Connecticut by MetLife, MLI-USA
operated as a single segment.
F-77
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
SCHEDULE III
CONSOLIDATED SUPPLEMENTARY INSURANCE INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(IN MILLIONS)
<Table>
<Caption>
PREMIUM POLICYHOLDER AMORTIZATION OF
REVENUE NET BENEFITS AND DAC AND VOBA OTHER PREMIUMS
AND POLICY INVESTMENT INTEREST CHARGED TO OPERATING WRITTEN
SEGMENT CHARGES INCOME CREDITED OTHER EXPENSES EXPENSES(1) (EXCLUDING LIFE)
- ------- ---------- ---------- ------------ --------------- ----------- ----------------
2006
Individual................. $1,462 $ 985 $ 984 $481 $564 $--
Institutional.............. 89 1,449 1,097 6 10 9
Corporate & Other.......... 25 405 27 1 111 25
------ ------ ------ ---- ---- ---
$1,576 $2,839 $2,108 $488 $685 $34
====== ====== ====== ==== ==== ===
2005(2)
Individual................. $ 997 $ 530 $ 641 $287 $353 $--
Institutional.............. 133 712 627 1 29 9
Corporate & Other.......... 13 196 22 -- 8 13
------ ------ ------ ---- ---- ---
$1,143 $1,438 $1,290 $288 $390 $22
====== ====== ====== ==== ==== ===
2004(3).................... $ 168 $ 207 $ 171 $115 $ 64 $--
====== ====== ====== ==== ==== ===
</Table>
- --------
(1) Includes other expenses excluding amortization of deferred acquisition
costs and value of business acquired charged to other expenses.
(2) Includes six months of results for MetLife Connecticut and twelve months
of results for MLI-USA.
(3) Prior to the acquisition of MetLife Connecticut by MetLife, MLI-USA
operated as a single segment.
F-78
METLIFE INSURANCE COMPANY OF CONNECTICUT
(A Wholly-Owned Subsidiary of MetLife, Inc.)
SCHEDULE IV
CONSOLIDATED REINSURANCE
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(IN MILLIONS)
<Table>
<Caption>
% AMOUNT
ASSUMED
GROSS AMOUNT CEDED ASSUMED NET AMOUNT TO NET
------------ -------- ------- ---------- --------
2006
Life insurance in force....... $153,390 $119,281 $14,374 $48,483 29.6%
======== ======== ======= =======
Insurance premium
Life insurance................ $ 323 $ 72 $ 21 $ 272 7.7%
Accident and health........... 276 240 -- 36 --%
-------- -------- ------- -------
Total insurance premium..... $ 599 $ 312 $ 21 $ 308 6.8%
======== ======== ======= =======
</Table>
<Table>
<Caption>
% AMOUNT
ASSUMED
GROSS AMOUNT CEDED ASSUMED NET AMOUNT TO NET
------------ ------- ------- ---------- --------
2005
Life insurance in force....... $126,362 $93,686 $16,921 $49,597 34.1%
======== ======= ======= =======
Insurance premium
Life insurance................ $ 269 $ 45 $ 38 $ 262 14.5%
Accident and health........... 144 125 -- 19 --%
-------- ------- ------- -------
Total insurance premium..... $ 413 $ 170 $ 38 $ 281 13.5%
======== ======= ======= =======
</Table>
<Table>
<Caption>
% AMOUNT
ASSUMED
GROSS AMOUNT CEDED ASSUMED NET AMOUNT TO NET
------------ ------ ------- ---------- --------
2004
Life insurance in force........ $4,310 $2,759 $-- $1,551 --%
====== ====== === ======
Insurance premium
Life insurance................. $ 13 $ 4 $-- $ 9 --%
------ ------ --- ------
Total insurance premium...... $ 13 $ 4 $-- $ 9 --%
====== ====== === ======
</Table>
For the year ended December 31, 2006, both reinsurance ceded and assumed
include affiliated transactions of $21 million. For the year ended December 31,
2005, reinsurance ceded and assumed include affiliated transactions of $12
million and $38 million, respectively. For the year ended December 31, 2004,
both reinsurance ceded and assumed include affiliated transactions of $1
million.
F-79
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) The financial statements of the Registrant and the report of Independent
Registered Public Accounting Firm thereto are contained in the Registrant's
Annual Report and are included in the Statement of Additional Information.
The financial statements of the Registrant include:
(1) Statement of Assets and Liabilities as of December 31, 2006
(2) Statement of Operations for the year ended December 31, 2006
(3) Statement of Changes in Net Assets for the years ended December 31,
2006 and 2005
(4) Notes to Financial Statements
The consolidated financial statements and schedules of MetLife Insurance Company
of Connecticut and subsidiaries (formerly The Travelers Insurance Company) and
the reports of Independent Registered Public Accounting Firms, are contained in
the Statement of Additional Information. The consolidated financial statements
of MetLife Insurance Company of Connecticut and subsidiaries include:
(1) Consolidated Balance Sheets as of December 31, 2006 and 2005
(2) Consolidated Statements of Income for the year ended December 31,
2006, for the six months ended December 31, 2005 and June 30, 2005 and
for the year ended December 31, 2004
(3) Consolidated Statements of Stockholder's Equity for the year ended
December 31, 2006, for the six months ended December 31, 2005 and June
30, 2005 and for the year ended December 31, 2004.
(4) Consolidated Statements of Cash Flows for the year ended December 31,
2006, for the six months ended December 31, 2005 and June 30, 2005 and
for the year ended December 31, 2004
(5) Notes to Consolidated Financial Statements
(6) Financial Statement Schedules
(b) Exhibits
<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
1. Resolution of The Travelers Insurance Company Board of Directors
authorizing the establishment of the Registrant. Not applicable.
2. Not Applicable.
3(a). Distribution and Principal Underwriting Agreement between The
Travelers Insurance Company and Travelers Distribution LLC.
(Incorporated herein by reference to Exhibit 4 to Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-4, File No.
333-118415, filed March 4, 2005.)
3(a)(i) Agreement and Plan of Merger dated as of October 20, 2006.
(Incorporated herein by reference to Exhibit 1(a) to the Registration
Statement on Form S-1, File No. 333-138472 filed on November 7,
2006.)
3(b) Form of Selling Agreement. (Incorporated herein by reference to
Exhibit 3(b) to Post-Effective Amendment No. 2 the Registration
Statement on Form N-4, File No. 333-65942 filed April 15, 2003.)
3(c) Form of Selling Agreement. (Incorporated herein by reference to
Exhibit 3(b) to Post-Effective Amendment No. 14 to The Travelers Fund
ABD for Variable Annuities to the Registration Statement on Form N-
4, File No. 033-65343 filed April 6, 2006.)
3(d) Master Retail Sales Agreement (MLIDC). (Incorporated herein by
reference to Exhibit 3(d) to Post-Effective Amendment No. 16 to
MetLife of CT Fund ABD for Variable Annuities to the Registration
Statement on Form N-4, File No. 033-65343/811-07465 filed April 4,
2007.)
</Table>
<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4. Form of Variable Annuity Contract. (Incorporated herein by reference
to Exhibit 4 to Pre-Effective Amendment No. 1 to the Registration
Statement on Form N-4, File No. 333-118415, filed March 4, 2005.)
a. Company Name Change Endorsement. (Incorporated herein by
reference to Exhibit 4(c) to Post-Effective Amendment No.
14 to the Registration Statement on Form N-4, File No. 033-
65343 filed April 5, 2006.)
b. Roth 401 Endorsement. (Incorporated herein by reference to
Exhibit 4 to Post-Effective Amendment No. 14 to The
Travelers Fund ABD for Variable Annuities to the
Registration Statement on Form N-4, File No. 033-65343 filed
April 5, 2006.)
c. Roth 403(b) Endorsement. (Incorporated herein by reference
to Exhibit 4 to Post-Effective Amendment No. 14 to The
Travelers Fund ABD for Variable Annuities to the
Registration Statement on Form N-4, File No. 033-65343 filed
April 5, 2006.)
5. Form of Application. (Incorporated herein by reference to Exhibit 4
to Pre-Effective Amendment No. 1 to the Registration Statement on
Form N-4, File No. 333-118415, filed March 4, 2005.)
a. 401(k) Group Annuity Group Master Data Sheet L-20105A 5-05*
b. 401(k) Group Annuity Group Master Data Sheet L-20105A 7-05*
c. 401(k) Group Annuity Group Master Data Sheet L-20105A 11-05*
d. 401(k) Group Annuity Group Master Data Sheet (New York only)
L-20105NY 5-05,*
e. 401(k) Group Annuity Group Master Data Sheet (New York only)
L-20105NY 7-05*
f. 401(k) Group Annuity Group Master Data Sheet (New York only)
L-20105NY 11-05*
* (Incorporated herein by reference to Post-Effective
Amendment No. 1 to the Registration Statement on Form N-
4, File No. 333-118415, filed April 10, 2006.)
g. Group Variable Annuity Master Application -- L-24767AZ Order
# L-24770AZ Rev. 05/06
h. 401(k) Group Annuity Group Master Data Sheet L-21015 A
GTE/BP; Rev. 05/06
i. Group Variable Annuity Master Application -- L-24767AZ Order
# L-24770AZ Rev. 11/06
j. 401(k) Group Annuity Group Master Data Sheet L-21015 A
GTE/BP; Rev. 11/06
6(a). Charter of The Travelers Insurance Company, as amended on October 19,
1994. (Incorporated herein by reference to Exhibit 6(a) to the
Registration Statement on Form N-4, File No. 333-40193, filed
November 13, 1998.)
6(b) By-Laws of The Travelers Insurance Company, as amended on October 20,
1994. (Incorporated herein by reference to Exhibit 6(b) to the
Registration Statement on Form N-4, File No. 333-40193, filed
November 13, 1998.)
6(c) Certificate of Amendment of the Charter as Amended and Restated of
The Travelers Insurance Company effective May 1, 2006. (Incorporated
herein by reference to Post-Effective Amendment No. 14 to The
Travelers Fund ABD for Variable Annuities Registration Statement on
Form N-4, File No. 033-65343 filed April 6, 2006.)
7. Specimen Reinsurance Agreement. Not applicable.
8. Form of Participation Agreement. (Incorporated herein by reference to
Exhibit 8 to Post-Effective Amendment No. 8 to the Registration
Statement on Form N-4, File No. 333-82009 filed April 20, 2005.)
8(a) Participation Agreement Among Met Investors Series Trust, Met
Investors Advisory, LLC, MetLife Investors Distribution Company, The
Travelers Insurance Company and The Travelers Life and Annuity
Company effective November 1, 2005. (Incorporated herein by
reference to Exhibit 8(c) to Post-Effective Amendment No. 14 to The
Travelers Fund ABD for Variable Annuities Registration Statement on
Form N-4, File No. 033-65343 filed April 6, 2006.)
8(b) Participation Agreement Among Metropolitan Series Fund, Inc., MetLife
Advisers, LLC, Metropolitan Life Insurance Company, The Travelers
Insurance Company and The Travelers Life and Annuity Company
effective November 1, 2005. (Incorporated herein by reference to
Exhibit 8(b) to Post-Effective Amendment No. 14 to The Travelers Fund
ABD for Variable Annuities Registration Statement on Form N-4, File
No. 033-65343 filed April 6, 2006.)
9. Opinion of Counsel as to the legality of securities being registered.
(Incorporated herein by reference to Exhibit 15(a) to this
Registration Statement on Form N-4, filed July 31, 2006.)
</Table>
<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10 (a) Consent of Deloitte and Touche LLP, Independent Registered Public
Accounting Firm. Filed herewith.
11 Not applicable.
12. Not applicable.
13. Powers of Attorney authorizing Michele H. Abate, John E. Connolly,
Jr., James L. Lipscomb, Gina C. Sandonato, Myra L. Saul, and Marie C.
Swift as signatory for Michael K. Farrell, William J. Mullaney, Lisa
M. Weber, Stanley J. Talbi and Joseph J. Prochaska. Filed herewith.
</Table>
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
Principal Business Address:
MetLife Insurance Company of Connecticut
One Cityplace
Hartford, CT 06103-3415
<Table>
<Caption>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH INSURANCE COMPANY
- -------------------------------- ---------------------------------------------------------------------
Michael K. Farrell Director and President
10 Park Avenue
Morristown, NJ 07962
William J. Mullaney Director
1 Metlife Plaza
27-01 Queens Plaza North
Long Island City, New York 11101
Lisa M. Weber Director
One MetLife Plaza
27-01 Queens Plaza North
Long Island City, New York 11101
Steven A. Kandarian Executive Vice President and Chief Investment Officer
10 Park Avenue
Morristown, NJ 07962
James L. Lipscomb Executive Vice President and General Counsel
One MetLife Plaza
27-01 Queens Plaza North
Long Island City, New York 11101
Joseph J. Prochaska, Jr. Executive Vice President and Chief Accounting Officer
One MetLife Plaza
27-01 Queens Plaza North
Long Island City, New York 11101
Stanley J. Talbi Executive Vice President and Chief Financial Officer
One MetLife Plaza
27-01 Queens Plaza North
Long Island City, New York 11101
Gwenn L. Carr Senior Vice President and Secretary
One MetLife Plaza
27-01 Queens Plaza North
Long Island City, New York 11101
Anthony J. Williamson Senior Vice President and Treasurer
One MetLife Plaza
27-01 Queens Plaza North
Long Island City, New York 11101
</Table>
<Table>
<Caption>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH INSURANCE COMPANY
- -------------------------------- ---------------------------------------------------------------------
Roberto Baron Vice President and Senior Actuary
One MetLife Plaza
27-01 Queens Plaza North
Long Island City, New York 11101
S. Peter Headley Vice President and Assistant Secretary
6750 Poplar Avenue
Germantown, TN 38138
Daniel D. Jordan Vice President and Assistant Secretary
501 Boylston Street
Boston, MA 02116
Bennett Kleinberg Vice President and Actuary
185 Asylum Street
Hartford, CT 06103
Paul L. LeClair Vice President and Actuary
501 Boylston Street
Boston, MA 02116
Linn K. Richardson Vice President and Actuary
10 Park Avenue
Morristown, NJ 07962
Jonathan L. Rosenthal Vice President and Chief Hedging Officer
10 Park Avenue
Morristown, NJ 07962
Jeffrey N. Altman Vice President
10 Park Avenue
Morristown, NJ 07962
Steven J. Brash Vice President
One MetLife Plaza
27-01 Queens Plaza North
Long Island City, New York 11101
Herbert B. Brown Vice President
One MetLife Plaza
27-01 Queens Plaza North
Long Island City, New York 11101
William D. Cammarata Vice President
18210 Crane Nest Drive
Tampa, FL 33647
Vincent Cirulli Vice President
10 Park Avenue
Morristown, NJ 07962
James R. Dingler Vice President
10 Park Avenue
Morristown, NJ 07962
Elizabeth M. Forget Vice President
260 Madison Ave
New York, NY 10016
Judith A. Gulotta Vice President
10 Park Avenue
Morristown, NJ 07962
C. Scott Inglis Vice President
10 Park Avenue
Morristown, NJ 07962
</Table>
<Table>
<Caption>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH INSURANCE COMPANY
- -------------------------------- ---------------------------------------------------------------------
Gene L. Lunman Vice President
185 Asylum Street
Hartford, CT 06103
Joseph J. Massimo Vice President
18210 Crane Nest Drive
Tampa, FL 33647
Daniel A. O'Neill Vice President
10 Park Avenue
Morristown, NJ 07962
Mark S. Reilly Vice President
185 Asylum Street
Hartford, CT 06103
Mark J. Remington Vice President
185 Asylum Street
Hartford, CT 06103
Ragai A. Roushdy Vice President
10 Park Avenue
Morristown, NJ 07962
Erik V. Savi Vice President
10 Park Avenue
Morristown, NJ 07962
Kevin M. Thorwarth Vice President
10 Park Avenue
Morristown, NJ 07962
Mark. H. Wilsmann Vice President
10 Park Avenue
Morristown, NJ 07962
</Table>
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
The Registrant is a separate account of MetLife Insurance Company of Connecticut
under Connecticut insurance law. The Depositor is a wholly owned subsidiary of
MetLife, Inc., a publicly traded company. No person is controlled by the
Registrant. The following outline indicates those entities that are controlled
by MetLife, Inc. or are under the common control of MetLife, Inc.
ORGANIZATIONAL STRUCTURE OF METLIFE, INC. AND SUBSIDIARIES
AS OF DECEMBER 31, 2006
The following is a list of subsidiaries of MetLife, Inc. updated as of December
31, 2006. Those entities which are listed at the left margin (labeled with
capital letters) are direct subsidiaries of MetLife, Inc. Unless otherwise
indicated, each entity which is indented under another entity is a subsidiary of
that other entity and, therefore, an indirect subsidiary of MetLife, Inc.
Certain inactive subsidiaries have been omitted from the MetLife, Inc.
organizational listing. The voting securities (excluding directors' qualifying
shares, (if any)) of the subsidiaries listed are 100% owned by their respective
parent corporations, unless otherwise indicated. The jurisdiction of domicile of
each subsidiary listed is set forth in the parenthetical following such
subsidiary.
A. MetLife Group, Inc. (NY)
B. MetLife Bank National Association (USA)
C. Exeter Reassurance Company, Ltd. (Bermuda)
D. MetLife Taiwan Insurance Company Limited (Taiwan)
E. Metropolitan Tower Life Insurance Company (DE)
1. TH Tower NGP, LLC (DE)
2. Partners Tower, L.P. (DE) - a 99% limited partnership interest of
Partners Tower, L.P. is held by Metropolitan Tower Life Insurance
Company and 1% general partnership interest is held by TH Tower NGP,
LLC (DE)
3. TH Tower Leasing, LLC (DE)
4. MetLife Reinsurance Company of Charleston (SC)
F. MetLife Pensiones S.A. (Mexico)- 97.4738% is owned by Metlife, Inc. and
2.5262% is owned by Metropolitan Asset Management Corporation.
G. MetLife Chile Inversiones Limitada (Chile)- 99.9999999% is owned by
MetLife, Inc. and 0.0000001% is owned by Natiloportem Holdings, Inc.
1. MetLife Chile Seguros de Vida S.A. (Chile)- 99.99% is owned by
MetLife Chile Inversiones Limitada, and 0.01% is owned by MetLife
International Holdings, Inc.
a) MetLife Chile Administradora de Mutuos Hipotecarios S.A.
(Chile)- 99.99% is owned by MetLife Chile Seguros de Vida
S.A., and 0.01% is owned by MetLife Chile Inversiones
Limitada.
H. MetLife Mexico S.A. (Mexico)- 98.70541% is owned by Metlife, Inc.,
1.27483% is owned by Metropolitan Asset Management Corporation and
0.01976% is owned by Metlife International Holdings, Inc.
1. MetLife Afore, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife
Mexico S.A. (Mexico) and 0.01% is owned by MetLife Pensiones S.A.
a) Met1 SIEFORE, S.A. de C.V. (Mexico)- 99.99% is owned by
MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife
Mexico S.A. (Mexico)
b) Met2 SIEFORE, S.A. de C.V. (Mexico)- 99.99% is owned by
MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife
Mexico S.A. (Mexico)
c) Met3 SIEFORE, S.A. de C.V. (Mexico)- 99.9% is owned by MetLife
Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A.
(Mexico)
I. MetLife Mexico Servicios, S.A. de C.V. (Mexico)- 98% is owned by MetLife,
Inc. and 2% is owned by MetLife International Holdings, Inc.
J. Metropolitan Life Seguros de Vida S.A. (Uruguay)
K. MetLife Securities, Inc. (DE)
L. Enterprise General Insurance Agency, Inc. (DE)
1. MetLife General Insurance Agency of Texas, Inc. (DE)
2. MetLife General Insurance Agency of Massachusetts, Inc. (MA)
1
M. Metropolitan Property and Casualty Insurance Company (RI)
1. Metropolitan General Insurance Company (RI)
2. Metropolitan Casualty Insurance Company (RI)
3. Metropolitan Direct Property and Casualty Insurance Company (RI)
4. Met P&C Managing General Agency, Inc. (TX)
5. MetLife Auto & Home Insurance Agency, Inc. (RI)
6. Metropolitan Group Property and Casualty Insurance Company (RI)
a) Metropolitan Reinsurance Company (U.K.) Limited (United
Kingdom)
7. Metropolitan Lloyds, Inc. (TX)
a) Metropolitan Lloyds Insurance Company of Texas (TX)-
Metropolitan Lloyds Insurance Company of Texas, an affiliated
association, provides automobile, homeowner and related
insurance for the Texas market. It is an association of
individuals designated as underwriters. Metropolitan Lloyds,
Inc., a subsidiary of Metropolitan Property and Casualty
Insurance Company, serves as the attorney-in-fact and manages
the association.
8. Economy Fire & Casualty Company (IL)
a) Economy Preferred Insurance Company (IL)
b) Economy Premier Assurance Company (IL)
N. Cova Corporation (MO)
1. Texas Life Insurance Company (TX)
2. Cova Life Management Company (DE)
O. MetLife Investors Insurance Company (MO)
P. First MetLife Investors Insurance Company (NY)
Q. Walnut Street Securities, Inc. (MO)
R. Newbury Insurance Company, Limited (BERMUDA)
S. MetLife Investors Group, Inc. (DE)
1. MetLife Investors Distribution Company (MO)
2. Met Investors Advisory, LLC (DE)
3. MetLife Investors Financial Agency, Inc. (TX)
2
T. MetLife International Holdings, Inc. (DE)
1. MetLife Mexico Cares, S.A. de C.V. (Mexico)
a) Fundacion MetLife Mexico, A.C. (Mexico)
2. Natiloportem Holdings, Inc. (DE)
a) Servicios Administrativos Gen, S.A. de C.V. (Mexico)
(1) MLA Comercial, S.A. de C.V. (Mexico) 99% is owned by
Servicios Administrativos Gen, S.A. de C.V. and 1% is
owned by MetLife Mexico Cares, S.A. de C.V.
(2) MLA Servicios, S.A. de C.V. (Mexico) 99% is owned by
Servicios Administrativos Gen, S.A. de C.V. and 1% is
owned by MetLife Mexico Cares, S.A. de C.V.
3. MetLife India Insurance Company Private Limited (India)- 26% is
owned by MetLife International Holdings, Inc. and 74% is owned by
third parties.
4. Metropolitan Life Insurance Company of Hong Kong Limited (Hong
Kong)- 99.9989% is owned by MetLife International Holdings, Inc. and
0.0011% is owned by Natiloporterm Holdings, Inc.
5. Metropolitan Life Seguros de Retiro S.A. (Argentina)- 95.23% is
owned by MetLife International Holdings, Inc. and 4.77% is owned
by Natiloportem Holdings, Inc.
6. Metropolitan Life Seguros de Vida S.A. (Argentina)- 95.2499% is
owned by MetLife International Holdings, Inc. and 4.7473% is owned
by Natiloportem Holdings, Inc.
7. MetLife Insurance Company of Korea Limited (South Korea)- 21.22% of
MetLife Insurance Company of Korea Limited is owned by MetLife,
Mexico, S.A. and 78.78% is owned by Metlife International Holdings,
Inc.
8. Metropolitan Life Seguros e Previdencia Privada S.A. (Brazil)-
91.227896580% is owned by MetLife International Holdings, Inc. and
8.772103054% is owned by MetLife Vida e Previdencia S.A., and
0.000000366% is owned by Natiloportem Holdings, Inc.
9. MetLife Global, Inc. (DE)
10. MetLife Administradora de Fundos Multipatrocinados Ltda (Brazil) -
95.4635% is owned by MetLife International Holdings, Inc. and
4.5364% is owned by Natiloportem Holdings, Inc.
11. MetLife Insurance Limited (United Kingdom)
12. MetLife General Insurance Limited (Australia)
13. MetLife Limited (United Kingdom)
14. MetLife Insurance S.A./NV (Belgium) - 99.9% is owned by MetLife
International Holdings, Inc. and 0.1% is owned by third parties.
15. MetLife Services Limited (United Kingdom)
16. Siembra Seguros de Vida S.A. (Argentina) - 97.9327% is owned by
MetLife International Holdings, Inc. and 2.0672% is owned by
Natiloportem Holdings, Inc.
17. MetLife International Insurance Ltd. (Bermuda)
18. MetLife Insurance Limited (Australia)
a) MetLife Insurance and Investment Trust (Australia)
b) MetLife Investments Pty Limited (Australia)
c) MetLife Trustee Pty Limited (Australia)
d) MetLife Services (Singapore) PTE Limited (Australia)
19. Siembra Seguros de Retiro S.A. (Argentina) - 96.8819% is owned by
MetLife International Holdings, Inc. and 3.1180% is owned by;
Natiloportem Holdings, Inc.
20. Best Market S.A. (Argentina) - 5% of the shares are held by
Natiloportem Holdings, Inc., and 94.9999% is owned by MetLife
International Holdings Inc.
21. Compania Previsional MetLife S.A. (Brazil) - 95.4635% is owned by
MetLife International Holdings, Inc. and 4.5364% is owned by
Natiloportem Holdings, Inc.
(a) Met AFJP S.A. (Argentina) - 75.4088% of the shares of Met
AFJP S.A. are held by Compania Previsional MetLife SA,
19.5912% is owned by Metropolitan Life Seguros de Vida SA,
3.9689% is held by Natiloportem Holdings, Inc., and 1.0310% is
held by Metropolitan Life Seguros de Retiro SA.
22. MetLife Worldwide Holdings, Inc. (DE)
a) MetLife Towarzystwo Ubezpieczen na Zycie S.A. (Poland)
b) MetLife Reinsurance (Bermuda) Ltd. (Bermuda)
c) MetLife Direct Co., Ltd. (Japan)
d) MetLife Vida e Previdencia S.A. (Brazil)
U. Metropolitan Life Insurance Company (NY)
1. 334 Madison Euro Investments, Inc. (DE)
a) Park Twenty Three Investments Company (United Kingdom)- 1%
voting control of Park Twenty Three Investments Company is
held by St. James Fleet Investments Two Limited.
(1) Convent Station Euro Investments Four Company (United
Kingdom)- 1% voting control of Convent Station Euro
Investments Four Company is held by 334 Madison Euro
Investments, Inc. as nominee for Park Twenty Three
Investments Company.
2. St. James Fleet Investments Two Limited (Cayman Islands)- 34% of the
shares of St. James Fleet Investments Two Limited is held by
Metropolitan Life Insurance Company.
3. One Madison Investments (Cayco) Limited (Cayman Islands)- 10.1%
voting control of One Madison Investments (Cayco) Limited is held by
Convent Station Euro Investments Four Company.
4. CRB Co, Inc. (MA)- AEW Real Estate Advisors, Inc. holds 49,000
preferred non-voting shares and AEW Advisors, Inc. holds 1,000
preferred non-voting shares of CRB, Co., Inc.
5. GA Holding Corp. (MA)
3
6. Thorngate, LLC (DE)
7. Alternative Fuel I, LLC (DE)
8. Transmountain Land & Livestock Company (MT)
9. MetPark Funding, Inc. (DE)
10. HPZ Assets LLC (DE)
11. Missouri Reinsurance (Barbados), Inc. (Barbados)
12. Metropolitan Tower Realty Company, Inc. (DE)
a) Midtown Heights, LLC (DE)
13. MetLife (India) Private Ltd. (India)
14. Metropolitan Marine Way Investments Limited (Canada)
15. MetLife Private Equity Holdings, LLC (DE)
16. 23rd Street Investments, Inc. (DE)
a) Mezzanine Investment Limited Partnership-BDR (DE).
Metropolitan Life Insurance Company holds a 99% limited
partnership interest in Mezzanine Investment Limited
Partnership-BDR and 23rd Street Investments, Inc. is a 1%
general partner.
b) Mezzanine Investment Limited Partnership-LG (DE). 23rd Street
Investments, Inc. is a 1% general partner of Mezzanine
Investment Limited Partnership-LG. Metropolitan Life Insurance
Company holds a 99% limited partnership interest in Mezzanine
Investment Limited Partnership-LG.
17. Metropolitan Realty Management, Inc. (DE)
18. Dewey Square South, LLC (NY)
19. Hyatt Legal Plans, Inc. (DE)
a) Hyatt Legal Plans of Florida, Inc. (FL)
20. MetLife Holdings, Inc. (DE)
a) MetLife Credit Corp. (DE)
b) MetLife Funding, Inc. (DE)
4
21. Bond Trust Account A (MA)
22. Metropolitan Asset Management Corporation (DE)
a) MetLife Capital Credit L.P. (DE)- 90% of MetLife Capital
Credit L.P. is held directly by Metropolitan Life Insurance
Company.
b) MetLife Capital Limited Partnership (DE)- 73.78% Limited
Partnership interest is held directly by Metropolitan Life
Insurance Company.
c) MetLife Investments Asia Limited (Hong Kong)- One share of
MetLife Investments Asia Limited is held by W&C Services,
Inc., a nominee of Metropolitan Asset Management Corporation.
d) MetLife Investments Limited (United Kingdom)- 23rd Street
Investments, Inc. holds one share of MetLife Investments
Limited and LA Investments, S.A. and 1% of MetLife Latin
America Asesorias e Inversiones Limitada.
e) LA Investments, S.A. (Argentina)- 23rd Street Investments,
Inc. holds one share of MetLife Investments Limited and LA
Investments, S.A. and 1% of MetLife Latin America Asesorias e
Inversiones Limitada.
f) MetLife Latin America Asesorias e Inversiones Limitada
(Chile)- 23rd Street Investments, Inc. holds one share of
MetLife Investments Limited and LA Investments, S.A. and
1% of MetLife Latin America Asesorias e Inversiones Limitada.
23. New England Life Insurance Company (MA)
a) MetLife Advisers, LLC (MA)
b) New England Securities Corporation (MA)
c) Omega Reinsurance Corporation (AZ)
24. GenAmerica Financial, LLC (MO)
a) GenAmerica Capital I (DE)
b) General American Life Insurance Company (MO)
(1) GenAmerica Management Corporation (MO)
5
(2) Reinsurance Group of America, Incorporated (MO) - (52.8%)
(a) Reinsurance Company of Missouri, Incorporated (MO)
(i) Timberlake Financial, L.L.C. (DE)
(A) Timberlake Reinsurance Company II (SC)
(ii) RGA Reinsurance Company (MO)
(A) Fairfield Management Group, Inc. (MO)
(aa) Reinsurance Partners, Inc. (MO)
(b) RGA Worldwide Reinsurance Company, Ltd. (Barbados)
(c) RGA Americas Reinsurance Company, Ltd. (Barbados)
(d) RGA Reinsurance Company (Barbados) Ltd. (Barbados)
(80%)
(i) RGA Financial Group, L.L.C. (DE)- RGA
Reinsurance Company also owns a 20% non-
equity membership in RGA Financial Group,
L.L.C.
(e) RGA Life Reinsurance Company of Canada (Canada)
(f) RGA International Corporation (Nova Scotia)
(g) RGA Holdings Limited (U.K.) (United Kingdom)
(i) RGA UK Services Limited (United Kingdom)
(ii) RGA Capital Limited U.K. (United
Kingdom)
(iii) RGA Reinsurance (UK) Limited (United
Kingdom)
(iv) RGA Services India Private Limited (India)
(h) RGA South African Holdings (Pty) Ltd. (South
Africa)
(i) RGA Reinsurance Company of South Africa
Limited (South Africa)
(i) RGA Australian Holdings PTY Limited (Australia)
(i) RGA Reinsurance Company of Australia
Limited (Australia)
(ii) RGA Asia Pacific PTY, Limited (Australia)
(j) General American Argentina Seguros de Vida, S.A.
(Argentina) - 95% of General American Argentina
Seguros de Vida, S.A. is owned by Reinsurance
Group of America, Incorporated and 5% is owned by
RGA Reinsurance Company (Barbados) Ltd.
6
(k) RGA Technology Partners, Inc. (MO)
(l) RGA International Reinsurance Company (Ireland)
(m) RGA Capital Trust I (DE)
(n) RGA Global Reinsurance Company, Ltd. (Bermuda)
25. Corporate Real Estate Holdings, LLC (DE)
26. Ten Park SPC (CAYMAN ISLANDS ) - 1% voting control of Ten Park SPC
is held by Metropolitan Asset Management Corporation
27. MetLife Tower Resources Group, Inc. (DE)
28. Headland - Pacific Palisades, LLC (CA)
29. Headland Properties Associates (CA)
30. Krisman, Inc. (MO)
31. Special Multi-Asset Receivables Trust (DE)
32. White Oak Royalty Company (OK)
33. 500 Grant Street GP LLC (DE)
34. 500 Grant Street Associates Limited Partnership (CT) - 99% of 500
Grant Street Associates Limited Partnership is held by Metropolitan
Life Insurance Company and 1% by 500 Grant Street GP LLC
35. MetLife Canada/MetVie Canada (Canada)
36. MetLife Retirement Services LLC (NJ)
a) MetLife Investment Funds Services LLC (NJ)
b) MetLife Investment Funds Management LLC (NJ)
c) MetLife Associates LLC (DE)
37. Euro CL Investments LLC (DE)
38. MEXDF Properties, LLC (DE)
39. MSV Irvine Property, LLC (DE) - 4% of MSV Irvine Property, LLC is
owned by Metropolitan Tower Realty Company, Inc. and 96% is owned
by Metropolitan Life Insurance Company
V. MetLife Capital Trust II (DE)
W. MetLife Capital Trust III (DE)
X. MetLife Insurance Company of Connecticut (Life Department) (Accident
Department) (CT)
1. 440 South LaSalle LLC (DE)
2. Pilgrim Investments Oakmont Lane, LLC (DE) - 50% is owned by MetLife
Insurance Company of Connecticut and 50% is owned by a third party
3. Pilgrim Alternative Investments Opportunity Fund I, LLC (DE) - 67%
is owned by MetLife Insurance Company of Connecticut, and 33% is
owned by third party
4. Pilgrim Alternative Investments Opportunity Fund III Associates, LLC
(CT) - 67% is owned by MetLife Insurance Company of Connecticut, and
33% is owned by third party
5. Pilgrim Investments Highland Park, LLC (DE)
6. Pilgrim Investments Schaumberg Windy Point, LLC (DE)
7. Pilgrim Investments York Road, LLC (DE)
8. Euro TI Investments LLC (DE)
9. Greenwich Street Investments, LLC (DE)
a) Greenwich Street Capital Offshore Fund, Ltd. (Virgin
Islands)
b) Greenwich Street Investments, L.P. (DE)
10. Hollow Creek, L.L.C. (CT)
11. One Financial Place Corporation (DE) - 100% is owned in the
aggregate by MetLife Insurance Company of Connecticut and MetLife
Life and Annuity Company of Connecticut.
12. One Financial Place Holdings, LLC (DE)-100% is owned in the
aggregate by MetLife Insurance Company of Connecticut and MetLife
Life and Annuity Company of Connecticut.
13. Plaza LLC (CT)
a) Travelers Asset Management International Company LLC
(NY)
b) Tower Square Securities, Inc. (CT)
1) Tower Square Securities Insurance Agency of New
Mexico, Inc. (NM)
2) Tower Square Securities Insurance Agency of
Ohio, Inc. (OH) (99%)
c) Travelers Investment Adviser, Inc. (DE)
14. TIC European Real Estate LP, LLC (DE)
15. MetLife European Holdings, Inc. (UK)
a) MetLife Europe Limited, Inc. (UK)
b) MetLife Pensions Trustees Limited (UK)
16. Travelers European Investments LLC (CT)
17. Travelers International Investments Ltd. (Cayman Islands)
18. Trumbull Street Equity Investments LLC (DE)
a) Tandem EGI/C Investments, L.P. (DE) - The General Partner is
Trumbull Street Equity Investments LLC.
19. MetLife Life and Annuity Company of Connecticut (CT)
a) Euro TL Investments LLC (DE)
20. TLA Holdings LLC (DE)
a) The Prospect Company (DE)
1) Panther Valley, Inc. (NJ)
21. TRAL & Co. (CT) - TRAL & Co. is a general partnership. Its partners
are MetLife Insurance Company of Connecticut and MetLife Life and
Annuity Company of Connecticut.
22. Tribeca Distressed Securities L.L.C. (DE)
23. MetLife Investors USA Insurance Comapny (DE)
Y. MetLife Reinsurance Company of South Carolina (SC)
Z. MetLife Investment Advisors Company, LLC (DE)
AA. Trumbull Street Investments LLC (DE)
BB. MetLife Standby I, LLC (DE)
1. MetLife Exchange Trust I (DE)
The voting securities (excluding directors' qualifying shares, if any) of each
subsidiary shown on the organizational chart are 100% owned by their respective
parent corporation, unless otherwise indicated.
In addition to the entities shown on the organizational chart, MetLife, Inc. (or
where indicated, a subsidiary) also owns interests in the following entities:
1) Metropolitan Life Insurance Company owns varying interests in certain mutual
funds distributed by its affiliates. These ownership interests are generally
expected to decrease as shares of the funds are purchased by unaffiliated
investors.
2) Metropolitan Life Insurance Company indirectly owns 100% of the non-voting
preferred stock of Nathan and Lewis Associates Ohio, Incorporated, an insurance
agency. 100% of the voting common stock of this company is held by an individual
who has agreed to vote such shares at the direction of N.L. HOLDING CORP. (DEL),
a direct wholly owned subsidiary of MetLife, Inc.
3) Mezzanine Investment Limited Partnerships ("MILPs"), Delaware limited
partnerships, are investment vehicles through which investments in certain
entities are held. A wholly owned subsidiary of Metropolitan Life Insurance
Company serves as the general partner of the limited partnerships and
Metropolitan Life Insurance Company directly owns a 99% limited partnership
interest in each MILP. The MILPs have various ownership and/or debt interests in
certain companies.
4) New England Life Insurance Company ("NELICO"), owns 100% of the voting common
stock of Omega Reinsurance Corporation, which is 100% of all the stock
outstanding as of 12/31/06.
5) The Metropolitan Money Market Pool and MetLife Intermediate Income Pool are
pass-through investment pools, of which Metropolitan Life Insurance Company
and/or its subsidiaries and/or affiliates are general partners.
NOTE: THE METLIFE, INC. ORGANIZATIONAL CHART DOES NOT INCLUDE REAL ESTATE JOINT
VENTURES AND PARTNERSHIPS OF WHICH METLIFE, INC. AND/OR ITS SUBSIDIARIES IS AN
INVESTMENT PARTNER. IN ADDITION, CERTAIN INACTIVE SUBSIDIARIES HAVE ALSO BEEN
OMITTED.
7
ITEM 27. NUMBER OF CONTRACT OWNERS
As of January 31, 2007: Qualified: 580
ITEM 28. INDEMNIFICATION
The Depositor's parent, MetLife, Inc. has secured a Financial Institutions Bond
in the amount of $50,000,000, subject to a $5,000,000 deductible. MetLife, Inc.
also maintains a Directors and Officers Liability and Corporate Reimbursement
Insurance Policy with limits of $400 million under which the Depositor and
MetLife Investors Distribution Company, the Registrant's underwriter (the
"Underwriter"), as well as certain other subsidiaries of MetLife are covered. A
provision in MetLife, Inc.'s by-laws provides for the indemnification (under
certain circumstances) of individuals serving as directors or officers of
certain organizations, including the Depositor and the Underwriter.
Sections 33-770 to 33-778, inclusive of the Connecticut General Statutes
("C.G.S.") regarding indemnification of directors and officers of Connecticut
corporations provides in general that Connecticut corporations shall indemnify
their officers, directors and certain other defined individuals against
judgments, fines, penalties, amounts paid in settlement and reasonable expenses
actually incurred in connection with proceedings against the corporation. The
corporation's obligation to provide such indemnification generally does not
apply unless (1) the individual is wholly successful on the merits in the
defense of any such proceeding; or (2) a determination is made (by persons
specified in the statute) that the individual acted in good faith and in the
best interests of the corporation and in all other cases, his conduct was at
least not opposed to the best interests of the corporation, and in a criminal
case he had no reasonable cause to believe his conduct was unlawful; or (3) the
court, upon application by the individual, determines in view of all of the
circumstances that such person is fairly and reasonably entitled to be
indemnified, and then for such amount as the court shall determine. With respect
to proceedings brought by or in the right of the corporation, the statute
provides that the corporation shall indemnify its officers, directors and
certain other defined individuals, against reasonable expenses actually incurred
by them in connection with such proceedings, subject to certain limitations.
C.G.S. Section 33-778 provides an exclusive remedy; a Connecticut corporation
cannot indemnify a director or officer to an extent either greater or less than
that authorized by the statute, e.g., pursuant to its certificate of
incorporation, by-laws, or any separate contractual arrangement. However, the
statute does specifically authorize a corporation to procure indemnification
insurance to provide greater indemnification rights. The premiums for such
insurance may be shared with the insured individuals on an agreed basis.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
ITEM 29. PRINCIPAL UNDERWRITER
(a) MetLife Investors Distribution Company
5 Park Plaza, Suite 1900
Irvine, CA 92614
Prior to October 20, 2006, MLI Distribution LLC was the principal
underwriter and distributor. On that date MLI Distribution LLC merged into
MetLife Investors Distribution Company.
MetLife Investors Distribution Company also serves as principal underwriter and
distributor for the following investment companies (other than the Registrant):
<Table>
MetLife of CT Fund U for Variable Annuities
MetLife of CT Fund BD for Variable Annuities
MetLife of CT Fund BD II for Variable Annuities
MetLife of CT Fund BD III for Variable Annuities
MetLife of CT Fund BD IV for Variable Annuities
MetLife of CT Fund ABD for Variable Annuities
MetLife of CT Fund ABD II for Variable Annuities
MetLife of CT Separate Account PF for Variable Annuities
MetLife of CT Separate Account PF II for Variable Annuities
MetLife of CT Separate Account QP for Variable Annuities
MetLife of CT Separate Account QPN for Variable Annuities
MetLife of CT Separate Account TM for Variable Annuities
MetLife of CT Separate Account TM II for Variable Annuities
</Table>
<Table>
MetLife of CT Separate Account Five for Variable Annuities
MetLife of CT Separate Account Six for Variable Annuities
MetLife of CT Separate Account Seven for Variable Annuities
MetLife of CT Separate Account Eight for Variable Annuities
MetLife of CT Separate Account Nine for Variable Annuities
MetLife of CT Separate Account Ten for Variable Annuities
MetLife of CT Fund UL for Variable Life Insurance,
MetLife of CT Fund UL II for Variable Life Insurance
MetLife of CT Fund UL III for Variable Life Insurance
MetLife of CT Variable Life Insurance Separate Account One
MetLife of CT Variable Life Insurance Separate Account Two
MetLife of CT Variable Life Insurance Separate Account Three
Metropolitan Life Variable Annuity Separate Account I
Metropolitan Life Variable Annuity Separate Account II
MetLife of CT Separate Account Eleven for Variable Annuities
MetLife of CT Separate Account Twelve for Variable Annuities
MetLife of CT Separate Account Thirteen for Variable Annuities
MetLife of CT Separate Account Fourteen for Variable Annuities
MetLife Insurance Company of Connecticut Variable Annuity Separate Account 2002
MetLife Life and Annuity Company of Connecticut Variable Annuity Separate Account
2002
Met Investors Series Trust
MetLife Investors Variable Annuity Account One
MetLife Investors Variable Annuity Account Five
MetLife Investors Variable Life Account One
MetLife Investors Variable Life Account Five
MetLife Investors USA Separate Account A
MetLife Investors USA Variable Life Account A
First MetLife Investors Variable Annuity Account One
General American Separate Account Eleven
General American Separate Account Twenty-Eight
General American Separate Account Twenty-Nine
General American Separate Account Two
Security Equity Separate Account Twenty-Six
Security Equity Separate Account Twenty-Seven
</Table>
(b) MetLife Investors Distribution Company is the principal underwriter for the
Contracts. The following persons are officers and managers of MetLife
Investors Distribution Company. The principal business address for MetLife
Investors Distribution Company is 5 Park Plaza, Suite 1900, Irvine, CA
92614.
<Table>
<Caption>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER
- -------------------------- ---------------------------------------------------------------------
Michael K. Farrell Director
5 Park Plaza
Suite 1900
Irvine, CA 92614
Craig W. Markham Director and Vice President
13045 Tesson Ferry Road
St. Louis, MO 63128
</Table>
<Table>
<Caption>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER
- -------------------------- ---------------------------------------------------------------------
William J. Toppeta Director
1 MetLife Plaza
27-01 Queens Plaza North
Long Island City, NY 11101
Paul A. Sylvester President, National Sales Manager- Annuities & LTC
10 Park Avenue
Morristown, NJ 07962
Elizabeth M. Forget Executive Vice President, Investment Fund Management & Marketing
260 Madison Avenue
New York, NY 10016
Paul A. LaPiana Executive Vice President, National Sales Manager-Life
5 Park Plaza
Suite 1900
Irvine, CA 92614
Richard C. Pearson Executive Vice President, General Counsel and Secretary
5 Park Plaza
Suite 1900
Irvine, CA 92614
Andrew Aiello Senior Vice President, Channel Head-National Accounts Channel
1 MetLife Plaza
27-01 Queens Plaza North
Long Island City, NY 11101
Jeffrey A. Barker Senior Vice President, Channel Head-Independent Accounts
1 MetLife Plaza
27-01 Queens Plaza North
Long Island City, NY 11101
Douglas P. Rodgers Senior Vice President, Channel Head-LTC
10 Park Avenue, 1st Floor
Morristown, NJ 07962
Myrna F. Solomon Senior Vice President, Channel Head-Banks
501 Boylston Street
Boston, MA 02116
Leslie Sutherland Senior Vice President, Channel Head-Broker/Dealers
1 MetLife Plaza
Long Island City, NY 11101
Edward C. Wilson Senior Vice President, Channel Head-Wirehouse
5 Park Plaza
Suite 1900
Irvine, CA 92614
Curtis Wohlers Senior Vice President, Channel Head-Planners
1 MetLife Plaza
27-01 Queens Plaza North
Long Island City, NY 11101
Jay S. Kaduson Senior Vice President
10 Park Avenue
Morristown, NJ 07962
Anthony J. Williamson Treasurer
1 MetLife Plaza
27-01 Queens Plaza North
Long Island City, NY 11101
</Table>
<Table>
<Caption>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER
- -------------------------- ---------------------------------------------------------------------
Peter Gruppuso Vice President and Chief Financial Officer
485-E US Highway 1 South
Iselin, NJ 08830
Debora L. Buffington Vice President, Director of Compliance
5 Park Plaza
Suite 1900
Irvine, CA 92614
David DeCarlo Vice President
5 Park Plaza
Suite 1900
Irvine, CA 92614
Charles M. Deuth Vice President, National Accounts
5 Park Plaza
Suite 1900
Irvine, CA 92614
Anthony J. Dufault Vice President
5 Park Plaza
Suite 1900
Irvine, CA 92614
James R. Fitzpatrick Vice President
5 Park Plaza
Suite 1900
Irvine, CA 92614
Paul M. Kos Vice President
5 Park Plaza
Suite 1900
Irvine, CA 92614
Craig W. Markham Vice President
13045 Tesson Ferry Rd
St. Louis, MO 63128
Deron J. Richens Vice President
5 Park Plaza
Suite 1900
Irvine, CA 92614
Cathy Sturdivant Vice President
5 Park Plaza
Suite 1900
Irvine, CA 92614
Paulina Vakouros Vice President
5 Park Plaza
Suite 1900
Irvine, CA 92614
</Table>
(c) Compensation from the Registrant. The following commissions and other
compensation were received by the Distributor, directly or indirectly, from
the Registrant during the Registrant's last fiscal year:
<Table>
<Caption>
(2)
NET
(1) UNDERWRITING (3) (4) (5)
NAME OF PRINCIPAL DISCOUNTS AND COMPENSATION ON BROKERAGE OTHER
UNDERWRITER COMMISSIONS REDEMPTION COMMISSIONS COMPENSATION
----------------- --------------- --------------- --------------- ---------------
MLI Distribution LLC................... $92,981,365 $0 $0 $0
</Table>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
(1) MetLife Insurance Company of Connecticut
One Cityplace
Hartford, Connecticut 06103-3415
ITEM 31. MANAGEMENT SERVICES
Not Applicable.
ITEM 32. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a) To file a post-effective amendment to this registration statement as
frequently as is necessary to ensure that the audited financial statements
in the registration statement are never more than sixteen months old for so
long as payments under the variable annuity contracts may be accepted;
(b) To include either (1) as part of any application to purchase a contract
offered by the prospectus, a space that an applicant can check to request a
Statement of Additional Information, or (2) a post card or similar written
communication affixed to or included in the prospectus that the applicant
can remove to send for a Statement of Additional Information; and
(c) To deliver with any Statement of Additional Information and any financial
statements required to be made available under this Form N-4 promptly upon
written or oral request.
The Company hereby represents:
(a) That the aggregate charges under the Contracts of the Registrant described
herein are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by the Company.
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements of Securities Act
Rule 485(b) for effectiveness of this amendment to this registration statement
and has caused this amendment to this registration statement to be signed on its
behalf, in the City of Hartford, and State of Connecticut, on this 6th day of
April 2007.
METLIFE INSURANCE COMPANY OF CONNECTICUT
METLIFE OF CT SEPARATE ACCOUNT QPN FOR
VARIABLE ANNUITIES
(Registrant)
METLIFE INSURANCE COMPANY OF CONNECTICUT
(Depositor)
By: /s/ BENNETT D. KLEINBERG
------------------------------------
Bennett D. Kleinberg, Vice President
and Actuary
As required by the Securities Act of 1933, this registration statement has been
signed by the following persons in the capacities indicated on the 6th day of
April 2007.
<Table>
<Caption>
/s/ *MICHAEL K. FARRELL Director and President
- ---------------------------------------------
(Michael K. Farrell)
/s/ *STANLEY J. TALBI Executive Vice President and Chief
- --------------------------------------------- Financial Officer
(Stanley J. Talbi)
/s/ *JOSEPH J. PROCHASKA, JR. Executive Vice President and Chief
- --------------------------------------------- Accounting Officer
(Joseph J. Prochaska, Jr.)
/s/ *WILLIAM J. MULLANEY Director
- ---------------------------------------------
(William J. Mullaney)
/s/ *LISA M. WEBER Director
- ---------------------------------------------
(Lisa M. Weber)
*By: /s/ MYRA L. SAUL
----------------------------------------
Myra L. Saul , Attorney-in-fact
</Table>
* MetLife Insurance Company of Connecticut. Executed by Myra L. Saul on
behalf of those indicated pursuant to powers of attorney filed herewith.
EXHIBIT INDEX
<Table>
5g. Group Variable Annuity Master Application -- L-24767AZ Order # L-
24770AZ Rev. 05/06
5h. 401(k) Group Annuity Group Master Data Sheet L-21015 A GTE/BP; Rev.
05/06
5i. Group Variable Annuity Master Application -- L-24767AZ Order # L-
24770AZ Rev. 11/06
5j. 401(k) Group Annuity Group Master Data Sheet L-21015 A GTE/BP; Rev.
11/06
10(a) Consent of Deloitte & Touche LLP, Independent Registered Public
Accounting Firm.
13 Powers of Attorney.
</Table>