METLIFE RETIREMENT ACCOUNT ANNUITY PROSPECTUS:
METLIFE OF CT SEPARATE ACCOUNT FIVE FOR VARIABLE ANNUITIES
METLIFE OF CT SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES
This prospectus describes MetLife Retirement Account Annuity, a flexible premium
deferred variable annuity contract (the "Contract") issued by MetLife Insurance
Company of Connecticut or MetLife Life and Annuity Company of Connecticut.
MetLife Life and Annuity Company does not solicit or issue insurance products in
the State of New York. Refer to the first page of your Contract for the name of
your issuing company. The Contract is available in connection with certain
retirement plans that qualify for special Federal income tax treatment
("Qualified Contracts".) We may issue it as an individual Contract or as a group
Contract. When we issue a group Contract, you will receive a certificate
summarizing the Contract's provisions. For convenience, we refer to Contracts
and certificates as "Contracts." The Contract is not available to new
purchasers. Current Contract Owners may make additional purchase payments.
You can choose to have your premium ("Purchase Payments") and any applicable
Purchase Payment Credits accumulate on a variable and, subject to availability,
fixed basis in one of our funding options. Your Contract Value before the
Maturity Date and the amount of monthly income afterwards will vary daily to
reflect the investment experience of the Variable Funding Options you select.
You bear the investment risk of investing in the Variable Funding Options. The
Variable Funding Options are:
<Table>
AMERICAN FUNDS INSURANCE SERIES Lord Abbett Mid-Cap Value
American Funds Global Growth Fund -- Class Portfolio -- Class B(+)
2 MFS(R) Value Portfolio -- Class A
American Funds Growth Fund -- Class 2 Met/AIM Capital Appreciation
American Funds Growth-Income Fund -- Class Portfolio -- Class A
2 Met/AIM Small Cap Growth Portfolio -- Class
DELAWARE VIP TRUST -- STANDARD CLASS A (+)
Delaware VIP Small Cap Value Series Neuberger Berman Real Estate
DREYFUS VARIABLE INVESTMENT FUND -- INITIAL Portfolio -- Class A
SHARES PIMCO Inflation Protected Bond
Dreyfus Variable Investment Fund Portfolio -- Class A (+)
Appreciation Portfolio Pioneer Fund Portfolio -- Class A
Dreyfus Variable Investment Fund Developing Pioneer Strategic Income Portfolio -- Class
Leaders Portfolio A
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS Third Avenue Small Cap Value
TRUST Portfolio -- Class B (+)
Templeton Developing Markets Securities METLIFE INVESTMENT FUNDS, INC.
Fund--- Class 2 MetLife Investment Diversified Bond
Templeton Foreign Securities Fund--- Class Fund -- Class I
2 MetLife Investment International Stock
JANUS ASPEN SERIES Fund -- Class I
Mid Cap Growth Portfolio -- Service Shares MetLife Investment Large Company Stock
LEGG MASON PARTNERS VARIABLE EQUITY TRUST(+) Fund -- Class I
Legg Mason Partners Variable Appreciation MetLife Investment Small Company Stock
Portfolio -- Class I(+) Fund -- Class I
Legg Mason Partners Variable Equity Index METROPOLITAN SERIES FUND, INC.
Portfolio -- Class II(+) BlackRock Aggressive Growth
Legg Mason Partners Variable Fundamental Portfolio -- Class D
Value Portfolio(+) -- Class I(+) BlackRock Bond Income Portfolio -- Class A
Legg Mason Partners Variable Investors BlackRock Money Market Portfolio -- Class A
Portfolio -- Class I(+) FI Value Leaders -- Class D(+)
Legg Mason Partners Variable Large Cap FI Large Cap Portfolio -- Class A
Growth Portfolio -- Class I(+) MFS(R) Total Return Portfolio -- Class F
Legg Mason Partners Variable Small Cap Oppenheimer Global Equity
Growth Portfolio -- Class I(+) Portfolio -- Class B
Legg Mason Partners Variable Social Western Asset Management U. S. Government
Awareness Portfolio(+) Portfolio -- Class A
LEGG MASON PARTNERS VARIABLE INCOME TRUST(+) PIMCO VARIABLE INSURANCE
Legg Mason Partners Variable Adjustable TRUST -- ADMINISTRATIVE CLASS
Rate Income Portfolio(+) Total Return Portfolio
Legg Mason Partners Variable High Income VAN KAMPEN LIFE INVESTMENT TRUST
Portfolio(+) Van Kampen Life Investment Trust
MET INVESTORS SERIES TRUST Comstock Portfolio -- Class II
Batterymarch Mid-Cap Stock VARIABLE INSURANCE PRODUCTS FUND -- SERVICE
Portfolio -- Class A CLASS 2
BlackRock High Yield Portfolio -- Class A VIP Contrafund(R) Portfolio
(+) VIP Mid Cap Portfolio
BlackRock Large-Cap Core Portfolio -- Class METROPOLITAN SERIES FUND, INC. -- ASSET
E(+) ALLOCATION PORTFOLIOS -- CLASS B
Dreman Small-Cap Value Portfolio -- Class A MetLife Conservative Allocation Portfolio
Harris Oakmark International MetLife Conservative to Moderate Allocation
Portfolio -- Class A Portfolio
Janus Forty Portfolio -- Class A (+) MetLife Moderate Allocation Portfolio
Lazard Mid-Cap Value Portfolio -- Class B MetLife Moderate to Aggressive Allocation
(+) Portfolio
Legg Mason Partners Managed Assets MetLife Aggressive Allocation Portfolio
Portfolio -- Class A
Lord Abbett Bond Debenture
Portfolio -- Class A
Lord Abbett Growth and Income
Portfolio -- Class B
</Table>
- -------
(+) This Variable Funding Option has been subject to a merger, substitution,
name or other change. Please see Appendix F for more information.
We also offer variable annuity Contracts that do not have Purchase Payment
Credits, and therefore may have lower fees. Over time, the value of the Purchase
Payment Credits could be more than offset by higher charges. You should
carefully consider whether or not this Contract is the most appropriate
investment for you.
The Contract, certain Contract features and/or some of the funding options may
not be available in all states. This prospectus provides 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 copy of the 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 us at MetLife Insurance Company of Connecticut, Annuity
Operations and Services, One Cityplace, 185 Asylum Street, 3CP, Hartford,
Connecticut 06103-3415, call 1- 800-842-9406 or access the SEC's website
(http://www.sec.gov). See Appendix H for the SAI's table of contents.
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 INSURED 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............................... 8
Condensed Financial Information......... 14
The Annuity Contract and Your Retirement
Plan.................................. 14
The Annuity Contract.................... 14
Contract Owner Inquiries.............. 15
Purchase Payments..................... 15
Purchase Payment Credits.............. 16
Conservation Credit................... 16
Accumulation Units.................... 16
The Variable Funding Options.......... 16
Notice of Substitution................ 18
Fixed Account........................... 25
Charges and Deductions.................. 25
General............................... 25
Withdrawal Charge..................... 26
Free Withdrawal Allowance............. 27
Transfer Charge....................... 27
Mortality and Expense Risk Charge..... 27
Variable Funding Option Expenses...... 27
Floor Benefit/Liquidity Benefit
Charges............................ 27
CHART Asset Allocation Program
Charges............................ 27
Premium Tax........................... 27
Changes in Taxes Based upon Premium or
Value.............................. 27
Transfers............................... 28
Market Timing/Excessive Trading....... 28
CHART Asset Allocation Program.......... 30
General............................... 30
CHART Asset Allocation Program........ 30
Program Fees - Deductions from
Contract Value..................... 31
Access to Your Money.................... 31
Systematic Withdrawals................ 32
Ownership Provisions.................... 32
Types of Ownership.................... 32
Contract Owner..................... 32
Beneficiary........................ 33
Death Benefit........................... 33
Death Proceeds before the Maturity
Date............................... 33
Standard Death Benefit................ 33
Step-Up Death Benefit Value........... 34
Optional Death Benefit and Credit..... 34
Payment of Proceeds................... 35
Beneficiary Contract Continuance...... 35
Planned Death Benefit................. 35
Death Proceeds after the Maturity
Date............................... 36
The Annuity Period...................... 36
Maturity Date......................... 36
Liquidity Benefit..................... 36
Allocation of Annuity................. 37
Variable Annuity...................... 37
Fixed Annuity......................... 38
Payment Options......................... 38
Election of Options................... 38
Annuity Options....................... 39
Miscellaneous Contract Provisions....... 39
Right to Return....................... 39
Termination........................... 39
Required Reports...................... 40
Suspension of Payments................ 40
Misstatement.......................... 40
The Separate Accounts................... 40
Performance Information............... 41
Federal Tax Considerations.............. 41
General Taxation of Annuities......... 41
Qualified Annuity Contracts........... 42
Taxation of Qualified Annuity
Contracts.......................... 42
Mandatory Distributions for Qualified
Plans.............................. 42
Individual Retirement Annuities....... 43
Roth IRAs............................. 43
Penalty Tax for Premature
Distribution....................... 44
Taxation of Death Benefit Proceeds.... 44
Treatment of Charges for Certain Asset
Allocation Programs................ 44
Treatment of Charges for Optional
Benefits........................... 44
Other Tax Considerations................ 45
Puerto Rico Tax Considerations........ 45
Non-Resident Aliens................... 45
Changes to Tax Rules and
Interpretations.................... 45
Hurricane Relief...................... 45
Incorporation of Certain Documents by
Reference............................. 46
Other Information....................... 47
The Insurance Companies............... 47
Financial Statements.................. 47
Distribution of the Contracts......... 47
Conformity with State and Federal
Laws............................... 49
Voting Rights......................... 49
Restrictions on Financial
Transactions....................... 49
Legal Proceedings..................... 50
Appendix A: Condensed Financial
Information for Separate Account
Five.................................. A-1
Appendix B: Condensed Financial
Information for Separate Account Six.. B-1
Appendix C: Waiver of Withdrawal Charge
for Nursing Home Confinement.......... C-1
Appendix D: Market Value Adjustment..... D-1
Appendix E: What You Need To Know If You
Are A Texas Optional Retirement
Program Participant................... E-1
Appendix F: Additional Information
Regarding the Underlying Funds........ F-1
Appendix G: Portfolio Legal and
Marketing Names....................... G-1
Appendix H: Contents of the Statement of
Additional Information................ H-1
</Table>
2
GLOSSARY
ACCUMULATION UNIT -- an accounting unit of measure used to calculate the value
of this Contract before Annuity Payments begin.
ANNUITANT -- the person on whose life the Maturity Date and Annuity Payments
depend.
ANNUITY PAYMENTS -- a series of periodic payments (a) for life; (b) for life
with a minimum number of payments; (c) for the joint lifetime of the Annuitant
and another person, and thereafter during the lifetime of the survivor; or (d)
for a fixed period.
ANNUITY UNIT -- an accounting unit of measure used to calculate the amount of
Annuity Payments.
CASH SURRENDER VALUE -- the Contract Value less any withdrawal charge and
premium tax not previously deducted.
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.
CONTINGENT ANNUITANT -- the individual who becomes the Annuitant when the
Annuitant who is not the owner dies prior to the Maturity Date.
CONTRACT -- for convenience, means the Contract or the Certificate.
CONTRACT DATE -- the date on which the Contract is issued.
CONTRACT OWNER (you) -- the person named in the Contract (on the specifications
page) as the owner of the Contract.
CONTRACT VALUE -- Purchase Payments and any associated Purchase Payment Credits,
plus or minus any investment experience on the amounts allocated to the variable
funds or interest on amounts allocated to the Fixed Account, adjusted by any
applicable charges and withdrawals.
CONTRACT YEARS -- twelve month periods beginning with the Contract Date.
DEATH REPORT DATE -- the day on which we have received 1) Due Proof of Death and
2) written payment instructions or election of spousal or beneficiary contract
continuation.
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.
FIXED ACCOUNT -- an account that consists of all of the assets under this
Contract other than those in the Separate Account.
HOME OFFICE -- the Home Office of MetLife Insurance Company of Connecticut or
MetLife Life and Annuity Company of Connecticut or any other office that we may
designate for the purpose of administering this Contract.
MATURITY DATE -- the date on which the Annuity Payments are to begin.
PAYMENT OPTION -- an Annuity or Income option elected under your Contract.
PURCHASE PAYMENT -- any premium paid by you to initiate or supplement this
Contract.
PURCHASE PAYMENT CREDIT -- an amount credited to your Contract Value that equals
a percentage of each Purchase Payment made.
QUALIFIED CONTRACT -- a contract used in a retirement plan or program that is
intended to qualify under Sections 401, 403, 408, or 414(d) of the Code.
SEPARATE ACCOUNT -- MetLife of CT Separate Account Five for Variable Annuities
and MetLife of CT Separate Account Six for Variable Annuities, each a segregated
account registered with the Securities and Exchange Commission ("SEC"), 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 -- that portion of the assets of a Separate Account that is allocated
to a particular Underlying Fund.
3
UNDERLYING FUND -- a portfolio of an open-end management investment company that
is registered with the SEC in which the Subaccounts invest.
VALUATION DATE -- a date on which a Subaccount is valued.
VALUATION PERIOD -- the period between successive valuations.
VARIABLE FUNDING OPTION -- an open-end diversified management investment company
that serves as an investment option under the Separate Account.
WE, US, OUR -- MetLife Insurance Company of Connecticut or MetLife Life and
Annuity Company of Connecticut.
WRITTEN REQUEST -- written information sent to us in a form and content
satisfactory to us and received at our Home Office.
YOU, YOUR -- the "You", depending on the context, may be the Participant or the
Contract Owner and a natural person, a trust established for the benefit of a
natural person, a charitable remainder trust, or a plan (or the employer
purchaser who has purchased the Contact on behalf of the plan).
4
SUMMARY:
METLIFE RETIREMENT ACCOUNT
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.
WHAT COMPANY WILL ISSUE MY CONTRACT? Your issuing company is either MetLife
Insurance Company of Connecticut or MetLife Life and Annuity Company of
Connecticut, (the "Company," "we" or "us"). MetLife Life and Annuity Company of
Connecticut does not solicit or issue insurance products in the State of New
York. Refer to your Contract for the name of your issuing Company. Each company
sponsors its own segregated account ("Separate Account"). MetLife Insurance
Company of Connecticut sponsors MetLife of CT Separate Account Five for Variable
Annuities ("Separate Account Five"); MetLife Life and Annuity Company of
Connecticut sponsors MetLife of CT Separate Account Six for Variable Annuities
("Separate Account Six"). When we refer to the Separate Account, we are
referring to either Separate Account Five or Separate Account Six, depending
upon your issuing Company. 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 ME A GENERAL DESCRIPTION OF THE CONTRACT? We designed the Contract
for retirement savings or other long-term investment purposes. The Contract
provides a death benefit as well as guaranteed payout options. You direct your
payment(s) to one or more of the Variable Funding Options and/or to the Fixed
Account that is part of our general account (the "Fixed Account"). We guarantee
money directed to the Fixed Account as to principal and interest. The Variable
Funding Options fluctuate with the investment performance of the Underlying
Funds and are not guaranteed. You can also lose money in the Variable Funding
Options.
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, your pre-tax contributions accumulate on a tax-
deferred basis and are taxed as income when you make a withdrawal, presumably
when you are in a lower tax bracket. The payout phase occurs when you begin
receiving payments from your Contract. The amount of money you accumulate in
your Contract determines the amount of income (Annuity Payments) you receive
during the payout phase.
During the payout phase, you may choose one of a number of annuity options. You
may receive income payments in the form of a variable annuity, a fixed annuity,
or a combination of both. If you elect variable income payments, the dollar
amount of your payments may increase or decrease. Once you choose one of the
annuity options and begin to receive payments, it cannot be changed.
WHO CAN PURCHASE THIS CONTRACT? The Contract is not available for purchase if
the proposed owner or Annuitant is age 81 or older. The Contract is not
available to new purchasers.
CAN I EXCHANGE MY CURRENT ANNUITY CONTRACT FOR THIS CONTRACT? The Code generally
permits you to exchange one annuity contract for another in a "tax-free
exchange." Therefore, you can transfer the proceeds from another annuity
contract to make Purchase Payments under this Contract. Before making an
exchange to acquire this Contract, you should carefully compare this Contract to
your current contract. You may have to pay a surrender charge under your current
contract to exchange it for this Contract, and this Contract has its own
surrender charges that would apply to you. The other fees and charges under this
Contract may be higher or lower and the benefits may be different than those of
your current contract. In addition, you may have to pay federal income or
penalty taxes on the exchange if it does not qualify for tax-free treatment. You
should not exchange another contract for this Contract unless you determine,
after evaluating all the facts, that the exchange is in your best interests.
Remember that the person selling you the Contract generally will earn a
commission on the sale.
WHO IS THE CONTRACT ISSUED TO? If you purchase an individual Contract, you are
the Contract Owner. If a group Contract is purchased, we issue certificates to
the individual participants. Where we refer to "you," we are referring to the
individual Contract Owner or the group participant, as applicable. We refer to
both contracts and certificates as "Contracts." If a group unallocated Contract
is purchased, we issue only the Contract.
We issue group Contracts in connection with retirement plans. Depending on your
Plan, certain features and/or Variable Funding Options described in this
prospectus may not be available to you. Your Plan provisions supersede the
prospectus. If you have any questions about your specific Plan, contact your
Plan administrator.
5
IS THERE A RIGHT TO RETURN PERIOD? If you cancel the Contract within ten days
after you receive it, you will receive a full refund of your Contract Value plus
any Contract charges and premium taxes you paid (but not fees and charges
assessed by the Underlying Funds). The number of days for the right to return
varies by state. Depending on state law, we may refund all of your purchase
payments or your Contract Value. You bear the investment risk on the Purchase
Payment allocated to a Variable Funding Option during the right to return
period; therefore, the Contract Value we return may be greater or less than your
Purchase Payment.
If you purchased your Contract as an Individual Retirement Annuity, and you
return it within the first seven days after delivery, or longer if your state
permits, we will refund your full Purchase Payment. During the remainder of the
right to return period, we will refund your Contract Value (including charges we
assessed). We will determine your Contract Value at the close of business on the
day we receive a Written Request for a refund.
During the right to return period, you will not bear any Contract fees
associated with the Purchase Payment Credits. If you exercise your right to
return, you will be in the same position as if you had exercised the right to
return in a variable annuity Contract with no Purchase Payment Credit. You
would, however, receive any gains, and we would bear any losses attributable to
the Purchase Payment Credits.
CAN YOU GIVE A GENERAL DESCRIPTION OF THE VARIABLE FUNDING OPTIONS AND HOW THEY
OPERATE? Through its Subaccounts, the Separate Account uses your Purchase
Payments to purchase shares, at your direction, of one or more of the Variable
Funding Options. In turn, each Variable Funding Option invests in an underlying
mutual fund ("Underlying Fund") that holds securities consistent with its own
investment policy. Depending on market conditions, you may make or lose money in
any of these Variable Funding Options.
You can transfer among the Variable Funding Options as frequently as you wish
without any current tax implications. Currently there is no charge for
transfers, nor a limit to the number of transfers allowed. We may, in the
future, charge a fee for any transfer request, or 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.
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 mortality and expense risk ("M&E") charge daily from the amounts you allocate
to the Separate Account. We deduct the M&E charge at an annual rate of 0.80% for
the Standard Death Benefit, and 1.25% for the Optional Death Benefit. Each
Underlying Fund also charges for management costs and other expenses.
We will apply a withdrawal charge to withdrawals from the Contract, and will
calculate it as a percentage of the Purchase Payments and any associated
Purchase Payment Credits withdrawn. The maximum percentage is 5%, decreasing to
0% in year six and later.
Upon annuitization, if you select the Variable Annuitization Floor Benefit,
there is a Floor Benefit charge assessed. This charge will vary based upon
market conditions, and will be set at the time you choose this option. Once
established, this charge will remain the same throughout the term of the
annuitization. If you select the Liquidity Benefit, there is a charge of 5% of
the amounts withdrawn.
If you are a participant in the CHART Asset Allocation Program, the maximum
annual charge is 0.75% deducted from amounts of the Variable Funding Options.
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, you will be taxed on your Purchase Payments,
Purchase Payment Credits and on any earnings when you make a withdrawal or begin
receiving Annuity Payments. Payments to the Contract are made with after-tax
dollars, and any credits and earnings will generally accumulate tax-deferred.
You will be taxed on these earnings when they are withdrawn from the Contract.
If you are younger than 59 1/2 when you take money out, you may be charged a 10%
federal penalty tax on the amount withdrawn. Under Non-Qualified Contracts,
withdrawals are considered to be made first from taxable earnings.
For owners of Qualified Contracts, if you reach a certain age, you may be
required by federal tax laws to begin receiving payments from your annuity or
risk paying a penalty tax. In those cases, we can calculate and pay you the
minimum required distribution amounts (see "Managed Distribution Program").
6
HOW MAY I ACCESS MY MONEY? You can take withdrawals any time during the
accumulation phase. Withdrawal charges may apply, and income taxes, and/or a
penalty tax may apply to taxable amounts withdrawn.
WHAT IS THE DEATH BENEFIT UNDER THE CONTRACT? You may choose to purchase the
Standard or Optional Death Benefit. If you die before the Contract is in the
payout phase, the person you have chosen as your beneficiary will receive a
death benefit. We calculate the death benefit value at the close of the business
day on which our Home Office receives (1) Due Proof of Death and (2) written
payment instructions or the election of beneficiary contract continuance. Please
refer to the Death Benefit section in the prospectus for more details.
WHERE MAY I FIND OUT MORE ABOUT ACCUMULATION UNIT VALUES? The Condensed
Financial Information in Appendix A or Appendix B to this prospectus provides
more information about Accumulation Unit values.
ARE THERE ANY ADDITIONAL FEATURES? This Contract has other features you may be
interested in. These include:
- DOLLAR COST AVERAGING. This is a program that allows you to invest a
fixed amount of money in Variable Funding Options each month,
theoretically giving you a lower average cost per unit over time than
a single one-time purchase. Dollar Cost Averaging requires regular
investments regardless of fluctuating price levels, and does not
guarantee profits or prevent losses in a declining market. Potential
investors should consider their financial ability to continue
purchases through periods of low price levels.
- SYSTEMATIC WITHDRAWAL OPTION. Before the Maturity Date, you can
arrange to have money sent to you at set intervals throughout the
year. Of course, any applicable income and penalty taxes will apply on
amounts withdrawn. Withdrawals in excess of the free withdrawal
allowance may be subject to a withdrawal charge.
- MANAGED DISTRIBUTION PROGRAM. This program allows us to automatically
calculate and distribute to you, in November of the applicable tax
year, an amount that will satisfy the Internal Revenue Service's
minimum distribution requirements imposed on certain Contracts once
the owner reaches age 70 1/2 or retires. These minimum distributions
occur during the accumulation phase.
- ASSET ALLOCATION SERVICES. Effective February 1, 2006, the CHART Asset
Allocation Program is closed. If you enrolled in the program prior to
February 1, 2006, you may continue to make additional Purchase
Payments into the program. If you cancel your enrollment in the
program, you may not re-enroll. Participants in the program enter into
a separate advisory agreement with MetLife Investment Fund Services
LLC ("MIFS"), an affiliate of the Company, for the purpose of
receiving asset allocation advice under MIFS's CHART program (the
"program"). Under the program, participants allocate Contract Value
according to asset allocation models developed by MIFS in consultation
with CRA/RogersCasey, Inc., a well-known investment consulting firm.
The program is not a part of the Contract issued by the Company, and
is closed to new participants. The program is fully described in a
separate disclosure statement prepared by MIFS.
- BENEFICIARY CONTRACT CONTINUANCE (NOT PERMITTED FOR NON-NATURAL
BENEFICIARIES). If you die before the Maturity Date, and if the value
of any beneficiary's portion of the death benefit is between $20,000
and $1,000,000 as of the date of your death, that beneficiary(s) may
elect to continue his/her portion of the Contract.
7
FEE TABLE
- --------------------------------------------------------------------------------
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 Contract Value between Variable Funding
Options. Expenses shown do not include premium taxes, which may be applicable.
CONTRACT OWNER TRANSACTION EXPENSES
<Table>
WITHDRAWAL CHARGE 5%(1)
</Table>
(as a percentage of the Purchase Payments and any applicable Purchase Payment
Credits withdrawn)
<Table>
TRANSFER CHARGE $10(2)
</Table>
(assessed on transfers that exceed 12 per year)
<Table>
LIQUIDITY BENEFIT CHARGE 5%
(During the annuity period, if you have elected the Liquidity Benefit, a surrender
charge of 5% of the amount withdrawn will be assessed. See 'Liquidity Benefit').
</Table>
- ---------
(1) The withdrawal charge declines to zero after the Purchase Payment has been
in the Contract for 5 years. The charge is as follows:
<Table>
<Caption>
YEARS SINCE PURCHASE PAYMENT MADE 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>
(2) We do not currently assess the transfer charge.
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.
ANNUAL SEPARATE ACCOUNT CHARGES
(as a percentage of the average daily net assets of the Separate Account)(3)
We will assess a minimum mortality and expense risk charge ("M&E") of 0.80% for
the standard death benefit and 1.25% for the optional Death Benefit. Below is a
summary of all maximum charges that may apply, depending on the death benefit
you select and the optional features you select:
<Table>
<Caption>
- -------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT: OPTIONAL DEATH BENEFIT:
- -------------------------------------------------------------------------------------------
Mortality and Expense Risk Charge 0.80% Mortality and Expense Risk Charge 1.25%
Administrative Expense Charge None Administrative Expense Charge None
---- ----
Total Annual Separate Account Total Annual Separate Account
Charges 0.80% Charges 1.25%
- -------------------------------------------------------------------------------------------
</Table>
During the annuity period, if you have elected the Variable Annuitization Floor
Benefit, a total annual separate account charge of up to 3.80% or 4.25% may
apply. See "Variable Annuitization Floor Benefit".
(3) 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.
and 0.11% for the Subaccount investing in the BlackRock High Yield
Portfolio of the Metropolitan Series Fund, Inc. We are also waiving 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
fund expenses that are 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; an amount equal to the underlying fund expenses
that are in excess of 0.72% for the Subaccount investing in the Capital
Guardian U.S. Equity Portfolio -- Class A in the Metropolitan Series Fund,
Inc.; and an amount equal to the underlying fund expenses that are in
excess of 0.65% for the Subaccount investing in the PIMCO Inflation Bond
Portfolio -- Class A of the Met Investors Series Trust; and an amount
equal to the underlying fund expenses that are in excess of 1.12% for the
Subaccount
8
investing in the Lord Abbett Mid-Cap Value Portfolio -- Class B of the Met
Investors Series Trust; and an amount equal to the underlying fund
expenses that are in excess of 1.10% for the Subaccount investing in the
Third Avenue Small Cap Value Portfolio -- Class B of the Met Investors
Series Trust; and an amount equal to the underlying fund expenses that are
in excess of 1.18% for the Subaccount investing in the MFS(R) Research
International Portfolio -- Class B of the Met Investors Series Trust.
CHART PROGRAM
Effective February 1, 2006, the CHART Asset Allocation Program is closed to new
participants. Plan participants who enrolled in the program prior to February 1,
2006, may continue to make additional Purchase Payments into the program. Plan
participants who cancel enrollment in the program, may not re-enroll.
MAXIMUM ANNUAL FEE FOR CHART PROGRAM ...............................0.75%
The following table describes the annual investment advisory fee for clients who
enter into an investment advisory agreement to participate in MIFS's CHART asset
allocation program. The annual fee is applied to the participant's current
Contract Value. Fees payable for participating in the program are deducted on a
quarterly basis from the Contract as a partial surrender.
<Table>
<Caption>
MAXIMUM
CONTRACT VALUE ANNUAL FEE FOR
EQUAL OR GREATER THAN BUT LESS THAN CHART PROGRAM
- --------------------- ------------- --------------
$0 $25,000 0.75%
$25,000 $50,000 0.75%
$50,000 $75,000 0.50%
$75,000 $100,000 0.35%
$100,000 $250,000 0.25%
$250,000 $500,000 0.15%
$500,00+ 0.10%
</Table>
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 1- 800-842-9406.
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) 0.38% 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%
American Funds Growth-Income Fund.. 0.27% 0.25% 0.01% 0.53% -- 0.53%
DELAWARE VIP TRUST -- STANDARD CLASS
Delaware VIP Small Cap Value
Series.......................... 0.72% -- 0.11% 0.83% -- 0.83%
</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*
- ---------------- ------------ -------------- ---------- ----------- ----------------- -----------
DREYFUS VARIABLE INVESTMENT
FUND -- INITIAL SHARES
Dreyfus Variable Investment Fund
Appreciation Portfolio**........ 0.75% -- 0.09% 0.84% -- 0.84%
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 Dynamic Capital Appreciation
Portfolio(+).................... 0.56% 0.25% 0.24% 1.05% -- 1.05%
VIP Mid Cap Portfolio.............. 0.57% 0.25% 0.11% 0.93% -- 0.93%
FRANKLIN TEMPLETON VARIABLE INSURANCE
PRODUCTS TRUST -- CLASS 2
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%(1)
JANUS ASPEN SERIES -- SERVICE SHARES
Mid Cap Growth Portfolio........... 0.64% 0.25% 0.06% 0.95% -- 0.95%
Worldwide Growth Portfolio(+)...... 0.60% -- 0.04% 0.64% -- 0.64%
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 -- Class
I............................... 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%(2)
Legg Mason Partners Variable
Dividend Strategy Portfolio(+).. 0.65% -- 0.24% 0.89% -- 0.89%
Legg Mason Partners Variable Equity
Index Portfolio -- Class II..... 0.31% 0.25% 0.03% 0.59% -- 0.59%
Legg Mason Partners Variable
Fundamental Value
Portfolio -- Class I............ 0.75% 0.02% 0.77% 0.77% -- 0.77%
Legg Mason Partners Variable
International All Cap
Opportunity Portfolio+.......... 0.85% -- 0.09% 0.94% -- 0.94%
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(3).................... 0.55% 0.25% 0.22% 1.02% -- 1.02%
Legg Mason Partners Variable High
Income Portfolio................ 0.60% -- 0.06% 0.66% -- 0.66%
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)
Dreman Small-Cap Value
Portfolio -- Class A............ 0.82% -- 0.37% 1.19% 0.09% 1.10%(7)
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%(8)
Lazard Mid-Cap Portfolio -- Class
B............................... 0.70% 0.25% 0.06% 1.01% -- 1.01%
Legg Mason Partners Managed Assets
Portfolio -- Class A............ 0.50% -- 0.11% 0.61% -- 0.61%(9)
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) Emerging Markets Equity
Portfolio -- Class A(+)......... 1.04% -- 0.29% 1.33% 0.03% 1.30%(10)
</Table>
10
<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*
- ---------------- ------------ -------------- ---------- ----------- ----------------- -----------
MFS(R) Research International
Portfolio -- Class B(+)......... 0.72% -- 0.14% 0.86% -- 0.86%
MFS(R) Value Portfolio -- Class A.. 0.73% -- 0.23% 0.96% -- 0.96%(11)
Met/AIM Capital Appreciation
Portfolio -- Class A............ 0.77% -- 0.09% 0.86% -- 0.86%(12)
Met/AIM Small Cap Growth Portfolio
-- Class A...................... 0.87% -- 0.06% 0.93% -- 0.93%(13)
Neuberger Berman Real Estate
Portfolio -- Class A............ 0.64% -- 0.04% 0.68% -- 0.68%
PIMCO Inflation Protected Bond
Portfolio -- Class A............ 0.50% -- 0.05% 0.55% -- 0.55%
Pioneer Fund Portfolio -- Class A.. 0.75% -- 0.30% 1.05% 0.05% 1.00%(14)
Pioneer Strategic Income
Portfolio -- Class A............ 0.70% -- 0.12% 0.82% -- 0.82%(15)
Third Avenue Small Cap Value
Portfolio -- Class B............ 0.74% 0.25% 0.04% 1.03% -- 1.03%
METLIFE INVESTMENT FUNDS,
INC. -- CLASS I(16)
MetLife Investment Diversified Bond
Fund............................ 0.41% -- 0.09% 0.50% 0.01% 0.49%(17)
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%(18)
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%(19)
BlackRock Money Market
Portfolio -- Class A............ 0.34% -- 0.04% 0.38% 0.01% 0.37%(20)
Capital Guardian U.S. Equity
Portfolio -- Class A(+)......... 0.66% -- 0.06% 0.72% -- 0.72%
FI Large Cap Portfolio -- Class A.. 0.78% -- 0.06% 0.84% -- 0.84%(21)
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%(22)
Oppenheimer Global Equity Portfolio
-- Class B...................... 0.53% 0.25% 0.09% 0.87% -- 0.87%
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%
PUTNAM VARIABLE TRUST -- CLASS IB
Putnam VT Discovery Growth
Fund(+)......................... 0.70% 0.25% 0.55% 1.50% -- 1.50%
VAN KAMPEN LIFE INVESTMENT
TRUST -- CLASS II
Comstock Portfolio................. 0.56% 0.25% 0.03% 0.84% -- 0.84%
Enterprise Portfolio(+)............ 0.50% 0.25% 0.18% 0.93% -- 0.93%
Strategic Growth Portfolio(+)...... 0.70% 0.25% 0.08% 1.03% -- 1.03%
WELLS FARGO VARIABLE TRUST
Wells Fargo Advantage VT Small/Mid
Cap Value Fund(+)............... 0.75% 0.25% 0.46% 1.46% 0.32% 1.14%
</Table>
<Table>
<Caption>
NET TOTAL
ANNUAL
OPERATING
DISTRIBUTION TOTAL CONTRACTUAL FEE NET TOTAL EXPENSES
AND/OR ANNUAL WAIVER ANNUAL INCLUDING
MANAGEMENT SERVICE OTHER OPERATING AND/OR EXPENSE OPERATING UNDERLYING
UNDERLYING FUND: FEE (12b-1) FEES EXPENSES EXPENSES REIMBURSEMENT EXPENSES** FUND EXPENSES
- ---------------- ------------ -------------- ---------- ----------- ----------------- ------------ ---------------
METROPOLITAN SERIES FUND,
INC.
MetLife Aggressive
Allocation
Portfolio -- Class
B................... 0.10% 0.25% 0.07% 0.42% 0.07% 0.35% 1.10%(23)
MetLife Conservative
Allocation
Portfolio -- Class
B................... 0.10% 0.25% 0.09% 0.44% 0.09% 0.35% 0.96%
MetLife Conservative to
Moderate Allocation
Portfolio -- Class
B................... 0.10% 0.25% 0.02% 0.37% 0.02% 0.35% 1.00%
MetLife Moderate
Allocation
Portfolio -- Class
B................... 0.10% 0.25% 0.01% 0.36% 0.01% 0.35% 1.05%
MetLife Moderate to
Aggressive
Allocation
Portfolio -- Class
B................... 0.10% 0.25% 0.01% 0.36% 0.01% 0.35% 1.10%
</Table>
11
- ---------
* 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.
+ Closed to new investors.
++ Fees and Expenses are based on the Portfolio's fiscal year ended October
31, 2006.
NOTES
(1) 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).
(2) Other expenses have been estimated based on expenses incurred by Class II
shares because no Class I shares were outstanding on December 31, 2006.
(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. 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 1.10%, excluding
12b-1 fees.
(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.
(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.
(10) 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 1.30%, excluding 12b-1 fees. The fees and expenses shown in
the table are annualized, based on the Portfolio's May 1, 2006 start date.
(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.
(12) 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.
(13) 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.
(14) 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.
(15) 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.
(16) Other Expenses have been restated to reflect current fees, as if current
fees had been in effect for the previous fiscal year.
(17) Assumes fee schedules were in place for the full year with Wellington
Management Company LLP.
(18) Assumes fee schedules were in place for the full year with Delaware
Management Company.
(19) 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.
(20) 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
0.345% for the first $500 million of the Portfolio's average daily net
assets and 0.335% for the next $500 million.
(21) The Management Fee has been restated to reflect current fees, as if fees
had been in effect for the previous fiscal year.
12
(22) The Management Fee has been restated to reflect current fees, as if
current fees had been in effect for the previous fiscal year.
(23) 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.
** Other Expenses include 0.02% 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.
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 elected the Optional Death Benefit and that 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. Your actual expenses will be less than those
shown if you do not elect the Optional Death Benefit.
EXAMPLE 1.
MAXIMUM CHARGES (assuming you select the Optional Death Benefit)
<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............... $809 $1,186 $1,687 $3,372 $385 $1,169 $1,970
Underlying Fund with Minimum Total
Annual Operating Expenses............... $673 $775 $1,002 $2,004 $249 $767 $1,311
<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............... $4,054
Underlying Fund with Minimum Total
Annual Operating Expenses............... $2,794
</Table>
13
EXAMPLE 2 -- This example assumes that you have elected the most expensive death
benefit option and the CHART program at the maximum fee. Under the CHART
program, you choose to enter into a separate investment advisory agreement with
MIFS for the purpose of receiving asset allocation advice. The example assumes
that your Contract Value is allocated to the most expensive and least expensive
Underlying Funds; however, under the program, your Contract Value is currently
allocated amongst four Underlying Funds, each of which is substantially less
expensive than the example reflecting the maximum total operating expenses. The
program is not part of the Contract issued by the Company.
<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............... $885 $1,409 $2,050 $4,054 $385 $1,169 $1,970
Underlying Fund with Minimum Total
Annual Operating Expenses............... $749 $1,007 $1,391 $2,794 $249 $767 $1,311
<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............... $4,054
Underlying Fund with Minimum Total
Annual Operating Expenses............... $2,794
</Table>
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
See Appendices A and B.
THE ANNUITY CONTRACT AND YOUR RETIREMENT PLAN
- --------------------------------------------------------------------------------
If you participate through a retirement plan or other group arrangement, the
Contract may provide that all or some of your rights or choices as described in
this Prospectus are subject to the plan's terms. For example, limitations on
your rights 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 your Contract Value. Also, the Contract may require that you or
your beneficiary obtain a signed authorization from your employer or plan
administrator to exercise certain rights. We may rely on your employer's or plan
administrator's statements to us as to the terms of the plan or your entitlement
to any amounts. We are not a party to your employer's retirement plan. We will
not be responsible for determining what your plan says. You should consult the
Contract and plan document to see how you may be affected. If you are a Texas
Optional Retirement Program participant, please see Appendix E for specific
information which applies to you.
THE ANNUITY CONTRACT
- --------------------------------------------------------------------------------
MetLife Retirement Account Annuity is a Contract 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 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.
The Company offers several different annuities that your investment professional
may be authorized to offer to you. Each annuity offers different features and
benefits that may be appropriate for you. In particular, the annuities differ
based on variations in the standard and optional death benefit protection
provided for your beneficiaries, the availability of optional living benefits,
the ability to access your Contract Value if necessary and the charges that you
will be subject to if you make a withdrawal or surrender the annuity. The
separate account charges and other charges may be different between each annuity
we offer. Optional death benefits and living benefits are subject to a separate
charge for the additional protections they offer to you and your beneficiaries.
Furthermore, annuities that offer greater
14
flexibility to access your Contract Value generally are subject to higher
separate account charges than annuities that deduct charges if you make a
withdrawal or surrender.
We encourage you to evaluate the fees, expenses, benefits and features of this
annuity against those of other investment products, including other 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.
You make Purchase Payments to us and we credit them to your Contract. We promise
to pay you an income, in the form of Annuity Payments, beginning on a future
date that you choose, the Maturity Date. The Purchase Payments accumulate tax
deferred in the funding options of your choice. We offer multiple Variable
Funding Options. We may also offer a Fixed Account option. Where permitted by
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. The Contract Owner
assumes the risk of gain or loss according to the performance of the Variable
Funding Options. The Contract Value is the amount of Purchase Payments and any
associated Purchase Payment Credits, plus or minus any investment experience on
the amounts you allocate to the Separate Account ("Separate Account Contract
Value") or interest on the amounts you allocate to the Fixed Account ("Fixed
Account Contract Value"). The Contract Value also reflects all withdrawals made
and charges deducted. There is generally no guarantee that at the Maturity Date
the Contract Value will equal or exceed the total Purchase Payments made under
the Contract. The date the Contract and its benefits become effective is
referred to as the Contract Date. Each 12-month period following the Contract
Date is called a Contract Year.
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.
The Contract is not available for purchase if the proposed owner or Annuitant is
age 81 or older. The Contract is not open to new purchasers.
Purchase of this Contract through a tax-qualified retirement plan or IRA does
not provide any additional tax deferral benefits beyond those provided by the
plan or the IRA. Accordingly, if you are purchasing this Contract through a plan
or IRA, you should consider purchasing this Contract for its Death Benefit,
Annuity Option Benefits, and other non-tax-related benefits. You should consult
with your financial adviser to determine if this Contract is appropriate for
you.
CONTRACT OWNER INQUIRIES
Any questions you have about your Contract should be directed to our Home Office
at 1-800-842-9406.
PURCHASE PAYMENTS
Your initial Purchase Payment is due and payable before the Contract becomes
effective. The initial Purchase Payment must be at least $20,000. You may make
additional payments of at least $5,000 at any time. No additional payments are
allowed if this Contract is purchased with a beneficiary-directed transfer of
death benefit proceeds. Under certain circumstances, we may waive the minimum
Purchase Payment requirement. Purchase Payments over $1,000,000 may be made only
with our prior consent.
We accept Purchase Payments made by check or cashier's check. We do not accept
cash, money orders or traveler's checks. 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 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, we will
return the Purchase Payment in full, unless you specifically consent for us to
keep it until you provide the necessary information.
15
We will credit subsequent Purchase Payments to a Contract on the same business
day we receive it, if it is 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). Purchase Payments
allocated to the Fixed Account are not eligible for Purchase Payment Credits.
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.
PURCHASE PAYMENT CREDITS
If, for an additional charge, you select the Optional Death Benefit, we will add
a credit to your Contract with each Purchase Payment. Each credit is added to
the Contract Value when the corresponding Purchase Payment is applied, and will
equal 2% of each Purchase Payment. These credits are applied pro rata to the
same Variable Funding Options to which your Purchase Payment was applied.
Purchase Payments allocated to the Fixed Account are not eligible for Purchase
Payment Credits.
You should know that over time and under certain circumstances (such as a period
of poor market performance) the costs associated with the Purchase Payment
Credits may more than offset the Purchase Payment Credits and related earnings.
You should consider this possibility before purchasing the Optional Death
Benefit.
CONSERVATION CREDIT
If you are purchasing this Contract with funds from another Contract issued by
us or our affiliates, you may receive a conservation credit to your Purchase
Payments. If applied, we will determine the amount of such credit.
ACCUMULATION UNITS
The period between the Contract Date and the Maturity Date is the Accumulation
Period. During the Accumulation Period, and Accumulation Unit is used to
calculate the value of a Contract. Each Variable 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 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 Variable Funding Option (or
taken from each funding option) by the value of its Accumulation Unit. Normally,
we calculate the value of an Accumulation Unit for each Variable 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.
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 maybe 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.
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
16
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 "Payment 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 Contract 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 a variety of
purposes, including payment of expenses for certain administrative, marketing
and support services with respect to the Contracts and, in the Company's role as
an 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 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
17
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 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, MetLife Investors
Distribution Company ("MLIDC"). Payments under an Underlying Fund's 12b-1 Plan
decrease the Fund's investment return.
We make certain payments to American Funds Distributors, Inc., principal
underwriters for the American Funds Insurance Series. (See "Distribution of
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 1-800-842-9406 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
Alliance Bernstein 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
Western Asset Management Company, PORTFOLIO
Wellington Management Company LLP and SsgA MetLife Investment Advisors Company, LLC
Funds Management, Inc.
</Table>
18
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 Variable Funding Options are listed below, along with their
investment advisers and any subadviser:
<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
American Funds Growth Seeks capital appreciation Capital Research and Management
Fund -- Class 2 through stocks. Company
American Funds Growth-Income Seeks both capital appreciation Capital Research and Management
Fund -- Class 2 and income. Company
DELAWARE VIP TRUST
Delaware VIP Small Cap Value Seeks capital appreciation. Delaware Management Company
Series -- Standard Class
DREYFUS VARIABLE INVESTMENT FUND
Dreyfus Variable Investment Seeks long term capital growth The Dreyfus Corporation
Fund Appreciation consistent with the preservation Subadviser: Fayez Serofim & Co.
Portfolio -- Initial Shares of capital. Its secondary goal is
current income.
Dreyfus Variable Investment Seeks capital growth. The Dreyfus Corporation
Fund Developing Leaders
Portfolio -- Initial Shares
FRANKLIN TEMPLETON VARIABLE
INSURANCE PRODUCTS TRUST
Templeton Developing Markets Seeks long-term capital Templeton Asset Management Ltd.
Securities Fund -- Class 2 appreciation.
</Table>
19
<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.
Worldwide Growth Seeks long-term growth of capital Janus Capital Management LLC
Portfolio -- Service Shares in a manner consistent with the
+ preservation of capital.
LEGG MASON PARTNERS VARIABLE
EQUITY TRUST
Legg Mason Partners Variable Seeks capital appreciation. This Legg Mason Partners Fund Advisor,
Aggressive Growth Portfolio+ objective may be changed without LLC ("LMPFA")
shareholder approval. Subadviser: ClearBridge Advisors,
LLC ("CBA")
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- Subadvisers: CBA and Western
Portfolio -- Class I+ term capital appreciation). This Asset Management Company ("WAM")
objective may be changed without
shareholder approval.
Legg Mason Partners Variable Seeks capital appreciation, LMPFA
Dividend Strategy Portfolio principally through investments Subadviser: CBA
in dividend-paying stocks. This
objective may be changed without
shareholder approval.
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.
Legg Mason Partners Variable Seeks long-term capital growth. LMPFA
Fundamental Value Current income is a secondary Subadviser: CBA
Portfolio -- Class I consideration. This objective may
be changed without shareholder
approval.
Legg Mason Partners Variable Seeks total return on assets from LMPFA
International All Cap growth of capital and income. Subadviser: Brandywine Global
Opportunity Portfolio + This objective may be changed Investment Management, LLC
without shareholder approval. ("Brandywine")
</Table>
20
<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 ("LMIC")
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. LMPFA
High Income Portfolio Secondarily, seeks capital Subadviser: Western Asset
appreciation. These objectives Management Company, Ltd. ("WAML")
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
Financial Management, Inc.
BlackRock High Yield Portfolio- Seeks to maximize total return, MIA
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 -- Class E Subadviser: BlackRock Advisors,
LLC
Dreman Small-Cap Value Seeks capital appreciation. MIA
Portfolio -- Class A Subadviser: Dreman Value
Management, LLC
Harris Oakmark International Seeks long-term capital MIA
Portfolio -- Class A appreciation. Subadviser: Harris Associates
L.P.
Janus Forty Portfolio -- Class Seeks capital appreciation. MIA
A Subadviser: Janus Capital
Management LLC
Lazard Mid-Cap Seeks long-term capital MIA
Portfolio -- Class B appreciation. Subadviser: Lazard Asset
Management LLC
</Table>
21
<Table>
<Caption>
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------- --------------------------------- ---------------------------------
Legg Mason Partners Managed Seeks high total return. MIA
Assets Portfolio -- Class A Subadvisers: Batterymarch; and
WAM
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
total return.
Lord Abbett Growth and Income Seeks growth of capital and MIA
Portfolio -- Class B current income without excessive Subadviser: Lord, Abbett & Co.
fluctuations in the market value. LLC
Lord Abbett Mid-Cap Value Seeks capital appreciation MIA
Portfolio -- Class B through investments primarily in Subadviser: Lord, Abbett & Co.
equity securities which are LLC
believed to be undervalued in the
marketplace.
Met/AIM Capital Appreciation Seeks capital appreciation. MIA
Portfolio -- Class A Subadviser: AIM Capital
Management, Inc.
Met/AIM Small Cap Growth Seeks long-term growth of MIA
Portfolio -- Class A capital. Subadviser: AIM Capital
Management, Inc.
MFS(R) Emerging Markets Equity Seeks capital appreciation. MIA
Portfolio -- Class A+ Subadviser: Massachusetts
Financial Services Company
("MFS")
MFS(R) Research International Seeks capital appreciation. MIA
Portfolio -- Class B+ Subadviser: MFS
MFS(R) Value Portfolio -- Class Seeks capital appreciation and MIA
A reasonable income. Subadviser: 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.
PIMCO Inflation Protected Bond Seeks to provide maximum real MIA
Portfolio -- Class A return, consistent with Subadviser: Pacific Investment
preservation of capital and Management Company LLC
prudent investment management.
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 Value Seeks long-term capital MIA
Portfolio -- Class B appreciation. Subadviser: Third Avenue
Management LLC
METLIFE INVESTMENT FUNDS, INC.
MetLife Investment Diversified Seeks maximum long-term total MetLife Investment Funds
Bond Fund -- Class I return (capital appreciation and Management LLC
income) by investing primarily in Subadvisers: WAM; Wellington
fixed income securities. Management Company LLP; and SsgA
Funds Management, Inc.
</Table>
22
<Table>
<Caption>
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------- --------------------------------- ---------------------------------
MetLife Investment Seeks maximum long-term total MetLife Investment Funds
International Stock return (capital appreciation and Management LLC
Fund -- Class I income) by investing primarily in Subadvisers: Alliance Bernstein
common stocks of established non- L.P.; Oechsle International
U.S. companies. Advisors LLC; and SsgA Funds
Management, Inc.
MetLife Investment Large Seeks maximum long-term total MetLife Investment Funds
Company Stock Fund -- Class return (capital appreciation and Management LLC
I income) by investing primarily in Subadvisers: Wellington
common stocks of well-established Management Company LLP; CBA; and
companies. SsgA Funds Management, Inc.
MetLife Investment Small Seeks to provide maximum long- MetLife Investment Funds
Company Stock Fund -- Class term total return (capital Management LLC
I appreciation and income) by Subadvisers: Delaware Management
investing primarily in common Company; OFI Institutional Asset
stocks of small companies. Management, Inc.; and SsgA Funds
Management, Inc
METROPOLITAN SERIES FUND, INC.
BlackRock Aggressive Growth Seeks maximum capital MetLife Advisers, LLC
Portfolio -- Class D appreciation. Subadviser: BlackRock Advisors,
LLC
BlackRock Bond Income Seeks competitive total return MetLife Advisers, LLC
Portfolio -- Class A primarily from investing in Subadviser: BlackRock Advisors,
fixed-income securities. LLC
BlackRock Money Market Seeks a high level of current MetLife Advisers, LLC
Portfolio -- Class A income consistent with Subadviser: BlackRock Advisers,
preservation of capital. LLC
Capital Guardian U. S. Equity Seeks long-term growth of MetLife Advisers, LLC
Portfolio -- Class A+ capital. Subadviser: Capital Guardian
Trust Company
FI Large Cap Portfolio -- Class Seeks long-term growth of MetLife Advisers, LLC
A capital. Subadviser: Fidelity Management &
Research Company, Inc. ("FMRC")
FI Value Leaders Seeks long-term growth of MetLife Advisers, LLC
Portfolio -- Class D capital. Subadviser: FMRC
MetLife Aggressive Allocation Seeks growth of capital. MetLife Advisers, LLC
Portfolio -- Class B
MetLife Conservative Allocation Seeks high level of current MetLife Advisers, LLC
Portfolio -- Class B income, with growth of capital as
a secondary objective.
MetLife Conservative to Seeks high total return in the MetLife Advisers, LLC
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, LLC
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, LLC
Allocation
Portfolio -- Class B
MFS(R) Total Return Seeks a favorable total return MetLife Advisers, LLC
Portfolio -- Class F through investment in a Subadviser: MFS
diversified portfolio.
Oppenheimer Global Equity Seeks capital appreciation. MetLife Advisers, LLC
Portfolio -- Class B Subadviser: OppenheimerFunds,
Inc.
</Table>
23
<Table>
<Caption>
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------- --------------------------------- ---------------------------------
Western Asset Management U.S. Seeks to maximize total return MetLife Advisers, LLC
Government consistent with preservation of Subadviser: WAM
Portfolio -- Class A capital and maintenance of
liquidity.
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.
PUTNAM VARIABLE TRUST
Putnam VT Discovery Growth Seeks long-term growth of Putnam Investment Management, LLC
Fund -- Class IB Shares+ capital.
VAN KAMPEN LIFE INVESTMENT TRUST
Van Kampen Life Investment Seeks capital growth and income Van Kampen Asset Management Inc.
Trust Comstock through investments in equity
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 Asset Management Inc.
Trust Strategic Growth
Portfolio -- Class II+
Van Kampen Life Investment Seeks capital appreciation Van Kampen Asset Management Inc.
Trust Enterprise through investments in securities
Portfolio -- Class II+ believed by the Portfolio's
investment adviser to have above-
average potential for capital
appreciation.
VARIABLE INSURANCE PRODUCTS FUND
Contrafund(R) Seeks long-term capital FMRC
Portfolio -- Service Class 2 appreciation.
Dynamic Capital Appreciation Seeks capital appreciation. FMRC
Portfolio -- Service Class
2+
Mid Cap Portfolio -- Service Seeks long-term growth of FMRC
Class 2 capital.
WELLS FARGO VARIABLE TRUST
Wells Fargo Advantage VT Seeks long-term capital Wells Fargo Funds Management, LLC
Small/Mid Cap Value Fund+ appreciation. Subadviser: Wells Capital
Management, Incorporated
</Table>
- ---------
+ Closed to new investors.
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. 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 Funds instead of investing in the asset allocation portfolios. A
Contract Owner who chooses to invest directly in the underlying portfolios would
not
24
however, receive asset allocation services provided by MetLife Advisers. For
more information regarding the asset allocation portfolios, please read the
prospectus for these portfolios.
FIXED ACCOUNT
- --------------------------------------------------------------------------------
We may offer our Fixed Account as a funding option. Please see separate
prospectus for more information.
CHARGES AND DEDUCTIONS
- --------------------------------------------------------------------------------
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 the Contract Owner, Annuitant,
or first of the joint owners
- the available funding options and related programs (including dollar
cost averaging, portfolio rebalancing, and systematic withdrawal
programs)
- administration of the annuity options available under the Contracts
- the distribution of various reports to Contract Owners
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
- other costs of doing business.
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
- that the costs of providing the services and benefits under the
Contracts will exceed the charges deducted.
We may also deduct a charge for taxes.
Unless otherwise specified, charges are deducted proportionately from all
funding options in which you 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. The amount of any fee or charge is
not impacted by an outstanding loan. 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.
25
WITHDRAWAL CHARGE
We do not deduct a sales charge from Purchase Payments when they are made to the
Contract. However, a withdrawal charge will apply if Purchase Payments and any
applicable Purchase Payment Credits are withdrawn before they have been in the
Contract for five years. We will assess the charge as a percentage of the
Purchase Payment and any applicable Purchase Payment Credits withdrawn as
follows:
<Table>
<Caption>
YEARS SINCE PURCHASE PAYMENT MADE WITHDRAWAL CHARGE
- ------------------------------------------ -----------------
GREATER THAN OR EQUAL TO BUT LESS THAN
0 years 1 year 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 purposes of the withdrawal charge calculation, withdrawals are deemed to be
taken first from:
(a) any Purchase Payment and any applicable Purchase Payment Credits to
which no withdrawal charge applies then;
(b) any remaining free withdrawal allowance (as described below) (after
being reduced by (a), then;
(c) any remaining Purchase Payment and any applicable Purchase Payment
Credits to which a withdrawal charge applies (on a first-in, first-out
basis), then;
(d) any Contract earnings.
Unless you instruct us otherwise, we will deduct the withdrawal charge from the
amount requested.
IF YOU DID NOT PURCHASE YOUR CONTRACT UNDER A 457 OR 403(B) QUALIFIED PLAN, WE
WILL NOT DEDUCT A WITHDRAWAL CHARGE:
- from payments we make due to the death of the Annuitant
- if an annuity payout has begun, other than the Liquidity Benefit
Option (See "Liquidity Benefit")
- from amounts withdrawn which are deposited to other contracts issued
by us or our affiliate, subject to our approval
- if withdrawals are taken under our Managed Distribution Program, if
elected by you (see Access to Your Money) or
- if you are confined to an eligible nursing home, as described in
Appendix C
IF YOU PURCHASED YOUR CONTRACT UNDER A 457 OR 403(B) QUALIFIED PLAN, WE WILL NOT
DEDUCT A WITHDRAWAL CHARGE:
- from payments we make due to the death of the Annuitant
- if an annuity payout has begun
- from amounts withdrawn which are deposited to other contracts issued
by us or our affiliate, subject to our approval
- if withdrawals are taken as a minimum distribution, as defined under
The Code
- if withdrawals are taken due to a hardship, as defined under The Code
- if withdrawals are taken due to a disability, as defined under The
Code, of the Annuitant;
- if you are confined to an eligible nursing home, as described in
Appendix C (403 (B) PLANS ONLY).
26
FREE WITHDRAWAL ALLOWANCE
Beginning in the second Contract Year, you may withdraw up to 20% of the
Contract Value annually. We calculate the available withdrawal amount as of the
end of the previous Contract Year.
Any withdrawal is subject to federal income taxes on the taxable portion. In
addition, a 10% federal penalty may be assessed on any withdrawal if the
Contract Owner is under age 59 1/2. You should consult with your tax adviser
regarding the tax consequences of a withdrawal.
TRANSFER CHARGE
We reserve the right to assess a transfer charge of up to $10.00 on transfers
exceeding 12 per year. We will notify you in writing at your last known address
at least 31 days before we impose any such transfer charge.
MORTALITY AND EXPENSE RISK CHARGE
Each business day, we deduct a mortality and expense risk ("M&E") charge from
amounts we hold in the Variable Funding Options. We reflect the deduction in our
calculation of accumulation and Annuity Unit values. The charges stated are the
maximum for this product. This charge is equal to 0.80% annually. If you choose
the Optional Death Benefit, the M&E charge is 1.25% annually. This charge
compensates the Company for risks assumed, benefits provided and expenses
incurred, including the payment of commissions to your sales agent.
VARIABLE FUNDING OPTION EXPENSES
We summarized the charges and expenses of the Underlying Funds in the fee table.
Please review the prospectus for each Underlying Fund for a more complete
description of that fund and its expenses. Underlying Fund expenses are not
fixed or guaranteed and are subject to change by the Fund.
FLOOR BENEFIT/LIQUIDITY BENEFIT CHARGES
If you select the Variable Annuitization Floor Benefit, we deduct a charge upon
election of this benefit. This charge compensates us for guaranteeing a minimum
variable Annuity Payment regardless of the performance of the Variable Funding
Options you selected. This charge will vary based upon market conditions, but
will never increase your annual Separate Account charge by more than 3%. The
charge will be set at the time of election, and will remain level throughout the
term of annuitization. If the Liquidity Benefit is selected, there is a
surrender charge of 5% of the amounts withdrawn during the annuity period.
Please refer to Payment Options for a description of these benefits.
CHART ASSET ALLOCATION PROGRAM FEE
If you are a participant in the CHART Program , there is an additional fee.
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.
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.
27
TRANSFERS
- --------------------------------------------------------------------------------
Subject to the limitations described below, you may transfer all or part of your
Contract 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.
Where permitted by state law, we reserve the right to restrict transfers from
the Variable 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 Contract 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., American Funds
Global Growth Fund, MFS(R) Emerging Markets Equity Portfolio, Delaware VIP Small
Cap Value Series, Dreyfus Variable Investment Fund Developing Leaders Portfolio,
Templeton Developing Markets Securities Fund, Templeton Foreign Securities Fund,
Janus Aspen Series Worldwide Growth Portfolio, Legg Mason Partners Variable High
Income Portfolio, Legg Mason Partners Variable International All Cap
Opportunities Portfolio, Legg Mason Partners Variable Small Cap Growth
Portfolio, Dreman Small-Cap Value Portfolio, Harris Oakmark International
Portfolio, Lord Abbett Bond Debenture Portfolio, Met/AIM Small Cap Growth
Portfolio, Pioneer Strategic Income Portfolio, MetLife Investment International
Stock Fund, MetLife Investment Small Company Stock Fund, Oppenheimer Global
Equity Portfolio, BlackRock High Yield Portfolio, MFS(R) Research International
Portfolio, and Third Avenue Small Cap Value Portfolio -- 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
28
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 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; any additional violation will result in the
imposition of the transfer restrictions described below. Further, as Monitored
Portfolios, American Funds portfolios also will be subject to our current market
timing and excessive trading policies, procedures and restrictions, and transfer
restrictions may be imposed upon a violation of either monitoring policy.
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.
Transfers made under a Dollar Cost Averaging Program, a rebalancing program or,
if applicable, any asset allocation program described in this prospectus are not
treated as transfers when we evaluate trading patterns for market timing.
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.
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 Fund 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
29
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.
CHART ASSET ALLOCATION PROGRAM
- --------------------------------------------------------------------------------
GENERAL
Asset allocation is a method of investment diversification that allocates assets
among asset classes with the goal of managing investment risk and potentially
enhancing returns over the long term. An asset Class refers to a category of
investments having similar characteristics, such as stocks/equities, bonds/
fixed income, and cash equivalents. There are often further divisions among
wider asset classes, for example, classes representing company size (large cap,
mid cap, and small cap), and classes representing foreign and U.S. investments.
Asset allocation strategies reflect the theory that diversification among asset
classes can help reduce volatility over the long term. THERE IS NO ASSURANCE
THAT INVESTMENT RETURNS WILL BE BETTER THROUGH PARTICIPATION IN AN ASSET
ALLOCATION PROGRAM -- INVESTMENTS MAY STILL LOSE MONEY AND EXPERIENCE
VOLATILITY.
THE ASSET ALLOCATION PROGRAM DESCRIBED BELOW IS NOT A PART OF THE CONTRACT
ISSUED BY THE COMPANY. THE COMPANY IS NOT REGISTERED AS AN INVESTMENT ADVISER,
AND IS NOT OFFERING INVESTMENT ADVICE IN MAKING AVAILABLE THE ASSET ALLOCATION
PROGRAM.
CHART ASSET ALLOCATION PROGRAM
Effective February 1, 2006, the CHART Asset Allocation Program is closed to new
participants. If you enrolled in the program prior to February 1, 2006, you may
continue to make additional Purchase Payments into the program. If you cancel
your enrollment in the program, you may not re-enroll.
An affiliate of the Company, MIFS offers an asset allocation program to
participants of qualified retirement plans who own the Contract individually or
are participants in a group Contract owned by the plan (collectively,
"participants"). The program, called "CHART", is available for an additional
asset-based fee that is payable by the participant to MIFS for offering the
program. When a participant elects the program ("program participant"), he or
she must enter into an investment advisory agreement with MIFS. MIFS has a
fiduciary obligation with respect to program participants.
MetLife Securities, Inc. or Metropolitan Life Insurance Company, affiliates of
MIFS, may receive compensation payable by the Company for selling the Contract
to your plan and for additional contributions made by plan participants. MIFS
entered into a Solicitation Agreement with MetLife Securities, Inc., a broker-
dealer affiliate of both the Company and Metropolitan Life Insurance Company,
whereby MetLife Securities, Inc. is compensated by MIFS for referring
participants who enter into investment advisory agreements with MIFS to
participate in CHART. MIFS, Metropolitan Life Insurance Company and MetLife
Securities, Inc. are all our affiliates.
The following is a general description of the CHART Program -- a complete
description is available in the Disclosure Statement for the program. NOTE:
There are limitations on the investment advisory activities that MIFS's
representatives can perform for program participants. Please refer to the
Disclosure Statement and other documents that MIFS is required to provide to
you.
30
Participants who enter into an investment advisory agreement with MIFS to
participate in the program are authorizing MIFS to allocate their Contract Value
according to asset allocation models developed in consultation with
CRA/RogersCasey, Inc., a well-known investment consulting firm. When electing
the program, a program participant must complete a questionnaire designed to
evaluate his or her risk tolerance and investment time horizon. Based on the
results of the questionnaire, participants are matched to an investor profile.
Each investor profile establishes allocation percentages among four "program
funds", each of which is a Variable Funding Option offered under the Contract.
Currently, the program funds are MetLife Investment International Stock Fund,
MetLife Investment Small Company Stock Fund, MetLife Investment Large Company
Stock Fund and MetLife Investment Diversified Bond Fund. Each of the program
funds is advised by MetLife Investment Funds Management LLC, an affiliate of
MIFS.
Periodically, MIFS reviews its investment model and each investor profile, and
may make changes to the allocation percentages between the asset classes of the
investor profiles, may change the number of asset classes, or may change the
program funds. If, as a result of such review, a change is made to an investor
profile, MIFS will notify program participants in advance of the change, and the
participant will have the opportunity to reject the change.
At any time, a program participant can request a change to his or her investor
profile or the allocation of his or her Contract Value amongst the Variable
Funding Options, or can elect to terminate the program. Program participants are
encouraged to regularly reconsider their investor profile or allocation by
calling MIFS for a review at the phone number provided in the investor advisory
agreement. Program participants are encouraged to do this at least once a year.
In addition, program participants will receive a quarterly performance report
from the Company that provides information about the Variable Funding Options.
Program participants who elect to participate in CHART are required to only
allocate their Contract Value amongst the program funds. A program participant
can elect to have his or her Contract Value "rebalanced" on a monthly,
quarterly, semi-annual, or annual basis, to maintain the asset allocation
percentages originally selected according to the model portfolio or a customized
portfolio.
PROGRAM FEES -- DEDUCTIONS FROM CONTRACT VALUE
MIFS charges an annual asset-based fee to participate in the program as a
percentage of the participant's Contract Value, as described in the table below.
<Table>
<Caption>
MAXIMUM
CONTRACT VALUE ANNUAL FEE FOR
EQUAL OR GREATER THAN BUT LESS THAN CHART PROGRAM
- --------------------- ------------- --------------
$0 $25,000 0.75%
$25,000 $50,000 0.75%
$50,000 $75,000 0.50%
$75,000 $100,000 0.35%
$100,000 $250,000 0.25%
$250,000 $500,000 0.15%
$500,00+ 0.10%
</Table>
Please refer to the disclosure statement for the program for a detailed
description of how and when the annual program fee is calculated and when it is
deducted.
The annual fee to participate in the program is in addition to any Contract fees
and charges. Fees payable for participating in the program are deducted on a
quarterly basis from the Contract as a partial surrender. Partial surrenders
made to pay program fees will reduce the participant's Contract Value, the
guaranteed minimum death benefit, and the amount available for free withdrawals.
ACCESS TO YOUR MONEY
- --------------------------------------------------------------------------------
Any time before the Maturity Date, you may redeem all or any portion of the Cash
Surrender Value, that is, the Contract Value less any withdrawal charge and any
premium tax not previously deducted. Unless you submit a Written Request
specifying the fixed or Variable Funding Option(s) from which we are to withdraw
amounts, we will make the withdrawal on a pro rata basis. We will determine the
Cash Surrender Value as of the close of business
31
after we receive your surrender request at our Home Office. The Cash Surrender
Value may be more or less than the Purchase Payments you made. You may not make
withdrawals during the annuity period.
For amounts allocated to the Variable Funding Options, we may defer payment of
any Cash Surrender Value for a period of up to five business days after the
Written Request is received. For amounts allocated to the Fixed Account, we may
defer payment of any Cash Surrender Value for a period up to six months. In
either case, it is our intent to pay as soon as possible. We cannot process
requests for withdrawals that are not in good order. We will contact you if
there is a deficiency causing a delay and will advise what is needed to act upon
the withdrawal request.
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.
If your Contract is issued as part of a 403(b) plan, there are restrictions on
your ability to make withdrawals from your Contract. You may not withdraw
contributions or earnings made to your Contract after December 31, 1988 unless
you are (a) age 59 1/2, (b) no longer employed, (c) deceased, (d) disabled, or
(e) experiencing a financial hardship. Even if you are experiencing a financial
hardship, you may only withdraw contributions, not earnings. You should consult
with your tax adviser before making a withdrawal from your Contract.
SYSTEMATIC WITHDRAWALS
Before the Maturity Date, you may choose to withdraw a specified dollar amount
(at least $100) on a monthly, quarterly, semiannual or annual basis. We will
deduct any applicable premium taxes and withdrawal charge. To elect systematic
withdrawals, you must have a Contract Value of at least $15,000 and you must
make the election on the form we provide. We will surrender Accumulation Units
pro rata from all funding options in which you have an interest, unless you
instruct us otherwise. You may begin or discontinue systematic withdrawals at
any time by notifying us in writing, but you must give at least 30 days notice
to change any systematic withdrawal instructions that are currently in place.
We reserve the right to discontinue offering systematic withdrawals or to assess
a processing fee for this service upon 30 days written notice to Contract Owners
(where allowed by state law).
Each systematic withdrawal is subject to federal income taxes on the taxable
portion. In addition, a 10% federal penalty tax may be assessed on systematic
withdrawals if the Contract Owner is under age 59 1/2. There is no additional
fee for electing systematic withdrawals. You should consult with your tax
adviser regarding the tax consequences of systematic withdrawals.
MANAGED DISTRIBUTION PROGRAM. Under the systematic withdrawal option, you may
choose to participate in the Managed Distribution Program. At no cost to you,
you may instruct us to calculate and make minimum distributions that may be
required by the IRS upon reaching age 70 1/2. (See Federal Tax Considerations")
These payments will not be subject to the withdrawal charge and will be in lieu
of the free withdrawal allowance. No Dollar Cost Averaging will be permitted if
you are participating in the Managed Distribution Program.
OWNERSHIP PROVISIONS
- --------------------------------------------------------------------------------
TYPES OF OWNERSHIP
CONTRACT OWNER
The Contract belongs to the Contract Owner named in the Contract (on the
Specifications page). The Annuitant is the individual upon whose life the
Maturity Date and the amount of monthly payments depend. You have sole power to
exercise any rights and to receive all benefits given in the Contract provided
you have not named an irrevocable beneficiary.
32
If this Contract is purchased by a beneficiary of another contract who directly
transferred the death proceeds due under that contract, he/she will be granted
the same rights the owner has under the Contract except that he/she cannot take
a loan or make additional Purchase Payments.
BENEFICIARY
You name the beneficiary in a Written Request. The beneficiary has the right to
receive any death benefit proceeds remaining under the Contract upon the death
of the Contract Owner. If more than one beneficiary survives the Annuitant or
Contract Owner, they will share equally in benefits unless you recorded
different shares with the Company by Written Request before the death of the
Contract Owner. In the case of a non-spousal beneficiary or a spousal
beneficiary who has not chosen to assume the Contract, we will not transfer or
otherwise remove the death benefit proceeds from either the Variable Funding
Options or the Fixed Account, as most recently elected by the Contract Owner,
until the Death Report Date.
Unless you have named an irrevocable beneficiary you have the right to change
any beneficiary by Written Request during the lifetime of the Annuitant and
while the Contract continues.
DEATH BENEFIT
- --------------------------------------------------------------------------------
Before the Maturity Date, generally, a death benefit is payable when you die. At
purchase, you elect either the standard death benefit or the optional death
benefit. We calculate the death benefit at the close of the business day on
which our Home Office receives (1) Due Proof of Death and (2) written payment
instructions or election of beneficiary contract continuance ("Death Report
Date").
DEATH PROCEEDS BEFORE THE MATURITY DATE
STANDARD DEATH BENEFIT
<Table>
<Caption>
- -------------------------------------------------------------------------------------
ANNUITANT'S AGE ON THE CONTRACT
DATE DEATH BENEFIT PAYABLE
- --------------------------------- ---------------------------------------------------
On or Before Age 80 Greater of:
1) Contract Value on the Death Report Date, or
2) Total Purchase Payments less the total amount
of any partial surrenders (including
associated charges, if any).
- --------------------------------- ---------------------------------------------------
After Age 80 Contract Value less any applicable premium tax.
- --------------------------------- ---------------------------------------------------
</Table>
33
OPTIONAL DEATH BENEFIT AND CREDIT
The Optional Death Benefit and Credit varies depending on the Annuitant's age on
the Contract Date.
<Table>
<Caption>
- -------------------------------------------------------------------------------------
ANNUITANT'S AGE ON THE CONTRACT
DATE DEATH BENEFIT PAYABLE
- --------------------------------- ---------------------------------------------------
Under Age 70 Greater of:
1) Contract Value on the Death Report Date, or
2) Total Purchase Payments less the total of any
withdrawals (and related charges); or
3) Maximum Step-Up death benefit value (described
below) in effect on Death Report Date which
are associated with Contract Date
anniversaries beginning with the 5th, and
ending with the last before the Annuitant's
76th birthday.
- --------------------------------- ---------------------------------------------------
Age 70-75 Greater of:
1) Contract Value on Death Report Date, or
2) Total Purchase Payments less the total of any
withdrawals (and related charges); or
3) Step-Up death benefit value (described below)
in effect on Death Report Date associated with
the 5th Contract Date anniversary.
- --------------------------------- ---------------------------------------------------
Age 76-80 Greater of (1) or (2) above.
- --------------------------------- ---------------------------------------------------
Age over 80 Contract Value on Death Report Date (less any
applicable premium tax)
- --------------------------------- ---------------------------------------------------
</Table>
STEP-UP DEATH BENEFIT VALUE
We will establish a separate Step-Up death benefit value on the fifth Contract
Date anniversary and on each subsequent Contract Date anniversary on or before
the Death Report Date. The Step-Up death benefit value will initially equal the
Contract Value on that anniversary. After a Step-Up death benefit value has been
established, we will recalculate it each time a Purchase Payment is made or a
withdrawal is taken until the Death Report Date. We will recalculate Step-Up
death benefit values by increasing them by the amount of each applicable
Purchase Payment and by reducing them by a partial surrender reduction (as
described below) for each applicable withdrawal. Recalculations of Step-Up death
benefit values related to any Purchase Payments or any withdrawals will be made
in the order that such Purchase Payments or partial surrender reductions occur.
PARTIAL SURRENDER REDUCTION. If you make a withdrawal, we will reduce the Step-
Up value by a partial surrender reduction which equals: (1) the step-up value
immediately prior to the withdrawal, multiplied by (2) the amount of the
withdrawal, divided by (3) the Contract Value before the withdrawal.
For example, assume your current Contract Value is $55,000. If your step-up
value immediately prior to the withdrawal is $50,000, and you decide to make a
withdrawal of $10,000, we would reduce the step-up value as follows:
50,000 x (10,000/55,000) = 9,090
Your new step-up value would be 50,000-9,090, or $40,910.
The following example shows what would happen in a declining market. Assume your
current Contract Value is $30,000. If your step-up value immediately prior to
the withdrawal is $50,000, and you decide to make a withdrawal of $10,000, we
would reduce the step-up value as follows:
50,000 x (10,000/30,000) = 16,666
Your new step-up value would be 50,000-16,666, or $33,334.
34
PAYMENT OF PROCEEDS
We describe the process of paying death benefit proceeds before the Maturity
Date in the chart below. The chart does not encompass every situation and is
merely intended as a general guide. More detailed information is provided in
your Contract. Generally, the person(s) receiving the benefit may request that
the proceeds be paid in a lump sum, or be applied to one of the settlement
options available under the Contract.
<Table>
<Caption>
- -----------------------------------------------------------------------------------------------------
MANDATORY
BEFORE THE MATURITY DATE, THE COMPANY WILL PAYOUT RULES
UPON THE DEATH OF THE PAY THE PROCEEDS TO: APPLY*
- -----------------------------------------------------------------------------------------------------
OWNER/ANNUITANT The beneficiary (ies), or if none, Yes
to the Contract Owner's estate.
BENEFICIARY No death proceeds are payable; N/A
Contract continues.
CONTINGENT BENEFICIARY No death proceeds are payable; N/A
Contract continues.
- -----------------------------------------------------------------------------------------------------
</Table>
- ---------
* Certain payout rules of the Internal Revenue Code (IRC) are triggered upon
the death of the Owner. Non-spousal beneficiaries (as well as spousal
beneficiaries who choose not to assume the Contract) must begin taking
distributions based on the beneficiary's life expectancy within one year
of death or take a complete distribution of Contract proceeds within 5
years of death. If mandatory distributions have begun, the 5 year payout
option is not available.
BENEFICIARY CONTRACT CONTINUANCE (NOT PERMITTED FOR NON-NATURAL BENEFICIARIES)
If you die before the Maturity Date, and if the value of any beneficiary's
portion of the death benefit is between $20,000 and $1,000,000 as of the Death
Report Date, (more than $1,000,000 is subject to Home Office approval), your
beneficiary(ies) may elect to continue his/her portion of the Contract subject
to applicable Internal Revenue Code distribution requirements, rather than
receive the death benefit in a lump sum. If the beneficiary chooses to continue
the Contract, the beneficiary can extend the payout phase of the Contract
enabling the beneficiary to "stretch" the death benefit distributions out over
his life expectancy as permitted by the Internal Revenue Code.
If your beneficiary elects to continue the Contract, the death benefit will be
calculated as of the Death Report Date. The initial Contract Value of the
continued Contract (the "adjusted Contract Value") will equal the greater of the
Contract Value or the death benefit calculated on the Death Report Date and will
be allocated to the funding options in the same proportion as prior to the Death
Report Date. If the adjusted Contract Value is allocated to the Variable Funding
Options, the beneficiary bears the investment risk.
The beneficiary who continues the Contract will be granted the same rights as
the owner under the original Contract, except the beneficiary cannot:
- take a loan
- make additional Purchase Payments
- transfer ownership of the Contract
The beneficiary may also name his/her own beneficiary ("succeeding beneficiary")
and has the right to take withdrawals at any time after the Death Report Date
without a withdrawal charge. All other fees and charges applicable to the
original Contract will also apply to the continued Contract. All benefits and
features of the continued Contract will be based on the beneficiary's age on the
Death Report Date as if the beneficiary had purchased the Contract with the
adjusted Contract Value on the Death Report Date.
PLANNED DEATH BENEFIT (INDIVIDUAL CONTRACTS ONLY)
You may request that rather than receive a lump-sum death benefit, the
beneficiary(ies) receive all or a portion of the death benefit proceeds either:
- through an annuity for life or a period that does not exceed the
beneficiary's life expectancy or
35
- under the terms of the Beneficiary Continuance provision described
above. If the Beneficiary Continuance provision is selected as a
planned death benefit, no surrenders will be allowed other than
payments meant to satisfy minimum distribution amounts or systematic
withdrawal amounts, if greater.
You must make the planned death benefit request as well as any revocation of
this request in writing. Upon your death, your beneficiary(s) cannot revoke or
modify this request. If the death benefit at the time we receive Due Proof of
Death is less than $2,000, we will only pay a lump sum to the beneficiary. If
periodic payments due under the planned death benefit election are less than
$100, we reserve the right to make Annuity Payments at less frequent intervals,
resulting in a payment of at least $100 per year. If no beneficiary is alive
when death benefits become payable, we will pay the death benefit as provided in
your Contract.
DEATH PROCEEDS AFTER THE MATURITY DATE
If any Contract Owner or the Annuitant dies on or after the Maturity Date, the
Company will pay the beneficiary a death benefit consisting of any benefit
remaining under the annuity option then in effect.
THE ANNUITY PERIOD
- --------------------------------------------------------------------------------
MATURITY DATE
Under the Contract, you can receive regular payments ("Annuity Payments"). You
can choose the month and the year in which those payments begin ("Maturity
Date"). You can also choose among income payouts (annuity options) or elect a
lump sum distribution. While the Annuitant is alive, you can change your
selection any time up to the Maturity Date. Annuity Payments will begin on the
Maturity Date stated in the Contract unless (1) you fully surrendered the
Contract; (2) we paid the proceeds to the beneficiary before that date; or (3)
you elected another 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; or (c) for the joint lifetime of the Annuitant and another
person, and thereafter during the lifetime of the survivor. We may require proof
that the Annuitant is alive before we make Annuity Payments. Not all options may
be available in all states.
You may choose to annuitize at any time after you purchase your Contract. Unless
you elect otherwise, the Maturity Date will be the Annuitant's 90th birthday or
ten years after the effective date of the Contract, if later.
This requirement may be changed by us.
At least 30 days before the original Maturity Date, you may elect to extend the
Maturity Date to any time prior to the Annuitant's 90th birthday or to a later
date with our consent. You may use certain annuity options taken at the Maturity
Date to meet the minimum required distribution requirements of federal tax law,
or you may use a program of withdrawals instead. These mandatory distribution
requirements take effect generally upon the death of the Contract Owner, or with
certain Qualified Contracts upon either the later of the Contract Owner's
attainment of age 70 1/2 or year of retirement; or the death of the Contract
Owner. You should seek independent tax advice regarding the election of minimum
required distributions.
LIQUIDITY BENEFIT (BENEFIT NOT AVAILABLE UNDER 457 PLANS)
If you select any annuity option that guarantees you payments for a minimum
period of time ("period certain"), you may take a lump sum payment (equal to a
portion or all of the value of the remaining payments) any time after the first
Contract Year. There is a charge of 5% of the amount withdrawn under this
option.
For variable Annuity Payments, we use the Assumed Net Investment Factor,
("ANIF") as the interest rate to determine the lump sum amount. If you request
only a percentage of the amount available, we will reduce the amount of each
payment during the rest of the period certain by that percentage. After the
period expires, your payments will increase to the level they would have been
had no liquidation taken place.
For fixed Annuity Payments, we calculate the present value of the remaining
period certain payments using a current interest rate. The current interest rate
used depends on the amount of time left in the annuity option you elected. The
current rate will be the same rate we would give someone electing an annuity
option for that same amount of time. If you request a percentage of the amount
available during the period certain, we will reduce the amount of each
36
payment during the rest of the period certain by that percentage. After the
period certain expires, your payments will increase to the level they would have
been had no liquidation taken place.
The market value adjustment formula for calculating the present value described
above for fixed Annuity Payments is as follows:
n
Present Value = SIGMA [Payments x (1/1 + iC)(t/365)
s = 1
Where
iC = the interest rate described above
n = the number of payments remaining in the Contract Owner's period certain at
the time of request for this benefit
t = the number of days remaining until that payment is made, adjusting for leap
years.
See Appendix D for examples of this market value adjustment.
ALLOCATION OF ANNUITY
You may elect to receive your 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 your Contract Value
to provide an annuity funded by the same funding options as you have selected
during the accumulation period. At least 30 days before the Maturity 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.)
ANNUITIZATION CREDIT. This credit is applied to the Contract Value used to
purchase one of the annuity options described below. The credit equals 0.5% of
your Contract Value if you annuitize during Contract Years 2-5, 1% during
Contract Years 6-10, and 2% after Contract Year 10. There is no credit applied
to Contracts held less than 1 year.
VARIABLE ANNUITY
You may choose an annuity payout that fluctuates depending on the investment
experience of the Variable Funding Options. We determine the number of Annuity
Units credited to the Contract by dividing the first monthly Annuity Payment
attributable to each Variable 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 Contract 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. You may select an assumed daily net investment factor of either
3% or 5% upon each full or partial annuitization. The Contract tables factor in
an assumed daily net investment factor of 3.0% or 5.0%. We call this your net
investment rate. Your net investment rate of 3% or 5% corresponds to an annual
interest rate of 3% or 5%. This means that if the annualized investment
performance, after expenses, of your Variable Funding Options is less than 3%,
or less than 5%, then the dollar amount of your variable Annuity Payments will
decrease. However, if the annualized investment performance, after expenses, of
your Variable Funding Options is greater than 3%, or greater than 5.0%, 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, as described above, of the applicable funding options.
The total amount of each Annuity Payment will equal the sum of the basic
payments in each funding option.
37
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 is due.
FIXED ANNUITY
You may choose a fixed annuity that provides payments that do not vary during
the annuity period. We will calculate the dollar amount of the first fixed
Annuity Payment as described under Variable Annuity, except that the amount we
apply to begin the annuity will be your Contract Value as of the date Annuity
Payments begin. Payout rates will not be lower than that shown in the Contract.
If it would produce a larger payment, the first fixed Annuity Payment will be
determined using the Life Annuity Tables in effect on the Maturity Date.
If you have elected the Increasing Benefit Option, the payments will be
calculated as above. However, the initial payment will be less than that
reflected in the table and the subsequent payments will be increased by the
percentage you elected.
PAYMENT OPTIONS
- --------------------------------------------------------------------------------
ELECTION OF OPTIONS
While the Annuitant is alive, you can change your annuity option selection any
time up to the Maturity Date. Once Annuity Payments have begun, no further
elections are allowed.
During the Annuitant's lifetime, if you do not elect otherwise before the
Maturity Date, we will pay you (or another designated payee) the first of a
series of monthly Annuity Payments based on the life of the Annuitant, in
accordance with Annuity Option 2 (Life Annuity with 120 monthly payments
assured). For certain Qualified Contracts, Annuity Option 4 (Joint and Last
Survivor Life Annuity -- Annuity Reduced on Death of Primary Payee) will be the
automatic option as described in the Contract.
The minimum amount that can be placed under an annuity option will be $2,000
unless we agree to a lesser amount. If any monthly periodic payment due is less
than $100, the Company reserves the right to make payments at less frequent
intervals, or to pay the Contract Value in a lump-sum.
On the Maturity Date, we will pay the amount due under the Contract in
accordance with the Payment Option that you select. You may choose to receive a
single lump-sum payment. You must elect an option in writing, in a form
satisfactory to the Company. Any election made during the lifetime of the
Annuitant must be made by the Contract Owner.
VARIABLE ANNUITIZATION FLOOR BENEFIT (BENEFIT NOT AVAILABLE UNDER 457 PLANS).
This benefit may not be available, or may only be available under certain
annuity options, if we determine market conditions so dictate. If available, we
will guarantee that, regardless of the performance of the Variable Funding
Options selected by you, your Annuity Payments will never be less than a certain
percentage of your first Annuity Payment. This percentage will vary depending on
market conditions, but will never be less than 50%. You may not elect this
benefit if you are over age 80. Additionally, you must select from certain funds
available under this guarantee. Currently, these funds are the FI Value Leaders
Portfolio, BlackRock Bond Portfolio and the Western Asset Management U.S.
Government Portfolio. We may, at our discretion, increase or decrease the number
of funds available under this benefit. This benefit is not currently available
under Annuity Option 5. The benefit is not available with the 5% ANIF under any
Option. If you select this benefit, you may not elect to liquidate any portion
of your Contract.
There is a charge for this guarantee, which will begin upon election of this
benefit. This charge will vary based upon market conditions, and will be
established at the time the benefit is elected. Once established, the charge
will remain level throughout the remainder of the annuitization, and will never
increase your annual Separate Account charge by more than 3% per year.
We reserve the right to restrict the amount of Contract Value to be annuitized
under this benefit.
38
ANNUITY OPTIONS
Subject to the conditions described in "Election of Options" above, we may pay
all or any part of the Cash Surrender Value under one or more of the following
annuity options. Payments under the annuity options are generally made on a
monthly basis. We may offer additional options.
Option 1 -- Life Annuity -- No Refund. The Company will make Annuity Payments
during the lifetime of the Annuitant ending with the last payment before death.
This option offers the maximum periodic payment, since there is no assurance of
a minimum number of payments or provision for a death benefit for beneficiaries.
Option 2 -- Life Annuity with 120, 180 or 240 Monthly Payments Assured. The
Company will make monthly Annuity Payments during the lifetime of the Annuitant,
with the agreement that if, at the death of that person, payments have been made
for less than 120, 180 or 240 months, as elected, we will continue making
payments to the beneficiary during the remainder of the period.
Option 3 -- Joint and Last Survivor Life Annuity -- No Refund. The Company will
make regular Annuity Payments during the lifetime of the Annuitant and a second
person. When either person dies, we will continue making payments to the
survivor. No further payments will be made following the death of the survivor.
Option 4 -- Joint and Last Survivor Life Annuity -- Annuity Reduced on Death of
Primary Payee. The Company will make Annuity Payments during the lifetimes of
the Annuitant and a second person. You will designate one as primary payee, and
the other will be designated as secondary payee. On the death of the secondary
payee, the Company 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, the Company will continue
to make 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 once both payees have died.
Option 5 -- Payments for a Fixed Period without Life Contingency. We will make
periodic payments for the period selected. Please note that Option 5 may not
satisfy the minimum required distribution rules for Qualified Contracts. Consult
a tax advisor before electing this option.
Option 6 -- Other Annuity Options. We will make any other arrangements for
Annuity Payments as may be mutually agreed upon.
MISCELLANEOUS CONTRACT PROVISIONS
- --------------------------------------------------------------------------------
RIGHT TO RETURN
You may return the Contract for a full refund of the Contract Value plus any
Contract charges and premium taxes you paid (but not any fees and charges the
Underlying Fund assessed) within ten days after you receive it (the "right to
return period"). The number of days for the right to return varies by state.
Depending on state law, we may refund all of your purchase payments or your
Contract Value. You bear the investment risk of investing in the Variable
Funding Options during the right to return period; therefore, if your state only
requires return of Contract Value, the Contract Value we return may be greater
or less than your Purchase Payment.
If you purchase the Contract as an Individual Retirement Annuity, and return it
within the first seven days after delivery, or longer if your state permits, we
will refund your Purchase Payment in full; during the remainder of the right to
return period, we will refund the Contract Value (including charges).
We will determine the Contract Value following the close of the business day on
which we receive your Contract and a Written Request for a refund. Where state
law requires a different period, or the return of Purchase Payments or other
variations of this provision, we will comply. Refer to your Contract for any
state-specific information.
TERMINATION
We reserve the right to terminate the Contract on any business day if your
Contract Value as of that date is less than $2,000 and you have not made
Purchase Payments for at least two years, unless otherwise specified by state
law. Accordingly, no Contract will be terminated due solely to negative
investment performance. Termination will not occur until 31 days after we have
mailed notice of termination to your last known address and to any assignee of
39
record. If we terminate the Contract, we will pay you the Cash Surrender Value
less any applicable taxes. In certain states, we may be required to pay you the
Contract Value.
REQUIRED REPORTS
As often as required by law, but at least once in each Contract Year before the
due date of the first Annuity Payment, we will furnish a report showing the
number of Accumulation Units credited to the Contract and the corresponding
Accumulation Unit value(s) as of the report date for each funding option to
which the Contract Owner has allocated amounts during the applicable period. The
Company will keep all records required under federal and state laws.
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
("the Exchange") is closed; (2) when trading on the 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. Payments from the Fixed Account may be
delayed up to 6 months.
MISSTATEMENT
We may require proof of age of the Owner, beneficiary or Annuitant before making
any payments under this Contract that are measured by the Owner's, beneficiary's
or Annuitant'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 Annuity Payments have begun, any underpayments will be deducted from or
added to the payment or payments made after the adjustment. In certain states,
we are required to pay interest on any underpayments.
THE SEPARATE ACCOUNTS
- --------------------------------------------------------------------------------
MetLife Insurance Company of Connecticut and MetLife Life and Annuity Company of
Connecticut each sponsor Separate Accounts: Separate Account Five and Separate
Account Six, respectively. Both Separate Account Five and Separate Account Six
were established on March 27, 1997 and are registered with the SEC as unit
investment trusts ("Separate Account") under the Investment Company Act of 1940,
as amended. We will invest Separate Account assets attributable to the Contracts
exclusively in the shares of the Variable Funding Options.
We hold the assets of Separate Account Five and Separate Account Six for the
exclusive and separate benefit of the owners of each 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.
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
40
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 Contract 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.
Our advertisements may show performance figures assuming that you do not elect
any optional features such as the Optional Death Benefit. However, if you elect
optional features, they involve additional charges that will serve to decrease
the performance of your Variable Funding Options. You may wish to speak with
your registered representative to obtain performance information specific to the
optional features you may wish to select.
Performance figures for each Variable Funding Option are based in part on the
performance of a corresponding Underlying Fund. In some cases, the Underlying
Fund may have existed before the technical inception of the corresponding
Variable Fund Option. In those cases, we can create "hypothetical historical
performance" of a Variable Fund Option. These figures show the performance that
the Variable Fund Option would have achieved had it been available during the
entire history of the Underlying Fund.
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
Contact 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%).
41
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.
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 ordinary income tax
rates 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, 457(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
42
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), 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.
INDIVIDUAL RETIREMENT ANNUITIES
The Contract has not been submitted to the IRS for approval as to form as a
valid IRA. Such approval would not constitute an IRS approval or endorsement of
any funding options under the Contract. IRS approval as to form is not required
to constitute a valid IRA. Disqualification of the Contract as an IRA could
result in the immediate taxation of amounts held in the Contract and other
adverse tax consequences.
To the extent of earned income for the year and not exceeding the applicable
limit for the taxable year, an individual may make contributions, which may be
deductible, to an individual retirement annuity (IRA). The applicable limit is
$4,000 in 2007 and may be indexed for inflation in future years. Additional
"catch-up contributions" may be made to an IRA by individuals age 50 or over.
There are certain limits on the deductible amount based on the adjusted gross
income of the individual and spouse and on their participation in a retirement
plan. If an individual is married and the spouse is not employed, the individual
may establish IRAs for the individual and spouse. Purchase Payments may then be
made annually into IRAs for both spouses in the maximum amount of 100% of earned
income up to a combined limit based on the individual limits outlined above.
Deductible contributions to an IRA and Roth IRA for the year must be aggregated
for purposes of the individual Code Section 408A limits and the Code Section 219
limits (age 50+catch-up).
Partial or full distributions are treated as ordinary income, except that
amounts contributed after 1986 on a non-deductible basis are not includable in
income when distributed. An additional tax of 10% will apply to any taxable
distribution from the IRA that is received by the participant before the age of
59 1/2 except by reason of death, disability or as part of a series of payments
for life or life expectancy. Distributions must commence by April 1st of the
calendar year after the close of the calendar year in which the individual
attains the age of 70 1/2. Certain other mandatory distribution rules apply on
the death of the individual. The individual must maintain personal and tax
return records of any non-deductible contributions and distributions.
Section 408 (k) of the Code provides for the purchase of a Simplified Employee
Pension (SEP) plan. A SEP is funded through an IRA and can accept an annual
employer contribution limited to the lesser of $45,000 or 100% of pay for each
participant in 2007.
ROTH IRAS
Section 408A of the Code permits certain individuals to contribute to a Roth
IRA. Eligibility to make contributions is based upon income, and the applicable
limits vary based on marital status and/or whether the contribution is a
43
rollover contribution from another IRA or an annual contribution. Contributions
to a Roth IRA, which are subject to certain limitations, (similar to the annual
limits for traditional IRAs), are not deductible and must be made in cash or as
a rollover or transfer from another Roth IRA or other IRA. A conversion of
"traditional" IRA to a Roth IRA may be subject to tax and other special rules
apply. You should consult a tax adviser before combining any converted amounts
with other Roth IRA contributions, including any other conversion amounts from
other tax years.
Qualified distributions from a Roth IRA are tax-free. A qualified distribution
requires that the Roth IRA has been held for at least 5 years, and the
distribution is made after age 59 1/2, on death or disability of the owner, or
for a limited amount ($10,000) for a qualified first time home purchase for the
owner or certain relatives. Income tax and a 10% penalty tax may apply to
distributions made (1) before age 59 1/2 (subject to certain exceptions) or (2)
during five taxable years starting with the year in which the first contribution
is made to the Roth IRA.
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.
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.
TREATMENT OF CHARGES FOR CERTAIN ASSET ALLOCATION PROGRAMS
Under various asset allocation programs that may be made available to
participants in qualified employer retirement plans, note that based on our
understanding of the tax law, including various IRS rulings, we do not treat
charges for such programs that are paid from the Contract as taxable
distributions. Consult your own tax advisor.
TREATMENT OF CHARGES FOR OPTIONAL BENEFITS
The Contract may provide one or more optional enhanced death benefits or other
minimum guaranteed benefit that in some cases may exceed the greater of purchase
price or the Contract Value. It is possible that the Internal Revenue Service
may take the position that the charges for the optional enhanced benefit(s) are
deemed to be taxable distributions to you. Although we do not believe that a
charge under such optional enhanced benefit should be treated as a taxable
withdrawal, you should consult with your tax adviser before selecting any rider
or endorsement to the Contract.
44
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 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.
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 investment divisions or
transfers from a subaccount to the Fixed Account.
- 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.
We reserve the right to amend your Contract where necessary to maintain its
status as a variable annuity contract under Federal tax law and to protect you
and other Contract Owners in the subaccounts from adverse tax consequences.
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.
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
45
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.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
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Under the Securities Act of 1933, the Company has filed with the Commission a
registration statement (the "Registration Statement") relating to the Contracts
offered by this prospectus. This prospectus has been filed as a part of the
Registration Statement and does not contain all of the information set forth in
the Registration Statement and the exhibits, and reference is hereby made to
such Registration Statement and exhibits for further information relating to the
Company and the Contracts.
The Company's latest annual report on Form 10-K for both MetLife Insurance
Company of Connecticut and MetLife Life and Annuity Company of Connecticut have
been filed with the Commission. It is incorporated by reference into this
prospectus. The Form 10-K for the period ended December 31, 2006 contains
additional information about the Company, including audited financial statements
for the Company's latest fiscal year. MetLife Insurance Company of Connecticut
filed its Form 10-K on April 2, 2007, via Edgar File No. 033-03094. MetLife Life
and Annuity Company of Connecticut filed its Form 10-K on March 7, 2007 via
EDGAR File No. 033-58677. All other reports filed by the Company pursuant to
Section 13(a) or 15(d) of the Exchange Act (such as quarterly and periodic
reports) or proxy or information statements filed pursuant to Section 14 of the
Exchange Act since the end of the fiscal year ending December 31, 2006 are also
incorporated by reference into this Prospectus.
There have been no material changes in the Company's affairs which have occurred
since the end of the latest fiscal year for which audited financial statements
were included in the latest Form 10-K or which have not been described in a Form
10-Q or Form 8-K filed by the Company under the Exchange Act.
If requested, the Company will furnish, without charge, a copy of any and all of
the reports or documents that have been incorporated by reference into this
prospectus. You may direct your requests to the Company at 185 Asylum Street,
Hartford, CT 06199-0009, Attention: Annuity Operations and Services. The
telephone number is (800) 842-9406. You may also access the incorporated reports
and other documents at www.metlife.com.
You may also read and copy any materials that the Company files with the SEC at
the SEC's Public Reference Room at 100 F Street, N.E., Washington, DC 20549. The
public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-202-551-8090. The SEC maintains an Internet site that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC at (http://www.sec.gov).
46
OTHER INFORMATION
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THE INSURANCE COMPANIES
Please refer to your Contract to determine which Company issued your Contract.
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.
METLIFE LIFE AND ANNUITY COMPANY OF CONNECTICUT is a stock insurance company
chartered in 1973 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 (except New York), the District of Columbia and
Puerto Rico. The Company is an indirect wholly-owned subsidiary of MetLife,
Inc., a publicly traded company. 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 and MetLife Life and Annuity Company of Connecticut (together the
"Company") have 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 enter into selling agreements with affiliated and
unaffiliated broker-dealers who are registered with the SEC and are members of
the NASD, and with entities that may offer the Contracts but are exempt from
registration. Applications for the Contract are solicited by registered
representatives who are associated persons of such affiliated or unaffiliated
broker-dealer firms. 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 Company no longer offers the Contracts to new purchasers, but it
continues to accept purchase payments from existing Contract Owners.
COMPENSATION. Broker-dealers who have selling agreements with MLIDC and the
Company are 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.
47
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
Contract 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 Contract Value (if asset-based compensation is paid to
registered representatives).
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 firm for services the
broker-dealer provides 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, the hiring and training of the
broker-dealer's sales personnel, the sponsoring of conferences and seminars by
the broker-dealer, or general marketing services performed by the broker-dealer.
The broker-dealer 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 Contracts, total assets attributable to sales of
the Contract by registered representatives of the broker-dealer firm 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 firm and its
registered representatives to favor the Company's products. The Company and
MLIDC have entered into preferred distribution arrangements with their affiliate
Tower Square Securities, Inc. and with the unaffiliated broker-dealer firms
identified in the Statement of Additional Information. The Company and MLIDC may
enter into similar arrangements with their other affiliates Metropolitan Life
Insurance Company, MetLife Securities, Inc., Walnut Street Securities, Inc. and
New England Securities Corporation. See the Statement of Additional
Information--"DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT" for a list of
the broker-dealer firms that received additional compensation during 2006, as
well as the range of additional compensation paid.
The Company and MLIDC have entered into selling agreements with certain broker-
dealer firms that have an affiliate that acts as investment adviser or sub-
adviser to one or more Underlying Funds which may be offered in the Contracts.
These investment advisory firms include Fidelity Management & Research Company,
Morgan Stanley Investment Advisers Inc., Merrill Lynch Investment Managers,
L.P., MetLife Investment Funds Management LLC, MetLife Advisers, LLC and Met
Investors Advisory LLC. MetLife Investment Funds Management LLC, MetLife
Advisers, LLC and Met Investors Advisory LLC are affiliates of the Company.
Registered representatives of broker-dealer firms with an affiliated company
acting as an adviser or a subadviser may favor these Funds when offering the
Contracts.
SALES OF THE CONTRACTS BY AFFILIATES OF THE COMPANY. The Company and MLIDC may
offer the Contracts through retail broker-dealer firms that are affiliates of
the Company, including Tower Square Securities, Inc., Metropolitan Life
Insurance Company, MetLife Securities, Inc., Walnut Street Securities, Inc. and
New England Securities Corporation. The compensation paid to affiliated broker-
dealer firms for sales of the Contracts is generally not expected to exceed, on
a present value basis, the percentages described above. These broker-dealer
firms pay their registered representatives all or a portion of the commissions
received for their sales of Contracts; some firms may retain a portion of
commissions. The amount the broker dealer firms pass on to their registered
representatives is determined in accordance with their internal compensation
programs. These programs may also include other types of cash compensation, such
as bonuses, equity awards (such as stock options), training allowances,
supplementary salary, financing arrangements, marketing support, medical and
other insurance benefits, retirement benefits, non-qualified deferred
compensation plans and other benefits. For registered representatives of certain
affiliates, the amount of this additional cash compensation is based primarily
on the amount of proprietary products sold and serviced by the representative.
Proprietary products are those issued by the Company or its affiliates. The
managers who supervise these registered representatives may also be entitled to
additional cash compensation based on the sale of proprietary products by their
representatives. Because the additional cash compensation paid to these
registered representatives and their managers is primarily based on sales of
proprietary products, these registered representatives and their managers have
an incentive to favor the sale of proprietary products over other products
issued by non-affiliates.
48
MetLife registered representatives receive cash payments for the products they
sell and service based upon a "gross dealer concession" model. The cash payment
is equal to a percentage of the gross dealer concession. For MetLife registered
representatives other than those in our MetLife Resources (MLR) Division, the
percentage is determined by a formula that takes into consideration the amount
of premiums and purchase payments applied to proprietary products that the
registered representative sells and services. The percentage could be as high as
100%. (MLR registered representatives receive compensation based upon premiums
and purchase payments applied to all products sold and serviced by the
representative.) In addition, all MetLife registered representative are entitled
to the additional compensation described above based on sales of proprietary
products. Because sales of proprietary products are a factor determining the
percentage of gross dealer concession and/or the amount of additional
compensation to which MetLife registered representatives are entitled, they have
an incentive to favor the sale of proprietary products. In addition, because
their sales managers' compensation is based on the sales made by the
representatives they supervise, these sales managers also have an incentive to
favor the sale of proprietary products.
The Company's affiliates also offer their registered representatives and their
managers non-cash compensation incentives, such as conferences, trips, prizes
and awards. Other non-cash compensation payments may be made for other services
that are not directly related to the sale of products. These payments may
include support services in the form of recruitment and training of personnel,
production of promotional materials and similar services.
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.
From time to time, MetLife Associates LLC or Metropolitan Life Insurance Company
pays organizations, associations and nonprofit organizations compensation to
endorse or sponsor the Company's variable annuity contracts or for access to the
organization's members. This compensation may include: the payment of fees,
funding their programs, scholarships, events or awards, such as a principal of
the year award; leasing their office space or paying fees for display space at
their events; purchasing advertisements in their publications; or reimbursing or
defraying their expenses. We also retain finders and consultants to introduce
MetLife Associates LLC or Metropolitan Life Insurance Company to potential
clients and for establishing and maintaining relationships between MetLife
Associates LLC or Metropolitan Life Insurance Company and various organizations.
We or our affiliates may pay duly licensed individuals associated with these
organizations cash compensation for the sales of the Contracts.
CONFORMITY WITH STATE AND FEDERAL LAWS
The laws of the state in which the Contract is issued 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 a 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.
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
49
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.
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.
50
APPENDIX A -- CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
THE TRAVELERS SEPARATE ACCOUNT FIVE 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 H. Please refer to the Fee Table section of this prospectus
for more information on Separate Account Charges.
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR
<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 Variable Insurance Funds
AIM V.I. Core Equity Subaccount (Series I)
(1/70)........................................... 2006 1.000 1.086 --
AIM V.I. Premier Equity Subaccount (Series I)
(5/01)........................................ 2006 0.839 0.883 --
2005 0.800 0.839 --
2004 0.763 0.800 --
2003 0.615 0.763 --
2002 0.888 0.615 --
2001 1.000 0.888 --
American Funds Insurance Series
American Funds Global Growth Subaccount (Class 2)
(5/04)........................................... 2006 1.255 1.499 3,790
2005 1.109 1.255 4,216
2004 1.000 1.109 --
American Funds Growth Subaccount (Class 2)
(5/04)........................................... 2006 1.258 1.375 102,812
2005 1.091 1.258 115,038
2004 1.000 1.091 14,605
American Funds Growth-Income Subaccount (Class 2)
(5/04)........................................... 2006 1.136 1.299 111,459
2005 1.082 1.136 77,329
2004 1.000 1.082 18,354
Capital Appreciation Fund
Capital Appreciation Fund (5/00)................. 2006 0.700 0.694 --
2005 0.597 0.700 571,867
2004 0.503 0.597 286,860
2003 0.406 0.503 148,185
2002 0.547 0.406 213,843
2001 0.745 0.547 6,402
2000 1.000 0.745 --
</Table>
A-1
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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
- -------------- ---- ----------------- ------------- ---------------
Credit Suisse Trust
Credit Suisse Trust Emerging Markets Subaccount
(10/99).......................................... 2006 1.793 2.357 16,897
2005 1.412 1.793 16,897
2004 1.140 1.412 11,251
2003 0.804 1.140 11,251
2002 0.916 0.804 11,251
2001 1.022 0.916 --
2000 1.506 1.022 --
1999 1.000 1.506 --
Delaware VIP Trust
Delaware VIP REIT Subaccount (Standard Class)
(9/00)........................................... 2006 2.517 3.312 --
2005 2.368 2.517 74,750
2004 1.816 2.368 85,371
2003 1.366 1.816 31,398
2002 1.318 1.366 19,794
2001 1.221 1.318 --
2000 1.000 1.221 --
Delaware VIP Small Cap Value Subaccount (Standard
Class) (10/99)................................... 2006 2.225 2.565 92,019
2005 2.050 2.225 83,441
2004 1.701 2.050 22,455
2003 1.208 1.701 22,455
2002 1.289 1.208 10,600
2001 1.162 1.289 --
2000 0.991 1.162 --
1999 1.000 0.991 --
Dreyfus Variable Investment Fund
Dreyfus VIF Appreciation Subaccount (Initial
Shares) (7/99)................................... 2006 1.027 1.187 139,246
2005 0.992 1.027 181,885
2004 0.952 0.992 123,030
2003 0.792 0.952 42,639
2002 0.958 0.792 54,702
2001 1.065 0.958 27,197
2000 1.081 1.065 24,552
1999 1.000 1.081 24,552
</Table>
A-2
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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) (10/99)......................... 2006 1.577 1.624 180,088
2005 1.503 1.577 167,125
2004 1.360 1.503 102,644
2003 1.041 1.360 57,302
2002 1.298 1.041 58,130
2001 1.394 1.298 13,264
2000 1.240 1.394 3,246
1999 1.000 1.240 --
Franklin Templeton Variable Insurance Products
Trust
FTVIPT Mutual Shares Securities Subaccount (Class
2) (5/03)........................................ 2006 1.475 1.732 --
2005 1.345 1.475 --
2004 1.204 1.345 6,200
2003 1.000 1.204 6,200
FTVIPT Templeton Developing Markets Securities
Subaccount (Class 2) (5/04)...................... 2006 1.560 1.982 79,346
2005 1.234 1.560 66,766
2004 1.000 1.234 --
FTVIPT Templeton Foreign Securities Subaccount
(Class 2) (5/04)................................. 2006 1.264 1.523 114,148
2005 1.156 1.264 100,149
2004 1.000 1.156 19,656
FTVIPT Templeton Growth Securities Subaccount
(Class 2) (5/04)................................. 2006 1.216 1.470 --
2005 1.126 1.216 247,616
2004 1.000 1.126 38,090
High Yield Bond Trust
High Yield Bond Trust (9/99)..................... 2006 1.538 1.576 --
2005 1.530 1.538 117,330
2004 1.418 1.530 100,536
2003 1.107 1.418 27,244
2002 1.067 1.107 --
2001 0.982 1.067 --
2000 0.980 0.982 --
1999 1.000 0.980 --
</Table>
A-3
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 Series
Janus Aspen Balanced Subaccount (Service Shares)
(5/01)........................................... 2006 1.154 1.195 --
2005 1.080 1.154 25,695
2004 1.005 1.080 25,695
2003 0.891 1.005 25,695
2002 0.962 0.891 --
2001 1.000 0.962 --
Janus Aspen Mid Cap Growth Subaccount (Service
Shares) (5/01)................................... 2006 0.978 1.099 85,976
2005 0.880 0.978 85,976
2004 0.736 0.880 64,111
2003 0.551 0.736 5,302
2002 0.772 0.551 33,784
2001 1.000 0.772 --
Janus Aspen Worldwide Growth Subaccount (Service
Shares) (5/00)................................... 2006 0.604 0.707 --
2005 0.577 0.604 5,661
2004 0.556 0.577 5,661
2003 0.453 0.556 5,661
2002 0.615 0.453 5,661
2001 0.801 0.615 5,661
2000 1.000 0.801 --
Lazard Retirement Series, Inc.
Lazard Retirement Small Cap Subaccount (5/04).... 2006 1.162 1.314 --
2005 1.127 1.162 7,320
2004 1.000 1.127 --
Legg Mason Partners Investment Series
LMPIS Dividend Strategy Subaccount (5/01)........ 2006 0.819 0.959 6,455
2005 0.828 0.819 6,455
2004 0.807 0.828 6,455
2003 0.659 0.807 6,455
2002 0.897 0.659 --
2001 1.000 0.897 --
</Table>
A-4
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 0.935 0.996 --
2005 0.887 0.935 --
2004 0.869 0.887 --
2003 0.652 0.869 --
2002 0.898 0.652 --
2001 1.000 0.898 --
Legg Mason Partners Variable Portfolios V
LMPVPV Small Cap Growth Opportunities Subaccount
(5/01)........................................... 2006 1.176 1.318 14,993
2005 1.130 1.176 13,085
2004 0.986 1.130 29,945
2003 0.700 0.986 --
2002 0.949 0.700 --
2001 1.000 0.949 --
Legg Mason Partners Variable Portfolios I, Inc.
LMPVPI All Cap Subaccount (Class I) (4/00)....... 2006 1.648 1.931 5,450
2005 1.596 1.648 5,450
2004 1.486 1.596 5,450
2003 1.077 1.486 3,532
2002 1.449 1.077 --
2001 1.433 1.449 --
2000 1.000 1.433 --
LMPVPI Investors Subaccount (Class I) (10/99).... 2006 1.372 1.609 6,680
2005 1.298 1.372 6,680
2004 1.185 1.298 6,680
2003 0.903 1.185 --
2002 1.183 0.903 6,424
2001 1.244 1.183 --
2000 1.088 1.244 --
1999 1.000 1.088 13,535
LMPVPI Small Cap Growth Subaccount (Class I)
(5/01)........................................... 2006 1.107 1.239 15,664
2005 1.064 1.107 5,985
2004 0.932 1.064 --
2003 0.631 0.932 --
2002 0.974 0.631 --
2001 1.000 0.974 --
</Table>
A-5
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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) (9/00).. 2006 1.239 1.384 --
2005 1.209 1.239 --
2004 1.121 1.209 --
2003 0.975 1.121 --
2002 1.055 0.975 --
2001 1.072 1.055 --
2000 1.000 1.072 --
Legg Mason Partners Variable Portfolios II
LMPVPII Appreciation Subaccount (5/01)........... 2006 1.065 1.213 33,806
2005 1.029 1.065 53,220
2004 0.954 1.029 53,728
2003 0.772 0.954 45,111
2002 0.943 0.772 20,346
2001 1.000 0.943 3,353
LMPVPII Equity Index Subaccount (Class II)
(7/99)........................................... 2006 0.978 1.117 447,334
2005 0.945 0.978 432,014
2004 0.864 0.945 140,723
2003 0.682 0.864 126,629
2002 0.886 0.682 47,426
2001 1.019 0.886 23,609
2000 1.133 1.019 14,389
1999 1.000 1.133 13,350
LMPVPII Fundamental Value Subaccount (5/01)...... 2006 1.107 1.283 37,151
2005 1.065 1.107 85,744
2004 0.992 1.065 157,189
2003 0.722 0.992 157,189
2002 0.924 0.722 30,684
2001 1.000 0.924 --
Legg Mason Partners Variable Portfolios III, Inc.
LMPVPIII Adjustable Rate Income Subaccount
(9/03)........................................... 2006 1.020 1.054 --
2005 1.005 1.020 --
2004 1.001 1.005 1,000
2003 1.000 1.001 1,000
</Table>
A-6
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 Aggressive Growth Subaccount (5/01)..... 2006 1.022 1.103 308,734
2005 0.923 1.022 319,390
2004 0.846 0.923 328,219
2003 0.634 0.846 251,625
2002 0.949 0.634 15,408
2001 1.000 0.949 2,646
LMPVPIII High Income Subaccount (8/99)........... 2006 1.187 1.307 41,449
2005 1.166 1.187 61,681
2004 1.065 1.166 63,799
2003 0.842 1.065 22,349
2002 0.877 0.842 20,231
2001 0.918 0.877 20,231
2000 1.007 0.918 20,231
1999 1.000 1.007 20,231
LMPVPIII International All Cap Growth Subaccount
(12/99).......................................... 2006 0.978 1.221 --
2005 0.883 0.978 17,480
2004 0.755 0.883 39,904
2003 0.597 0.755 3,291
2002 0.810 0.597 3,291
2001 1.186 0.810 3,291
2000 1.569 1.186 3,291
1999 1.000 1.569 --
LMPVPIII Large Cap Growth Subaccount (10/99)..... 2006 1.030 1.068 33,827
2005 0.987 1.030 53,253
2004 0.991 0.987 40,912
2003 0.677 0.991 5,766
2002 0.907 0.677 --
2001 1.045 0.907 --
2000 1.132 1.045 --
1999 1.000 1.132 --
LMPVPIII Social Awareness Stock Subaccount
(7/99)........................................... 2006 0.957 1.023 4,305
2005 0.925 0.957 18,473
2004 0.877 0.925 18,473
2003 0.686 0.877 18,473
2002 0.921 0.686 14,167
2001 1.100 0.921 14,167
2000 1.115 1.100 14,167
1999 1.000 1.115 14,167
</Table>
A-7
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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
- -------------- ---- ----------------- ------------- ---------------
Lord Abbett Series Fund, Inc.
Lord Abbett Growth and Income Subaccount (Class
VC) (5/04)....................................... 2006 1.138 1.323 46,483
2005 1.111 1.138 28,886
2004 1.000 1.111 --
Lord Abbett Mid-Cap Value Subaccount (Class VC)
(5/04)........................................... 2006 1.251 1.392 10,015
2005 1.165 1.251 --
2004 1.000 1.165 --
Managed Assets Trust
Managed Assets Trust (6/99)...................... 2006 1.243 1.286 --
2005 1.206 1.243 107,946
2004 1.111 1.206 41,606
2003 0.918 1.111 25,510
2002 1.013 0.918 25,510
2001 1.076 1.013 25,510
2000 1.102 1.076 20,767
1999 1.000 1.102 13,609
Met Investors Series Trust
MIST Batterymarch Mid-Cap Stock Subaccount (Class
A) (1/70)........................................ 2006 1.000 1.899 20,578
MIST BlackRock Large-Cap Core Subaccount (Class
A) (1/70)........................................ 2006 1.000 1.130 --
MIST Dreman Small-Cap Value Subaccount (Class A)
(1/70)........................................... 2006 1.000 1.072 --
MIST Harris Oakmark International Subaccount
(Class A) (1/70)*................................ 2006 1.000 1.346 1,727
MIST Janus Capital Appreciation Subaccount (Class
A) (1/70)........................................ 2006 1.000 0.716 565,464
MIST Legg Mason Partners Managed Assets
Subaccount (Class A) (1/70)...................... 2006 1.000 1.366 77,621
MIST Lord Abbett Bond Debenture Subaccount (Class
A) (1/70)........................................ 2006 1.000 1.166 --
MIST Lord Abbett Growth and Income Subaccount
(Class B) (1/70) *............................... 2006 1.000 1.083 5,088
MIST Met/AIM Capital Appreciation Subaccount
(Class A) (1/70)................................. 2006 1.000 1.015 6,755
</Table>
A-8
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 Met/AIM Small Cap Growth Subaccount (Class
A) (1/70)........................................ 2006 1.000 1.030 --
MIST MFS(R) Value Subaccount (Class A) (1/70).... 2006 1.000 1.432 229,224
MIST Neuberger Berman Real Estate Subaccount
(Class A) (1/70)................................. 2006 1.000 1.227 227,280
MIST Pioneer Fund Subaccount (Class A) (1/70).... 2006 1.000 1.024 34,912
MIST Pioneer Mid-Cap Value Subaccount (Class A)
(1/70)........................................... 2006 1.000 1.118 --
MIST Pioneer Strategic Income Subaccount (Class
A) (1/70)........................................ 2006 1.000 1.534 187,233
MIST Third Avenue Small Cap Value Subaccount
(Class B) (1/70)................................. 2006 1.000 1.343 31,734
MetLife Investment Funds, Inc.
MetLife Investment Diversified Bond Subaccount
(Class I) (9/99)................................. 2006 1.377 1.425 1,575,036
2005 1.360 1.377 1,482,566
2004 1.310 1.360 764,591
2003 1.251 1.310 481,357
2002 1.157 1.251 470,261
2001 1.092 1.157 --
2000 0.979 1.092 12,041
1999 1.000 0.979 37,502
MetLife Investment International Stock Subaccount
(Class I) (7/99)................................. 2006 1.165 1.462 496,825
2005 1.024 1.165 484,883
2004 0.899 1.024 349,627
2003 0.697 0.899 291,178
2002 0.904 0.697 223,222
2001 1.160 0.904 --
2000 1.272 1.160 1,916
1999 1.000 1.272 6,933
</Table>
A-9
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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) (9/99)................................. 2006 0.789 0.881 1,054,352
2005 0.746 0.789 977,381
2004 0.683 0.746 656,590
2003 0.537 0.683 525,471
2002 0.702 0.537 430,013
2001 0.840 0.702 --
2000 0.995 0.840 10,384
1999 1.000 0.995 21,459
MetLife Investment Small Company Stock Subaccount
(Class I) (9/99)................................. 2006 2.101 2.369 175,234
2005 1.974 2.101 154,209
2004 1.732 1.974 107,116
2003 1.220 1.732 83,489
2002 1.612 1.220 66,192
2001 1.600 1.612 --
2000 1.465 1.600 1,472
1999 1.000 1.465 6,201
Metropolitan Series Fund, Inc.
MSF BlackRock Aggressive Growth Subaccount (Class
D) (1/70)........................................ 2006 1.000 1.095 44,628
MSF BlackRock Bond Income Subaccount (Class A)
(1/70)........................................... 2006 1.000 1.349 19,379
MSF BlackRock Money Market Subaccount (Class A)
(1/70)........................................... 2006 1.000 1.196 323,370
MSF FI Large Cap Subaccount (Class A) (1/70)..... 2006 1.000 0.968 124,183
MSF FI Value Leaders Subaccount (Class D)
(1/70)........................................... 2006 1.000 1.396 474,781
MSF MetLife Aggressive Allocation Subaccount
(1/70)........................................... 2006 1.000 1.081 --
2005 1.000 1.000 --
MSF MetLife Conservative Allocation Subaccount
(1/70)........................................... 2006 1.000 1.047 --
2005 1.000 1.000 --
MSF MetLife Conservative to Moderate Allocation
Subaccount (1/70)................................ 2006 1.000 1.053 10,264
2005 1.000 1.000 --
MSF MetLife Moderate Allocation Subaccount
(1/70)........................................... 2006 1.000 1.058 --
2005 1.000 1.000 --
</Table>
A-10
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 MetLife Moderate to Aggressive Allocation
Subaccount (1/70)................................ 2006 1.000 1.112 --
2005 1.000 1.000 --
MSF MFS(R) Total Return Subaccount (Class F)
(1/70)........................................... 2006 1.000 1.558 923,199
MSF Oppenheimer Global Equity Subaccount (Class
B) (1/70)*....................................... 2006 1.000 1.056 333,798
MSF Western Asset Management High Yield Bond
Subaccount (Class A) (1/70)...................... 2006 1.000 1.684 122,596
MSF Western Asset Management U.S. Government
Subaccount (Class A) (1/70)*..................... 2006 1.000 1.453 255,141
Money Market Portfolio
Money Market Subaccount (9/99)................... 2006 1.151 1.164 --
2005 1.127 1.151 775,320
2004 1.125 1.127 236,987
2003 1.125 1.125 289,912
2002 1.119 1.125 264,365
2001 1.087 1.119 77,342
2000 1.032 1.087 76,073
1999 1.000 1.032 36,453
Oppenheimer Variable Account Funds
Oppenheimer Main Street/VA Subaccount ( Service
Shares) (5/04)................................... 2006 1.131 1.198 --
2005 1.078 1.131 --
2004 1.000 1.078 --
PIMCO Variable Insurance Trust
PIMCO VIT Real Return Subaccount (Administrative
Class) (10/05)................................... 2006 1.012 1.011 --
2005 1.008 1.012 --
PIMCO VIT Total Return Subaccount (Administrative
Class) (5/01).................................... 2006 1.260 1.298 116,821
2005 1.240 1.260 123,296
2004 1.192 1.240 152,147
2003 1.144 1.192 6,319
2002 1.057 1.144 7,538
2001 1.000 1.057 --
</Table>
A-11
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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
- -------------- ---- ----------------- ------------- ---------------
Putnam Variable Trust
Putnam VT Discovery Growth Subaccount (Class IB)
(5/01)........................................... 2006 0.839 0.925 --
2005 0.789 0.839 --
2004 0.739 0.789 --
2003 0.564 0.739 --
2002 0.808 0.564 --
2001 1.000 0.808 --
Putnam VT International Equity Subaccount (Class
IB) (5/01)....................................... 2006 1.150 1.457 --
2005 1.033 1.150 --
2004 0.897 1.033 6,667
2003 0.703 0.897 6,667
2002 0.861 0.703 --
2001 1.000 0.861 --
Putnam VT Small Cap Value Subaccount (Class IB)
(5/01)........................................... 2006 1.749 2.035 44,194
2005 1.647 1.749 77,457
2004 1.315 1.647 63,465
2003 0.886 1.315 43,406
2002 1.093 0.886 40,852
2001 1.000 1.093 --
The Travelers Series Trust
Travelers AIM Capital Appreciation Subaccount
(5/01)........................................... 2006 0.957 1.022 --
2005 0.887 0.957 6,755
2004 0.840 0.887 6,755
2003 0.654 0.840 --
2002 0.867 0.654 --
2001 1.000 0.867 --
Travelers Convertible Securities Subaccount
(5/04)........................................... 2006 1.035 1.106 --
2005 1.040 1.035 --
2004 1.000 1.040 --
Travelers Disciplined Mid Cap Stock Subaccount
(8/99)........................................... 2006 1.812 1.984 --
2005 1.625 1.812 44,834
2004 1.406 1.625 46,180
2003 1.060 1.406 38,942
2002 1.247 1.060 22,864
2001 1.310 1.247 4,950
2000 1.132 1.310 4,950
1999 1.000 1.132 4,950
</Table>
A-12
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 Equity Income Subaccount (7/99)........ 2006 1.285 1.354 --
2005 1.240 1.285 484,509
2004 1.137 1.240 294,106
2003 0.874 1.137 192,847
2002 1.024 0.874 151,978
2001 1.105 1.024 109,815
2000 1.021 1.105 12,381
1999 1.000 1.021 12,381
Travelers Federated Stock Subaccount (11/01)..... 2006 1.163 1.208 --
2005 1.113 1.163 4,216
2004 1.015 1.113 4,216
2003 0.802 1.015 4,216
2002 1.002 0.802 4,216
2001 1.000 1.002 --
Travelers Large Cap Subaccount (7/99)............ 2006 0.919 0.949 --
2005 0.852 0.919 99,935
2004 0.807 0.852 111,168
2003 0.652 0.807 96,847
2002 0.851 0.652 96,847
2001 1.038 0.851 96,847
2000 1.224 1.038 52,127
1999 1.000 1.224 12,719
Travelers Mercury Large Cap Core Subaccount
(6/00)........................................... 2006 0.997 1.061 --
2005 0.897 0.997 --
2004 0.780 0.897 --
2003 0.649 0.780 --
2002 0.874 0.649 --
2001 1.136 0.874 --
2000 1.000 1.136 --
Travelers MFS(R) Mid Cap Growth Subaccount
(10/99).......................................... 2006 1.052 1.116 --
2005 1.029 1.052 57,026
2004 0.909 1.029 59,981
2003 0.668 0.909 47,678
2002 1.317 0.668 45,675
2001 1.739 1.317 33,694
2000 1.603 1.739 30,494
1999 1.000 1.603 --
</Table>
A-13
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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) Total Return Subaccount (7/99).. 2006 1.400 1.449 --
2005 1.371 1.400 659,159
2004 1.240 1.371 337,809
2003 1.073 1.240 153,776
2002 1.141 1.073 135,391
2001 1.150 1.141 53,295
2000 0.994 1.150 --
1999 1.000 0.994 --
Travelers MFS(R) Value Subaccount (5/04)......... 2006 1.190 1.289 --
2005 1.127 1.190 142,445
2004 1.000 1.127 21,046
Travelers Mondrian International Stock Subaccount
(8/99)........................................... 2006 1.055 1.215 --
2005 0.971 1.055 6,318
2004 0.846 0.971 6,318
2003 0.663 0.846 6,318
2002 0.768 0.663 6,318
2001 1.049 0.768 4,591
2000 1.194 1.049 4,591
1999 1.000 1.194 4,591
Travelers Pioneer Fund Subaccount (8/99)......... 2006 0.890 0.947 --
2005 0.847 0.890 36,743
2004 0.768 0.847 18,862
2003 0.625 0.768 31,058
2002 0.903 0.625 24,128
2001 1.183 0.903 --
2000 0.959 1.183 --
1999 1.000 0.959 --
Travelers Pioneer Mid Cap Value Subaccount
(1/70)........................................... 2006 1.001 1.057 --
2005 1.000 1.001 --
Travelers Pioneer Strategic Income Subaccount
(1/01)........................................... 2006 1.455 1.473 --
2005 1.415 1.455 143,490
2004 1.285 1.415 32,760
2003 1.084 1.285 32,760
2002 1.032 1.084 27,083
2001 1.000 1.032 --
</Table>
A-14
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 Quality Bond Subaccount (8/99)......... 2006 1.300 1.292 --
2005 1.290 1.300 39,391
2004 1.259 1.290 40,044
2003 1.186 1.259 36,759
2002 1.130 1.186 19,941
2001 1.063 1.130 19,941
2000 1.002 1.063 19,941
1999 1.000 1.002 19,941
Travelers Strategic Equity Subaccount (7/99)..... 2006 0.871 0.911 --
2005 0.861 0.871 70,166
2004 0.787 0.861 81,278
2003 0.598 0.787 67,954
2002 0.908 0.598 67,954
2001 1.057 0.908 67,954
2000 1.303 1.057 56,806
1999 1.000 1.303 17,222
Travelers Style Focus Series: Small Cap Growth
Subaccount (1/70)................................ 2006 1.000 1.032 --
2005 1.000 1.000 --
Travelers Style Focus Series: Small Cap Value
Subaccount (1/70)................................ 2006 1.000 1.000 --
2005 1.000 1.000 --
Travelers U.S. Government Securities Subaccount
(8/99)........................................... 2006 1.445 1.396 --
2005 1.396 1.445 480,652
2004 1.326 1.396 357,708
2003 1.301 1.326 328,667
2002 1.154 1.301 366,169
2001 1.099 1.154 20,423
2000 0.968 1.099 20,423
1999 1.000 0.968 20,423
Van Kampen Life Investment Trust
Van Kampen LIT Comstock Subaccount (Class II)
(5/03)........................................... 2006 1.512 1.741 14,254
2005 1.464 1.512 14,254
2004 1.257 1.464 --
2003 1.000 1.257 --
</Table>
A-15
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 0.875 0.926 --
2005 0.817 0.875 --
2004 0.794 0.817 --
2003 0.637 0.794 --
2002 0.911 0.637 --
2001 1.000 0.911 --
Van Kampen LIT Strategic Growth Subaccount (Class
II) (5/01)....................................... 2006 0.778 0.792 --
2005 0.729 0.778 --
2004 0.688 0.729 --
2003 0.546 0.688 --
2002 0.817 0.546 --
2001 1.000 0.817 --
Variable Insurance Products Fund
VIP Asset Manager Subaccount (Service Class 2)
(5/00)........................................... 2006 1.019 1.057 --
2005 0.990 1.019 --
2004 0.949 0.990 23,009
2003 0.813 0.949 23,009
2002 0.900 0.813 51,769
2001 0.949 0.900 --
2000 1.000 0.949 --
VIP Contrafund(R) Subaccount (Service Class 2)
(5/01)........................................... 2006 1.432 1.583 161,039
2005 1.238 1.432 138,871
2004 1.083 1.238 124,888
2003 0.852 1.083 75,992
2002 0.950 0.852 14,509
2001 1.000 0.950 --
VIP Dynamic Capital Appreciation Subaccount
(Service Class 2) (5/01)......................... 2006 1.157 1.306 --
2005 0.966 1.157 9,176
2004 0.962 0.966 12,814
2003 0.776 0.962 12,814
2002 0.846 0.776 12,814
2001 1.000 0.846 2,853
</Table>
A-16
<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 1.830 2.040 256,022
2005 1.563 1.830 246,839
2004 1.264 1.563 92,254
2003 0.921 1.264 47,487
2002 1.032 0.921 9,533
2001 1.000 1.032 --
Wells Fargo Variable Trust
Wells Fargo Advantage VT Small/Mid Cap Value
Subaccount (3/00)................................ 2006 1.358 1.559 --
2005 1.175 1.358 8,864
2004 1.014 1.175 8,864
2003 0.739 1.014 8,864
2002 0.969 0.739 8,864
2001 0.938 0.969 --
2000 1.000 0.938 --
</Table>
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.25% 140 FL
<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 II
LMPVPII Equity Index Subaccount (Class II)
(7/99)........................................... 2006 0.862 0.967 --
2005 0.850 0.862 --
2004 0.791 0.850 --
2003 0.636 0.791 --
2002 0.841 0.636 --
2001 0.986 0.841 --
2000 1.117 0.986 --
1999 1.000 1.117 --
</Table>
NOTES
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 F for
more information on Variable Funding Option name changes, mergers and
substitutions.
A-17
Effective on or about 02/25/05, The Travelers Series Trust -- MFS(R) Emerging
Growth Portfolio merged into Travelers Series Trust -- MFS(R) Mid Cap Growth
Portfolio and is no longer available as a funding option.
Effective on or about 05/01/06, AIM Variable Insurance Funds -- AIM V.I. Premier
Equity Fund merged into AIM Variable Insurance Funds -- AIM V.I. Core Equity
Portfolio and is no longer available as a funding option.
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, Managed Assets Trust merged into Metropolitan
Series Fund, Inc. -- Legg Mason Partners Managed Assets Portfolio -- Class A and
is no longer available as a funding option.
Effective on or about 05/01/06, Money Market Portfolio merged into Metropolitan
Series Fund, Inc. -- Black Rock Money Market Portfolio -- Class A and is no
longer available as a funding option.
Effective on or about 05/01/06, High Yield Bond Trust merged into Metropolitan
Series Fund, Inc. -- Western Asset Management High Yield Bond 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 -- Style Focus
Series: Small Cap Value Portfolio merged into Met Investors Series
Trust -- Dreman Small-Cap Value 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 -- Federated Stock
Portfolio merged into 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, 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 -- Met 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 Mid-Cap
Value Portfolio merged into Met Investors Series Trust -- Pioneer Mid-Cap 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 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.
A-18
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 Trust 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 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
Management 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 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 and is no
longer available as a funding option.
Effective on or about 05/01/06, Delaware VIP Trust -- Mutual VIP REIT
Series -- Standard Class was replaced by Met Investors Series Trust -- Neuberger
Berman Real Estate Portfolio and is no longer available as a funding option.
Effective on or about 05/01/06, Fidelity Variable Insurance Products -- Fidelity
Asset Manager Portfolio -- Service Class 2 was replaced by 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, Janus Aspen Series -- Janus Aspen Balanced
Portfolio -- Service Shares was replaced by 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, Franklin Templeton Variable Insurance Products
Trust -- Franklin Templeton Growth Securities Fund -- Class 2 Shares was
replaced by Metropolitan Series Fund, Inc. -- Oppenheimer Global Equity
Portfolio -- Class B and is no longer available as a funding option.
Effective on or about 05/01/06, Fidelity Variable Insurance Products Fund -- VIP
Asset Manager Portfolio was replaced by Metropolitan Series Fund, Inc. -- MFS(R)
Total Return Portfolio -- Class F 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 Met Investors Series Trust -- Third Avenue Small
Cap Portfolio and is no longer available as a funding option.
A-19
THIS PAGE INTENTIONALLY LEFT BLANK.
APPENDIX B -- CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
THE TRAVELERS SEPARATE ACCOUNT SIX 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 H. Please refer to the Fee Table section of this prospectus
for more information on Separate Account Charges.
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR
<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 Variable Insurance Funds
AIM V.I. Core Equity Subaccount (Series I)
(1/70)........................................... 2006 1.000 1.086 --
AIM V.I. Premier Equity Subaccount (Series I)
(7/01)........................................... 2006 0.839 0.883 --
2005 0.800 0.839 --
2004 0.763 0.800 103,702
2003 0.615 0.763 103,682
2002 0.888 0.615 55,895
2001 1.000 0.888 --
American Funds Insurance Series
American Funds Global Growth Subaccount (Class 2)
(5/04)........................................... 2006 1.255 1.499 197,638
2005 1.109 1.255 119,722
2004 1.010 1.109 31,153
American Funds Growth Subaccount (Class 2)
(5/04)........................................... 2006 1.258 1.375 198,092
2005 1.091 1.258 157,801
2004 0.970 1.091 16,521
American Funds Growth-Income Subaccount (Class 2)
(5/04)........................................... 2006 1.136 1.299 560,986
2005 1.082 1.136 385,501
2004 0.979 1.082 104,915
</Table>
B-1
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 (5/00)................. 2006 0.700 0.694 --
2005 0.597 0.700 1,713,108
2004 0.503 0.597 1,555,826
2003 0.406 0.503 1,630,081
2002 0.547 0.406 1,837,286
2001 0.745 0.547 1,046,590
2000 1.000 0.745 1,006,482
Credit Suisse Trust
Credit Suisse Trust Emerging Markets Subaccount
(5/99)........................................... 2006 1.793 2.357 26,390
2005 1.412 1.793 35,759
2004 1.140 1.412 44,528
2003 0.804 1.140 46,418
2002 0.916 0.804 45,812
2001 1.022 0.916 54,766
2000 1.506 1.022 71,391
1999 1.000 1.506 54,662
Delaware VIP Trust
Delaware VIP REIT Subaccount (Standard Class)
(7/99)........................................... 2006 2.517 3.312 --
2005 2.368 2.517 312,481
2004 1.816 2.368 330,738
2003 1.366 1.816 282,138
2002 1.318 1.366 242,450
2001 1.221 1.318 128,487
2000 0.937 1.221 102,023
1999 1.000 0.937 --
Delaware VIP Small Cap Value Subaccount (Standard
Class) (4/99).................................... 2006 2.225 2.565 234,566
2005 2.050 2.225 232,445
2004 1.701 2.050 203,692
2003 1.208 1.701 177,208
2002 1.289 1.208 139,177
2001 1.162 1.289 13,468
2000 0.991 1.162 5,110
1999 1.000 0.991 --
</Table>
B-2
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 Variable Investment Fund
Dreyfus VIF Appreciation Subaccount (Initial
Shares) (3/99)................................... 2006 1.027 1.187 274,576
2005 0.992 1.027 318,098
2004 0.952 0.992 330,399
2003 0.792 0.952 331,736
2002 0.958 0.792 356,023
2001 1.065 0.958 396,091
2000 1.081 1.065 311,873
1999 1.000 1.081 244,529
Dreyfus VIF Developing Leaders Subaccount
(Initial Shares) (4/99).......................... 2006 1.577 1.624 410,979
2005 1.503 1.577 463,289
2004 1.360 1.503 619,182
2003 1.041 1.360 589,418
2002 1.298 1.041 540,784
2001 1.394 1.298 388,047
2000 1.240 1.394 305,761
1999 1.000 1.240 45,091
Franklin Templeton Variable Insurance Products
Trust
FTVIPT Mutual Shares Securities Subaccount (Class
2) (8/03)........................................ 2006 1.475 1.732 --
2005 1.345 1.475 61,250
2004 1.204 1.345 23,498
2003 1.000 1.204 17,090
FTVIPT Templeton Developing Markets Securities
Subaccount (Class 2) (6/04)...................... 2006 1.560 1.982 108,900
2005 1.234 1.560 102,975
2004 0.972 1.234 --
FTVIPT Templeton Foreign Securities Subaccount
(Class 2) (5/04)................................. 2006 1.264 1.523 240,063
2005 1.156 1.264 193,399
2004 0.962 1.156 40,991
FTVIPT Templeton Growth Securities Subaccount
(Class 2) (6/04)................................. 2006 1.216 1.470 --
2005 1.126 1.216 196,213
2004 1.021 1.126 57,703
</Table>
B-3
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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
- -------------- ---- ----------------- ------------- ---------------
High Yield Bond Trust
High Yield Bond Trust (5/99)..................... 2006 1.538 1.576 --
2005 1.530 1.538 359,521
2004 1.418 1.530 368,425
2003 1.107 1.418 381,556
2002 1.067 1.107 411,756
2001 0.982 1.067 314,101
2000 0.980 0.982 101,750
1999 1.000 0.980 92,789
Janus Aspen Series
Janus Aspen Balanced Subaccount (Service Shares)
(5/01)........................................... 2006 1.154 1.195 --
2005 1.080 1.154 157,215
2004 1.005 1.080 157,215
2003 0.891 1.005 123,022
2002 0.962 0.891 83,565
2001 1.000 0.962 --
Janus Aspen Mid Cap Growth Subaccount (Service
Shares) (8/01)................................... 2006 0.978 1.099 23,960
2005 0.880 0.978 23,960
2004 0.736 0.880 --
2003 0.551 0.736 --
2002 0.772 0.551 --
2001 1.000 0.772 --
Janus Aspen Worldwide Growth Subaccount (Service
Shares) (5/00)................................... 2006 0.604 0.707 159,300
2005 0.577 0.604 254,343
2004 0.556 0.577 303,997
2003 0.453 0.556 319,311
2002 0.615 0.453 382,579
2001 0.801 0.615 441,531
2000 1.000 0.801 424,750
Lazard Retirement Series, Inc.
Lazard Retirement Small Cap Subaccount (5/04).... 2006 1.162 1.314 --
2005 1.127 1.162 3,023
2004 1.009 1.127 --
</Table>
B-4
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 Investment Series
LMPIS Dividend Strategy Subaccount (5/01)........ 2006 0.819 0.959 21,723
2005 0.828 0.819 23,093
2004 0.807 0.828 23,093
2003 0.659 0.807 20,096
2002 0.897 0.659 20,096
2001 1.000 0.897 20,096
LMPIS Premier Selections All Cap Growth
Subaccount (6/01)................................ 2006 0.935 0.996 1,526
2005 0.887 0.935 2,816
2004 0.869 0.887 2,816
2003 0.652 0.869 --
2002 0.898 0.652 --
2001 1.000 0.898 --
Legg Mason Partners Variable Portfolios V
LMPVPV Small Cap Growth Opportunities Subaccount
(5/01)........................................... 2006 1.176 1.318 23,728
2005 1.130 1.176 27,437
2004 0.986 1.130 2,533
2003 0.700 0.986 --
2002 0.949 0.700 --
2001 1.000 0.949 --
Legg Mason Partners Variable Portfolios I, Inc.
LMPVPI All Cap Subaccount (Class I) (3/99)....... 2006 1.648 1.931 199,969
2005 1.596 1.648 338,497
2004 1.486 1.596 344,257
2003 1.077 1.486 357,262
2002 1.449 1.077 340,827
2001 1.433 1.449 172,311
2000 1.222 1.433 70,934
1999 1.000 1.222 13,279
LMPVPI Investors Subaccount (Class I) (3/99)..... 2006 1.372 1.609 116,024
2005 1.298 1.372 128,604
2004 1.185 1.298 149,763
2003 0.903 1.185 151,723
2002 1.183 0.903 140,603
2001 1.244 1.183 102,276
2000 1.088 1.244 20,655
1999 1.000 1.088 5,119
</Table>
B-5
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 Small Cap Growth Subaccount (Class I)
(6/01)........................................... 2006 1.107 1.239 5,596
2005 1.064 1.107 5,596
2004 0.932 1.064 --
2003 0.631 0.932 --
2002 0.974 0.631 --
2001 1.000 0.974 997
LMPVPI Total Return Subaccount (Class I) (3/99).. 2006 1.239 1.384 19,523
2005 1.209 1.239 23,410
2004 1.121 1.209 29,201
2003 0.975 1.121 13,990
2002 1.055 0.975 10,605
2001 1.072 1.055 7,423
2000 1.002 1.072 5,470
1999 1.000 1.002 --
Legg Mason Partners Variable Portfolios II
LMPVPII Appreciation Subaccount (8/01)........... 2006 1.065 1.213 217,023
2005 1.029 1.065 264,932
2004 0.954 1.029 162,864
2003 0.772 0.954 100,091
2002 0.943 0.772 82,395
2001 1.000 0.943 14,712
LMPVPII Equity Index Subaccount (Class II)
(3/99)........................................... 2006 0.978 1.117 1,635,266
2005 0.945 0.978 1,770,764
2004 0.864 0.945 1,899,361
2003 0.682 0.864 1,719,505
2002 0.886 0.682 1,579,821
2001 1.019 0.886 1,055,882
2000 1.133 1.019 842,129
1999 1.000 1.133 207,054
LMPVPII Fundamental Value Subaccount (5/01)...... 2006 1.107 1.283 526,606
2005 1.065 1.107 584,303
2004 0.992 1.065 630,507
2003 0.722 0.992 637,061
2002 0.924 0.722 486,577
2001 1.000 0.924 106,535
</Table>
B-6
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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
(10/03).......................................... 2006 1.020 1.054 76,332
2005 1.005 1.020 65,137
2004 1.001 1.005 56,767
2003 1.000 1.001 12,265
LMPVPIII Aggressive Growth Subaccount (5/01)..... 2006 1.022 1.103 731,816
2005 0.923 1.022 833,193
2004 0.846 0.923 947,296
2003 0.634 0.846 829,147
2002 0.949 0.634 372,023
2001 1.000 0.949 148,073
LMPVPIII High Income Subaccount (5/99)........... 2006 1.187 1.307 45,580
2005 1.166 1.187 46,658
2004 1.065 1.166 12,147
2003 0.842 1.065 20,424
2002 0.877 0.842 17,421
2001 0.918 0.877 26,499
2000 1.007 0.918 12,407
1999 1.000 1.007 --
LMPVPIII International All Cap Growth Subaccount
(3/99)........................................... 2006 0.978 1.221 113,853
2005 0.883 0.978 131,177
2004 0.755 0.883 176,162
2003 0.597 0.755 182,229
2002 0.810 0.597 184,371
2001 1.186 0.810 202,204
2000 1.569 1.186 76,324
1999 1.000 1.569 33,821
LMPVPIII Large Cap Growth Subaccount (3/99)...... 2006 1.030 1.068 256,366
2005 0.987 1.030 269,310
2004 0.991 0.987 338,275
2003 0.677 0.991 414,434
2002 0.907 0.677 335,753
2001 1.045 0.907 323,325
2000 1.132 1.045 265,016
1999 1.000 1.132 100,647
</Table>
B-7
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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
(3/99)........................................... 2006 0.957 1.023 159,985
2005 0.925 0.957 142,054
2004 0.877 0.925 210,284
2003 0.686 0.877 190,338
2002 0.921 0.686 205,434
2001 1.100 0.921 252,885
2000 1.115 1.100 338,770
1999 1.000 1.115 204,232
Lord Abbett Series Fund, Inc.
Lord Abbett Growth and Income Subaccount (Class
VC) (5/04)....................................... 2006 1.138 1.323 92,757
2005 1.111 1.138 87,476
2004 0.968 1.111 --
Lord Abbett Mid-Cap Value Subaccount (Class VC)
(7/04)........................................... 2006 1.251 1.392 77,035
2005 1.165 1.251 97,239
2004 1.007 1.165 34,410
Managed Assets Trust
Managed Assets Trust (3/99)...................... 2006 1.243 1.286 --
2005 1.206 1.243 979,865
2004 1.111 1.206 946,294
2003 0.918 1.111 968,180
2002 1.013 0.918 1,042,680
2001 1.076 1.013 1,174,637
2000 1.102 1.076 913,007
1999 1.000 1.102 232,345
Met Investors Series Trust
MIST Batterymarch Mid-Cap Stock Subaccount (Class
A) (1/70)........................................ 2006 1.000 1.899 242,970
MIST BlackRock Large-Cap Core Subaccount (Class
A) (1/70)........................................ 2006 1.000 1.130 47,332
MIST Dreman Small-Cap Value Subaccount (Class A)
(1/70)........................................... 2006 1.000 1.072 --
MIST Harris Oakmark International Subaccount
(Class A) (1/70)*................................ 2006 1.000 1.346 67,105
MIST Janus Capital Appreciation Subaccount (Class
A) (1/70)........................................ 2006 1.000 0.716 1,648,856
MIST Legg Mason Partners Managed Assets
Subaccount (Class A) (1/70)...................... 2006 1.000 1.366 892,153
</Table>
B-8
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 Bond Debenture Subaccount (Class
A) (1/70)........................................ 2006 1.000 1.166 5,612
MIST Lord Abbett Growth and Income Subaccount
(Class B) (1/70)*................................ 2006 1.000 1.083 220,648
MIST Met/AIM Capital Appreciation Subaccount
(Class A) (1/70)................................. 2006 1.000 1.015 47,120
MIST Met/AIM Small Cap Growth Subaccount (Class
A) (1/70)........................................ 2006 1.000 1.030 --
MIST MFS(R) Value Subaccount (Class A) (1/70).... 2006 1.000 1.432 27,241
MIST Neuberger Berman Real Estate Subaccount
(Class A) (1/70)................................. 2006 1.000 1.227 824,805
MIST Pioneer Fund Subaccount (Class A) (1/70).... 2006 1.000 1.024 62,738
MIST Pioneer Mid-Cap Value Subaccount (Class A)
(1/70)........................................... 2006 1.000 1.118 --
MIST Pioneer Strategic Income Subaccount (Class
A) (1/70)........................................ 2006 1.000 1.534 177,407
MIST Third Avenue Small Cap Value Subaccount
(Class B) (1/70)................................. 2006 1.000 1.343 11,926
MetLife Investment Funds, Inc.
MetLife Investment Diversified Bond Subaccount
(Class I) (3/99)................................. 2006 1.377 1.425 4,163,264
2005 1.360 1.377 4,657,584
2004 1.310 1.360 4,115,266
2003 1.251 1.310 3,142,575
2002 1.157 1.251 3,360,816
2001 1.092 1.157 2,080,975
2000 0.979 1.092 601,543
1999 1.000 0.979 139,623
MetLife Investment International Stock Subaccount
(Class I) (3/99)................................. 2006 1.165 1.462 1,877,384
2005 1.024 1.165 2,279,498
2004 0.899 1.024 2,148,904
2003 0.697 0.899 2,010,293
2002 0.904 0.697 2,025,194
2001 1.160 0.904 1,238,125
2000 1.272 1.160 474,746
1999 1.000 1.272 90,221
</Table>
B-9
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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) (3/99)................................. 2006 0.789 0.881 4,176,636
2005 0.746 0.789 4,775,451
2004 0.683 0.746 4,498,084
2003 0.537 0.683 4,110,325
2002 0.702 0.537 3,575,681
2001 0.840 0.702 2,080,499
2000 0.995 0.840 959,029
1999 1.000 0.995 228,230
MetLife Investment Small Company Stock Subaccount
(Class I) (3/99)................................. 2006 2.101 2.369 824,371
2005 1.974 2.101 940,105
2004 1.732 1.974 879,208
2003 1.220 1.732 844,568
2002 1.612 1.220 739,822
2001 1.600 1.612 542,731
2000 1.465 1.600 462,418
1999 1.000 1.465 113,574
Metropolitan Series Fund, Inc.
MSF BlackRock Aggressive Growth Subaccount (Class
D) (1/70)........................................ 2006 1.000 1.095 166,266
MSF BlackRock Bond Income Subaccount (Class A)
(1/70)........................................... 2006 1.000 1.349 424,506
MSF BlackRock Money Market Subaccount (Class A)
(1/70)........................................... 2006 1.000 1.196 541,103
MSF FI Large Cap Subaccount (Class A) (1/70)..... 2006 1.000 0.968 872,082
MSF FI Value Leaders Subaccount (Class D)
(1/70)........................................... 2006 1.000 1.396 1,157,148
MSF MetLife Aggressive Allocation Subaccount
(1/70)........................................... 2006 1.000 1.081 --
2005 1.000 1.000 --
MSF MetLife Conservative Allocation Subaccount
(1/70)........................................... 2006 1.000 1.047 --
2005 1.000 1.000 --
MSF MetLife Conservative to Moderate Allocation
Subaccount (1/70)................................ 2006 1.000 1.053 --
2005 1.000 1.000 --
MSF MetLife Moderate Allocation Subaccount
(1/70)........................................... 2006 1.000 1.058 --
2005 1.000 1.000 --
</Table>
B-10
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 MetLife Moderate to Aggressive Allocation
Subaccount (1/70)................................ 2006 1.000 1.112 --
2005 1.000 1.000 --
MSF MFS(R) Total Return Subaccount (Class F)
(1/70)........................................... 2006 1.000 1.558 1,461,415
MSF Oppenheimer Global Equity Subaccount (Class
B) (1/70)*....................................... 2006 1.000 1.056 269,938
MSF Western Asset Management High Yield Bond
Subaccount (Class A) (1/70)...................... 2006 1.000 1.684 270,148
MSF Western Asset Management U.S. Government
Subaccount (Class A) (1/70)*..................... 2006 1.000 1.453 574,277
Money Market Portfolio
Money Market Subaccount (4/99)................... 2006 1.151 1.164 --
2005 1.127 1.151 847,943
2004 1.125 1.127 1,106,052
2003 1.125 1.125 1,753,058
2002 1.119 1.125 1,258,377
2001 1.087 1.119 990,283
2000 1.032 1.087 700,403
1999 1.000 1.032 239,890
Oppenheimer Variable Account Funds
Oppenheimer Main Street/VA Subaccount ( Service
Shares) (5/04)................................... 2006 1.131 1.198 --
2005 1.078 1.131 14,297
2004 0.975 1.078 10,342
PIMCO Variable Insurance Trust
PIMCO VIT Real Return Subaccount (Administrative
Class) (7/05).................................... 2006 1.012 1.011 72,677
2005 1.000 1.012 42,479
PIMCO VIT Total Return Subaccount (Administrative
Class) (6/01).................................... 2006 1.260 1.298 539,536
2005 1.240 1.260 569,639
2004 1.192 1.240 378,880
2003 1.144 1.192 385,107
2002 1.057 1.144 388,046
2001 1.000 1.057 42,621
</Table>
B-11
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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
- -------------- ---- ----------------- ------------- ---------------
Putnam Variable Trust
Putnam VT Discovery Growth Subaccount (Class IB)
(12/01).......................................... 2006 0.839 0.925 11,671
2005 0.789 0.839 11,671
2004 0.739 0.789 11,671
2003 0.564 0.739 11,671
2002 0.808 0.564 11,671
2001 1.000 0.808 --
Putnam VT International Equity Subaccount (Class
IB) (5/01)....................................... 2006 1.150 1.457 65,112
2005 1.033 1.150 81,614
2004 0.897 1.033 85,063
2003 0.703 0.897 88,330
2002 0.861 0.703 89,130
2001 1.000 0.861 36,530
Putnam VT Small Cap Value Subaccount (Class IB)
(6/01)........................................... 2006 1.749 2.035 278,813
2005 1.647 1.749 319,412
2004 1.315 1.647 205,632
2003 0.886 1.315 173,137
2002 1.093 0.886 235,414
2001 1.000 1.093 1,734
The Travelers Series Trust
Travelers AIM Capital Appreciation Subaccount
(11/01).......................................... 2006 0.957 1.022 --
2005 0.887 0.957 51,831
2004 0.840 0.887 72,426
2003 0.654 0.840 35,106
2002 0.867 0.654 38,688
2001 1.000 0.867 --
Travelers Convertible Securities Subaccount
(5/04)........................................... 2006 1.035 1.106 --
2005 1.040 1.035 5,612
2004 0.990 1.040 --
Travelers Disciplined Mid Cap Stock Subaccount
(6/99)........................................... 2006 1.812 1.984 --
2005 1.625 1.812 288,657
2004 1.406 1.625 300,148
2003 1.060 1.406 298,395
2002 1.247 1.060 244,570
2001 1.310 1.247 156,409
2000 1.132 1.310 87,378
1999 1.000 1.132 --
</Table>
B-12
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 Equity Income Subaccount (3/99)........ 2006 1.285 1.354 --
2005 1.240 1.285 1,344,215
2004 1.137 1.240 1,226,765
2003 0.874 1.137 1,133,992
2002 1.024 0.874 1,011,873
2001 1.105 1.024 343,935
2000 1.021 1.105 212,588
1999 1.000 1.021 216,322
Travelers Federated Stock Subaccount (4/99)...... 2006 1.163 1.208 --
2005 1.113 1.163 59,781
2004 1.015 1.113 60,043
2003 0.802 1.015 60,043
2002 1.002 0.802 52,941
2001 0.993 1.002 24,072
2000 0.965 0.993 4,126
1999 1.000 0.965 --
Travelers Large Cap Subaccount (3/99)............ 2006 0.919 0.949 --
2005 0.852 0.919 512,059
2004 0.807 0.852 512,693
2003 0.652 0.807 524,562
2002 0.851 0.652 448,487
2001 1.038 0.851 409,069
2000 1.224 1.038 334,348
1999 1.000 1.224 247,021
Travelers Mercury Large Cap Core Subaccount
(3/99)........................................... 2006 0.997 1.061 --
2005 0.897 0.997 49,017
2004 0.780 0.897 15,265
2003 0.649 0.780 15,265
2002 0.874 0.649 16,447
2001 1.136 0.874 17,029
2000 1.213 1.136 80,150
1999 1.000 1.213 --
</Table>
B-13
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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
(5/99)........................................... 2006 1.052 1.116 --
2005 1.029 1.052 189,859
2004 0.909 1.029 247,955
2003 0.668 0.909 256,356
2002 1.317 0.668 249,539
2001 1.739 1.317 238,188
2000 1.603 1.739 201,277
1999 1.000 1.603 22,378
Travelers MFS(R) Total Return Subaccount (4/99).. 2006 1.400 1.449 --
2005 1.371 1.400 1,402,006
2004 1.240 1.371 1,303,774
2003 1.073 1.240 1,112,494
2002 1.141 1.073 994,730
2001 1.150 1.141 458,197
2000 0.994 1.150 177,102
1999 1.000 0.994 56,338
Travelers MFS(R) Value Subaccount (5/04)......... 2006 1.190 1.289 --
2005 1.127 1.190 25,099
2004 0.969 1.127 --
Travelers Mondrian International Stock Subaccount
(4/99)........................................... 2006 1.055 1.215 --
2005 0.971 1.055 80,241
2004 0.846 0.971 81,385
2003 0.663 0.846 57,438
2002 0.768 0.663 39,307
2001 1.049 0.768 43,074
2000 1.194 1.049 43,159
1999 1.000 1.194 13,922
Travelers Pioneer Fund Subaccount (5/99)......... 2006 0.890 0.947 --
2005 0.847 0.890 62,738
2004 0.768 0.847 128,011
2003 0.625 0.768 139,015
2002 0.903 0.625 177,705
2001 1.183 0.903 175,971
2000 0.959 1.183 136,065
1999 1.000 0.959 52,624
Travelers Pioneer Mid Cap Value Subaccount
(7/05)........................................... 2006 1.001 1.057 --
2005 1.000 1.001 --
</Table>
B-14
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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
(6/99)........................................... 2006 1.455 1.473 --
2005 1.415 1.455 99,903
2004 1.285 1.415 48,519
2003 1.084 1.285 37,669
2002 1.032 1.084 29,999
2001 0.998 1.032 17,469
2000 1.010 0.998 --
1999 1.000 1.010 --
Travelers Quality Bond Subaccount (3/99)......... 2006 1.300 1.292 --
2005 1.290 1.300 453,665
2004 1.259 1.290 428,682
2003 1.186 1.259 336,903
2002 1.130 1.186 324,873
2001 1.063 1.130 229,303
2000 1.002 1.063 89,190
1999 1.000 1.002 30,445
Travelers Strategic Equity Subaccount (3/99)..... 2006 0.871 0.911 --
2005 0.861 0.871 578,902
2004 0.787 0.861 781,329
2003 0.598 0.787 861,404
2002 0.908 0.598 907,697
2001 1.057 0.908 1,013,052
2000 1.303 1.057 787,876
1999 1.000 1.303 274,568
Travelers Style Focus Series: Small Cap Growth
Subaccount (1/70)................................ 2006 1.000 1.032 --
2005 1.000 1.000 --
Travelers Style Focus Series: Small Cap Value
Subaccount (1/70)................................ 2006 1.000 1.000 --
2005 1.000 1.000 --
Travelers U.S. Government Securities Subaccount
(3/99)........................................... 2006 1.445 1.396 --
2005 1.396 1.445 664,291
2004 1.326 1.396 612,998
2003 1.301 1.326 641,656
2002 1.154 1.301 674,168
2001 1.099 1.154 329,688
2000 0.968 1.099 147,364
1999 1.000 0.968 81,239
</Table>
B-15
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 Life Investment Trust
Van Kampen LIT Comstock Subaccount (Class II)
(8/03)........................................... 2006 1.512 1.741 18,593
2005 1.464 1.512 32,763
2004 1.257 1.464 35,463
2003 1.000 1.257 15,449
Van Kampen LIT Enterprise Subaccount (Class II)
(10/01).......................................... 2006 0.875 0.926 --
2005 0.817 0.875 --
2004 0.794 0.817 --
2003 0.637 0.794 --
2002 0.911 0.637 --
2001 1.000 0.911 --
Van Kampen LIT Strategic Growth Subaccount (Class
II) (1/02)....................................... 2006 0.778 0.792 --
2005 0.729 0.778 --
2004 0.688 0.729 --
2003 0.546 0.688 --
2002 0.817 0.546 --
2001 1.000 0.817 --
Variable Insurance Products Fund
VIP Asset Manager Subaccount (Service Class 2)
(6/00)........................................... 2006 1.019 1.057 --
2005 0.990 1.019 229,844
2004 0.949 0.990 291,168
2003 0.813 0.949 262,244
2002 0.900 0.813 227,798
2001 0.949 0.900 178,530
2000 1.000 0.949 133,640
VIP Contrafund(R) Subaccount (Service Class 2)
(9/01)........................................... 2006 1.432 1.583 382,235
2005 1.238 1.432 307,737
2004 1.083 1.238 274,073
2003 0.852 1.083 244,184
2002 0.950 0.852 208,513
2001 1.000 0.950 --
</Table>
B-16
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (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 Dynamic Capital Appreciation Subaccount
(Service Class 2) (5/01)......................... 2006 1.157 1.306 14,225
2005 0.966 1.157 16,820
2004 0.962 0.966 16,820
2003 0.776 0.962 5,993
2002 0.846 0.776 5,993
2001 1.000 0.846 --
VIP Mid Cap Subaccount (Service Class 2) (7/01).. 2006 1.830 2.040 383,405
2005 1.563 1.830 373,612
2004 1.264 1.563 181,421
2003 0.921 1.264 103,818
2002 1.032 0.921 100,887
2001 1.000 1.032 --
Wells Fargo Variable Trust
Wells Fargo Advantage VT Small/Mid Cap Value
Subaccount (7/99)................................ 2006 1.358 1.559 6,351
2005 1.175 1.358 6,351
2004 1.014 1.175 6,351
2003 0.739 1.014 9,511
2002 0.969 0.739 9,511
2001 0.938 0.969 6,351
2000 0.877 0.938 6,351
1999 1.000 0.877 6,351
</Table>
SEPARATE ACCOUNT CHARGES 1.25% 140 FL
<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 II
LMPVPII Equity Index Subaccount (Class II)
(3/99)........................................... 2006 0.862 0.967 --
2005 0.850 0.862 --
2004 0.791 0.850 --
2003 0.636 0.791 --
2002 0.841 0.636 --
2001 0.986 0.841 --
2000 1.117 0.986 --
1999 1.000 1.117 --
</Table>
B-17
NOTES
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 F for
more information on Variable Funding Option name changes, mergers and
substitutions.
Effective on or about 02/25/05, The Travelers Series Trust -- MFS(R) Emerging
Growth Portfolio merged into Travelers Series Trust -- MFS(R) Mid Cap Growth
Portfolio and is no longer available as a funding option.
Effective on or about 05/01/06, AIM Variable Insurance Funds -- AIM V.I. Premier
Equity Fund merged into AIM Variable Insurance Funds -- AIM V.I. Core Equity
Portfolio and is no longer available as a funding option.
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, Managed Assets Trust merged into Metropolitan
Series Fund, Inc. -- Legg Mason Partners Managed Assets Portfolio -- Class A and
is no longer available as a funding option.
Effective on or about 05/01/06, Money Market Portfolio merged into Metropolitan
Series Fund, Inc. -- BlackRock Money Market Portfolio -- Class A and is no
longer available as a funding option.
Effective on or about 05/01/06, High Yield Bond Trust merged into Metropolitan
Series Fund, Inc. -- Western Asset Management High Yield Bond 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 -- Style Focus
Series: Small Cap Value Portfolio merged into Met Investors Series
Trust -- Dreman Small-Cap Value 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 -- Federated Stock
Portfolio merged into 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, 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 -- Met 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.
B-18
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 Mid-Cap
Value Portfolio merged into Met Investors Series Trust -- Pioneer Mid-Cap 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 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 Trust 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 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
Management 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 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 and is no
longer available as a funding option.
Effective on or about 05/01/06, Delaware VIP Trust -- Mutual VIP REIT
Series -- Standard Class was replaced by Met Investors Series Trust -- Neuberger
Berman Real Estate Portfolio and is no longer available as a funding option.
Effective on or about 05/01/06, Fidelity Variable Insurance Products -- Fidelity
Asset Manager Portfolio -- Service Class 2 was replaced by 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, Janus Aspen Series -- Janus Aspen Balanced
Portfolio -- Service Shares was replaced by 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, Franklin Templeton Variable Insurance Products
Trust -- Franklin Templeton Growth Securities Fund -- Class 2 Shares was
replaced by Metropolitan Series Fund, Inc. -- Oppenheimer Global Equity
Portfolio -- Class B and is no longer available as a funding option.
Effective on or about 05/01/06, Fidelity Variable Insurance Products Fund -- VIP
Asset Manager Portfolio was replaced by Metropolitan Series Fund, Inc. -- MFS(R)
Total Return Portfolio -- Class F 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 Met Investors Series Trust -- Third Avenue Small
Cap Portfolio and is no longer available as a funding option.
B-19
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APPENDIX C
- --------------------------------------------------------------------------------
WAIVER OF WITHDRAWAL CHARGE FOR NURSING HOME CONFINEMENT
NOT AVAILABLE UNDER SECTION 457 PLANS
NOT AVAILABLE IF OWNER IS AGE 71 OR OLDER ON THE CONTRACT DATE.
PLEASE REFER TO YOUR CONTRACT FOR STATE VARIATIONS OF THIS WAIVER.
If, after the first Contract Year and before the Maturity Date, the Annuitant
begins confinement in an eligible nursing home, you may surrender or make
withdrawal, subject to the maximum withdrawal amount described below, without
incurring a withdrawal charge. In order for the Company to waive the withdrawal
charge, the withdrawal must be made during continued confinement in an eligible
nursing home after the qualifying period has been satisfied, or within sixty
(60) days after such confinement ends. The qualifying period is confinement in
an eligible nursing home for ninety (90) consecutive days. We will require proof
of confinement in a form satisfactory to us, which may include certification by
a licensed physician that such confinement is medically necessary.
An eligible nursing home is defined as an institution or special nursing unit of
a hospital which:
(a) is Medicare approved as a provider of skilled nursing care services;
and
(b) is not, other than in name only, an acute care hospital, a home for
the aged, a retirement home, a rest home, a community living center,
or a place mainly for the treatment of alcoholism, mental illness or
drug abuse.
OR
Meets all of the following standards:
(a) is licensed as a nursing care facility by the state in which it is
licensed;
(b) is either a freestanding facility or a distinct part of another
facility such as a ward, wing, unit or swing-bed of a hospital or
other facility;
(c) provides nursing care to individuals who are not able to care for
themselves and who require nursing care;
(d) provides, as a primary function, nursing care and room and board; and
charges for these services;
(e) provides care under the supervision of a licensed physician,
registered nurse (RN) or licensed practical nurse (LPN);
(f) may provide care by a licensed physical, respiratory, occupational or
speech therapist; and
(g) is not, other than in name only, an acute care hospital, a home for
the aged, a retirement home, a rest home, a community living center,
or a place mainly for the treatment of alcoholism, mental illness or
drug abuse.
FILING A CLAIM: You must provide the Company with written notice of a claim
during continued confinement after the 90-day qualifying period, or within sixty
days after such confinement ends.
The maximum withdrawal amount for which we will waive the withdrawal charge is
the Contract Value on the next Valuation Date following written proof of claim,
less any Purchase Payments made within a one-year period before confinement in
an eligible nursing home begins, less any Purchase Payments made on or after the
Annuitant's 71st birthday.
We will pay any withdrawal requested under the scope of this waiver as soon as
we receive proper written proof of your claim, and we will pay the withdrawal in
a lump sum. You should consult with your personal tax adviser regarding the tax
impact of any withdrawals taken from your Contract.
C-1
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APPENDIX D
- --------------------------------------------------------------------------------
MARKET VALUE ADJUSTMENT
If you have selected any period certain option, you may elect to surrender a
payment equal to a portion of the present value of the remaining period certain
payments any time after the first Contract Year. There is a surrender charge of
5% of the amount withdrawn under this option.
For fixed Annuity Payments, we calculate the present value of the remaining
period certain payments using a current interest rate. The current interest rate
is the then current annual rate of return offered by Us on a new Fixed Annuity
Period Certain Only annuitizations for the amount of time remaining in the
certain period. If the period of time remaining is less that the minimum length
of time for which we offer a new Fixed Annuity Period Certain Only
annuitization, then the interest rate will be the rate of return for that
minimum length of time.
The formula for calculating the Present Value is as follows:
N
Present Value = [SIGMA] [Payments x (1/1 + iC)(t/365)
s = 1
Where
iC = the interest rate described above
n = the number of payments remaining in the Contract Owner's certain
period at the time of request for this benefit
t = number of days remaining until that payment is made, adjusting
for leap years.
If you request a percentage of the total amount available, then the remaining
period certain payments will be reduced by that percentage for the remainder of
the certain period. After the certain period expires, any remaining payments, if
applicable, will increase to the level they would have been had no liquidation
taken place.
ILLUSTRATION:
<Table>
Amount Annuitized $12,589.80
Annuity Option Life with 10 year certain period
Annuity Payments $1,000 Annually -- first payment immediately
</Table>
For the purposes of illustration, assume after two years (immediately preceding
the third payment), you choose to receive full liquidity, and the current rate
of return that we are then crediting for 8 year fixed Period Certain Only
Annuitizations is 4.00%. The total amount available for liquidity is calculated
as follows:
1000 + (1000/1.04) + (1000/1.04)2 + (1000/1.04)3 + (1000/1.04)4 +
(1000/1.04)5 + (1000/1.04)6 + (1000/1.04)7 = $7002.06
The surrender penalty is calculated as 5% of $7,002.06, or $350.10.
The net result to you after subtraction of the surrender penalty of $350.10
would be $6,651.96.
You would receive no more payments for 8 years. After 8 years, if you are still
living, you will receive $1,000 annually until your death.
D-1
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APPENDIX E
- --------------------------------------------------------------------------------
WHAT YOU NEED TO KNOW IF YOU ARE A TEXAS OPTIONAL
RETIREMENT PROGRAM PARTICIPANT
If you are a participant in the Texas Optional Retirement Program, Texas law
permits us to make withdrawals on your behalf only if you die, retire or
terminate employment in all Texas institutions of higher education, as defined
under Texas law. Any withdrawal you ask for requires a written statement from
the appropriate Texas institution of higher education verifying your vesting
status and (if applicable) termination of employment. Also, we require a written
statement from you that you are not transferring employment to another Texas
institution of higher education. If you retire or terminate employment in all
Texas institutions of higher education or die before being vested, amounts
provided by the state's matching contribution will be refunded to the
appropriate Texas institution. We may change these restrictions or add others
without your consent to the extent necessary to maintain compliance with the
law.
E-1
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APPENDIX F
- --------------------------------------------------------------------------------
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
- -------------------------------------------------- --------------------------------------------------
MET INVESTORS SERIES TRUST MET INVESTORS SERIES TRUST
Janus Capital Appreciation Portfolio Janus Forty Portfolio
LEGG MASON PARTNERS VARIABLE PORTFOLIOS III, INC. LEGG MASON PARTNERS VARIABLE EQUITY TRUST
Growth Portfolio+ Legg Mason Partners Variable International All Cap
Legg Mason Partners Variable Social Awareness Opportunity Portfolio*+
Stock Portfolio Legg Mason Partners Variable Social Awareness
LEGG MASON PARTNERS VARIABLE PORTFOLIO IV Portfolio*
Balanced All Cap Growth and Value Portfolio LEGG MASON PARTNERS VARIABLE PORTFOLIO IV Legg
Mason Partners Variable Capital and Income
Portfolio+
</Table>
* See "FUND FAMILY CHANGES AND PORTFOLIO SHARE CLASS NAME CHANGE" IN THIS
APPENDIX
+ Closed to new investors.
UNDERLYING FUND MERGERS/REORGANIZATIONS
The former Underlying Funds were merged with and into the new Underlying Funds.
<Table>
<Caption>
FORMER UNDERLYING FUND NEW UNDERLYING FUND
- -------------------------------------------------- --------------------------------------------------
LEGG MASON PARTNERS INVESTMENT SERIES LEGG MASON PARTNERS VARIABLE EQUITY TRUST*
Legg Mason Partners Variable Premier Selections Legg Mason Partners Variable Aggressive Growth
All Cap Growth Portfolio -- Class 1+ Portfolio -- Class I+
LEGG MASON PARTNERS VARIABLE PORTFOLIOS I, INC. LEGG MASON PARTNERS VARIABLE EQUITY TRUST*
Legg Mason Partners Variable All Cap Portfolio -- Legg Mason Partners Variable Fundamental Value
Class I Portfolio -- Class I
LEGG MASON PARTNERS VARIABLE PORTFOLIOS I, INC LEGG MASON PARTNERS EQUITY TRUST*
Legg Mason Partners Variable Total Return Legg Mason Partners Variable Multiple Discipline
Portfolio -- Class I++ Portfolio -- Balanced All Cap Growth and Value
Portfolio -- Class I and renamed Legg Mason
Partners Variable Capital and Income Portfolio**+.
LEGG MASON PARTNERS VARIABLE PORTFOLIOS V LEGG MASON PARTNERS VARIABLE EQUITY TRUST*
Legg Mason Partners Variable Small Cap Growth Legg Mason Partners Variable Small Cap Growth
Opportunities Portfolio -- Class I Portfolio -- Class I
MET INVESTORS SERIES TRUST MET INVESTORS SERIES TRUST
Pioneer Mid-Cap Value Portfolio -- Class A Lazard Mid-Cap Portfolio -- Class B
METROPOLITAN SERIES FUND, INC. MET INVESTORS SERIES TRUST
Western Asset Management High Yield Bond BlackRock High Yield Portfolio -- Class A
Portfolio -- Class A
</Table>
+ Closed to New Investors
* See "Fund Family Changes and Portfolio Share Class Name Change" in this
Appendix
** See "Underlying Fund Name Changes" in this Appendix
F-1
UNDERLYING FUND SUBSTITUTIONS
<Table>
<Caption>
FORMER UNDERLYING FUND NEW UNDERLYING FUND
- ------------------------------------------------------------ ------------------------------------------------------------
AIM VARIABLE INSURANCE FUNDS METROPOLITAN SERIES FUND, INC.
AIM V.I. Core Equity Fund -- Series I+ Capital Guardian U.S. Equity Portfolio -- Class A+
CREDIT SUISSE TRUST MET INVESTORS SERIES TRUST
Credit Suisse Emerging Markets Portfolio+ MFS(R) Emerging Markets Equity Portfolio -- Class A+
LAZARD RETIREMENT SERIES, INC. MET INVESTORS SERIES TRUST
Lazard Retirement Small Cap Portfolio Third Avenue Small Cap Value Portfolio -- Class B
PIMCO VARIABLE INSURANCE TRUST MET INVESTORS SERIES TRUST
Real Return Portfolio -- Administrative Class -- PIMCO Inflation Protected Bond Portfolio -- Class A
Class VC
PUTNAM VARIABLE TRUST MET INVESTORS SERIES TRUST
Putnam VT International Equity Fund (Class IB)+ MFS(R) Research International Portfolio -- Class B+
Putnam VT Small Cap Value Fund -- Class IB Third Avenue Small Cap Value Portfolio -- Class B
LORD ABBETT SERIES FUND, INC. MET INVESTORS SERIES TRUST
Lord Abbett Growth and Income Portfolio -- Class VC Lord Abbett Growth and Income Portfolio -- Class B
Lord Abbett Mid-Cap Value Portfolio -- Class VC Lord Abbett Mid-Cap Value Portfolio -- Class B
</Table>
UNDERLYING FUND FAMILY CHANGES AND PORTFOLIO SHARE CLASS NAME CHANGE
<Table>
<Caption>
FORMER UNDERLYING FUND FAMILY NEW UNDERLYING FUND FAMILY
- ------------------------------------------------------------ ------------------------------------------------------------
LEGG MASON PARTNERS INVESTMENT SERIES LEGG MASON PARTNERS VARIABLE EQUITY TRUST.
Legg Mason Partners Variable Dividend Strategy Legg Mason Partners Variable Dividend Strategy
Portfolio+ Portfolio+
LEGG MASON PARTNERS VARIABLE PORTFOLIOS I, INC. LEGG MASON PARTNERS VARIABLE EQUITY TRUST
Legg Mason Partners Variable Investors Portfolio Legg Mason Partners Variable Investors Portfolio
Legg Mason Partners Variable Small Cap Growth Legg Mason Partners Variable Small Cap Growth
Portfolio+ Portfolio
LEGG MASON PARTNERS VARIABLE PORTFOLIOS II LEGG MASON PARTNERS VARIABLE EQUITY TRUST
Legg Mason Partners Variable Appreciation Portfolio -- Legg Mason Partners Variable Appreciation Portfolio --
Class I Class I**
Legg Mason Partners Variable Equity Index Portfolio Legg Mason Partners Variable Equity Index Portfolio
Legg Mason Partners Variable Fundamental Value Legg Mason Partners Variable Fundamental Value
Portfolio -- Class I+ Portfolio -- Class I**
LEGG MASON PARTNERS VARIABLE PORTFOLIOS III, INC. LEGG MASON PARTNERS VARIABLE EQUITY TRUST.
Legg Mason Partners Variable Aggressive Growth Legg Mason Partners Variable Aggressive Growth
Portfolio -- Class I Portfolio -- Class I**+
Legg Mason Partners Variable International All Cap Legg Mason Partners Variable International All Cap
Opportunity Portfolio Opportunity Portfolio+
Legg Mason Partners Variable Large Cap Growth Legg Mason Partners Variable
Portfolio Large Cap Growth Portfolio
Legg Mason Partners Variable Social Awareness Legg Mason Partners Variable Social Awareness
Portfolio Portfolio++
LEGG MASON PARTNERS VARIABLE PORTFOLIOS III, INC. LEGG MASON PARTNERS VARIABLE INCOME TRUST
Legg Mason Partners Variable Adjustable Rate Income Legg Mason Partners Variable Adjustable Rate Income
Portfolio Portfolio
Legg Mason Partners Variable High Income Legg Mason Partners Variable High Income
Portfolio Portfolio
LEGG MASON PARTNERS VARIABLE PORTFOLIOS IV LEGG MASON VARIABLE EQUITY TRUST
Legg Mason Partners Variable Capital and Income Legg Mason Partners Variable Capital and Income
Portfolio Portfolio+
</Table>
F-2
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 A BlackRock Large Cap Core Portfolios -- Class E
</Table>
++ See Underlying Fund Name Changes in this Appendix
** Single Share Class Structure has been renamed Class I
+ Closed to New Investors
F-3
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APPENDIX G
- --------------------------------------------------------------------------------
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
JANUS ASPEN SERIES Worldwide Growth Portfolio Janus Aspen Series Worldwide
Growth Portfolio
METROPOLITAN SERIES FUND, INC. FI Large Cap Portfolio FI Large Cap Portfolio (Fidelity)
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
VAN KAMPEN LIFE INVESTMENT TRUST Van Kampen Life Investment Trust Van Kampen LIT Enterprise
Enterprise Portfolio Portfolio
VARIABLE INSURANCE PRODUCTS Dynamic Capital Appreciation Fidelity VIP Dynamic Capital
Portfolio Appreciation Portfolio
VARIABLE INSURANCE PRODUCTS Contrafund(R) Portfolio Fidelity VIP Contrafund(R)
Portfolio
VARIABLE INSURANCE PRODUCTS Mid Cap Portfolio Fidelity VIP Mid Cap Portfolio
</Table>
G-1
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APPENDIX H
- --------------------------------------------------------------------------------
CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
The Statement of Additional Information contains more specific information and
financial statements relating to MetLife Insurance Company of Connecticut or
MetLife Life and Annuity Company of Connecticut. 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 Firm
Condensed Financial Information
Financial Statements
- --------------------------------------------------------------------------------
Copies of the Statement of Additional Information dated April 30, 2007 are
available without charge. To request a copy, please clip this coupon on the line
above, enter your name and address in the spaces provided below, and mail to:
MetLife Insurance Company of Connecticut or MetLife Life and Annuity Company of
Connecticut, Annuity Operations and Services, One Cityplace, 185 Asylum Street,
3CP, Hartford, Connecticut 06103-3415.
Name: -----------------------------------------------
Address: --------------------------------------------
Check Box:
For the MetLife Insurance Company of Connecticut Statement of Additional
Information, please request MIC Book 21 and for the MetLife Life and Annuity
Company of Connecticut Statement of Additional Information, please request MLAC
Book 21.
[ ] MIC Book 21
[ ] MLAC Book 21
H-1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
METLIFE RETIREMENT ACCOUNT ANNUITY PROSPECTUS:
METLIFE OF CT SEPARATE ACCOUNT FIVE FOR VARIABLE ANNUITIES
METLIFE OF CT SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES
BOOK 21 APRIL 30, 2007
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------