METLIFE RETIREMENT ACCOUNT ANNUITY PROSPECTUS:
This prospectus describes MetLife Retirement Account Annuity, a flexible premium
deferred variable annuity contract (the "Contract") issued by MetLife Insurance
Company of Connecticut. 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 Funding Options you select. You bear
the investment risk of investing in the Funding Options. The Funding Options
available for all Contracts are:
<Table>
AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 Lord Abbett Bond Debenture
American Funds Global Growth Fund Portfolio -- Class A
American Funds Growth Fund Lord Abbett Growth and Income
American Funds Growth-Income Fund Portfolio -- Class B
DELAWARE VIP TRUST -- STANDARD CLASS Lord Abbett Mid Cap Value
Delaware VIP Small Cap Value Series Portfolio -- Class B
FIDELITY(R) VARIABLE INSURANCE Met/AIM Small Cap Growth Portfolio -- Class
PRODUCTS -- SERVICE CLASS 2 A
Contrafund(R) Portfolio PIMCO Inflation Protected Bond
Mid Cap Portfolio Portfolio -- Class A
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS PIMCO Total Return Portfolio -- Class B
TRUST -- CLASS 2 Pioneer Fund Portfolio -- Class A
Templeton Developing Markets Securities Pioneer Strategic Income Portfolio -- Class
Fund A
Templeton Foreign Securities Fund Third Avenue Small Cap Value
JANUS ASPEN SERIES -- SERVICE SHARES Portfolio -- Class B
Enterprise Portfolio Van Kampen Comstock Portfolio -- Class B
LEGG MASON PARTNERS VARIABLE EQUITY TRUST METROPOLITAN SERIES FUND, INC.
Legg Mason Partners Variable Appreciation Barclays Capital Aggregate Bond Index
Portfolio -- Class I Portfolio -- Class A
Legg Mason Partners Variable Fundamental BlackRock Aggressive Growth
Value Portfolio -- Class I Portfolio -- Class D
Legg Mason Partners Variable Investors BlackRock Bond Income Portfolio -- Class A
Portfolio -- Class I BlackRock Diversified Portfolio -- Class A
Legg Mason Partners Variable Large Cap BlackRock Legacy Large Cap Growth
Growth Portfolio -- Class I Portfolio -- Class A
Legg Mason Partners Variable Small Cap BlackRock Money Market Portfolio -- Class A
Growth Portfolio -- Class I Davis Venture Value Portfolio -- Class A
Legg Mason Partners Variable Social FI Value Leaders Portfolio -- Class D
Awareness Portfolio MetLife Aggressive Allocation
LEGG MASON PARTNERS VARIABLE INCOME TRUST Portfolio -- Class B
Legg Mason Partners Variable Adjustable MetLife Conservative Allocation
Rate Income Portfolio Portfolio -- Class B
Legg Mason Partners Variable High Income MetLife Conservative to Moderate Allocation
Portfolio Portfolio -- Class B
MET INVESTORS SERIES TRUST MetLife Moderate Allocation
BlackRock High Yield Portfolio -- Class A Portfolio -- Class B
BlackRock Large Cap Core Portfolio -- Class MetLife Moderate to Aggressive Allocation
E Portfolio -- Class B
Clarion Global Real Estate MetLife Stock Index Portfolio -- Class A
Portfolio -- Class A MFS(R) Total Return Portfolio -- Class F
Dreman Small Cap Value Portfolio -- Class A MFS(R) Value Portfolio -- Class A
Harris Oakmark International Morgan Stanley EAFE(R) Index
Portfolio -- Class A Portfolio -- Class A
Janus Forty Portfolio -- Class A Oppenheimer Global Equity
Lazard Mid Cap Portfolio -- Class A Portfolio -- Class B
Russell 2000(R) Index Portfolio -- Class A
T. Rowe Price Small Cap Growth
Portfolio -- Class B
Western Asset Management U.S. Government
Portfolio -- Class A
</Table>
Certain Funding Options have been subject to a merger, substitution or other
change. Please see "Appendix B -- Additional Information Regarding the
Underlying Funds."
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 Fixed Account is described in a separate prospectus. The Contract, certain
contract features and/or some of the Funding Options may not be available in all
states.
This prospectus sets forth the information that you should know before investing
in the Contract. This prospectus should be kept for future reference. You can
receive additional information about your Contract by requesting a Statement of
Additional Information ("SAI") dated May 1, 2009. 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 P.O. 4700 Westown
Parkway, Ste. 200, West Des Moines, IA 50266, call 1-800-842-9406, or access the
SEC's website (http://www.sec.gov). See Appendix D 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: MAY 1, 2009
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
Glossary................................................................ 3
Summary:................................................................ 5
Fee Table............................................................... 8
Condensed Financial Information......................................... 13
The Annuity Contract and Your Retirement Plan........................... 13
The Annuity Contract.................................................... 13
Contract Owner Inquiries.............................................. 14
Purchase Payments..................................................... 14
Purchase Payments -- Section 403(b) Plans............................. 15
Purchase Payment Credits.............................................. 15
Conservation Credit................................................... 15
Accumulation Units.................................................... 15
The Funding Options................................................... 16
Metropolitan Series Fund, Inc. Asset Allocation Portfolios............ 22
Fixed Account........................................................... 22
Charges and Deductions.................................................. 22
General............................................................... 22
Withdrawal Charge..................................................... 23
Free Withdrawal Allowancee............................................ 24
Transfer Charge....................................................... 24
Mortality and Expense Risk Charge..................................... 24
Funding Option Expenses............................................... 25
Floor Benefit/Liquidity Benefit Charges............................... 25
Premium Tax........................................................... 25
Changes in Taxes Based upon Premium or Value.......................... 25
Transfers............................................................... 25
Market Timing/Excessive Trading....................................... 26
Dollar Cost Averaging................................................. 28
Access to Your Money.................................................... 28
Systematic Withdrawals................................................ 29
Ownership Provisions.................................................... 29
Types of Ownership.................................................... 29
Contract Owner........................................................ 29
Beneficiary........................................................... 29
Annuitant............................................................. 29
Death Benefit........................................................... 30
Death Proceeds before the Maturity Date............................... 30
Optional Death Benefit and Credit..................................... 30
Payment of Proceeds................................................... 31
Beneficiary Contract Continuance...................................... 31
Planned Death Benefit................................................. 32
Death Proceeds after the Maturity Date................................ 32
Total Control Account................................................. 32
The Annuity Period...................................................... 33
Maturity Date......................................................... 33
Allocation of Annuity................................................. 33
Variable Annuity...................................................... 33
Fixed Annuity......................................................... 34
Liquidity Benefit..................................................... 34
Payment Options......................................................... 35
Election of Options................................................... 35
Annuity Options....................................................... 35
Miscellaneous Contract Provisions....................................... 36
Right to Return....................................................... 36
Termination........................................................... 36
Required Reports...................................................... 36
Suspension of Payments................................................ 37
Misstatement.......................................................... 37
The Separate Account.................................................... 37
Performance Information............................................... 38
Federal Tax Considerations.............................................. 38
General............................................................... 39
Separate Account Charges.............................................. 40
Qualified Contracts................................................... 40
TSAs (ERISA and non-ERISA) - 403(b)................................... 43
Individual Retirement Annuities....................................... 45
Traditional IRA Annuities............................................. 45
Roth IRA Annuities.................................................... 46
SEPs Annuities........................................................ 48
401(k)................................................................ 49
Non-Qualified Annuities............................................... 49
Puerto Rico Tax Considerations........................................ 52
Information Incorporated by Reference................................... 55
Other Information....................................................... 56
The Insurance Company................................................. 56
Financial Statements.................................................. 56
Distribution of the Contracts......................................... 56
Conformity with State and Federal Laws................................ 58
Voting Rights......................................................... 58
Contract Modification................................................. 59
Postponement of Payment (the "Emergency Procedure")................... 59
Restrictions on Financial Transactions................................ 59
Legal Proceedings..................................................... 59
Appendix A: Condensed Financial Information for MetLife of CT Separate
Account Eleven for Variable Annuities................................. A-1
Appendix B: Additional Information Regarding the Underlying Funds....... B-1
Appendix C: Portfolio Legal and Marketing Names......................... C-1
Appendix D: Contents of the Statement of Additional Information......... D-1
Appendix E: What You Need To Know If You Are A Texas Optional Retirement
Program Participant................................................... E-1
Appendix F: Competing Funds............................................. F-1
Appendix G: Waiver of Withdrawal Charge for Nursing Home Confinement.... G-1
Appendix H: Market Value Adjustment..................................... H-1
</Table>
2
GLOSSARY
ACCUMULATION PERIOD -- the period before the commencement of Annuity Payments.
ACCUMULATION UNIT -- an accounting unit of measure used to calculate Contract
Values before Annuity Payments begin.
ANNUITANT -- a person on whose life the Maturity Date depends, and Annuity
Payments are made.
ANNUITY -- payment of income for a stated period or amount.
ANNUITY PAYMENTS -- a series of periodic payments (i) for life; (ii) for life
with a minimum number of payments; (iii) for the joint lifetime of the Annuitant
and another person, and thereafter during the lifetime of the survivor; or (iv)
for a fixed period.
ANNUITY PERIOD -- the period following commencement of Annuity Payments.
ANNUITY UNIT -- an accounting unit of measure used to calculate the amount of
Annuity Payments.
BENEFICIARY(IES) -- the person(s) or trustee designated to receive any remaining
contractual benefits in the event of a Participant's, Annuitant's or Contract
Owner's death, as applicable.
CASH SURRENDER VALUE -- the Contract Value less any amounts deducted upon a
withdrawal or surrender, outstanding loans, if available under the Contract, any
applicable Premium Taxes or other surrender charges not previoulsy deducted.
CERTIFICATE -- (if applicable), the document issued to Participants under a
master group Contract. Any reference in this prospectus to the Contract includes
the underlying Certificate.
CODE -- the Internal Revenue Code of 1986, as amended, and all related laws and
regulations that are in effect during the term of this Contract.
COMPANY (WE, US, OUR) -- MetLife Insurance Company of Connecticut.
COMPETING FUND -- any investment option under the Plan, which, in Our opinion,
consists primarily of fixed-income securities and/or money market instruments.
CONTRACT -- for convenience, means the Contract or Certificate, (if applicable).
For example, Contract Year also means Certificate Year.
CONTRACT DATE -- the date on which the Contract is issued. For certain group
Contracts, it is the date on which the Contract becomes effective, as shown on
the specifications page of the Cotnract.
CONTRACT OWNER -- the person named in the Contract (on the specifications page).
For certain group Contracts, the Contract Owner is the trustee or other entity
which owns the Contract.
CONTRACT VALUE/ ACCOUNT VALUE/ CASH VALUE -- the value of the Accumulation Units
in Your Account (or a Participant's Individual Account, if applicable) less any
reductions for administrative charges, (hereinafter referred to in the
prospectus as Contract Value).
CONTRACT YEAR -- twelve month periods beginning with the Contract Date, or any
anniversary thereof.
DEATH REPORT DATE -- the day on which we have received (i) Due Proof of Death
and (ii) written payment instructions or election of spousal or Beneficiary
Contract continuation in Good Order.
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.
ERISA -- The Employee Retirement Income Security Act of 1974, as amended, and
all related laws and regulations which are in effect during the term of this
Contract.
3
FIXED ACCOUNT -- an account that consists of all of the assets under the
Contract other than those in the Separate Account. The Fixed Account is part of
the general assets of the Company.
FIXED ANNUITY -- an Annuity payout option with payments which remain fixed as to
dollar amount throughout the payment period and which do not vary with the
investment experience of a Separate Account.
FUNDING OPTIONS -- the variable investment options to which Purchase Payments
under the Contract may be allocated.
GOOD ORDER -- A request or transaction generally is considered in "good order"
if it complies with our administrative procedures and the required information
is complete and accurate. A request or transaction may be rejected or delayed if
not in good order. If you have any questions, you should contact us or your
sales representative before submitting the form or request.
HOME OFFICE -- the Home Office of MetLife Insurance Company of Connecticut, 1300
Hall Boulevard, Bloomfield, CT 06002-2910, or any other office that we may
designate for the purpose of administering this Contract. The office that
administers Your Contract is located at 4700 Westown Parkway, Ste. 200, West Des
Moines, Iowa 50266.
INDIVIDUAL ACCOUNT -- an account which Accumulation Units are credited to a
Participant or Beneficiary under the Contract.
MATURITY DATE/ ANNUITY COMMENCEMENT DATE -- the date on which the Annuity
Payments are to begin, (hereinafter referred to in the prospectus as Maturity
Date).
PAYMENT OPTION -- an Annuity or income option elected under your Contract.
PLAN -- for a group Contract, the Plan or the arrangement used in a retirement
plan or program whereby the Purchase Payments and any gains are intended to
qualify under Sections 401, 403(b) or 457 of the Code.
PREMIUM TAX -- the amount of tax, if any, charged by the state or municipality.
PURCHASE PAYMENTS -- the premium payment(s) applied to the Contract, less any
Premium Taxes, (if applicable).
PURCHASE PAYMENT CONSERVATION CREDIT -- an amount which may be credited to your
Contract Value that equals a percentage of each Purchase Payment made where such
funds originated from other Contracts issued by Us or Our affiliates.
QUALIFIED CONTRACT -- a Contract used in a retirement plan or program that is
intended to qualify under Sections 401, 403, 408, 414(d) or 457 of the Code.
SEPARATE ACCOUNT -- a segregated account, 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.
UNDERLYING FUND -- a portfolio of an open-end management investment company that
is registered with the Securities and Exchange Commission ("SEC") in which the
Subaccounts invest.
VALUATION DATE -- a day on which the New York Stock Exchange ("NYSE") is open
for business. The value of each Subaccount is determined at the close of the
NYSE on such days.
VALUATION PERIOD -- the period between the end of one Valuation Date and the end
of the next Valuation Date.
VARIABLE ANNUITY -- an Annuity payout option providing for payments varying in
amount in accordance with the investment experience of the assets held in the
underlying securities of the Separate Account.
WRITTEN REQUEST -- written instructions or information sent to Us in a form and
content satisfactory to Us and received in good order at Our Home Office.
YOU, YOUR -- "You", depending on the context, may be the Certificate holder, the
participant or the Contract Owner and a natural person, a trust established for
the benefit of a natural person or a charitable remainder trust, or a Plan (or
the employer purchaser who has purchased the Contract 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.
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 Funding Options and/or to the Fixed Account
that is part of the general account (the "Fixed Account"). We guarantee money
directed to the Fixed Account as to principal and interest. The Funding Options
fluctuate with the investment performance of the Underlying Funds and are not
guaranteed. You can also lose money in the 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, pre-tax contributions accumulate on a tax-deferred
basis and are taxed as income when You make a withdrawal, presumably when 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 purchase 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. For
convenience, We refer to both Contracts and Certificates as "Contracts". If a
group unallocated Contract is purchased, We issue only a Contract.
We issue group Contracts in connection with retirement plans. Depending on Your
retirement plan provisions, certain features and/or Funding Options described in
this prospectus may not be available to You. Your retirement plan provisions
supersede the prospectus. If You have any questions about Your specific
retirement plan, contact Your retirement plan administrator.
IS THERE A RIGHT TO RETURN PERIOD? If You cancel the Contract within ten days
after You receive it, You 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 Payments
allocated to a Funding Option during the right to return period; therefore, the
Contract Value returned to You 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.
5
During the right to return period, You will not bear any Contract fees
associated with the Purchase Payment Conservation 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
Conservation Credit. You would, however, receive any gains, and We would bear
any losses attributable to the Purchase Payment Conservation Credits.
CAN YOU GIVE A GENERAL DESCRIPTION OF THE 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 Funding Options. In
turn, each 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
Funding Options.
You can transfer among the 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 ("M&E") risk charge daily from the amounts You allocate
to the Separate Account. We deduct the M&E risk 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 Conservation Credits withdrawn. The maximum percentage is 5%
decreasing to 0% in year six or later.
Upon annuitization, if You select the Variable Annuitization Floor Benefit,
there is a 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.
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 Conservation 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").
HOW MAY I ACCESS MY MONEY? You can take withdrawals any time during the
accumulation phase. Withdrawal charges may apply, as well as income taxes,
and/or a penalty tax on 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. Any
amounts paid will be reduced by any applicable Premium Tax, outstanding loans or
surrenders not previously deducted. Please refer to the "Death Benefit" section
of the prospectus for more details.
WHERE MAY I FIND OUT MORE ABOUT ACCUMULATION UNIT VALUES? The Condensed
Financial Information in Appendix A and Appendix A-1 to this prospectus provides
more information about Accumulation Unit values.
6
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 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 annual 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.
- 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(ies) may
elect to continue his/her portion of the Contract and take the
required distributions over time, rather than have the death benefit
paid in a lump sum to the Beneficiary.
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 transferContract Value between Funding Options.
Expenses shown do not include Premium Taxes, which may be applicable.
CONTRACT OWNER TRANSACTION EXPENSES
<Table>
WITHDRAWAL CHARGE........................................................ 5%(1)
(as a percentage of the Purchase Payments and any applicable Purchase
Payment Credits withdrawn)
</Table>
<Table>
TRANSFER CHARGE.......................................................... $10(2)
(assessed on transfers that exceed 12 per year)
</Table>
<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
- ------------------------------------------
GREATER THAN OR EQUAL TO BUT LESS THAN WITHDRAWAL CHARGE
- ------------------------ ------------- -----------------
0 years 1 years 5%
1 years 2 years 4%
2 years 3 years 3%
3 years 4 years 2%
4 years 5 years 1%
5 years+ 0%
</Table>
(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>
- ---------------------------------------------------------------------------------------------------
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 Charge 0.80% Total Annual Separate Account Charge 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; 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 Pioneer Fund
Portfolio -- Class A of the Met Investors Series Trust; 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; an amount equal to the Underlying Fund
expenses that are in excess of 1.12% for the Subaccount investing in the
Lord Abbett
8
Mid-Cap Value Portfolio -- Class B of the Met Investors Series Trust; 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; 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; the amount, if
any, equal to the Underlying Fund expenses that are in excess of 0.84% for
the Subaccount investing in T. Rowe Price Small Cap Growth
Portfolio -- Class B of the Metropolitan Series Fund, Inc.; the amount, if
any, equal to the Underlying Fund expenses that are in excess of 0.90% for
the Subaccount investing in the Oppenheimer Global Equity
Portfolio -- Class B of the Metropolitan Series Fund, Inc.; and the
amount, if any, equal to the Underlying Fund expenses that are in excess
of 1.50% for the Subaccount investing in the Van Kampen Mid Cap Growth
Portfolio -- Class B of the Met Investors Series Trust.
UNDERLYING FUND EXPENSES AS OF DECEMBER 31, 2008 (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. Certain Portfolios may
impose a redemption fee in the future. 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 (12b-1) fees, and
other expenses) 0.29% 1.79%
</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 ACQUIRED FUND FEES OPERATING AND/OR EXPENSE OPERATING
UNDERLYING FUND FEE (12b-1) FEES EXPENSES AND EXPENSES* EXPENSES REIMBURSEMENT EXPENSES**
- --------------- ---------- ------------ -------- ------------------ --------- --------------- ---------------
AMERICAN FUNDS INSURANCE
SERIES(R) -- CLASS 2
American Funds Global Growth
Fund........................ 0.53% 0.25% 0.02% -- 0.80% -- 0.80%
American Funds Growth Fund..... 0.32% 0.25% 0.01% -- 0.58% -- 0.58%
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...................... 0.73% -- 0.12% -- 0.85% -- 0.85%(1)
FIDELITY(R) VARIABLE INSURANCE
PRODUCTS -- SERVICE CLASS 2
Contrafund(R) Portfolio........ 0.56% 0.25% 0.10% -- 0.91% -- 0.91%
Dynamic Capital Appreciation
Portfolio+.................. 0.56% 0.25% 0.31% -- 1.12% -- 1.12%
Mid Cap Portfolio.............. 0.56% 0.25% 0.12% -- 0.93% -- 0.93%
FRANKLIN TEMPLETON VARIABLE
INSURANCE PRODUCTS
TRUST -- CLASS 2
Templeton Developing Markets
Securities Fund............. 1.24% 0.25% 0.29% 0.01% 1.79% 0.01% 1.78%(2)
Templeton Foreign Securities
Fund........................ 0.64% 0.25% 0.15% 0.02% 1.06% 0.02% 1.04%(2)
JANUS ASPEN SERIES -- SERVICE
SHARES
Enterprise Portfolio........... 0.64% 0.25% 0.03% -- 0.92% -- 0.92%
LEGG MASON PARTNERS VARIABLE
EQUITY TRUST
Legg Mason Partners Variable
Aggressive Growth
Portfolio -- Class I+++..... 0.75% -- 0.04% -- 0.79% -- 0.79%(3)
Legg Mason Partners Variable
Appreciation
Portfolio -- Class I........ 0.70% -- 0.06% 0.01% 0.77% -- 0.77%(3)
Legg Mason Partners Variable
Capital and Income
Portfolio -- Class I+....... 0.75% -- 0.16% -- 0.91% -- 0.91%(3)
</Table>
9
<Table>
<Caption>
DISTRIBUTION TOTAL CONTRACTUAL FEE NET TOTAL
AND/OR ANNUAL WAIVER ANNUAL
MANAGEMENT SERVICE OTHER ACQUIRED FUND FEES OPERATING AND/OR EXPENSE OPERATING
UNDERLYING FUND FEE (12b-1) FEES EXPENSES AND EXPENSES* EXPENSES REIMBURSEMENT EXPENSES**
- --------------- ---------- ------------ -------- ------------------ --------- --------------- ---------------
Legg Mason Partners Variable
Dividend Strategy
Portfolio+++................ 0.65% -- 0.24% -- 0.89% -- 0.89%(3)
Legg Mason Partners Variable
Fundamental Value
Portfolio -- Class I........ 0.75% -- 0.05% -- 0.80% -- 0.80%(3)
Legg Mason Partners Variable
International All Cap
Opportunity Portfolio+++.... 0.85% -- 0.20% -- 1.05% -- 1.05%(3)
Legg Mason Partners Variable
Investors Portfolio -- Class
I........................... 0.64% -- 0.09% -- 0.73% -- 0.73%(3)
Legg Mason Partners Variable
Large Cap Growth
Portfolio -- Class I++...... 0.75% -- 0.08% -- 0.83% -- 0.83%(3)
Legg Mason Partners Variable
Small Cap Growth
Portfolio -- Class I........ 0.75% -- 0.19% -- 0.94% -- 0.94%(3)
Legg Mason Partners Variable
Social Awareness
Portfolio++................. 0.67% -- 0.24% -- 0.91% -- 0.91%(3)
LEGG MASON PARTNERS VARIABLE
INCOME TRUST
Legg Mason Partners Variable
Adjustable Rate Income
Portfolio++................. 0.55% 0.25% 0.42% -- 1.22% -- 1.22%(3)
Legg Mason Partners Variable
High Income Portfolio++..... 0.60% -- 0.11% -- 0.71% -- 0.71%(3)
MET INVESTORS SERIES TRUST
BlackRock High Yield
Portfolio -- Class A........ 0.60% -- 0.07% -- 0.67% -- 0.67%
BlackRock Large Cap Core
Portfolio -- Class E........ 0.58% 0.15% 0.04% -- 0.77% -- 0.77%
Clarion Global Real Estate
Portfolio -- Class A........ 0.63% -- 0.06% -- 0.69% -- 0.69%
Dreman Small Cap Value
Portfolio -- Class A........ 0.79% -- 0.07% -- 0.86% -- 0.86%
Harris Oakmark International
Portfolio -- Class A........ 0.78% -- 0.07% -- 0.85% -- 0.85%
Janus Forty Portfolio -- Class
A........................... 0.64% -- 0.03% -- 0.67% -- 0.67%
Lazard Mid Cap
Portfolio -- Class A........ 0.69% -- 0.05% -- 0.74% -- 0.74%(4)
Lord Abbett Bond Debenture
Portfolio -- Class A........ 0.50% -- 0.03% -- 0.53% -- 0.53%
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%(5)
Met/AIM Small Cap Growth
Portfolio -- Class A........ 0.86% -- 0.03% -- 0.89% -- 0.89%
MFS(R) Emerging Markets Equity
Portfolio -- Class A+....... 0.98% -- 0.13% -- 1.11% -- 1.11%
MFS(R) Research International
Portfolio -- Class B+....... 0.70% 0.25% 0.06% -- 1.01% -- 1.01%
PIMCO Inflation Protected Bond
Portfolio -- Class A........ 0.49% -- 0.04% -- 0.53% -- 0.53%
PIMCO Total Return
Portfolio -- Class B++++.... 0.48% 0.25% 0.05% -- 0.78% -- 0.78%
Pioneer Fund Portfolio -- Class
A........................... 0.70% -- 0.29% -- 0.99% -- 0.99%(6)
Pioneer Strategic Income
Portfolio -- Class A........ 0.60% -- 0.07% -- 0.67% -- 0.67%
Third Avenue Small Cap Value
Portfolio -- Class B........ 0.73% 0.25% 0.04% -- 1.02% -- 1.02%
Van Kampen Comstock
Portfolio -- Class B++++.... 0.58% 0.25% 0.03% -- 0.86% -- 0.86%
Van Kampen Mid Cap Growth
Portfolio -- Class B+....... 0.70% 0.25% 0.19% -- 1.14% -- 1.14%(7)
</Table>
10
<Table>
<Caption>
DISTRIBUTION TOTAL CONTRACTUAL FEE NET TOTAL
AND/OR ANNUAL WAIVER ANNUAL
MANAGEMENT SERVICE OTHER ACQUIRED FUND FEES OPERATING AND/OR EXPENSE OPERATING
UNDERLYING FUND FEE (12b-1) FEES EXPENSES AND EXPENSES* EXPENSES REIMBURSEMENT EXPENSES**
- --------------- ---------- ------------ -------- ------------------ --------- --------------- ---------------
METROPOLITAN SERIES FUND, INC.
Barclays Capital Aggregate Bond
Index Portfolio -- Class A.. 0.25% -- 0.04% -- 0.29% 0.01% 0.28%(8)
BlackRock Aggressive Growth
Portfolio -- Class D........ 0.72% 0.10% 0.05% -- 0.87% -- 0.87%
BlackRock Bond Income
Portfolio -- Class A........ 0.38% -- 0.05% -- 0.43% 0.01% 0.42%(9)
BlackRock Diversified
Portfolio -- Class A++++.... 0.45% -- 0.04% -- 0.49% -- 0.49%
BlackRock Legacy Large Cap
Growth Portfolio -- Class
A++++....................... 0.73% -- 0.05% -- 0.78% 0.01% 0.77%(10)
BlackRock Money Market
Portfolio -- Class A........ 0.32% -- 0.02% -- 0.34% 0.01% 0.33%(11)
Davis Venture Value
Portfolio -- Class A........ 0.70% -- 0.03% -- 0.73% 0.04% 0.69%(12)
FI Value Leaders
Portfolio -- Class D........ 0.65% 0.10% 0.06% -- 0.81% -- 0.81%
Jennison Growth
Portfolio -- Class B+....... 0.63% 0.25% 0.04% -- 0.92% -- 0.92%
MetLife Aggressive Allocation
Portfolio -- Class B........ 0.10% 0.25% 0.03% 0.72% 1.10% 0.03% 1.07%(13)
MetLife Conservative Allocation
Portfolio -- Class B........ 0.10% 0.25% 0.02% 0.56% 0.93% 0.02% 0.91%(13)
MetLife Conservative to
Moderate Allocation
Portfolio -- Class B........ 0.09% 0.25% 0.01% 0.61% 0.96% -- 0.96%(13)
MetLife Moderate Allocation
Portfolio -- Class B........ 0.07% 0.25% -- 0.65% 0.97% -- 0.97%(13)
MetLife Moderate to Aggressive
Allocation
Portfolio -- Class B........ 0.07% 0.25% -- 0.68% 1.00% -- 1.00%(13)
MetLife Stock Index
Portfolio -- Class A........ 0.25% -- 0.04% -- 0.29% 0.01% 0.28%(8)
MFS(R) Total Return
Portfolio -- Class F........ 0.53% 0.20% 0.05% -- 0.78% -- 0.78%
MFS(R) Value Portfolio -- Class
A........................... 0.72% -- 0.08% -- 0.80% 0.07% 0.73%(14)
Morgan Stanley EAFE(R) Index
Portfolio -- Class A........ 0.30% -- 0.12% 0.01% 0.43% 0.01% 0.42%(15)
Oppenheimer Global Equity
Portfolio -- Class B........ 0.52% 0.25% 0.09% -- 0.86% -- 0.86%
Russell 2000(R) Index
Portfolio -- Class A........ 0.25% -- 0.07% 0.01% 0.33% 0.01% 0.32%(8)
T. Rowe Price Small Cap Growth
Portfolio -- Class B........ 0.51% 0.25% 0.08% -- 0.84% -- 0.84%
Western Asset Management U.S.
Government
Portfolio -- Class A........ 0.48% -- 0.04% -- 0.52% -- 0.52%
WELLS FARGO VARIABLE TRUST
VT Small/Mid Cap Value Fund+... 0.75% 0.25% 0.69% -- 1.69% .055% 1.14%(16)
</Table>
- ---------
* Acquired Fund Fees and Expenses are fees and expenses incurred indirectly
by a portfolio as a result of investing in shares of one or more
underlying portfolios.
** Net 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.
+ Not available under all Contracts. Availability depends on Contract issue
date.
++ Fees and expenses of this Portfolio are based on the Portfolio's fiscal
year ended October 31, 2008.
(1) Service Class shares are subject to a 12b-1 fee of 0.30% of average daily
net assets, however this fee is not applicable to the Standard Class
shares available in Your Contract.
(2) The manager has agreed in advance to reduce its fee from assets invested
by the Fund in a Franklin Templeton money market fund (the Sweep Money
Fund which is the "acquired fund" in this case) to the extent of the
Fund's fees and expenses of the acquired fund. This reduction is required
by the Trust's board of trustees and an exemptive order by the Securities
and Exchange Commission; this arrangement will continue as long as the
exemptive order is relied upon.
11
(3) Other Expenses have been revised to reflect the estimated effect of
additional prospectus and shareholder report printing and mailing expenses
expected to be incurred by the fund going forward.
(4) Other Expenses include 0.02% of deferred expense reimbursement from a
prior period.
(5) Other Expenses include 0.03% of deferred expense reimbursement from a
prior period.
(6) The Management Fee has been restated to reflect an amended management fee
agreement as if the fees had been in effect during the previous fiscal
year. Other Expenses include 0.01% of deferred expense reimbursement from
a prior period.
(7) Other Expenses include 0.08% of deferred expense reimbursement from a
prior period.
(8) MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009
through April 30, 2010, to reduce the management fee for each Class of the
Portfolio to 0.243%.
(9) MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009
through April 30, 2010, to reduce the management fee for each Class of the
Portfolio to the annual rate of 0.325% for the Portfolio's average daily
net assets in excess of $1 billion but less than $2 billion.
(10) MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009
through April 30, 2010, to reduce the management fee for each Class of the
Portfolio to the annual rate of 0.73% for the first $300 million of the
Portfolio's average daily net assets and 0.705% for the next $700 million.
(11) MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009
through April 30, 2010, to reduce the management fee for each Class of the
Portfolio 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.
Other Expenses include Treasury Guarantee Program expenses of 0.012%
incurred for the period September 19, 2008 through December 31, 2008.
(12) MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009
through April 30, 2010, to reduce the management fee for each Class of the
Portfolio to the annual rate of 0.75% for the first $50 million of the
Portfolio's average daily net assets, 0.70% for the next $450 million,
0.65% for the next $4 billion, and 0.625% for amounts over $4.5 billion.
(13) The Portfolio is a "fund of funds" that invests substantially all of its
assets in other portfolios of the Met Investors Series Trust and the
Metropolitan Series Fund, Inc. Because the Portfolio invests in other
underlying portfolios, the Portfolio will bear its pro rata portion of the
operating expenses of the underlying portfolios in which it invests,
including the management fee. MetLife Advisers, LLC has contractually
agreed, for the period May 1, 2009 through April 30, 2010, to waive fees
or pay all expenses (other than acquired fund fees and expenses, brokerage
costs, taxes, interest and any extraordinary expenses) so as to limit net
operating expenses of the Portfolio to 0.10% of the average daily net
assets of the Class A shares, 0.35% of the average daily net assets of the
Class B shares and 0.25% of the average daily net assets of the Class E
shares.
(14) MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009
through April 30, 2010, to reduce the management fee for each Class of the
Portfolio to the annual rate of 0.65% for the first $1.25 billion of the
Portfolio's average daily net assets, 0.60% for the next $250 million, and
0.50% for amounts over $1.5 billion.
(15) MetLife Advisers, LLC has contractually agreed, for the period May 1, 2009
through April 30, 2010, to reduce the management fee for each Class of the
Portfolio to 0.293%.
(16) The following advisory fee schedule is charged to the Fund as a percentage
of the Fund's average daily net assets: 0.75% for the first $500 million;
0.70% million for the next $500 million; 0.65% for the next $2 billion;
0.625% for the next $2 billion, and 0.60% for assets over $5 billion.
Other Expenses includes expenses payable to affiliates of Wells Fargo &
Company, and may include expenses of any money market or other fund held
by the Fund. The adviser has committed through April 30, 2010 to waive
fees and/or reimburse expenses to the extent necessary to ensure that the
Fund's net operating expenses, excluding brokerage commissions, interest,
taxes, and extraordinary expenses do not exceed the net operating expense
ratio shown. The committed net operating expense ratio may be increased
only with the approval of the Board of Trustees.
++ This portfolio is not available for investment prior to May 4, 2009.
EXAMPLE
The example is 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.
The example does not represent past or future expenses. Your actual expenses may
be more or less than those shown.
The example assumes that You invest $10,000 in the Contract for the time periods
indicated and that Your investment has a 5% return each year. The example
reflects the annual Contract administrative charge, factoring in that the charge
is waived for Contracts over a certain value. Additionally, the example is based
on the minimum and maximum Underlying Fund total annual operating expenses shown
above, and does not reflect any Underlying Fund fee waivers and/or expense
reimbursements.
The example assumes that 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.
12
EXAMPLE 1. MAXIMUM CHARGES (ASSUMING YOU SELECT THE OPTIONAL DEATH BENEFIT)
<Table>
<Caption>
IF CONTRACT IS NOT SURRENDERED
OR
IF CONTRACT IS SURRENDERED AT THE ANNUITIZED AT THE END OF
END OF PERIOD SHOWN: 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.............................. $817 $1,208 $1,723 $3,440 $392 $1,190 $2,004
Underlying Fund with Minimum Total
Annual Operating
Expenses.............................. $664 $ 748 $ 955 $1,907 $240 $ 740 $1,266
<Caption>
IF
CONTRACT
IS NOT
SURREN-
DERED OR
ANNUI-
TIZED AT
THE END
OF
PERIOD
SHOWN:
--------
FUNDING OPTION 10 YEARS
- -------------- --------
Underlying Fund with Maximum Total
Annual Operating
Expenses.............................. $4,117
Underlying Fund with Minimum Total
Annual Operating
Expenses.............................. $2,705
</Table>
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
See Appendix A.
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 Funding Options, 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 the retirement Plan. We will not be
responsible for determining what the 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 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 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 Contract 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.
13
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 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 Funding
Options. The Contract Value is the amount of Purchase Payments and any
associated Purchase Payment Conservation 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.
Purchase of this Contract through a tax-qualified retirement Plan or individual
retirement Annuity does not provide any additional tax deferral benefits beyond
those provided by the Plan or the individual retirement Annuity. Accordingly, if
You are purchasing this Contract through a Plan or individual retirement
Annuity, 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.
Because the Contract proceeds must be distributed within the time periods
required by the Code, the right of a spouse to continue the Contract, and all
Contract provisions relating to spousal continuation, are available only to a
person who is defined as a "spouse" under the federal Defense of Marriage Act,
or any other applicable federal law. Therefore, under current federal law, a
purchaser who has or is contemplating a civil union or same sex marriage should
note that the rights of a spouse under the spousal continuations provisions of
this Contract will not be available to such partner or same sex marriage spouse.
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. Purchase Payments may be made at any time while the
Annuitant is alive and before Annuity Payments begin.
We will apply the initial Purchase Payment less any applicable Premium Tax
within two business days after We receive it at Our Home Office with a properly
completed application or order request. If Your request or other information
accompanying the initial Purchase Payment is incomplete when received, We will
hold the Purchase Payment for up to five business days. If We cannot obtain the
necessary information within five business days of Our receipt, We will return
the Purchase Payment in full, unless You specifically consent for Us to keep it
until You provide the necessary information.
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
14
Money"). Purchase Payments allocated to the Fixed Account are not eligible for
Purchase Payment Conservation Credits.
We will credit subsequent Purchase Payments to a Contract on the same business
day We receive it, if received in Good Order by Our Home Office by 4:00 p.m.
Eastern time. A business day is any day that the "NYSE" is open for regular
trading (except when trading is restricted due to an emergency as defined by the
SEC).
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.
If You send Purchase Payments or transaction requests to an address other than
the one We have designated for receipt of such Purchase Payments or requests, We
may return the Purchase Payment to You, or there may be a delay in applying the
Purchase Payment or transaction to Your Contract.
PURCHASE PAYMENTS -- SECTION 403(B) PLANS
The Internal Revenue Service ("IRS") announced new regulations affecting Section
403(b) Plans and arrangements. As part of these regulations, which generally are
effective January 1, 2009, employers will need to meet certain requirements in
order for their employees' Annuity contracts that fund these programs to retain
a tax deferred status under Section 403(b). Prior to the new rules, transfers of
one Annuity contract to another would not result in a loss of tax deferred
status under 403(b) under certain conditions (so-called "90-24 transfers"). The
new regulations have the following effect regarding transfers: (1) a newly
issued contract funded by a transfer which is completed AFTER September 24,
2007, is subject to the employer requirements referred to above; (2) additional
Purchase Payments made AFTER September 24, 2007, to a contract that was funded
by a 90-24 transfer ON OR BEFORE September 24, 2007, MAY subject the contract to
this new employer requirement.
If Your Contract/Certificate was issued previously as a result of a 90-24
transfer completed on or before September 24, 2007, and You have never made
salary reduction contributions into Your Contract/Certificate, We urge You to
consult with Your tax adviser prior to making additional Purchase Payments.
PURCHASE PAYMENT CONSERVATION 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 Funding Options to which Your Purchase Payment was applied. Purchase
Payments allocated to the Fixed Account are not eligible for Purchase Payment
Conservation 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
Conservation Credits may more than offset the Purchase Payment Conservation
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, an Accumulation Unit is used to
calculate the value of a Contract. Each Funding Option has a corresponding
Accumulation Unit value. The Accumulation Units are valued each business day and
their values may increase or decrease from day to day. The daily change in 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
15
Fee Table in this prospectus. The number of Accumulation Units We will credit to
Your Contract once We receive a Purchase Payment or transfer request (or
liquidate for a withdrawal request) is determined by dividing the amount
directed to each Funding Option (or taken from each Funding Option) by the value
of its Accumulation Unit. Normally We calculate the value of an Accumulation
Unit for each Funding Option as of the close of regular trading (generally 4:00
p.m. Eastern time) each day the NYSE 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 FUNDING OPTIONS
You choose the Funding Options to which You allocate Your Purchase Payments.
From time to time We may make new Funding Options available. These 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, as amended
( the "1940 Act"). 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 a number
of criteria, including asset class coverage, the strength of the adviser's or
subadviser's reputation and tenure, brand recognition, performance, and the
capability and qualification of each investment firm. Another factor We consider
during the selection process is whether the Underlying Fund's adviser or
subadviser is one of Our affiliates or whether the Underlying Fund, its adviser,
its subadviser(s), or an affiliate will make payments to Us or Our affiliates.
In this regard, the profit distributions We receive from Our affiliated
investment advisers are a component of the total revenue that We consider in
configuring the features and investment choices available in the variable
insurance products that We and Our affiliated insurance companies issue. Since
We and Our affiliated insurance companies may benefit more from the allocation
of assets to portfolios advised by Our affiliates than those that are not, We
may be more inclined to offer portfolios advised by Our affiliates in the
variable insurance products We issue. For additional information on these
arrangements, see "Payments We Receive." We review the Underlying Funds
periodically and may remove an Underlying Fund or limit its availability to new
Purchase Payments and/or transfers of Contract Value if We determine that the
Underlying Fund no longer meets one or more of the selection criteria, and/or if
the Underlying Fund has not attracted significant allocations from Contract
Owners. In some cases, We have included Underlying Funds based on
recommendations made by broker-dealer firms. These broker-dealer firms may
receive payments from the Underlying Funds they recommend and may benefit
accordingly from the allocation of Contract Value to such Underlying Funds. 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 SEC and applicable state insurance departments.
Furthermore, We may close Underlying Funds to allocations of Purchase Payments
Contract or 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
16
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 companies -- The Travelers Insurance Company and The
Travelers Life and Annuity Company -- (now MetLife Insurance Company of
Connecticut) -- from Citigroup. Legg Mason replaced the Citigroup affiliates as
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
affiliate MetLife Advisers, 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 the 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 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 its affiliated investment adviser MetLife Advisers, LLC,
which is formed as a "limited liability company." The Company's ownership
interest in MetLife Advisers, LLC entitles Us to profit distributions if the
adviser makes a profit with respect to the advisory fees it receives from the
Underlying Funds. The Company will benefit accordingly from assets allocated to
the Underlying Funds to the extent they result in profits to the adviser. (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 1940 Act. An Underlying Fund's 12b-1 Plan, if any, is described in more
detail in the Underlying Fund's prospectus. (See "Fee Table -- Underlying Fund
Fees and Expenses" and "Other Information -- Distribution of the Contracts.")
Any payments We receive pursuant to those 12b-1 Plans are paid to Us or Our
distributor. Payments under an Underlying Fund's 12b-1 Plan decrease the
Underlying Fund's investment return.
We make certain payments to American Funds Distributors, Inc., principal
underwriters for the American Funds Insurance Series(R). (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.
The current Underlying Funds are listed below, along with their investment
advisers and any subadviser.
<Table>
<Caption>
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- -------------------------------- -------------------------------- --------------------------------
AMERICAN FUNDS INSURANCE
SERIES(R) -- CLASS 2
American Funds Global Growth Seeks capital appreciation Capital Research and Management
Fund through stocks. Company
</Table>
17
<Table>
<Caption>
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- -------------------------------- -------------------------------- --------------------------------
American Funds Growth Fund Seeks capital appreciation Capital Research and Management
through stocks. Company
American Funds Growth-Income Seeks both capital appreciation Capital Research and Management
Fund and income. Company
DELAWARE VIP TRUST -- STANDARD
CLASS
Delaware VIP Small Cap Value Seeks capital appreciation. Delaware Management Company
Series
FIDELITY(R) VARIABLE INSURANCE
PRODUCTS -- SERVICE CLASS 2
Contrafund(R) Portfolio Seeks long-term capital Fidelity Management & Research
appreciation. Company Subadviser: FMR Co.,
Inc., Fidelity Research &
Analysis Company
Dynamic Capital Appreciation Seeks capital appreciation. Fidelity Management & Research
Portfolio+ Company Subadviser: FMR Co.,
Inc., Fidelity Research &
Analysis Company
Mid Cap Portfolio Seeks long-term growth of Fidelity Management & Research
capital. Company Subadviser: FMR Co.,
Inc., Fidelity Research &
Analysis Company
FRANKLIN TEMPLETON VARIABLE
INSURANCE PRODUCTS
TRUST -- CLASS 2
Templeton Developing Markets Seeks long-term capital Templeton Asset Management Ltd.
Securities Fund appreciation.
Templeton Foreign Securities Seeks long-term capital growth. Templeton Investment Counsel,
Fund LLC Subadviser: Franklin
Templeton Investment Management
Limited
JANUS ASPEN SERIES -- SERVICE
SHARES
Enterprise Portfolio Seeks long-term growth of Janus Capital Management LLC
capital.
LEGG MASON PARTNERS VARIABLE
EQUITY TRUST
Legg Mason Partners Variable Seeks capital appreciation. Legg Mason Partners Fund
Aggressive Growth Advisor, LLC Subadviser:
Portfolio -- Class I+ ClearBridge Advisors, LLC
Legg Mason Partners Variable Seeks long-term appreciation of Legg Mason Partners Fund
Appreciation capital. Advisor, LLC Subadviser:
Portfolio -- Class I ClearBridge Advisors, LLC
Legg Mason Partners Variable Seeks total return (that is, a Legg Mason Partners Fund
Capital and Income combination of income and long- Advisor, LLC Subadvisers:
Portfolio -- Class I+ term capital appreciation). Western Asset Management
Company; ClearBridge Advisors,
LLC; Western Asset Management
Company Limited
Legg Mason Partners Variable Seeks capital appreciation, Legg Mason Partners Fund
Dividend Strategy Portfolio+ principally through investments Advisor, LLC Subadviser:
in dividend-paying stocks. ClearBridge Advisors, LLC
</Table>
18
<Table>
<Caption>
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- -------------------------------- -------------------------------- --------------------------------
Legg Mason Partners Variable Seeks long-term capital growth. Legg Mason Partners Fund
Fundamental Value Current income is a secondary Advisor, LLC Subadviser:
Portfolio -- Class I consideration. ClearBridge Advisors, LLC
Legg Mason Partners Variable Seeks total return on assets Legg Mason Partners Fund
International All Cap from growth of capital and Advisor, LLC Subadviser: Global
Opportunity Portfolio+ income. Currents Investment Management,
LLC
Legg Mason Partners Variable Seeks long-term growth of Legg Mason Partners Fund
Investors Portfolio -- Class I capital. Current income is a Advisor, LLC Subadviser:
secondary objective. ClearBridge Advisors, LLC
Legg Mason Partners Variable Seeks long-term growth of Legg Mason Partners Fund
Large Cap Growth capital. Advisor, LLC Subadviser:
Portfolio -- Class I ClearBridge Advisors, LLC
Legg Mason Partners Variable Seeks long-term growth of Legg Mason Partners Fund
Small Cap Growth capital. Advisor, LLC Subadviser:
Portfolio -- Class I ClearBridge Advisors, LLC
Legg Mason Partners Variable Seeks capital appreciation and Legg Mason Partners Fund
Social Awareness Portfolio retention of net investment Advisor, LLC Subadviser: Legg
income. Mason Investment Counsel, LLC
LEGG MASON PARTNERS VARIABLE
INCOME TRUST
Legg Mason Partners Variable Seeks to provide high current Legg Mason Partners Fund
Adjustable Rate Income income and to limit the degree Advisor, LLC Subadviser: Western
Portfolio of fluctuation of its net asset Asset Management Company
value resulting from movements
in interest rates.
Legg Mason Partners Variable Seeks high current income. Legg Mason Partners Fund
High Income Portfolio Secondarily, seeks capital Advisor, LLC Subadvisers:
appreciation. Western Asset Management
Company; Western Asset
Management Company Limited
MET INVESTORS SERIES TRUST++
BlackRock High Yield Seeks to maximize total return, MetLife Advisers, LLC
Portfolio -- Class A consistent with income Subadviser: BlackRock Financial
generation and prudent Management, Inc.
investment management.
BlackRock Large Cap Core Seeks long-term capital growth. MetLife Advisers, LLC
Portfolio -- Class E Subadviser: BlackRock Advisors,
LLC
Clarion Global Real Estate Seeks to provide total return MetLife Advisers, LLC
Portfolio -- Class A through investment in real Subadviser: ING Clarion Real
estate securities, emphasizing Estate Securities, L.P.
both capital appreciation and
current income.
Dreman Small Cap Value Seeks capital appreciation. MetLife Advisers, LLC
Portfolio -- Class A Subadviser: Dreman Value
Management, L.L.C.
Harris Oakmark International Seeks long-term capital MetLife Advisers, LLC
Portfolio -- Class A appreciation. Subadviser: Harris Associates
L.P.
Janus Forty Portfolio -- Class A Seeks capital appreciation. MetLife Advisers, LLC
Subadviser: Janus Capital
Management LLC
Lazard Mid Cap Seeks long-term growth of MetLife Advisers, LLC
Portfolio -- Class A capital. Subadviser: Lazard Asset
Management LLC
Lord Abbett Bond Debenture Seeks high current income and MetLife Advisers, LLC
Portfolio -- Class A the opportunity for capital Subadviser: Lord, Abbett & Co.
appreciation to produce a high LLC
total return.
</Table>
19
<Table>
<Caption>
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- -------------------------------- -------------------------------- --------------------------------
Lord Abbett Growth and Income Seeks long-term growth of MetLife Advisers, LLC
Portfolio -- Class B capital and income without Subadviser: Lord, Abbett & Co.
excessive fluctuation in market LLC
value.
Lord Abbett Mid Cap Value Seeks capital appreciation MetLife Advisers, LLC
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 Small Cap Growth Seeks long-term growth of MetLife Advisers, LLC
Portfolio -- Class A capital. Subadviser: Invesco Aim Capital
Management, Inc.
MFS(R) Emerging Markets Equity Seeks capital appreciation. MetLife Advisers, LLC
Portfolio -- Class A+ Subadviser: Massachusetts
Financial Services Company
MFS(R) Research International Seeks capital appreciation. MetLife Advisers, LLC
Portfolio -- Class B+ Subadviser: Massachusetts
Financial Services Company
PIMCO Inflation Protected Bond Seeks to provide maximum real MetLife Advisers, LLC
Portfolio -- Class A return, consistent with Subadviser: Pacific Investment
preservation of capital and Management Company LLC
prudent investment management.
PIMCO Total Return Seeks maximum total return, MetLife Advisers, LLC
Portfolio -- Class B consistent with the preservation Subadviser: Pacific Investment
of capital and prudent Management Company LLC
investment management.
Pioneer Fund Portfolio -- Class Seeks reasonable income and MetLife Advisers, LLC
A capital growth. Subadviser: Pioneer Investment
Management, Inc.
Pioneer Strategic Income Seeks a high level of current MetLife Advisers, LLC
Portfolio -- Class A income. Subadviser: Pioneer Investment
Management, Inc.
Third Avenue Small Cap Value Seeks long-term capital MetLife Advisers, LLC
Portfolio -- Class B appreciation. Subadviser: Third Avenue
Management LLC
Van Kampen Comstock Seeks capital growth and income. MetLife Advisers, LLC
Portfolio -- Class B Subadviser: Morgan Stanley
Investment Management, Inc.
(d/b/a Van Kampen)
Van Kampen Mid Cap Growth Seeks capital appreciation. MetLife Advisers, LLC
Portfolio -- Class B+ Subadviser: Morgan Stanley
Investment Management, Inc.
(d/b/a Van Kampen)
METROPOLITAN SERIES FUND, INC.
Barclays Capital Aggregate Bond Seeks to equal the performance MetLife Advisers, LLC
Index Portfolio -- Class A of the Barclays Capital U.S. Subadviser: MetLife Investment
Aggregate Bond Index. Advisors Company, LLC
BlackRock Aggressive Growth Seeks maximum capital MetLife Advisers, LLC
Portfolio -- Class D appreciation. Subadviser: BlackRock Advisors,
LLC
BlackRock Bond Income Seeks a competitive total return MetLife Advisers, LLC
Portfolio -- Class A primarily from investing in Subadviser: BlackRock Advisors,
fixed-income securities. LLC
</Table>
20
<Table>
<Caption>
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- -------------------------------- -------------------------------- --------------------------------
BlackRock Diversified Seeks high total return while MetLife Advisers, LLC
Portfolio -- Class A attempting to limit investment Subadviser: BlackRock Advisors,
risk and preserve capital. LLC
BlackRock Legacy Large Cap Seeks long-term growth of MetLife Advisers, LLC
Growth Portfolio -- Class A capital. Subadviser: BlackRock Advisors,
LLC
BlackRock Money Market Seeks a high level of current MetLife Advisers, LLC
Portfolio -- Class A income consistent with Subadviser: BlackRock Advisors,
preservation of capital. LLC
Davis Venture Value Seeks growth of capital. MetLife Advisers, LLC
Portfolio -- Class A Subadviser: Davis Selected
Advisers, L.P.
FI Value Leaders Seeks long-term growth of MetLife Advisers, LLC
Portfolio -- Class D capital. Subadviser: Pyramis Global
Advisors, LLC
Jennison Growth Seeks long-term growth of MetLife Advisers, LLC
Portfolio -- Class B+ capital. Subadviser: Jennison Associates
LLC
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 Moderate Seeks high total return in the MetLife Advisers, LLC
Allocation Portfolio -- Class form of income and growth of
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
MetLife Stock Index Seeks to equal the performance MetLife Advisers, LLC
Portfolio -- Class A of the Standard & Poor's 500(R) Subadviser: MetLife Investment
Composite Stock Price Index. Advisors Company, LLC
MFS(R) Total Return Seeks a favorable total return MetLife Advisers, LLC
Portfolio -- Class F through investment in a Subadviser: Massachusetts
diversified portfolio. Financial Services Company
MFS(R) Value Portfolio -- Class Seeks capital appreciation. MetLife Advisers, LLC
A Subadviser: Massachusetts
Financial Services Company
Morgan Stanley EAFE(R) Index Seeks to equal the performance MetLife Advisers, LLC
Portfolio -- Class A of the MSCI EAFE(R) Index. Subadviser: MetLife Investment
Advisors Company, LLC
Oppenheimer Global Equity Seeks capital appreciation. MetLife Advisers, LLC
Portfolio -- Class B Subadviser: OppenheimerFunds,
Inc.
Russell 2000(R) Index Seeks to equal the return of the MetLife Advisers, LLC
Portfolio -- Class A Russell 2000(R) Index. Subadviser: MetLife Investment
Advisors Company, LLC
T. Rowe Price Small Cap Growth Seeks long-term capital growth. MetLife Advisers, LLC
Portfolio -- Class B Subadviser: T. Rowe Price
Associates, Inc.
Western Asset Management U.S. Seeks to maximize total return MetLife Advisers, LLC
Government Portfolio -- Class consistent with preservation of Subadviser: Western Asset
A capital and maintenance of Management Company
liquidity.
</Table>
21
<Table>
<Caption>
FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
- -------------------------------- -------------------------------- --------------------------------
WELLS FARGO VARIABLE TRUST
VT Small/Mid Cap Value Fund+ Seeks long-term capital Wells Fargo Funds Management,
appreciation. LLC Subadviser: Wells Capital
Management Incorporated
</Table>
- ---------
+ Not available under all Contracts. Availability depends on Contract issue
date.
++ Prior to May 1, 2009, Met Investors Advisory, LLC was the investment
adviser of Met Investors Series Trust (the "Trust"). On May 1, 2009, Met
Investors Advisory, LLC merged with and into MetLife Advisers, LLC, and
MetLife Advisers, LLC has now become the investment adviser of the Trust.
Certain Funding Options have been subject to a merger, substitution or other
change. Please see "Appendix B -- Additional Information Regarding the
Underlying Funds".
METROPOLITAN SERIES FUND, INC. 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 portfolios instead of investing in the asset allocation portfolios.
A Contract Owner who chooses to invest directly in the underlying portfolios
would not, however, receive asset allocation services provided by MetLife
Advisers. For more information regarding the asset allocation portfolios, please
read the prospectus for these portfolios.
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 services 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;
and
- the distribution of various reports to Contract Owners.
22
Costs and expenses We incur include:
- losses associated with various overhead and other expenses associated
with providing the services and benefits provided by the Contracts;
- sales and marketing expenses including commission payments to Your
sales agent; and
- other costs of doing business.
Risks We assume include:
- that Annuitants may live longer than estimated when the Annuity
factors under the Contracts were established;
- that the amount of the death benefit will be greater than the Contract
Value; and
- that the costs of providing the services and benefits under the
Contracts will exceed the charges deducted.
We may also deduct a charge for 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.
Withdrawals pursuant to a request to divide Contract Value due to a divorce are
subject to withdrawal charges.
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
- -----------------------------------------
GREATER THAN OR EQUAL TO BUT LESS THAN WITHDRAWAL CHARGE
- ------------------------ ------------- -----------------
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 will be deemed to
be taken first from:
(a) any Purchase Payments to which no withdrawal charge applies then
(b) any remaining free withdrawal allowance (as described below) after
reduction by the amount of (a), then
(c) any Purchase Payments to which withdrawal charges apply (on a first-
in, first-out basis) and, finally
23
(d) from 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 G
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 G (403 (b) Plans only).
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 tax 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 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 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.
24
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 Underlying 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 the "Payment Options" section for a description of these
benefits.
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.
TRANSFERS
- --------------------------------------------------------------------------------
Subject to the limitations described below, You may transfer all or part of Your
Contract Value between 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 NYSE 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 NYSE
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 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 $10 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 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 Funding Options to which
Your Contract Value is allocated.
You may also transfer between the Funding Options and the Fixed Account;
however, no transfers are allowed between the Fixed Account and any Competing
Fund. Amounts previously transferred from the Fixed Account to the Underlying
Funds may not be transferred back to the Fixed Account or any Competing Fund for
a period of at least 3 months for the date of the transfer. Amounts previously
transferred from a Competing Fund to and Underlying Fund, which is not a
Competing Fund, may not be transferred to the Fixed Account for a period of at
least 3 months from the date of the Purchase Payment. (Please refer to "Appendix
F -- Competing Funds".)
25
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 Underlying 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 presented in the
international, small-cap, and high-yield Underlying Funds (i.e., American Funds
Global Growth Fund, Clarion Global Real Estate Portfolio, MFS(R) Emerging
Markets Equity Portfolio, Delaware VIP Small Cap Value Series, Templeton
Developing Markets Securities Fund, Templeton Foreign Securities Fund, 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, Morgan Stanley EAFE(R) Index Portfolio, Pioneer Strategic
Income Portfolio, Oppenheimer Global Equity Portfolio, BlackRock High Yield
Portfolio, MFS(R) Research International Portfolio, Russell 2000(R) Index
Portfolio, T. Rowe Price Small Cap Growth Portfolio, Third Avenue Small Cap
Value Portfolio and Wells Fargo VT Small Mid Cap Value Fund -- the "Monitored
Portfolios"), In addition, as described below, We treat all American Funds
Insurance Series((R) )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 Funds to bring
any potential disruptive trading activity they identify to Our attention for
investigation on a case-by-case basis. We will also investigate other harmful
transfer activity that We identify from time to time. We may revise these
policies and procedures in Our sole discretion at any time without prior notice.
AMERICAN FUNDS((R)) MONITORING POLICY. As a condition to making their portfolios
available in Our products, American Funds(R) 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(R) 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(R) 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
26
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 Contract Owner; or
- reject the transfer or exchange instructions of individual Contract
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 Contract 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 Fund 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 an individual Contract Owner, 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 Contract Owners of variable insurance Contracts and/or individual
retirement Plans 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 Funds (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 Funds, 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.
27
DOLLAR COST AVERAGING
Dollar Cost Averaging or the pre-authorized transfer program (the "DCA Program")
allows You to transfer a set dollar amount to other Funding Options on a monthly
or quarterly basis during the accumulation phase of the Contract. Using this
method, You will purchase more Accumulation Units in a Funding Option if the
value per unit is low and will purchase fewer Accumulation Units if the value
per unit is high. Therefore, You may achieve a lower-than-average cost per unit
in the long run if You have the financial ability to continue the program over a
long enough period of time. Dollar Cost Averaging does not assure a profit or
protect against a loss.
You may elect the DCA Program through Written Request or other method acceptable
to Us. You must have a minimum total Contract Value of $5,000 to enroll in the
DCA Program. The minimum amount that may be transferred through this program is
$400. There is no additional fee to participate in the DCA Program.
You may establish pre-authorized transfers of Contract Values from the Fixed
Account, subject to certain restrictions. Under the DCA Program, automated
transfers from the Fixed Account may not deplete Your Fixed Account Value in
less than twelve months from Your enrollment in the DCA Program.
You may only have one DCA Program in place at one time. We will allocate any
subsequent Purchase Payments We receive within the program period selected to
the current Funding Options over the remainder of that program transfer period,
unless You direct otherwise.
All provisions and terms of the Contract apply to the DCA Program, including
provisions relating to the transfer of money between Funding Options. We reserve
the right to suspend or modify transfer privileges at any time and to assess a
processing fee for this service.
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 Account or Funding Option(s) from which We are to withdraw
amounts, We will make the withdrawal on a pro rata basis. The Cash Surrender
Value will be determined as of the close of business 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 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 Contract Owner'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.
For those participating in the Texas Optional Retirement Program, withdrawals
may only be made upon termination of employment, retirement or death as provided
in the Texas Optional Retirement Program (See Appendix E for additional
information).
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.
28
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, and may be subject to withdrawal charges. 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 Program 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
Contract Specifications page). 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
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 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.
ANNUITANT
The Annuitant is the individual on whose life the Maturity Date and the amount
of the monthly Annuity Payments depend.
29
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 in Good Order
("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>
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.
30
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.
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, to Yes
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 Code are triggered upon the death of the
Contract 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 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 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 Funding Options,
the Beneficiary bears the investment risk.
31
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
- 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(ies) 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.
TOTAL CONTROL ACCOUNT
If Your Contract was issued in connection with a 403(b) Plan, Your Beneficiary
may elect to have the Contract's death benefit proceeds paid through an account
called the Total Control Account at the time for payment. The Total Control
Account is an interest-bearing account through which the Beneficiary has
complete access to the proceeds, with unlimited check writing privileges. We
credit interest to the account at a rate that will not be less than a minimum
guaranteed rate.
Assets backing the Total Control Accounts are maintained in Our general account
and are subject to the claims of Our creditors. We will bear the investment
experience of such assets; however, regardless of the investment experience of
such assets, the interest credited to the Total Control Account will never fall
below the applicable guaranteed minimum rate. Because We bear the investment
experience of the assets backing the Total Control Account, We may receive a
profit from these assets. The Total Control Account is not insured by the FDIC
or any other governmental agency.
32
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 Annuity Payments are made. 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. You should seek independent tax
advice regarding the election of minimum required distributions.
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 Funding Options. We determine the number of Annuity Units
credited to the Contract by dividing the first monthly Annuity Payment
attributable to each Funding Option by the corresponding Accumulation Unit value
as of 14 days before the date Annuity Payments begin. We use an Annuity Unit to
measure the dollar value of an Annuity Payment. The number of Annuity Units (but
not their value) remains fixed during the Annuity Period.
DETERMINATION OF FIRST ANNUITY PAYMENT. Your Contract contains the tables We use
to determine Your first monthly Annuity Payment. If You elect a Variable
Annuity, the amount We apply to it will be the 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 3.0% or
5.0% upon each full or partial annuitization. The Contract tables factor in an
assumed net investment factor of 3.0% or 5.0%. We call this Your net investment
rate. Your net investment rate of 3.0% or
33
5.0% corresponds to an annual interest rate of 3.0% or 5.0%. This means that if
the annualized investment performance, after expenses, of Your Funding Options
is less than 3.0% or 5.0%, then the dollar amount of Your Variable Annuity
Payments will decrease. However, if the annualized investment performance, after
expenses, of Your Funding Options is greater than 3.0% or 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. 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 those 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 for the same class of
Contract Owners 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.
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 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 = [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 H for examples of this market value adjustment.
34
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, 180 or 240 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, We reserve 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 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.
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. Where required by state law or
under a qualified retirement plan, the Annuitant's sex will not be taken into
account in calculating Annuity Payments. Annuity rates will not be less than the
rates guaranteed by the Contract at the time of purchase for the assumed
investment return and annuity option elected. Due to underwriting,
administrative or Code considerations, the choice of percentage reduction and/or
the duration of the guarantee period may be limited under joint and last
survivor life annuity options.
Option 1 -- Life Annuity -- No Refund. The Company will make Annuity Payments
during the lifetime of the Annuitant, terminating with the last payment
preceding death. While this option offers the maximum periodic payments, there
is no assurance of a minimum number of payments nor a 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,
35
payments have been made for less than 120, 180 or 240 months, as elected,
payments will be continued during the remainder of the period to the Beneficiary
designated.
Option 3 -- Joint and Last Survivor Life Annuity -- No Refund. The Company will
make 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. There is no
assurance of a minimum number of payments, nor is there a provision for a death
benefit upon the survivor's death.
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. One of the two persons will be designated as
the primary payee. The other will be designated as secondary payee. On the death
of the secondary payee, if survived by the primary 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, if survived by the secondary 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 (Term Certain). 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
adviser 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 Funding Options
during the right to return period; therefore, if Your state only requires return
of Contract Value, the Contract Value returned 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 the
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
record. If the Contract is terminated, We will pay You the Cash Surrender Value
less any applicable Premium Tax,. 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
36
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 NYSE is
closed; (2) when trading on the NYSE 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 of the Separate Account's net assets; or (4)
during any other period when the SEC, by order, so permits for the protection of
security holders. At any time, payments from the Fixed Account may be delayed up
to 6 months.
MISSTATEMENT
We may require proof of age of the Owner, 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 overpayments or 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 ACCOUNT
- --------------------------------------------------------------------------------
The Company issues the Contract under Separate Account Eleven. Separate Account
Eleven was established on November 14, 2002 and is registered with SEC as a unit
investment trust under the Investment Company Act of 1940, as amended. Prior to
December 8, 2008, the Company issued the Contract under MetLife of CT Separate
Account Five for Variable Annuities ("Separate Account Five") and Separate
Account Six for Variable Annuities ("Separate Account Six"). On December 8,
2008,Separate Account Five and Separate Account Six along with certain other
separate accounts (collectively, the "Former Separate Accounts") were combined
with and into Separate Account Eleven (the "Combination").
In connection with the Combination, We transferred the assets of the Former
Separate Accounts to Separate Account Eleven and Separate Account Eleven assumed
the liabilities and contractual obligations of the Former Separate Accounts. The
financial statements of Separate Account Eleven reflect the Combination. Assets
and liabilities are reported on a combined basis and unit values are illustrated
as a range.
We hold the assets of the Separate Account for the exclusive benefit of the
owners of the Separate Account, according to the laws of Connecticut. Income,
gains and losses, whether or not realized, from assets allocated to the Separate
Account are, in accordance with the Contracts, credited to or charged against
the Separate Account without regard to other income, gains and losses of the
Company. The assets held by the Separate Account are not chargeable with
liabilities arising out of any other business that We may conduct. Obligations
under the Contract are obligations of the Company. Any obligations that exceed
the assets in the Separate Account are payable by the Company's general account.
The amount of the guaranteed death benefit that exceeds the Contract Value is
paid from the Company's general account. Benefit amounts paid from the general
account are subject to the financial strength and claims paying ability of the
Company.
All investment income and other distributions of the Funding Options are payable
to the Separate Account. We reinvest all such income and/or distributions in
shares of the respective Funding Option at net asset value. Shares of the
Funding Options are currently sold only to life insurance company separate
accounts to fund Variable Annuity and variable life insurance Contracts or to
qualified pension or retirement Plans as permitted under the Code, and the
regulations thereunder.
We reserve the right to transfer the assets of the Separate Account to another
separate account, and to modify the structure or operation of the Separate
Account, subject to necessary regulatory approvals. If We do so, We guarantee
that the modification will not affect Your Contract Value.
37
The Company reserves the right, subject to compliance with the law, to
substitute investment alternatives under the Contract and/or to offer additional
Funding Options.
Certain 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 Funding Options do not
currently foresee any such disadvantages either to Variable Annuity Contract
Owners or variable life policy owners, each Funding Option's Board of Directors
intends to monitor events in order to identify any material conflicts between
them and to determine what action, if any, should be taken. If a Board of
Directors was to conclude that separate funds should be established for variable
life and Variable Annuity separate accounts, the Variable Annuity Contract
Owners would not bear any of the related expenses, but Variable Annuity Contract
Owners and variable life insurance policy owners would no longer have the
economies of scale resulting from a larger combined fund.
PERFORMANCE INFORMATION
In advertisements for the Contract, We may include performance figures to show
You how a 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 Funding Option and are not an indication of how a Funding
Option will perform in the future.
Our advertisements may show performance figures assuming that You do not elect
any optional features. However, if You elect any optional features, they involve
additional charges that will cause the performance of Your Funding Options to
decrease. 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 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 Funding Option. In
those cases, We can create "hypothetical historical performance" of a Funding
Option. These figures show the performance that the Funding 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
- --------------------------------------------------------------------------------
The following information on taxes is a general discussion of the subject. It is
not intended as tax advice. The Internal Revenue Code ("Code") is complex and
subject to change regularly. Failure to comply with the tax law may result in
significant adverse tax consequences and IRS penalties. Consult Your own tax
adviser about Your circumstances, any recent tax developments, and the impact of
state income taxation. For purposes of this section, We address Contracts and
Annuity Payments under the Contracts together.
You should read the general provisions and any sections relating to Your type of
annuity to familiarize Yourself with some of the tax rules for Your particular
Contract.
You are responsible for determining whether Your purchase of a Contract,
withdrawals, Annuity Payments and any other transactions under Your Contract
satisfy applicable tax law. We are not responsible for determining if Your
employer's Plan or arrangement satisfies the requirements of the Code and/or the
Employee Retirement Income Security Act of 1974 (ERISA).
Where otherwise permitted under the Contract, the transfer of ownership of a
Contract, the designation or change in designation of an Annuitant, payee or
other Beneficiary who is not also a Contract Owner, the selection of certain
Maturity Dates, the exchange of a Contract, or the receipt of a Contract in an
exchange, may result in income tax
38
and other tax consequences, including additional withholding, estate tax, gift
tax and generation skipping transfer tax, that are not discussed in this
prospectus. Please consult Your tax adviser.
ANNUITY PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
Purchasers that are not U.S. citizens or residents will generally be subject to
U.S. federal withholding tax on taxable distributions from annuity Contracts at
a 30% rate, unless a lower treaty rate applies. In addition, purchasers may be
subject to state and/or municipal taxes and taxes that may be imposed by the
purchaser's country of citizenship or residence. Prospective purchasers are
advised to consult with a qualified tax adviser regarding U.S. state and foreign
taxation with respect to purchasing an annuity Contract.
We do not expect to incur federal, state or local income taxes on the earnings
or realized capital gains attributable to the Separate Account. However, if We
do incur such taxes in the future, We reserve the right to charge amounts
allocated to the Separate Account for these taxes.
To the extent permitted under federal tax law, We may claim the benefit of the
corporate dividends received deduction and of certain foreign tax credits
attributable to taxes paid by certain of the Underlying Funds to foreign
jurisdictions.
GENERAL
Contracts are a means of setting aside money for future needs-usually
retirement. Congress recognizes how important saving for retirement is and has
provided special rules in the Code.
All tax-sheltered annuities ("TSAs") (ERISA and non-ERISA), individual
retirement annuities ("IRAs") (including Simplified Employee Pensions ("SEP"s),
and 401(k) Plans receive tax deferral under the Code. Although there are no
additional tax benefits by funding such retirement arrangements with an annuity,
doing so offers You additional insurance benefits such as the availability of a
guaranteed income for life.
Under current federal income tax law, the taxable portion of distributions and
withdrawals from variable annuity Contracts (including TSAs, IRAs and 401(k)s)
are subject to ordinary income tax and are not eligible for the lower tax rates
that apply to long term capital gains and qualifying dividends.
WITHDRAWALS
When money is withdrawn from Your Contract (whether by You or Your Beneficiary),
the amount treated as taxable income and taxed as ordinary income differs
depending on the type of annuity You purchase (e.g., IRA or TSA); and payment
method or Annuity Payment type You elect. If You meet certain requirements Your
designated Roth (or Roth IRA) earnings are free from federal income taxes.
We will withhold a portion of the amount of Your withdrawal for income taxes,
unless You elect otherwise. The amount We withhold is determined by the Code.
WITHDRAWALS BEFORE AGE 59 1/2
Because these products are intended for retirement, if You make a taxable
withdrawal before age 59 1/2 You may incur a 10% tax penalty, in addition to
ordinary income taxes. See "Separate Account Charges" for further information
regarding withdrawals.
As indicated in the chart below, some taxable distributions prior to age 59 1/2
are exempt from the penalty. Some of these exceptions include amounts received:
<Table>
<Caption>
--------------------------------------------
- -----------------------------------------------------------------------------------------
403(B)
-TSA
AND
TSA NON-
TYPE OF CONTRACT 401(K) ERISA IRA SEP QUAL
- -----------------------------------------------------------------------------------------
In a series of substantially equal payments
made annually (or more frequently) for life X(1) X(1) X X X
or life expectancy (SEPP)
- -----------------------------------------------------------------------------------------
</Table>
39
<Table>
<Caption>
--------------------------------------------
- -----------------------------------------------------------------------------------------
403(B)
-TSA
AND
TSA NON-
TYPE OF CONTRACT 401(K) ERISA IRA SEP QUAL
- -----------------------------------------------------------------------------------------
After You die X X X X X
- -----------------------------------------------------------------------------------------
After You become totally disabled (as
defined in the Code) X X X X X
- -----------------------------------------------------------------------------------------
To pay deductible medical expenses X X X X
- -----------------------------------------------------------------------------------------
After Separation from service if You are
over 55 at time of separation( 1) X X
- -----------------------------------------------------------------------------------------
After December 31, 1999 for IRS levies X X X X
- -----------------------------------------------------------------------------------------
To pay medical insurance premiums if You are
unemployed X X
- -----------------------------------------------------------------------------------------
For qualified higher education expenses, or X X
- -----------------------------------------------------------------------------------------
For qualified first time home purchases up
to $10,000 X X
- -----------------------------------------------------------------------------------------
Pursuant to qualified domestic relations
orders X X
- -----------------------------------------------------------------------------------------
Certain immediate income annuities providing
a series of substantially equal periodic
payments made annually (or more frequently) X
over the specified payment period
- -----------------------------------------------------------------------------------------
</Table>
1. You must be separated from service at the time payments begin.
SYSTEMATIC WITHDRAWAL PROGRAM FOR SUBSTANTIALLY EQUAL PERIODIC PAYMENTS (SEPP)
AND INCOME OPTIONS
If You are considering using the Systematic Withdrawal Program or selecting an
Annuity option for the purpose of meeting the SEPP exception to the 10% tax
penalty, consult with Your tax adviser. It is not clear whether certain
withdrawals or Annuity Payments under a variable annuity will satisfy the SEPP
exception.
If You receive systematic payments that You intend to qualify for the SEPP
exception, any modifications (except due to death or disability) to Your payment
before age 59 1/2 or within five years after beginning SEPP payments, whichever
is later, will result in the retroactive imposition of the 10% penalty with
interest. Such modifications may include additional Purchase Payments or
withdrawals (including tax-free transfers or rollovers of income payments) from
the Contract.
SEPARATE ACCOUNT CHARGES
It is conceivable that the charges for certain benefits such as any of the
guaranteed death benefits and certain living benefits could be considered to be
taxable each year as deemed distributions from the Contract to pay for non-
annuity benefits. We currently treat these charges as an intrinsic part of the
Contract and do not tax report these as taxable income. However, it is possible
that this may change in the future if We determine that this is required by the
IRS. If so, the charge could also be subject to a 10% penalty tax if the
taxpayer is under age 59 1/2.
QUALIFIED CONTRACTS - GENERALLY
PURCHASE PAYMENTS
Generally, all Purchase Payments will be contributed on a "before-tax" basis.
This means that the Purchase Payments entitle You to a tax deduction or are not
subject to current income tax.
Under some circumstances "after-tax" Purchase Payments can be made to certain
annuities. These Purchase Payments do not reduce Your taxable income or give You
a tax deduction.
40
There are different annual Purchase Payments limits for the annuities offered in
this prospectus. Purchase Payments in excess of the limits may result in adverse
tax consequences.
Your Contract may accept certain direct transfers and rollovers from other
qualified Plan accounts and contracts: such transfers and rollovers are
generally not subject to annual limitations on Purchase Payments.
WITHDRAWALS, TRANSFERS AND ANNUITY PAYMENTS
Because Your Purchase Payments are generally on a before-tax basis, You
generally pay income taxes on the full amount of money You withdraw as well as
income earned under the Contract. Withdrawals and annuity payments attributable
to any after-tax contributions are not subject to income tax (except for the
portion of the withdrawal or payment allocable to earnings).
If certain requirements are met, You may be able to transfer amounts in Your
Contract to another eligible retirement Plan or IRA. For 457(b) Plans maintained
by non-governmental employers, if certain conditions are met, amounts may be
transferred into another 457(b) Plan maintained by a non-governmental employer.
Your Contract is not forfeitable (e.g., not subject to claims of Your creditors)
and You may not transfer it to someone else. An important exception is that Your
account may be transferred pursuant to a qualified domestic relations order
(QDRO).
Please consult the specific section for the type of annuity You purchased to
determine if there are restrictions on withdrawals, transfers or annuity
payments.
Minimum distribution requirements also apply to the Contracts. These are
described separately later in this section.
Certain mandatory distributions made to participants in an amount in excess of
$1,000 (but less than $5,000) must be automatically rolled over to an IRA
designated by the Plan, unless the participant elects to receive it in cash or
roll it over to a different IRA or eligible retirement Plan.
ELIGIBLE ROLLOVER DISTRIBUTIONS AND 20% MANDATORY WITHHOLDING
We are required to withhold 20% of the taxable portion of Your withdrawal that
constitutes an "eligible rollover distribution" for federal income taxes. We are
not required to withhold this money if You direct Us, the trustee or the
custodian of the Plan, to directly rollover Your eligible rollover distribution
to a Traditional IRA or another eligible retirement Plan.
Generally, an "eligible rollover distribution" is any taxable amount You receive
from Your Contract. (In certain cases, after-tax amounts may also be considered
eligible rollover distributions). However, it does not include taxable
distributions such as:
- Withdrawals made to satisfy minimum distribution requirements
- Certain withdrawals on account of financial hardship
Other exceptions to the definition of eligible rollover distribution may exist.
For taxable withdrawals that are not "eligible rollover distributions," the Code
requires different withholding rules. The withholding amounts are determined at
the time of payment. In certain instances, You may elect out of these
withholding requirements. You may be subject to the 10% penalty tax if You
withdraw taxable money before You turn age 59 1/2.
MINIMUM DISTRIBUTION REQUIREMENTS
Generally, You must begin receiving withdrawals by April 1 of the latter of:
- the calendar year following the year in which You reach age 70 1/2 or
- the calendar year following the calendar year You retire, provided You
do not own 5% or more of Your employer.
41
For IRAs (including SEPs), You must begin receiving withdrawals by April 1 of
the year in which You reach age 70 1/2 even if You have not retired.
Under recently enacted legislation, You (and after Your death, Your designated
beneficiaries) generally do not have to take the required minimum distribution
("RMD") for 2009. The waiver does not apply to any 2008 payments even if
received in 2009; for those payments, You are still required to receive Your
first RMD payment by April 1, 2009. In contrast, if Your first RMD would have
been due by April 1, 2010, You are not required to take such distribution;
however, Your 2010 RMD is due by December 31, 2010. For after-death RMDs, the
five year rule is applied without regard to calendar year 2009. For instance, if
You died in 2007, the five year period ends in 2013 instead of 2012. This RMD
waiver does not apply if You are receiving Annuity Payments under Your Contract.
The RMD rules are complex, so consult with Your tax adviser before waiving Your
2009 RMD payment.
In general the amount of required minimum distribution (including death benefit
distributions discussed below) must be calculated separately with respect to
each Section 403(b) arrangement, but then the aggregate amount of the required
distribution may be taken under the tax law from any one or more of the
participant's several TSA arrangements. Otherwise, You may not satisfy minimum
distributions for an employer's qualified Plan (i.e., 401(a), 403(a), 457(b))
with distributions from another qualified Plan of the same or a different
employer.
Complex rules apply to the calculation of these withdrawals. A tax penalty of
50% applies to withdrawals which should have been taken but were not. It is not
clear whether annuity payments under a variable annuity will satisfy these
rules. Consult Your tax adviser prior to choosing a pay-out option.
In general the amount of required minimum distribution (including death benefit
distributions discussed below) must be calculated separately with respect to
each IRA or SEP IRA, but then the aggregate amount of the required distribution
may be generally taken under the tax law for the IRAs/SEP IRAs from any one or
more of the taxpayer's IRAs/SEP IRAs.
You may not satisfy minimum distributions for one type of IRA or qualified Plan
with distributions from an account or annuity contract under another type of IRA
or qualified Plan (e.g. IRA and 403(b)).
In general, Income Tax regulations permit income payments to increase based not
only with respect to the investment experience of the Underlying Funds but also
with respect to actuarial gains. Additionally, these regulations permit payments
under immediate annuities to increase due to a full withdrawal or to a partial
withdrawal under certain circumstances.
The regulations also require that the value of benefits under a deferred annuity
including certain death benefits in excess of cash value must be added to the
amount credited to Your account in computing the amount required to be
distributed over the applicable period. You should consult Your own tax adviser
as to how these rules affect Your own Contract. We will provide You with
additional information regarding the amount that is subject to minimum
distribution under this rule.
If You intend to receive Your minimum distributions which are payable over the
joint lives of You and a Beneficiary who is not Your spouse (or over a period
not exceeding the joint life expectancy of You and Your non-spousal
Beneficiary), be advised that federal tax rules may require that payments be
made over a shorter period or may require that payments to the beneficiary be
reduced after Your death to meet the minimum distribution incidental benefit
rules and avoid the 50% excise tax. Consult Your tax adviser.
DEATH BENEFITS
The death benefit is taxable to the recipient in the same manner as if paid to
the Contract owner (under the rules for withdrawals or annuity payments,
whichever is applicable).
Generally, if You die before required minimum distribution withdrawals have
begun, We must make payment of Your entire interest by December 31st of the year
that is the fifth anniversary of Your death or begin making payments over a
period and in a manner allowed by the Code to Your beneficiary by December 31st
of the year after Your death. Consult Your tax adviser because the application
of these rules to Your particular circumstances may have been impacted by the
2009 RMD waiver (see Minimum Distribution Requirements section for additional
information).
If Your spouse is Your Beneficiary, and Your Contract permits, Your spouse may
delay the start of these payments until December 31 of the year in which You
would have reached age 70 1/2. Alternatively, if Your spouse is Your sole
42
Beneficiary and Your contract is an IRA, he or she may elect to rollover the
death proceeds into his or her own IRA (or, if You meet certain requirements, a
Roth IRA and pay tax on the taxable portion of the death proceeds in the year of
the rollover) and treat the IRA (or Roth IRA) as his or her own.
If Your spouse is Your Beneficiary, Your spouse may also be able to rollover the
death proceeds into another eligible retirement Plan in which he or she
participates, if permitted under the receiving Plan.
If Your spouse is not Your Beneficiary and Your Contract permits, Your
Beneficiary may also be able to rollover the death proceeds via a direct
trustee-to-trustee transfer into an inherited IRA. However, such Beneficiary may
not treat the inherited IRA as his or her own IRA. Starting in 2010, certain
employer Plans (i.e. 401(a), 403(a), 403(b), and governmental 457 Plans) are
required to permit a non-spouse direct trustee-to-trustee rollover.
If You die after required distributions begin, payments of Your entire remaining
interest must be made in a manner and over a period as provided under the Code
(and any applicable regulations).
If an individual retirement annuity Contract is issued in Your name after Your
death for the benefit of Your designated Beneficiary with a Purchase Payment
which is directly transferred to the Contract from another IRA or eligible
retirement Plan, the death benefit must continue to be distributed to Your
Beneficiary's Beneficiary in a manner at least as rapidly as the method of
distribution in effect at the time of Your Beneficiary's death.
INCIDENTAL BENEFITS
Certain death benefits may be considered incidental benefits under a tax
qualified Plan, which are limited under the Code. Failure to satisfy these
limitations may have adverse tax consequences to the Plan and to the
participant.
Where otherwise permitted to be offered under annuity contracts issued in
connection with qualified Plans, the amount of life insurance is limited under
the incidental death benefit rules. You should consult Your own tax adviser
prior to purchase of the Contract under any type of IRA, Section 403(b)
arrangement or qualified Plan as a violation of these requirements could result
in adverse tax consequences to the Plan and to the participant including current
taxation of amounts under the Contract.
TSAS (ERISA AND NON-ERISA) - 403(B)
TSAs fall under Section 403(b) of the Code, which provides certain tax benefits
to eligible employees of public school systems and organizations that are tax
exempt under Section 501(c)(3) of the Code.
In general, contributions to Section 403(b) arrangements are subject to
contribution limitations under Section 415(c) of the Code (the lesser of 100% of
includable compensation or the applicable limit for the year).
On July 26, 2007, final 403(b) regulations were issued by the U.S. Treasury
which will impact how We administer Your 403(b) Contract. In order to satisfy
the 403(b) final regulations and prevent Your Contract from being subject to
adverse tax consequences including potential penalties, contract exchanges after
September 24, 2007 must, at minimum, meet the following requirements: (1) the
Plan must allow the exchange, (2) the exchange must not result in a reduction in
the Participant or Beneficiary's accumulated benefit, (3) the receiving contract
includes distribution restrictions that are no less stringent than those imposed
on the contract being exchanged, and (4) the employer enters into an agreement
with the issuer of the receiving contract to provide information to enable the
contract provider to comply with Code requirements. Such information would
include details concerning severance from employment, hardship withdrawals,
loans and tax basis. You should consult Your tax or legal counsel for any advice
relating to Contract exchanges or any other matter relating to these
regulations.
WITHDRAWALS AND INCOME PAYMENTS
If You are under 59 1/2, You generally cannot withdraw money from Your TSA
Contract unless the withdrawal:
- Relates to Purchase Payments made prior to 1989 (and pre-1989 earnings
on those Purchase Payments);
- Is directly transferred to another permissible investment under 403(b)
arrangements;
- Relates to amounts that are not salary reduction elective deferrals if
Your Plan allows it;
43
- Occurs after You die, leave Your job or become disabled (as defined by
the Code);
- Is for financial hardship (but only to the extent of Purchase
Payments) if Your Plan allows it;
- Relates to distributions attributable to certain TSA Plan terminations
if the conditions of the new income tax regulations are met;
- Relates to rollover or after-tax contributions; or
- Is for the purchase of permissive service credit under a governmental
defined benefit Plan.
Recent income tax regulations also provide certain new restrictions on
withdrawals of amounts from TSAs that are not attributable to salary reduction
contributions. Under these regulations, a Section 403(b) Contract is permitted
to distribute retirement benefits attributable to pre-tax contributions other
than elective deferrals to the Participant no earlier than upon the earlier of
the Participant's severance from employment or upon the prior occurrence of some
event such as after a fixed number of years, the attainment of a stated age, or
disability. This new withdrawal restriction is applicable for TSA Contracts
issued on or after January 1, 2009.
DESIGNATED ROTH ACCOUNT FOR 403(B) PLANS
Employers that established and maintain a TSA/ 403(b) Plan ("the Plan") may also
establish a Qualified Roth Contribution Program under Section 402A of the Code
("Designated Roth Accounts") to accept after tax contributions as part of the
TSA Plan. In accordance with Our administrative procedures, We may permit these
contributions to be made as Purchase Payments to a 403(b) Contract under the
following conditions:
- The employer maintaining the Plan has demonstrated to Our satisfaction
that Designated Roth Accounts are permitted under the Plan.
- In accordance with Our administrative procedures, the amount of
elective deferrals has been irrevocably designated as an after-tax
contribution to the Designated Roth Account.
- All state regulatory approvals have been obtained to permit the
Contract to accept such after-tax elective deferral contributions
(and, where permitted under the Qualified Roth Contribution Program
and the Contract, rollovers and trustee-to trustee transfers from
other Designated Roth Accounts).
- In accordance with Our procedures and in a form satisfactory to Us, We
may accept rollovers from other funding vehicles under any Qualified
Roth Contribution Program of the same type in which the employee
participates as well as trustee-to-trustee transfers from other
funding vehicles under the same Qualified Roth Contribution Program
for which the participant is making elective deferral contributions to
the Contract.
- No other contribution types (including employer contributions,
matching contributions, etc.) will be allowed as designated Roth
contributions, unless they become permitted under the Code.
- If permitted under the federal tax law, We may permit both pre-tax
contributions under a 403(b) Plan as well as after-tax contributions
under that Plan's Qualified Roth Contribution Program to be made under
the same Contract as well as rollover contributions and contributions
by trustee-to-trustee transfers. In such cases, We will account
separately for the designated Roth contributions and the earnings
thereon from the contributions and earnings made under the pre-tax TSA
Plan (whether made as elective deferrals, rollover contributions or
trustee-to-trustee transfers). As between the pre-tax or traditional
Plan and the Qualified Roth Contribution Program, We will allocate any
living benefits or death benefits provided under the Contract on a
reasonable basis, as permitted under the tax law.
- We may refuse to accept contributions made as rollovers and trustee-to
trustee transfers, unless We are furnished with a breakdown as between
participant contributions and earnings at the time of the
contribution.
You and Your employer should consult their own tax and legal advisers prior to
making or permitting contributions to be made to a Qualified Roth Contribution
Program.
44
The IRS was given authority in the final Roth account regulations to issue
additional guidance addressing the potential for improper transfers of value to
Roth accounts due to the allocation of contract income, expenses, gains and
losses. The IRS has not issued the additional guidance and, as a result, there
is uncertainty regarding the status of Roth accounts and particularly Roth
accounts under annuity contracts that allocate charges for guarantees. You
should consult Your tax or legal counsel for advice relating to Roth accounts
and other matters relating to the final Roth account regulations.
SECTION 403(B) COLLATERALIZED LOANS
If Your employer's plan and TSA Contract permits loans, such loans will be made
only from any fixed account value and only up to certain limits. In that case,
We credit Your fixed account value up to the amount of the outstanding loan
balance with a rate of interest that is less than the interest rate We charge
for the loan.
The Code and applicable income tax regulations limit the amount that may be
borrowed from Your Contract and all of Your employer Plans in the aggregate and
also require that loans be repaid, at a minimum, in scheduled level payments
over a proscribed term.
Your employer's plan and Contract will indicate whether loans are permitted. The
terms of the loan are governed by the Contract and loan agreement. Failure to
satisfy loan limits under the Code or to make any scheduled payments according
to the terms of Your loan agreement and federal tax law could have adverse tax
consequences. Consult Your tax adviser and read Your loan agreement and Contract
prior to taking any loan.
INDIVIDUAL RETIREMENT ANNUITIES ("IRAS")
TRADITIONAL IRAS, ROTH IRAS AND SEPS
The sale of a Contract for use with an IRA may be subject to special disclosure
requirements of the IRS. Purchasers of a Contract for use with IRAs will be
provided with supplemental information required by the IRS or other appropriate
agency. A Contract issued in connection with an IRA may be amended as necessary
to conform to the requirements of the Code.
IRA Contracts may not invest in life insurance. The Contract offers death
benefits and optional benefits that in some cases may exceed the greater of the
Purchase Payments or the Account Value which could conceivably be characterized
as life insurance.
Generally, except for Roth IRAs, IRAs can accept deductible (or pre-tax)
Purchase Payments. Deductible or pre-tax Purchase Payments will be taxed when
distributed from the Contract.
You must be both the Contract Owner and the Annuitant under the Contract. Your
IRA annuity is not forfeitable and You may not transfer, assign or pledge it to
someone else. You are not permitted to borrow from the Contract. You can
transfer Your IRA proceeds to a similar IRA or certain eligible retirement Plans
of an employer without incurring federal income taxes if certain conditions are
satisfied.
Consult Your tax adviser prior to the purchase of the Contract as a Traditional
IRA, Roth IRA or SEP.
TRADITIONAL IRA ANNUITIES
PURCHASE PAYMENTS
Purchase Payments (except for permissible rollovers and direct transfers) are
generally not permitted after the calendar year in which You attain age 69 1/2.
Except for permissible rollovers and direct transfers, Purchase Payments to
Traditional and Roth IRAs for individuals under age 50 are limited to the lesser
of 100% of compensation or the deductible amount established each year under the
Code. A Purchase Payment up to the deductible amount can also be made for a non-
working spouse provided the couple's compensation is at least equal to their
aggregate contributions. For additional information see IRS Publication 590
available at www.irs.gov.
45
- Individuals age 50 or older can make an additional "catch-up" Purchase
Payment (assuming the individual has sufficient compensation).
- If You are an active participant in a retirement Plan of an employer,
Your contributions may be limited.
- Purchase Payments in excess of these amounts may be subject to a
penalty tax.
- If contributions are being made under a SEP or a SAR-SEP Plan of Your
employer, additional amounts may be contributed as permitted by the
Code and the terms of the employer's Plan.
- These age and dollar limits do not apply to tax-free rollovers or
transfers from other IRAs or other eligible retirement Plans.
- If certain conditions are met, You can change Your Traditional IRA
Purchase Payment to a Roth IRA before You file Your income tax return
(including filing extensions).
WITHDRAWALS AND ANNUITY PAYMENTS
Withdrawals (other than tax free transfers or rollovers to other individual
retirement arrangements or eligible retirement Plans) and Annuity Payments are
included in income except for the portion that represents a return of non-
deductible Purchase Payments. This portion is generally determined based on a
ratio of all non-deductible Purchase Payments to the total values of all Your
Traditional IRAs. We will withhold a portion of the taxable amount of Your
withdrawal for income taxes, unless You elect otherwise. The amount We withhold
is determined by the Code. Also see general section titled "Withdrawals" above.
DEATH BENEFITS
The death benefit is taxable to the recipient in the same manner as if paid to
the Contract Owner (under the rules for withdrawals or Annuity Payments,
whichever is applicable).
Generally, if You die before required minimum distribution withdrawals have
begun, We must make payment of Your entire interest by December 31st of the year
that is the fifth anniversary of Your death or begin making payments over a
period and in a manner allowed by the Code to Your Beneficiary by December 31st
of the year after Your death. Consult Your tax adviser because the application
of these rules to Your particular circumstances may have been impacted by the
2009 RMD waiver (see Minimum Distribution Requirements section for additional
information).
If Your spouse is Your Beneficiary, and Your Contract permits, Your spouse may
delay the start of these payments until December 31 of the year in which You
would have reached age 70 1/2. Alternatively, if Your spouse is Your
Beneficiary, he or she may elect to continue as "Contract Owner" of the
Contract.
If You die after required distributions begin, payments of Your entire remaining
interest must be made in a manner and over a period as provided under the Code
(and any applicable regulations).
If the Contract is issued in Your name after Your death for the benefit of Your
designated Beneficiary with a Purchase Payment which is directly transferred to
the Contract from another IRA account or IRA annuity You owned, the death
benefit must continue to be distributed to Your Beneficiary's Beneficiary in a
manner at least as rapidly as the method of distribution in effect at the time
of Your Beneficiary's death.
ROTH IRA ANNUITIES
Roth IRAs are different from other IRAs because You have the opportunity to
enjoy tax-free earnings. However, You can only make after-tax Purchase Payments
to a Roth IRA.
PURCHASE PAYMENTS
Roth IRA Purchase Payments for individuals under age 50 are non-deductible and
are limited, in a manner similar to IRAs, to the lesser of 100% of compensation
or the annual deductible IRA amount. This limit includes contributions to all
Your Traditional and Roth IRAs for the year. Individuals age 50 or older can
make an additional "catch- up" Purchase Payment each year (assuming the
individual has sufficient compensation).
46
You may contribute up to the annual Purchase Payment limit if Your modified
adjusted gross income does not exceed certain limits. Purchase Payments are
phased out depending on Your modified adjusted gross income and Your filing
status. See IRS Publication 590 available at www.irs.gov for additional
information.
Further, with respect to Traditional IRA amounts which were converted to a Roth
IRA, such conversion must have occurred at least five years prior to purchase of
this Contract. Consult Your independent tax adviser.
Annual Purchase Payments limits do not apply to a rollover from a Roth IRA to
another Roth IRA or a conversion from a Traditional IRA to a Roth IRA. You can
contribute to a Roth IRA after age 70 1/2. If certain conditions are met, You
can change Your Roth IRA contribution to a Traditional IRA before You file Your
income return (including filing extensions).
Roth IRAs may also accept a rollover from other types of eligible retirement
Plans (e.g., 403(b), 401(a), and 457(b) Plans of a state or local government
employer) if Code requirements are met. The taxable portion of the proceeds are
subject to income tax in the year of the rollover.
If You exceed the Purchase Payment limits You may be subject to a tax penalty.
WITHDRAWALS
Generally, withdrawals of earnings from Roth IRAs are free from federal income
tax if they meet the following two requirements:
- The withdrawal is made at least five taxable years after Your first
Purchase Payment to a Roth IRA, And
- The withdrawal is made: on or after the date You reach age 59 1/2;
upon Your death or disability; or for a qualified first time home
purchase (up to $10,000).
Withdrawals of earnings which do not meet these requirements are taxable and a
10% penalty tax may apply if made before age 59 1/2. See Withdrawal chart above.
Consult Your tax adviser to determine if an exception applies.
Withdrawals from a Roth IRA are made first from Purchase Payments and then from
earnings. Generally, You do not pay income tax on withdrawals of Purchase
Payments. However, withdrawals of taxable amounts converted from a non-Roth IRA
prior to age 59 1/2 will be subject to the 10% penalty tax (unless You meet an
exception) if made within 5 taxable years of such conversion. See withdrawals
chart above.
The order in which money is withdrawn from a Roth IRA is as follows (all Roth
IRAs owned by a taxpayer are combined for withdrawal purposes):
- The first money withdrawn is any annual (non-conversion/rollover)
contributions to the Roth IRA. These are received tax and penalty
free.
- The next money withdrawn is from conversion/rollover contributions
from a non-Roth IRA or an eligible retirement plan (other than a
designated Roth account), on a first-in, first-out basis. For these
purposes, distributions are treated as coming first from the taxable
portion of the conversion/rollover contribution. As previously
discussed, depending upon when it occurs, withdrawals of taxable
converted amounts may be subject to a penalty tax, or result in the
acceleration of inclusion of income.
- The next money withdrawn is from earnings in the Roth IRA. This is
received tax-free if it meets the requirements previously discussed;
otherwise it is subject to federal income tax and an additional 10%
penalty tax may apply if You are under age 59 1/2.
- We may be required to withhold a portion of Your withdrawal for income
taxes, unless You elect otherwise. The amount will be determined by
the Code.
CONVERSION
You may convert/rollover an existing IRA or an eligible retirement plan (other
than a designated Roth account) to a Roth IRA if Your modified adjusted gross
income does not exceed $100,000 in the year You convert.
47
If You are married but file separately, You may not convert a Traditional IRA or
an eligible retirement plan (other than a designated Roth account) into a Roth
IRA.
The above income limit and filing status restriction will not apply for tax
years beginning in 2010.
Except to the extent You have non-deductible contributions, the amount converted
from an existing IRA or eligible retirement plan (other than a designated Roth
account) into a Roth IRA is taxable. Generally, the 10% withdrawal penalty does
not apply to conversions/rollovers. (See exception discussed previously.)
For conversions occurring in 2010, the amount converted into a Roth IRA may be
included in Your taxable income ratably over 2011 and 2012 and does not have to
be included in Your taxable income in 2010.
Caution: The IRS issued guidance in 2005 requiring the taxable amount converted
be based on the fair market value of the entire IRA annuity contract being
converted or redesignated into a Roth IRA. Such fair market value, in general,
is to be determined by taking into account the value of all benefits (both
living benefits and death benefits) in addition to the Account Value; as well as
adding back certain loads and charges incurred during the prior 12 months
period. Your Contract may include such benefits, and applicable charges.
Accordingly, taxpayers considering redesignating a Traditional IRA annuity into
a Roth IRA annuity should consult their own tax adviser prior to converting. The
taxable amount may exceed the Account Value at date of conversion.
Unless You elect otherwise, amounts converted from a Traditional IRA or an
eligible retirement Plan (other than a designated Roth account) to a Roth IRA
will be subject to income tax withholding. The amount withheld is determined by
the Code.
If You mistakenly convert or otherwise wish to change Your Roth IRA contribution
to a Traditional IRA contribution, the tax law allows You to reverse Your
conversion provided You do so before You file Your tax return for the year of
the contribution and if certain conditions are met.
REQUIRED DISTRIBUTIONS
Required minimum distribution rules that apply to other types of IRAs while You
are alive do not apply to Roth IRAs. However, in general, the same rules with
respect to minimum distributions required to be made to a Beneficiary after Your
death under Traditional IRAs do apply to Roth IRAs. Note, as previously
mentioned, certain required minimum distributions are waived for 2009. Consult
Your tax adviser prior to waiving Your 2009 RMD.
Note that where payments under a Roth immediate Annuity have begun prior to Your
death the remaining interest in the Contract must be paid to Your designated
Beneficiary by the end of the fifth year following Your death or over a period
no longer than the Beneficiary's remaining life expectancy at the time You die.
DEATH BENEFITS
Generally, when You die We must make payment of Your entire interest by the
December 31st of the year that is the fifth anniversary of Your death or begin
making payments over a period and in a manner allowed by the Code to Your
Beneficiary by December 31st of the year after Your death.
If Your spouse is Your Beneficiary, Your spouse may delay the start of required
payments until December 31st of the year in which You would have reached age
70 1/2.
If Your spouse is Your Beneficiary, he or she may elect to continue as "Contract
Owner" of the Contract.
SEPS ANNUITIES
The Code provides certain contribution limitations and eligibility requirements
under SEP arrangements. The minimum distribution requirements are generally the
same as Traditional IRAs.
PURCHASE PAYMENTS TO SEPS.
If contributions are being made under a SEP Plan of Your employer, additional
amounts may be contributed as permitted by the Code and the terms of the
employer's Plan.
48
Except for permissible contributions under the Code made in accordance with the
employer's SEP Plan, permissible rollovers and direct transfers, Purchase
Payments to SEPs for individuals under age 50 are limited to the lesser of 100%
of compensation or the deductible amount each year. This deductible amount is
$5,000 in 2008 (adjusted for inflation thereafter).
Participants age 50 or older can make an additional "catch-up" Purchase Payment
of $1,000 a year (assuming the individual has sufficient compensation). This
amount may be adjusted annually for inflation. Purchase Payments in excess of
this amount may be subject to a penalty tax.
Purchase Payments (except for permissible rollovers and direct transfers) are
generally not permitted after the calendar year in which You attain age 69 1/2.
These age and dollar limits do not apply to tax-free rollovers or transfers.
WITHDRAWALS AND ANNUITY PAYMENTS
Withdrawals and Annuity Payments are included in income except for the portion
that represents a return of non-deductible Purchase Payments. This portion is
generally determined based on a ratio of all non-deductible Purchase Payments to
the total values of all Your Traditional IRAs in the case of SEPs.
DEATH BENEFITS
The death benefit is taxable to the recipient in the same manner as if paid to
the owner (under the rules for withdrawals or Annuity Payments, whichever is
applicable).
Generally, if You die before required minimum distribution withdrawals have
begun, We must make payment of Your entire interest by December 31st of the year
that is the fifth anniversary of Your death or begin making payments over a
period and in a manner allowed by the Code to Your Beneficiary by December 31st
of the year after Your death. Consult Your tax adviser because the application
of these rules to Your particular circumstances may have been impacted by the
2009 RMD waiver (see Minimum Distribution Requirements Section for additional
information).
If Your spouse is Your Beneficiary, Your spouse may delay the start of these
payments until December 31 of the year in which You would have reached age
70 1/2. Alternatively, if Your spouse is Your Beneficiary, he or she may elect
to continue as "Contract Owner" of the Contract and treat it as his/her own
Traditional IRA (in the case of SEPs).
If You die after required distributions begin, payments of Your entire remaining
interest must be made in a manner and over a period as provided under the Code
(and any applicable regulations).
If the Contract is issued in Your name after Your death for the benefit of Your
designated Beneficiary with a Purchase Payment which is directly transferred to
the Contract from another IRA account or IRA annuity You owned, the death
benefit must continue to be distributed to Your Beneficiary's Beneficiary in a
manner at least as rapidly as the method of distribution in effect at the time
of Your Beneficiary's death.
401(K)
The tax rules regarding retirement Plans are complex. We do not give tax advice.
Please consult Your tax adviser about Your particular situation.
See the "General" and the "Qualified Contracts -- Generally" headings under this
section for a brief description of the tax rules that apply to 401(k)s.
NON-QUALIFIED ANNUITIES
- Purchase Payments to non-qualified Contracts are on an "after-tax"
basis, so You only pay income taxes on Your earnings. Generally, these
earnings are taxed when received from the Contract.
- Under the Code, withdrawals need not be made by a particular age.
However, it is possible that the IRS 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.
49
- Your non-qualified Contract may be exchanged for another non-qualified
annuity under Section 1035 without paying income taxes if certain Code
requirements are met. Once Annuity Payments have commenced, You may
not be able to transfer withdrawals to another non-qualified annuity
contract in a tax-free Section 1035 exchange.
- The IRS recently issued guidance under which direct transfers of less
than the entire account value from one non-qualified annuity to
another non-qualified annuity ("partial exchange") on or after June
30, 2008, may be treated as a taxable withdrawal rather than a non-
taxable exchange under certain circumstances. Such circumstances
generally include situations where amounts are withdrawn or annuity
payments are made from either contract involved in the partial
exchange within a period of twelve months following the transfers.
Certain exceptions may apply. Consult Your own independent tax adviser
prior to a partial exchange.
- Consult Your tax adviser prior to changing the Annuitant or prior to
changing the date You determine to commence Annuity Payments if
permitted under the terms of Your Contract. It is conceivable that the
IRS could consider such actions to be a taxable exchange of annuity
Contracts.
- Where otherwise permitted under the Contract, pledges, assignments and
other types of transfers of all or a portion of Your Account Value
generally result in the immediate taxation of the gain in Your
Contract. This rule may not apply to certain transfers between
spouses.
- Contracts issued after October 21, 1988 by the same insurance company
or affiliates to an owner in the same year are combined for tax
purposes. As a result, a greater portion of Your withdrawals may be
considered taxable income than You would otherwise expect.
- When a non-natural person owns a non-qualified Contract, the annuity
will generally not be treated as an annuity for tax purposes and thus
loses the benefit of tax deferral. Corporations and certain other
entities are generally considered non-natural persons. However, an
annuity owned by a non-natural person as agent for an individual will
be treated as an annuity for tax purposes.
- In those limited situations where the annuity is beneficially owned by
a non-natural person and the annuity qualifies as such for federal
income tax purposes, the entity may have a limited ability to deduct
interest. Certain income annuities under Section 72(u)(4) of the Code
purchased with a single payment consisting of substantially equal
periodic payments with a Maturity Date within 12 months of purchase
may also be considered annuities for federal income tax purposes where
owned by a non-natural person.
PURCHASE PAYMENTS
Although the Code does not limit the amount of Your Purchase Payments, Your
Contract may limit them.
PARTIAL AND FULL WITHDRAWALS
Generally, when You (or Your Beneficiary in the case of a death benefit) make a
partial withdrawal from Your non-qualified annuity, the Code treats such a
partial withdrawal as: first coming from earnings (and thus subject to income
tax); and then from Your Purchase Payments (which are not subject to income
tax). This rule does not apply to payments made pursuant to an income pay-out
option under Your Contract. In the case of a full withdrawal, the withdrawn
amounts are treated as first coming from Your non-taxable return of Purchase
Payment and then from a taxable payment of earnings.
Generally, once the total amount treated as a return of Your Purchase Payment
equals the amount of such Purchase Payment (reduced by any refund or guarantee
feature as required by federal tax law), all remaining withdrawals are fully
taxable. If You die before the Purchase Payment is returned, the unreturned
amount may be deductible on Your final income tax return or deductible by Your
Beneficiary if Annuity Payments continue after Your death. We will tell You what
Your Purchase Payment was and whether a withdrawal includes a non-taxable return
of Your Purchase Payment.
50
ANNUITY PAYMENTS
Annuity Payments are subject to an "exclusion ratio" or "excludable amount"
which determines how much of each payment is treated as: a non-taxable return of
Your Purchase Payments and a taxable payment of earnings.
Annuity Payments and amounts received on the exercise of a withdrawal or partial
withdrawal option under Your non-qualified annuity may not be transferred in a
tax-free exchange into another annuity contract. In accordance with Our
procedures, such amounts will instead be taxable under the rules for Annuity
Payments or withdrawals, whichever is applicable.
Generally, once the total amount treated as a return of Your Purchase Payment
equals the amount of such Purchase Payment (reduced by any refund or guarantee
feature as required by federal tax law), all remaining Annuity Payments are
fully taxable. If You die before the Purchase Payment is returned, the
unreturned amount may be deductible on Your final income tax return or
deductible by Your Beneficiary if Annuity Payments continue after Your death. We
will tell You what Your Purchase Payment was and to what extent an Annuity
Payment includes a non-taxable return of Your Purchase Payment.
The IRS has not approved the use of an exclusion ratio when only part of an
Account Value is used to convert to Annuity Payments.
We will treat the application of less than Your entire Account Value under a
non-qualified Contract to a pay-out option (taking an immediate annuity) as a
taxable withdrawal for federal income tax purposes and also as subject to the
10% penalty tax (if You are under age 59 1/2) in addition to ordinary income
tax. We will then treat the amount of the withdrawal as the purchase price of an
immediate annuity and tax report the Annuity Payments received under the rules
for variable immediate annuities. Consult Your tax attorney prior to partially
annuitizing Your Contract.
The IRS has not specifically approved the use of a method to calculate an
excludable amount with respect to a variable immediate annuity where transfers/
reallocations are permitted between subaccounts or from a subaccount into a
fixed option.
We generally will tell You how much of each Annuity Payment is a return of non-
taxable Purchase Payments. We will determine such excludable amount for each
Annuity Payment under the Contract as a whole by using the rules applicable to
variable Annuity Payments in general (i.e., by dividing Your after-tax purchase
price, as adjusted for any refund or guarantee feature by the number of expected
Annuity Payments from the appropriate IRS table). However, it is possible that
the IRS could conclude that the taxable portion of Annuity Payments under a non-
qualified Contract is an amount greater (or lesser) than the taxable amount
determined by Us and reported by Us to You and the IRS.
Generally, once the total amount treated as a non-taxable return of Your
Purchase Payment equals Your Purchase Payment, then all remaining payments are
fully taxable. We will withhold a portion of the taxable amount of Your Annuity
Payment for income taxes, unless You elect otherwise. The amount We withhold is
determined by the Code
If the amount of Annuity Payments received in any calendar year is less than the
excludable amount applicable to the year, the excess is not allowable as a
deduction. However, You may generally elect the year in which to begin to apply
this excess ratably to increase the excludable amount attributable to future
years. Consult Your tax adviser as to the details and consequences of making
such election. Also, consult Your tax adviser as to the tax treatment of any
unrecovered after-tax cost in the year that the Contract terminates.
DEATH BENEFITS
The death benefit under an annuity is generally taxable to the recipient in the
same manner as if paid to the Contract Owner (under the rules for withdrawals or
Annuity Payments, whichever is applicable).
If You die before the annuity starting date, as defined under Treasury
Regulations, payments must begin for a period and in a manner allowed by the
Code (and any regulations thereunder) to Your Beneficiary within one year of the
date of Your death or, if not, payment of Your entire interest in the Contract
must be made within five years of the date of Your death. If Your spouse is Your
Beneficiary, he or she may elect to continue as Contract Owner.
If You die on or after the annuity starting date, as defined under Treasury
Regulations, payments must continue to be made at least as rapidly as before
Your death in accordance with the Annuity Option selected.
51
If You die before all Purchase Payments are returned, the unreturned amount may
be deductible on Your final income tax return or excluded from income by Your
Beneficiary if Annuity Payments continue after Your death.
In the case of joint Contract Owners, the above rules will be applied on the
death of any Contract Owner.
Where the Contract Owner is not a natural person, these rules will be applied on
the death of any Annuitant (or on the change in Annuitant, if permitted under
the Contract).
If death benefit payments are being made to Your designated Beneficiary and
he/she dies prior to receiving the entire remaining interest in the Contract,
such remaining interest will be paid out at least as rapidly as under the
distribution method being used at the time of Your designated Beneficiary's
death.
After Your death, if Your designated Beneficiary dies prior to electing a method
for the payment of the death benefit, the remaining interest in the Contract
will be paid out in a lump sum. In all cases, such payments will be made within
five years of the date of Your death.
DIVERSIFICATION
In order for Your non-qualified Contract to be considered an annuity Contract
for federal income tax purposes, We must comply with certain diversification
standards with respect to the investments underlying the Contract. We believe
that We satisfy and will continue to satisfy these diversification standards.
Inadvertent failure to meet these standards may be correctable. Failure to meet
these standards would result in immediate taxation to Contract Owners of gains
under their Contract.
INVESTOR CONTROL
In certain circumstances, owners of variable annuity Contracts have been
considered to be the owners of the assets of the underlying Separate Account for
federal income tax purposes due to their ability to exercise investment control
over those assets. When this is the case, the Contract Owners have been
currently taxed on income and gains attributable to the variable account assets.
There is little guidance in this area, and some features of the Contract, such
as the number of Funding Options available and the flexibility of the Contract
Owner to allocate Purchase Payments and transfer amounts among the Funding
Options have not been addressed in public rulings. While We believe that the
Contract does not give the Contract Owner investment control over Separate
Account assets, We reserve the right to modify the Contract as necessary to
prevent a Contract Owner from being treated as the owner of the Separate Account
assets supporting the Contract.
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/reallocations between Subaccounts or
transfers/reallocations from a Subaccount to a fixed account or Fixed
Annuity option.
- 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/reallocations 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.
PUERTO RICO TAX CONSIDERATIONS
The Puerto Rico Internal Revenue Code of 1994 (the "1994 Code") provides the
following tax treatment for Contracts issued to Contract Owners in the
Commonwealth of Puerto Rico.
52
GENERAL TAX TREATMENT OF ANNUITIES
For Puerto Rico tax purposes, amounts received as an annuity under an annuity
contract are defined as amounts (determined based on a computation with
reference to life expectancy and mortality tables) received in periodical
installments and payable over a period longer than one year from the annuity
starting date.
Annuity payments generally have two elements: a part that constitutes a return
of the annuity's cost (return of capital) and a part that constitutes income.
From each annuity payment received, taxpayers must include in their gross income
for income tax purposes the lower of (a) the annuity payments received during
the taxable year, or (b) 3% of the aggregate premiums or consideration paid for
the annuity divided by 12 and multiplied by the number of months in respect to
which the installment is paid. The excess over the 3% is excluded from gross
income until the aggregate premiums or consideration is recovered.
Once the annuity's cost has been fully recovered, all of the annuity payment
constitutes taxable income. There is no penalty tax on early distributions from
annuity contracts.
No gain or loss has to be generally recognized when certain insurance policies
are exchanged for other insurance policies. These tax free exchanges include a
life insurance contract for another or for an endowment or annuity contract (or
a combination thereof). The total amount received, within the same taxable year,
from a variable annuity contract issued by an eligible insurance company, may be
taxed as a long-term capital gain at the rate in effect at the time of the
transaction. Effective July 1, 2007, the rate in effect is 10%.
A VARIABLE ANNUITY CONTRACT UNDER NON-QUALIFIED PLANS
A variable annuity contract may be purchased by an employer under a non-
qualified stock bonus, pension, profit-sharing or annuity plan. The employer may
purchase the annuity contract and transfer it to a trust created under the terms
of the non-qualified plan or can make contributions to the non-qualified trust
in order to provide (an) annuity contract(s) for his employees.
The purchase payments paid or the employer's contributions made to a trust under
a plan during a taxable year of the employer which ends within or with a taxable
year of the trust shall be included in the gross income of the employee, if his
beneficial interest in the employer's contribution is non-forfeitable at the
time the contribution is made. An employee's beneficial interest in the
contributions is non-forfeitable if there is no contingency under the plan which
may cause the employee to lose his rights in the contribution.
When the contributions are included in the employee's gross income, they are
considered part of the consideration paid by him for the annuity. The amounts
contributed by the employer constitute consideration paid by the employee which
is taken into account for purposes of determining the taxable amount of each
annuity payment received.
The contributions paid by the employer to or under the non-qualified plan for
providing retirement benefits to the employees under an annuity or insurance
contract are deductible in the taxable year when paid if the employee's rights
to or derived from such employer's contribution are non-forfeitable at the time
the contribution is made.
If an amount is paid on behalf of the employee during the taxable year but the
rights of the employee therein are forfeitable at the time the amount is paid,
no employer deduction is allowable for such amount for any taxable year.
A non-qualified plan may not be subject to certain rules which apply to a
qualified plan such as rules regarding participation, vesting, and funding.
Thus, non-qualified annuity plans may be used by an employer to provide
additional benefits to key employees.
Since a non-qualified trust is not tax-exempt, the trust itself will be taxable
on the income of the trust assets.
A VARIABLE ANNUITY CONTRACT UNDER A QUALIFIED PLAN
A variable annuity contract may be purchased by an employer for an employee
under a qualified pension, profit-sharing, stock bonus, annuity, or a cash or
deferred arrangement ("CODA") plan established pursuant to Section 1165 of the
1994 Code. The employer has two alternatives: (1) purchase the annuity contract
and transfer the same to the
53
trust under the plan, or (2) make contributions to a trust under a qualified
plan for the purpose of providing an annuity contract for an employee.
Qualified plans must comply with the requirements of Section 1165(a) of the 1994
Code which include, among others, certain participation requirements.
The trust created under the qualified plan is exempt from tax on its investment
income.
a. Contributions
The employer is entitled, in determining its net taxable income, to
claim a current income tax deduction for contributions made to the
trust created under the terms of a qualified plan. However, statutory
limitations on the deductibility of contributions made to the trust
under a qualified plan limit the amount of funds that may be
contributed each year.
b. Distributions
The amount paid by the employer towards the purchase of the variable
annuity contract or contributed to the trust for providing variable
annuity contracts for the employees is not required to be included in
the income of the employee. However, any amount received or made
available to the employee under the qualified plan is includible in
the gross income of the employee in the taxable year in which received
or made available.
In such case, the amount paid or contributed by the employer shall not
constitute consideration paid by the employee for the variable annuity
contract for purposes of determining the amount of annuity payments
required to be included in the employee's gross income. Thus, amounts
actually distributed or made available to any employee under the
qualified plan shall be included in their entirety in the employee's
gross income.
Lump-sum proceeds from a Puerto Rico qualified retirement plan due to separation
from service will generally be taxed at a 20% capital gain tax rate to be
withheld at the source.
A special rate of 10% may apply instead, if the plan satisfies the following
requirements: (1) the plan's trust is organized under the laws of Puerto Rico,
or has a Puerto Rico resident trustee and uses such trustee as paying agent; and
(2) after December 31, 2007, 10% of all plan's trust assets attributable to
participants which are Puerto Rico residents must be invested in "property
located in Puerto Rico" for a three-year period. If those two requirements are
not satisfied, the distribution will generally be subject to the 20% tax rate.
The three-year period includes the year of the distribution and the two
immediately preceding years. Property located in Puerto Rico includes Shares of
stock of a Puerto Rico corporation, bonds, notes and other evidence of
indebtedness issued by the Commonwealth of Puerto Rico or the instrumentalities
thereof.
The 1994 Code does not impose a penalty tax in cases of early (premature)
distributions from a qualified plan.
c. Rollover
Deferral of the recognition of income continues upon the receipt of a
distribution by a participant from a qualified plan, if the total
distribution is contributed to another qualified retirement plan or
traditional individual retirement account ("IRA") for the employee's
benefit no later than sixty (60) days after the distribution.
ERISA CONSIDERATIONS
In the context of a Puerto Rico qualified retirement plan trust, the IRS has
recently held that the transfer of assets and liabilities from a qualified
retirement plan trust under the Code to that type of plan would generally be
treated as a distribution includible in gross income for U. S. income tax
purposes even if the Puerto Rico retirement plan is a plan described in ERISA
Section 1022(i)(1). By contrast, a transfer from a qualified retirement plan
trust under the Code to a Puerto Rico qualified retirement plan trust that has
made an election under ERISA Section 1022(i)(2) is not treated as a distribution
from the transferor plan for U.S. income tax purposes because a Puerto Rico
retirement plan that has made an election under ERISA Section 1022(i)(2) is
treated as a qualified retirement plan for purposes Code Section 401(a). The IRS
has determined that the above described rules prescribing the inclusion in
income of
54
transfers of assets and liabilities to a Puerto Rico retirement plan trust
described in ERISA Section 1022(i)(1) would be applicable to transfers taking
effect after December 31, 2010.
..
INFORMATION INCORPORATED BY REFERENCE
- --------------------------------------------------------------------------------
Under the Securities Act of 1933, the Company has filed with the Securities and
Exchange Commission ("SEC") 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 annual report on Form 10-K was filed with the SEC on March 26, 2009
via EDGAR File No. 033-03094. The Form 10-K contains information for the period
ended December 31, 2008 about the Company, including consolidated audited
financial statements for the Company's latest fiscal year. The Form 10-K is
incorporated by reference into this prospectus. All other reports filed by the
Company pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended ("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, 2008 are also incorporated
by reference into this prospectus. We are not incorporating by reference, in any
case, any documents or information deemed to have been furnished and not filed
in accordance with SEC rules.
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 consolidated 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, 1300 Hall Boulevard,
Bloomfield, Connecticut, 06002-2910. The telephone number is 1-800-842-9406. 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.
EXPERTS
Legal matters in connection with federal laws and regulations affecting the
issue and sale of the Contracts described in this prospectus and the
organization of the Company, its authority to issue such Contracts under
Connecticut law and the validity of the forms of the Contracts under Connecticut
law have been passed on by legal counsel for the Company.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The consolidated financial statements, and the related financial statement
schedules, incorporated in this Registration Statement by reference from the
MetLife Insurance Company of Connecticut and subsidiaries' (the "Company's")
Annual Report on Form 10-K for the year ended December 31, 2008, have been
audited by Deloitte & Touche LLP, an independent registered public accounting
firm, as stated in their report (which expresses an unqualified opinion and
includes an explanatory paragraph regarding changes in the Company's method of
accounting for certain assets and liabilities to a fair value measurement
approach as required by accounting guidance adopted on January 1, 2008, and its
method of accounting for deferred acquisition costs as required by accounting
guidance adopted on January 1, 2007), which is incorporated herein by reference.
Such financial statements and financial statement schedules have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
55
OTHER INFORMATION
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THE INSURANCE COMPANY
MetLife Insurance Company of Connecticut (the "Company") is a stock insurance
company chartered in 1863 in Connecticut and continuously engaged in the
insurance business since that time. 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 1300 Hall Boulevard,
Bloomfield, Connecticut 06002-2910. The office that administers Your Contract is
located at 4700 Westown Parkway, Ste. 200, West Des Moines, Iowa 50266.
FINANCIAL STATEMENTS
The financial statements for the insurance company and for the Separate Accounts
are located in the Statement of Additional Information.
DISTRIBUTION OF THE CONTRACTS
DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT. MetLife Insurance Company of
Connecticut (the "Company") has appointed MetLife Investors Distribution Company
("MLIDC") to serve as the principal underwriter and distributor of the
securities offered through this prospectus, pursuant to the terms of a
Distribution and Principal Underwriting Agreement. 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, California, 92614. MLIDC is registered as a broker-dealer with the 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 Financial Industry
Regulatory Authority ("FINRA"). An investor brochure that includes information
describing FINRA's Public Disclosure Program is available by calling FINRA's
Public Disclosure Program hotline at 1-800-289-9999,or by visiting FINRA's
website www.finra.org.
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 FINRA, 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 Contracts are offered on a continuous basis. 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.
We generally pay compensation as a percentage of Funding Options invested in the
Contract. Alternatively, We may pay lower compensation on Funding Options 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
56
expected to exceed 7.5% 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, 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
compensation during 2008, 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
subadviser to one or more Underlying Funds which are offered under the
Contracts. These investment advisory firms include Fidelity Management &
Research Company, Morgan Stanley Investment Advisers, Inc., Merrill Lynch
Investment Managers, L.P., MetLife Advisers, LLC and MetLife Investment Advisors
Company, LLC. MetLife Advisers, LLC and MetLife Investment Advisors Company, 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.
SALE 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., MetLife Securities, Inc.,
Walnut Street Securities, Inc. and New England Securities Corporation. The
compensation paid to affiliated broker-dealer firms for sales of the Contract 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, financial 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.
Metropolitan Life Insurance Company ("MetLife"), an affiliate of the Company,
registered representatives, who are associated with MetLife Securities, Inc.,
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 Funding Options applied
to proprietary products that the registered representative sells and services.
The percentage could be as high as 100%.
57
(MLR registered representatives receive compensation based upon premiums and
Funding Options applied to all products sold and serviced by the
representative.) In addition, all MetLife registered representatives 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 concessions 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 sales 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(R), 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 Funds' shares in connection with the Contract.
From time to time MetLife pays organizations, associations, and nonprofit
organizations fees to endorse or sponsor MetLife's variable annuity contracts.
We may also obtain access to an organization's members to market Our variable
annuity contracts. These organizations are compensated for their endorsement or
sponsorship of Our variable annuity contracts in various ways. Primarily, they
receive a flat fee from MetLife. We also compensate these organizations by Our
funding of their programs, scholarships, events or awards, such as principal of
the year award. We may also lease their office space or pay fees for display
space at their events, purchase advertisements in their publications or
reimburse or defray their expenses. In some cases, We hire the organizations to
perform administrative services for Us, for which they are paid a fee based upon
a percentage of the account balances their members hold in the Contract. We also
retain finders and consultants to introduce MetLife to potential clients and for
establishing and maintaining relationships between MetLife and various
organizations. The finders and consultants are primarily paid flat fees and may
be reimbursed for their expenses. We or Our affiliates may also 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 We deliver a Contract govern that Contract. Where
a state has not approved a Contract feature or Funding Option, it will not be
available in that state. Any paid-up Annuity, Cash Surrender Value or death
benefits that are available under the Contract are not less than the minimum
benefits required by the statutes of the state in which We delivered the
Contract. We reserve the right to make any changes, including retroactive
changes, in the Contract to the extent that the change is required to meet the
requirements of any law or regulation issued by any governmental agency to which
the Company, the Contract or the Contract Owner is subject.
VOTING RIGHTS
The Company is the legal owner of the shares of the Underlying Funds. However,
We believe that when an Underlying Fund solicits proxies in conjunction with a
vote of shareholders We are required to obtain from You and from other owners'
instructions on how to vote those shares. We will vote all shares, including
those We may own on Our own behalf, and those where We have not received
instructions from Contract Owners, in the same proportion as shares for which We
received voting instructions. The effect of this proportional voting is that a
small number of Contract Owners may control the outcome of 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.
In accordance with Our view of present applicable law, We will vote shares of
the Underlying Funds at regular and special meetings of the shareholders of the
funds in accordance with instructions received from persons having a voting
interest in the corresponding subaccounts. We will vote shares for which We have
not received instructions in the same proportion as We vote shares for which We
have received instructions. However, if the 1940 Act or any regulation
thereunder should be amended, or if the present interpretation thereof should
change, and as a result We determine that We are permitted to vote shares of the
Underlying Funds in Our own right, We may elect to do so.
58
The number of shares which a person has a right to vote will be determined as of
the date concurrent with the date established by the respective mutual fund for
determining shareholders eligible to vote at the meeting of the fund, and voting
instructions will be solicited by written communication before the meeting in
accordance with the procedures established by the mutual fund.
Each person having a voting interest will receive periodic reports relating to
the fund(s) in which he or she has an interest, proxy material and a form with
which to give such instructions with respect to the proportion of the fund
shares held in the subaccounts corresponding to his or her interest.
CONTRACT MODIFICATION
We reserve the right to modify the Contract to keep it qualified under all
related law and regulations that are in effect during the term of this Contract.
We will obtain the approval of any regulatory authority needed for the
modifications.
POSTPONEMENT OF PAYMENT (THE "EMERGENCY PROCEDURE")
Payment of any benefit or determination of values may be postponed whenever: (1)
the NYSE is closed; (2) when trading on the NYSE is restricted; (3) when an
emergency exists as determined by the Commission so that disposal of the
securities held in the Funding Options is not reasonably practicable or it is
not reasonably practicable to determine the value of the Funding Option's net
assets; or (4) during any other period when the SEC, by order, so permits for
the protection of Contract Owners. This Emergency Procedure will supercede any
provision of the Contract that specifies a Valuation Date. At any time, payments
from the Fixed Account may also be delayed.
RESTRICTIONS ON FINANCIAL TRANSACTIONS
Federal laws designed to counter terrorism and prevent money laundering might,
in certain circumstances, require Us to block a Contract Owner's ability to make
certain transactions and thereby refuse to accept any request for transfers,
withdrawals, surrenders, or death benefits, until the instructions are received
from the appropriate regulator. We may also be required to provide additional
information about You and Your Contract to government regulators.
LEGAL PROCEEDINGS
In the ordinary course of business, the Company, similar to other life insurance
companies, is involved in lawsuits (including class action lawsuits),
arbitrations and other legal proceedings. Also, from time to time, state and
federal regulators or other officials conduct formal and informal examinations
or undertake other actions dealing with various aspects of the financial
services and insurance industries. In some legal proceedings involving insurers,
substantial damages have been sought and/or material settlement payments have
been made.
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.
59
THIS PAGE INTENTIONALLY LEFT BLANK.
APPENDIX A
- --------------------------------------------------------------------------------
CONDENSED FINANCIAL INFORMATION
FOR METLIFE OF CT SEPARATE ACCOUNT ELEVEN FOR VARIABLE ANNUITIES
(FORMERLY METLIFE OF CT SEPARATE ACCOUNT FIVE FOR VARIABLE ANNUITIES AND
METLIFE OF CT 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 D. Please refer to the Fee Table section of this prospectus
for more information on Separate Account Charges.
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
AIM Variable Insurance Funds
AIM V.I. Core Equity Subaccount (Series I) (1/70).. 2007 1.086 1.166 --
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 0.800 103,702
2003 0.615 0.763 103,682
2002 0.888 0.615 55,895
2001 1.000 0.888 --
American Funds Insurance Series(R)
American Funds Global Growth Subaccount (Class 2)
(5/04)............................................. 2008 1.708 1.044 255,182
2007 1.499 1.708 198,131
2006 1.255 1.499 201,428
2005 1.109 1.255 123,938
2004 1.000 1.109 31,153
American Funds Growth Subaccount (Class 2) (5/04).. 2008 1.532 0.852 259,445
2007 1.375 1.532 401,723
2006 1.258 1.375 300,904
2005 1.091 1.258 272,838
2004 1.000 1.091 31,126
American Funds Growth-Income Subaccount (Class 2)
(5/04)............................................. 2008 1.353 0.834 641,183
2007 1.299 1.353 680,711
2006 1.136 1.299 672,446
2005 1.082 1.136 462,830
2004 1.000 1.082 123,269
</Table>
A-1
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Capital Appreciation Fund
Capital Appreciation Fund (5/00)................... 2006 0.700 0.694 --
2005 0.597 0.700 2,284,975
2004 0.503 0.597 1,842,685
2003 0.406 0.503 1,778,266
2002 0.547 0.406 2,051,129
2001 0.745 0.547 1,052,993
2000 1.000 0.745 1,006,482
Credit Suisse Trust
Credit Suisse Trust Emerging Markets Subaccount
(5/99)............................................. 2007 2.357 2.475 --
2006 1.793 2.357 43,286
2005 1.412 1.793 52,655
2004 1.140 1.412 55,778
2003 0.804 1.140 57,669
2002 0.916 0.804 57,063
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 2.517 387,231
2004 1.816 2.368 416,109
2003 1.366 1.816 313,536
2002 1.318 1.366 262,243
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)...................................... 2008 2.376 1.653 181,430
2007 2.565 2.376 262,100
2006 2.225 2.565 326,585
2005 2.050 2.225 315,886
2004 1.701 2.050 226,147
2003 1.208 1.701 199,663
2002 1.289 1.208 149,777
2001 1.162 1.289 13,468
2000 0.991 1.162 5,110
1999 1.000 0.991 --
</Table>
A-2
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Dreyfus Variable Investment Fund
Dreyfus VIF Appreciation Subaccount (Initial
Shares) (3/99)..................................... 2008 1.261 1.210 --
2007 1.187 1.261 400,199
2006 1.027 1.187 413,822
2005 0.992 1.027 499,982
2004 0.952 0.992 453,429
2003 0.792 0.952 374,375
2002 0.958 0.792 410,725
2001 1.065 0.958 423,288
2000 1.081 1.065 336,425
1999 1.000 1.081 269,081
Dreyfus VIF Developing Leaders Subaccount (Initial
Shares) (4/99)..................................... 2008 1.433 1.356 --
2007 1.624 1.433 394,226
2006 1.577 1.624 591,068
2005 1.503 1.577 630,414
2004 1.360 1.503 721,826
2003 1.041 1.360 646,720
2002 1.298 1.041 598,914
2001 1.394 1.298 401,311
2000 1.240 1.394 309,007
1999 1.000 1.240 45,091
Fidelity(R) Variable Insurance Products
Fidelity VIP Contrafund(R) Subaccount (Service
Class 2) (5/01).................................... 2008 1.842 1.047 644,893
2007 1.583 1.842 638,957
2006 1.432 1.583 543,274
2005 1.238 1.432 446,608
2004 1.083 1.238 398,961
2003 0.852 1.083 320,177
2002 0.950 0.852 223,022
2001 1.000 0.950 --
Fidelity VIP Dynamic Capital Appreciation
Subaccount (Service Class 2) (5/01)................ 2008 1.383 0.805 14,225
2007 1.306 1.383 14,225
2006 1.157 1.306 14,225
2005 0.966 1.157 25,996
2004 0.962 0.966 29,634
2003 0.776 0.962 18,807
2002 0.846 0.776 18,807
2001 1.000 0.846 2,853
</Table>
A-3
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Fidelity VIP Mid Cap Subaccount (Service Class 2)
(5/01)............................................. 2008 2.334 1.399 525,624
2007 2.040 2.334 586,405
2006 1.830 2.040 639,427
2005 1.563 1.830 620,450
2004 1.264 1.563 273,675
2003 0.921 1.264 151,306
2002 1.032 0.921 110,420
2001 1.000 1.032 --
VIP Asset Manager Subaccount (Service Class 2)
(5/00)............................................. 2006 1.019 1.057 --
2005 0.990 1.019 229,844
2004 0.949 0.990 314,177
2003 0.813 0.949 285,253
2002 0.900 0.813 279,567
2001 0.949 0.900 178,530
2000 1.000 0.949 133,640
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 61,250
2004 1.204 1.345 29,698
2003 1.000 1.204 23,290
FTVIPT Templeton Developing Markets Securities
Subaccount (Class 2) (5/04)........................ 2008 2.532 1.188 200,098
2007 1.982 2.532 229,731
2006 1.560 1.982 188,246
2005 1.234 1.560 169,740
2004 1.000 1.234 --
FTVIPT Templeton Foreign Securities Subaccount
(Class 2) (5/04)................................... 2008 1.744 1.032 219,281
2007 1.523 1.744 307,793
2006 1.264 1.523 354,212
2005 1.156 1.264 293,548
2004 1.000 1.156 60,647
FTVIPT Templeton Growth Securities Subaccount
(Class 2) (5/04)................................... 2006 1.216 1.470 --
2005 1.126 1.216 443,829
2004 1.000 1.126 95,793
</Table>
A-4
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
High Yield Bond Trust
High Yield Bond Trust (5/99)....................... 2006 1.538 1.576 --
2005 1.530 1.538 476,850
2004 1.418 1.530 468,961
2003 1.107 1.418 408,800
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 1.154 182,910
2004 1.005 1.080 182,910
2003 0.891 1.005 148,717
2002 0.962 0.891 83,565
2001 1.000 0.962 --
Janus Aspen Mid Cap Growth Subaccount (Service
Shares) (5/01)..................................... 2008 1.327 0.739 182,916
2007 1.099 1.327 132,831
2006 0.978 1.099 109,936
2005 0.880 0.978 109,936
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)..................................... 2008 0.767 0.724 --
2007 0.707 0.767 137,374
2006 0.604 0.707 159,300
2005 0.577 0.604 260,004
2004 0.556 0.577 309,658
2003 0.453 0.556 324,972
2002 0.615 0.453 388,240
2001 0.801 0.615 447,192
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 10,343
2004 1.000 1.127 --
</Table>
A-5
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Legg Mason Partners Investment Series
LMPIS Premier Selections All Cap Growth Subaccount
(5/01)............................................. 2008 1.063 1.063 --
2007 0.996 1.063 --
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 Equity Trust
LMPVET Aggressive Growth Subaccount (Class I)
(5/01)............................................. 2008 1.111 0.657 459,813
2007 1.103 1.111 693,899
2006 1.022 1.103 1,040,550
2005 0.923 1.022 1,152,583
2004 0.846 0.923 1,275,516
2003 0.634 0.846 1,080,772
2002 0.949 0.634 387,432
2001 1.000 0.949 150,719
LMPVET Appreciation Subaccount (Class I) (5/01).... 2008 1.305 0.915 44,567
2007 1.213 1.305 141,356
2006 1.065 1.213 250,829
2005 1.029 1.065 318,152
2004 0.954 1.029 216,592
2003 0.772 0.954 145,202
2002 0.943 0.772 102,740
2001 1.000 0.943 18,065
LMPVET Capital and Income Subaccount (Class I)
(4/07)............................................. 2008 1.436 0.926 5,033
2007 1.422 1.436 9,259
LMPVET Dividend Strategy Subaccount (5/01)......... 2008 1.012 0.717 6,645
2007 0.959 1.012 6,566
2006 0.819 0.959 28,177
2005 0.828 0.819 29,548
2004 0.807 0.828 29,548
2003 0.659 0.807 26,551
2002 0.897 0.659 20,096
2001 1.000 0.897 20,096
</Table>
A-6
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
LMPVET Equity Index Subaccount (Class II) (3/99)... 2008 1.162 0.721 1,104,097
2007 1.117 1.162 1,593,670
2006 0.978 1.117 2,082,600
2005 0.945 0.978 2,202,778
2004 0.864 0.945 2,040,084
2003 0.682 0.864 1,846,133
2002 0.886 0.682 1,627,247
2001 1.019 0.886 1,079,490
2000 1.133 1.019 856,518
1999 1.000 1.133 220,404
LMPVET Fundamental Value Subaccount (Class I)
(5/01)............................................. 2008 1.289 0.811 525,631
2007 1.283 1.289 510,366
2006 1.107 1.283 563,757
2005 1.065 1.107 670,046
2004 0.992 1.065 787,696
2003 0.722 0.992 794,250
2002 0.924 0.722 517,261
2001 1.000 0.924 106,535
LMPVET International All Cap Opportunity Subaccount
(3/99)............................................. 2008 1.288 0.723 96,223
2007 1.221 1.288 103,913
2006 0.978 1.221 113,853
2005 0.883 0.978 148,656
2004 0.755 0.883 216,066
2003 0.597 0.755 185,520
2002 0.810 0.597 187,662
2001 1.186 0.810 205,495
2000 1.569 1.186 79,615
1999 1.000 1.569 33,821
LMPVET Investors Subaccount (Class I) (3/99)....... 2008 1.659 1.059 69,357
2007 1.609 1.659 69,933
2006 1.372 1.609 122,704
2005 1.298 1.372 135,284
2004 1.185 1.298 156,443
2003 0.903 1.185 151,723
2002 1.183 0.903 147,027
2001 1.244 1.183 102,276
2000 1.088 1.244 20,655
1999 1.000 1.088 18,654
</Table>
A-7
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
LMPVET Large Cap Growth Subaccount (Class I)
(3/99)............................................. 2008 1.116 0.694 213,063
2007 1.068 1.116 253,432
2006 1.030 1.068 290,193
2005 0.987 1.030 322,563
2004 0.991 0.987 379,187
2003 0.677 0.991 420,200
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
LMPVET Small Cap Growth Subaccount (Class I)
(5/01)............................................. 2008 1.352 0.795 15,752
2007 1.239 1.352 34,531
2006 1.107 1.239 21,260
2005 1.064 1.107 11,581
2004 0.932 1.064 --
2003 0.631 0.932 --
2002 0.974 0.631 --
2001 1.000 0.974 997
LMPVET Social Awareness Subaccount (3/99).......... 2008 1.125 0.835 86,288
2007 1.023 1.125 119,903
2006 0.957 1.023 164,290
2005 0.925 0.957 160,526
2004 0.877 0.925 228,757
2003 0.686 0.877 208,810
2002 0.921 0.686 219,601
2001 1.100 0.921 267,052
2000 1.115 1.100 352,938
1999 1.000 1.115 218,399
Legg Mason Partners Variable Income Trust
LMPVIT Adjustable Rate Income Subaccount (9/03).... 2008 1.059 0.828 60,637
2007 1.054 1.059 58,097
2006 1.020 1.054 76,332
2005 1.005 1.020 65,137
2004 1.001 1.005 57,767
2003 1.000 1.001 13,265
</Table>
A-8
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
LMPVIT High Income Subaccount (5/99)............... 2008 1.301 0.903 79,229
2007 1.307 1.301 79,810
2006 1.187 1.307 87,030
2005 1.166 1.187 108,339
2004 1.065 1.166 75,946
2003 0.842 1.065 42,773
2002 0.877 0.842 37,653
2001 0.918 0.877 46,730
2000 1.007 0.918 32,638
1999 1.000 1.007 20,231
Legg Mason Partners Variable Portfolios V
LMPVPV Small Cap Growth Opportunities Subaccount
(Class I) (5/01)................................... 2007 1.318 1.410 --
2006 1.176 1.318 38,721
2005 1.130 1.176 40,522
2004 0.986 1.130 32,478
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)......... 2007 1.931 2.031 --
2006 1.648 1.931 205,419
2005 1.596 1.648 343,946
2004 1.486 1.596 349,707
2003 1.077 1.486 360,795
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 Total Return Subaccount (Class I) (3/99).... 2007 1.384 1.428 --
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 --
</Table>
A-9
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Lord Abbett Series Fund, Inc.
Lord Abbett Growth and Income Subaccount (Class VC)
(5/04)............................................. 2007 1.323 1.379 --
2006 1.138 1.323 139,240
2005 1.111 1.138 116,362
2004 1.000 1.111 --
Lord Abbett Mid-Cap Value Subaccount (Class VC)
(5/04)............................................. 2007 1.392 1.539 --
2006 1.251 1.392 87,049
2005 1.165 1.251 97,239
2004 1.000 1.165 34,410
Managed Assets Trust
Managed Assets Trust (3/99)........................ 2006 1.243 1.286 --
2005 1.206 1.243 1,087,811
2004 1.111 1.206 987,899
2003 0.918 1.111 993,690
2002 1.013 0.918 1,068,189
2001 1.076 1.013 1,200,147
2000 1.102 1.076 933,773
1999 1.000 1.102 245,954
Met Investors Series Trust
MIST Batterymarch Mid-Cap Stock Subaccount (Class
A) (1/70).......................................... 2008 1.999 1.931 --
2007 1.899 1.999 208,565
2006 1.000 1.899 263,548
MIST BlackRock High Yield Subaccount (Class A)
(4/07) *........................................... 2008 1.715 1.291 286,945
2007 1.752 1.715 364,702
MIST BlackRock Large Cap Core Subaccount (Class A)
(1/70)............................................. 2007 1.130 1.188 --
2006 1.000 1.130 47,332
MIST BlackRock Large Cap Core Subaccount (Class E)
(4/07)............................................. 2008 1.193 0.742 42,836
2007 1.178 1.193 52,037
MIST Clarion Global Real Estate Subaccount (Class
A) (4/07).......................................... 2008 1.037 0.601 547,382
2007 1.227 1.037 695,134
2006 1.000 1.227 1,052,085
MIST Dreman Small Cap Value Subaccount (Class A)
(1/70)............................................. 2008 1.053 0.781 3,496
2007 1.072 1.053 3,496
2006 1.000 1.072 --
MIST Harris Oakmark International Subaccount (Class
A) (1/70) *........................................ 2008 1.324 0.779 80,244
2007 1.346 1.324 110,975
2006 1.000 1.346 68,832
</Table>
A-10
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
MIST Janus Forty Subaccount (Class A) (1/70)....... 2008 0.926 0.534 1,822,392
2007 0.716 0.926 1,664,279
2006 1.000 0.716 2,214,320
MIST Lazard Mid Cap Subaccount (Class A) (4/07).... 2008 1.090 1.226 191,471
2007 1.224 1.090 33,322
MIST Legg Mason Partners Managed Assets Subaccount
(Class A) (1/70)................................... 2008 1.441 1.069 541,314
2007 1.366 1.441 713,853
2006 1.000 1.366 969,775
MIST Lord Abbett Bond Debenture Subaccount (Class
A) (1/70).......................................... 2008 1.235 1.000 51,346
2007 1.166 1.235 42,953
2006 1.000 1.166 5,612
MIST Lord Abbett Growth and Income Subaccount
(Class B) (1/70) *................................. 2008 1.118 0.707 266,250
2007 1.083 1.118 304,362
2006 1.000 1.083 225,735
MIST Lord Abbett Mid Cap Value Subaccount (Class B)
(4/07) *........................................... 2008 1.390 0.845 28,054
2007 1.523 1.390 64,347
MIST Met/AIM Capital Appreciation Subaccount (Class
A) (1/70).......................................... 2008 1.126 0.641 44,755
2007 1.015 1.126 49,884
2006 1.000 1.015 53,874
MIST Met/AIM Small Cap Growth Subaccount (Class A)
(1/70)............................................. 2008 1.138 0.693 28,861
2007 1.030 1.138 48,872
2006 1.000 1.030 --
MIST MFS(R) Emerging Markets Equity Subaccount
(Class A) (4/07)................................... 2008 3.116 1.379 46,184
2007 2.460 3.116 41,536
MIST MFS(R) Research International Subaccount
(Class B) (4/07) *................................. 2008 1.662 0.950 57,376
2007 1.574 1.662 57,376
MIST PIMCO Inflation Protected Bond Subaccount
(Class A) (4/07) *................................. 2008 1.105 1.024 110,255
2007 1.038 1.105 66,495
MIST Pioneer Fund Subaccount (Class A) (1/70)...... 2008 1.066 0.710 47,245
2007 1.024 1.066 73,922
2006 1.000 1.024 97,650
MIST Pioneer Mid-Cap Value Subaccount (Class A)
(1/70)............................................. 2007 1.118 1.238 --
2006 1.000 1.118 --
</Table>
A-11
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
MIST Pioneer Strategic Income Subaccount (Class A)
(1/70)............................................. 2008 1.623 1.437 280,945
2007 1.534 1.623 336,305
2006 1.000 1.534 364,640
MIST Third Avenue Small Cap Value Subaccount (Class
B) (1/70) *........................................ 2008 1.292 0.900 336,398
2007 1.343 1.292 401,095
2006 1.000 1.343 43,659
MIST Van Kampen Mid Cap Growth Subaccount (Class B)
(4/08)............................................. 2008 0.938 0.524 5,963
MetLife Investment Funds, Inc.
MetLife Investment Diversified Bond Subaccount
(Class I) (3/99)................................... 2007 1.425 1.477 --
2006 1.377 1.425 5,738,300
2005 1.360 1.377 6,140,150
2004 1.310 1.360 4,879,858
2003 1.251 1.310 3,623,933
2002 1.157 1.251 3,831,077
2001 1.092 1.157 2,080,975
2000 0.979 1.092 613,585
1999 1.000 0.979 177,125
MetLife Investment International Stock Subaccount
(Class I) (3/99)................................... 2007 1.462 1.576 --
2006 1.165 1.462 2,374,209
2005 1.024 1.165 2,764,381
2004 0.899 1.024 2,498,531
2003 0.697 0.899 2,301,471
2002 0.904 0.697 2,248,416
2001 1.160 0.904 1,238,125
2000 1.272 1.160 476,662
1999 1.000 1.272 97,154
MetLife Investment Large Company Stock Subaccount
(Class I) (3/99)................................... 2007 0.881 0.924 --
2006 0.789 0.881 5,230,988
2005 0.746 0.789 5,752,832
2004 0.683 0.746 5,154,675
2003 0.537 0.683 4,635,797
2002 0.702 0.537 4,005,694
2001 0.840 0.702 2,080,499
2000 0.995 0.840 969,414
1999 1.000 0.995 249,689
</Table>
A-12
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
MetLife Investment Small Company Stock Subaccount
(Class I) (3/99)................................... 2007 2.369 2.376 --
2006 2.101 2.369 999,605
2005 1.974 2.101 1,094,314
2004 1.732 1.974 986,324
2003 1.220 1.732 928,057
2002 1.612 1.220 806,014
2001 1.600 1.612 542,731
2000 1.465 1.600 463,890
1999 1.000 1.465 119,775
Metropolitan Series Fund, Inc.
MSF BlackRock Aggressive Growth Subaccount (Class
D) (1/70).......................................... 2008 1.308 0.704 176,598
2007 1.095 1.308 190,638
2006 1.000 1.095 210,894
MSF BlackRock Bond Income Subaccount (Class A)
(1/70)............................................. 2008 1.423 1.363 398,583
2007 1.349 1.423 422,549
2006 1.000 1.349 443,885
MSF BlackRock Money Market Subaccount (Class A)
(1/70)............................................. 2008 1.247 1.272 912,074
2007 1.196 1.247 819,845
2006 1.000 1.196 864,472
MSF Capital Guardian U.S. Equity Subaccount (Class
A) (4/07) *........................................ 2008 1.098 0.651 --
2007 1.154 1.098 --
MSF Davis Venture Value Subaccount (Class A)
(4/08)............................................. 2008 1.205 0.748 284,521
MSF FI Large Cap Subaccount (Class A) (1/70)....... 2008 0.998 0.546 621,132
2007 0.968 0.998 744,398
2006 1.000 0.968 996,265
MSF FI Value Leaders Subaccount (Class D) (1/70)... 2008 1.442 0.872 816,052
2007 1.396 1.442 1,131,279
2006 1.000 1.396 1,631,929
MSF Jennison Growth Subaccount (Class B) (4/08).... 2008 0.879 0.585 7,996
MSF Lehman Brothers Aggregate Bond Index Subaccount
(Class A) (11/07) *................................ 2008 1.497 1.574 1,383,974
2007 1.476 1.497 2,082,097
MSF MetLife Aggressive Allocation Subaccount (Class
B) (1/70).......................................... 2008 1.108 0.654 64,958
2007 1.081 1.108 69,710
2006 1.000 1.081 --
</Table>
A-13
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
MSF MetLife Conservative Allocation Subaccount
(Class B) (1/70)................................... 2008 1.097 0.932 272,670
2007 1.047 1.097 475,083
2006 1.000 1.047 --
MSF MetLife Conservative to Moderate Allocation
Subaccount (Class B) (1/70)........................ 2008 1.095 0.852 3,167,724
2007 1.053 1.095 2,886,642
2006 1.000 1.053 10,264
MSF MetLife Moderate Allocation Subaccount (Class
B) (1/70).......................................... 2008 1.095 0.776 2,873,729
2007 1.058 1.095 2,846,726
2006 1.000 1.058 --
MSF MetLife Moderate to Aggressive Allocation
Subaccount (Class B) (1/70)........................ 2008 1.145 0.737 1,457,354
2007 1.112 1.145 1,990,934
2006 1.000 1.112 --
MSF MetLife Stock Index Subaccount (Class A)
(11/07) *.......................................... 2008 0.935 0.583 1,227,395
2007 0.942 0.935 1,846,718
MSF MFS(R) Total Return Subaccount (Class F)
(1/70)............................................. 2008 1.610 1.241 1,510,239
2007 1.558 1.610 1,837,378
2006 1.000 1.558 2,384,614
MSF MFS(R) Value Subaccount (Class A) (4/06)....... 2008 1.529 1.024 320,012
2007 1.432 1.529 274,421
2006 1.000 1.432 256,465
MSF Morgan Stanley EAFE(R) Index Subaccount (Class
A) (11/07) *....................................... 2008 1.554 0.893 655,499
2007 1.591 1.554 1,020,290
MSF Oppenheimer Global Equity Subaccount (Class B)
(1/70) *........................................... 2008 1.113 0.657 355,695
2007 1.056 1.113 575,683
2006 1.000 1.056 603,735
MSF Russell 2000(R) Index Subaccount (Class A)
(11/07) *.......................................... 2008 2.360 1.557 342,711
2007 2.428 2.360 483,039
MSF T. Rowe Price Small Cap Growth Subaccount
(Class B) (4/08)................................... 2008 1.359 0.898 290,835
MSF Western Asset Management High Yield Bond
Subaccount (Class A) (1/70)........................ 2007 1.684 1.752 --
2006 1.000 1.684 392,744
</Table>
A-14
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
MSF Western Asset Management U.S. Government
Subaccount (Class A) (1/70) *...................... 2008 1.506 1.491 630,731
2007 1.453 1.506 650,800
2006 1.000 1.453 829,418
Money Market Portfolio
Money Market Subaccount (4/99)..................... 2006 1.151 1.164 --
2005 1.127 1.151 1,623,263
2004 1.125 1.127 1,343,039
2003 1.125 1.125 2,042,971
2002 1.119 1.125 1,522,743
2001 1.087 1.119 1,067,624
2000 1.032 1.087 776,476
1999 1.000 1.032 276,343
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 1.000 1.078 10,342
PIMCO Variable Insurance Trust
PIMCO VIT Real Return Subaccount (Administrative
Class) (7/05)...................................... 2007 1.011 1.034 --
2006 1.012 1.011 72,677
2005 1.008 1.012 42,479
PIMCO VIT Total Return Subaccount (Administrative
Class) (5/01)...................................... 2008 1.401 1.456 750,233
2007 1.298 1.401 457,308
2006 1.260 1.298 656,357
2005 1.240 1.260 692,935
2004 1.192 1.240 531,028
2003 1.144 1.192 391,427
2002 1.057 1.144 395,584
2001 1.000 1.057 42,621
Putnam Variable Trust
Putnam VT Discovery Growth Subaccount (Class IB)
(5/01)............................................. 2008 1.012 0.941 --
2007 0.925 1.012 11,671
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 --
</Table>
A-15
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Putnam VT International Equity Subaccount (Class
IB) (5/01)......................................... 2007 1.457 1.582 --
2006 1.150 1.457 65,112
2005 1.033 1.150 81,614
2004 0.897 1.033 91,730
2003 0.703 0.897 94,997
2002 0.861 0.703 89,130
2001 1.000 0.861 36,530
Putnam VT Small Cap Value Subaccount (Class IB)
(5/01)............................................. 2007 2.035 2.179 --
2006 1.749 2.035 323,007
2005 1.647 1.749 396,869
2004 1.315 1.647 269,097
2003 0.886 1.315 216,542
2002 1.093 0.886 276,266
2001 1.000 1.093 1,734
The Travelers Series Trust
Travelers AIM Capital Appreciation Subaccount
(5/01)............................................. 2006 0.957 1.022 --
2005 0.887 0.957 58,585
2004 0.840 0.887 79,181
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 1.000 1.040 --
Travelers Disciplined Mid Cap Stock Subaccount
(6/99)............................................. 2006 1.812 1.984 --
2005 1.625 1.812 333,491
2004 1.406 1.625 346,328
2003 1.060 1.406 337,337
2002 1.247 1.060 267,434
2001 1.310 1.247 161,359
2000 1.132 1.310 92,328
1999 1.000 1.132 4,950
Travelers Equity Income Subaccount (3/99).......... 2006 1.285 1.354 --
2005 1.240 1.285 1,828,724
2004 1.137 1.240 1,520,872
2003 0.874 1.137 1,326,839
2002 1.024 0.874 1,163,851
2001 1.105 1.024 453,751
2000 1.021 1.105 224,970
1999 1.000 1.021 228,704
</Table>
A-16
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Travelers Federated Stock Subaccount (4/99)........ 2006 1.163 1.208 --
2005 1.113 1.163 63,997
2004 1.015 1.113 64,259
2003 0.802 1.015 64,259
2002 1.002 0.802 57,157
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 0.919 611,994
2004 0.807 0.852 623,861
2003 0.652 0.807 621,409
2002 0.851 0.652 545,335
2001 1.038 0.851 505,916
2000 1.224 1.038 386,475
1999 1.000 1.224 259,740
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 --
Travelers MFS(R) Mid Cap Growth Subaccount (5/99).. 2006 1.052 1.116 --
2005 1.029 1.052 246,885
2004 0.909 1.029 307,936
2003 0.668 0.909 304,034
2002 1.317 0.668 295,213
2001 1.739 1.317 271,882
2000 1.603 1.739 231,771
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 2,061,164
2004 1.240 1.371 1,641,583
2003 1.073 1.240 1,266,270
2002 1.141 1.073 1,130,121
2001 1.150 1.141 511,493
2000 0.994 1.150 177,102
1999 1.000 0.994 56,338
</Table>
A-17
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Travelers MFS(R) Value Subaccount (5/04)........... 2006 1.190 1.289 --
2005 1.127 1.190 167,544
2004 1.000 1.127 21,046
Travelers Mondrian International Stock Subaccount
(4/99)............................................. 2006 1.055 1.215 --
2005 0.971 1.055 86,559
2004 0.846 0.971 87,703
2003 0.663 0.846 63,756
2002 0.768 0.663 45,625
2001 1.049 0.768 47,664
2000 1.194 1.049 47,750
1999 1.000 1.194 18,513
Travelers Pioneer Fund Subaccount (5/99)........... 2006 0.890 0.947 --
2005 0.847 0.890 99,481
2004 0.768 0.847 146,873
2003 0.625 0.768 170,073
2002 0.903 0.625 201,833
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 (1/70).. 2006 1.001 1.057 --
2005 1.000 1.001 --
Travelers Pioneer Strategic Income Subaccount
(6/99)............................................. 2006 1.455 1.473 --
2005 1.415 1.455 243,393
2004 1.285 1.415 81,279
2003 1.084 1.285 70,429
2002 1.032 1.084 57,082
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 1.300 493,056
2004 1.259 1.290 468,725
2003 1.186 1.259 373,662
2002 1.130 1.186 344,814
2001 1.063 1.130 249,243
2000 1.002 1.063 109,131
1999 1.000 1.002 50,386
</Table>
A-18
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Travelers Strategic Equity Subaccount (3/99)....... 2006 0.871 0.911 --
2005 0.861 0.871 649,068
2004 0.787 0.861 862,607
2003 0.598 0.787 929,358
2002 0.908 0.598 975,651
2001 1.057 0.908 1,081,006
2000 1.303 1.057 844,683
1999 1.000 1.303 291,790
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 1,144,943
2004 1.326 1.396 970,706
2003 1.301 1.326 970,322
2002 1.154 1.301 1,040,337
2001 1.099 1.154 350,111
2000 0.968 1.099 167,787
1999 1.000 0.968 101,662
Van Kampen Life Investment Trust
Van Kampen LIT Capital Growth Subaccount (Class II)
(5/01)............................................. 2008 0.917 0.876 --
2007 0.792 0.917 7,996
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 --
Van Kampen LIT Comstock Subaccount (Class II)
(5/03)............................................. 2008 1.687 1.074 33,596
2007 1.741 1.687 45,628
2006 1.512 1.741 32,848
2005 1.464 1.512 47,018
2004 1.257 1.464 35,463
2003 1.000 1.257 15,449
</Table>
A-19
MRA -- SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Van Kampen LIT Enterprise Subaccount (Class II)
(5/01)............................................. 2008 1.034 0.584 --
2007 0.926 1.034 --
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 --
Wells Fargo Variable Trust
Wells Fargo VT Advantage Small/Mid Cap Value
Subaccount (7/99).................................. 2008 1.535 0.845 6,351
2007 1.559 1.535 6,351
2006 1.358 1.559 6,351
2005 1.175 1.358 15,215
2004 1.014 1.175 15,215
2003 0.739 1.014 18,374
2002 0.969 0.739 18,374
2001 0.938 0.969 6,351
2000 0.877 0.938 6,351
1999 1.000 0.877 6,351
</Table>
MRA -- SEPARATE ACCOUNT CHARGES 1.25% 140 FL
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Legg Mason Partners Variable Equity Trust
LMPVET Equity Index Subaccount (Class II) (3/99)... 2008 0.988 0.601 --
2007 0.967 0.988 --
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 --
Met Investors Series Trust
MIST Van Kampen Mid Cap Growth Subaccount (Class B)
(4/08)............................................. 2008 1.130 0.623 --
Metropolitan Series Fund, Inc.
MSF Davis Venture Value Subaccount (Class A)
(4/08)............................................. 2008 3.263 2.000 --
MSF Jennison Growth Subaccount (Class B) (4/08).... 2008 1.140 0.750 --
</Table>
A-20
MRA -- SEPARATE ACCOUNT CHARGES 1.25% 140 FL (CONTINUED)
<Table>
<Caption>
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
MSF T. Rowe Price Small Cap Growth Subaccount
(Class B) (4/08)................................... 2008 1.320 0.861 --
</Table>
- ---------
* We are currently waiving a portion of the Mortality and Expense Risk
charge for this Subaccount. Please see "Fee Table -- Annual Separate
Account Charges" for more information.
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, 2008.
Number of Units Outstanding at the end of the year may include units for
Contracts in payout phase.
Variable Funding Option mergers and substitutions that occurred between January
1, 2005 and December 31, 2008 are displayed below. Please see Appendix B for
more information on Variable Funding Option mergers, substitutions and other
changes.
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.
A-21
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 S+A54eries 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.
A-22
Effective on or about 04/30/2007, AIM Variable Insurance Funds-AIM V.I. Core
Equity Fund was replaced by Metropolitan Series Fund, Inc.-Capital Guardian U.S.
Equity Portfolio and is no longer available as a funding option.
Effective on or about 04/30/2007, Credit Suisse Trust-Credit Suisse Trust
Emerging Markets Portfolio was replaced by Met Investors Series Trust-MFS(R)
Emerging Markets Equity Portfolio and is no longer available as a funding
option.
Effective on or about 04/30/2007, Legg Mason Partners Investment Series-Legg
Mason Partners Variable Premier Selections All Cap Growth Portfolio merged into
Legg Mason Partners Variable Equity Trust-Legg Mason Partners Variable
Aggressive Growth Portfolio and is no longer available as a funding option.
Effective on or about 04/30/2007, Legg Mason Partners Variable Portfolios I,
Inc.-Legg Mason Partners Variable All Cap Portfolio merged into Legg Mason
Partners Variable Equity Trust-Legg Mason Partners Variable Fundamental Value
Portfolio and is no longer available as a funding option.
Effective on or about 04/30/2007, Legg Mason Partners Variable Portfolios V-Legg
Mason Partners Variable Small Cap Growth Opportunities Portfolio merged into
Legg Mason Partners Variable Equity Trust-Legg Mason Partners Variable Small Cap
Growth Portfolio and is no longer available as a funding option.
Effective on or about 04/30/2007, Legg Mason Partners Variable Portfolios I,
Inc.-Legg Mason Partners Variable Total Return Portfolio merged into Legg Mason
Partners Variable Equity Trust-Legg Mason Partners Variable Capital and Income
Portfolio and is no longer available as a funding option.
Effective on or about 04/30/2007, Lord Abbett Series Fund, Inc.-Lord Abbett
Growth and Income Portfolio 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 04/30/2007, Lord Abbett Series Fund, Inc.-Lord Abbett Mid-
Cap Value Portfolio was replaced by Met Investors Series Trust-Lord Abbett Mid-
Cap Value Portfolio and is no longer available as a funding option.
Effective on or about 04/30/2007, Met Investors Series Trust-BlackRock Large-Cap
Core Portfolio -- Class A was exchanged for Met Investors Series Trust-BlackRock
Large-Cap Core Portfolio -- Class E and is no longer available as a funding
option.
Effective on or about 04/30/2007, Met Investors Series Trust-Pioneer Mid-Cap
Value Portfolio merged into Met Investors Series Trust-Lazard Mid-Cap Portfolio
and is no longer available as a funding option.
Effective on or about 04/30/2007, Metropolitan Series Funds, Inc.-Western Asset
Management High Yield Bond Portfolio merged into Met Investors Series Trust-
BlackRock High Yield Portfolio and is no longer available as a funding option.
Effective on or about 04/30/2007, PIMCO Variable Insurance Trust-Real Return
Portfolio was replaced by Met Investors Series Trust-PIMCO Inflation Protected
Bond Portfolio and is no longer available as a funding option.
Effective on or about 04/30/2007, Putnam Variable Trust-Putnam VT International
Equity Fund was replaced by Met Investors Series Trust-MFS(R) Research
International Portfolio and is no longer available as a funding option.
Effective on or about 04/30/2007, Putnam Variable Trust-Putnam VT Small Cap
Value Fund was replaced by Met Investors Series Trust-Third Avenue Small Cap
Value Portfolio and is no longer available as a funding option.
Effective on or about 11/12/2007, MetLife Investment Funds, Inc.-MetLife
Investment Diversified Bond Portfolio was replaced by Metropolitan Series Fund,
Inc.-Lehman Brothers(R) Aggregate Bond Index Portfolio -- Class A and is no
longer available as a funding option.
Effective on or about 11/12/2007, MetLife Investment Funds, Inc.-MetLife
Investment International Stock Portfolio was replaced by Metropolitan Series
Fund, Inc.-Morgan Stanley EAFE(R) Index Portfolio -- Class A and is no longer
available as a funding option.
Effective on or about 11/12/2007, MetLife Investment Funds, Inc.-MetLife
Investment Large Company Stock Fund was replaced by Metropolitan Series Fund,
Inc.-MetLife Stock Index Portfolio -- Class A and is no longer available as a
funding option.
A-23
Effective on or about 11/12/2007, MetLife Investment Funds, Inc.-MetLife
Investment Small Company Stock Fund was replaced by Metropolitan Series Fund,
Inc.-Russell 2000(R) Index Portfolio -- Class A and is no longer available as a
funding option.
Effective on or about 4/28/2008, Dreyfus Variable Investment Fund-Appreciation
Portfolio was replaced by Metropolitan Series Fund, Inc.-Davis Venture Value
Portfolio and is no longer available as a funding option.
Effective on or about 4/28/2008, Dreyfus Variable Investment Fund-Developing
Leaders Portfolio was replaced by Metropolitan Series Fund, Inc.-T. Rowe Price
Small Cap Growth Portfolio and is no longer available as a funding option.
Effective on or about 4/28/2008, Janus Aspen Series-Worldwide Growth Portfolio
was replaced by Metropolitan Series Fund, Inc.-Oppenheimer Global Equity
Portfolio and is no longer available as a funding option.
Effective on or about 4/28/2008, Putnam Variable Trust-Putnam VT Discovery
Growth Fund was replaced by Met Investors Series Trust-Van Kampen Mid Cap Growth
Portfolio and is no longer available as a funding option.
Effective on or about 4/28/2008, Van Kampen Life Investment Trust-Van Kampen
Life Investment Trust Strategic Growth Portfolio was replaced by Metropolitan
Series Fund, Inc.-Jennison Growth Portfolio and is no longer available as a
funding option.
Effective on or about 4/28/2008, Met Investors Series Trust-Batterymarch Mid-Cap
Stock Portfolio merged into Met Investors Series Trust-Lazard Mid Cap Portfolio
and is no longer available as a funding option.
Effective on or about 4/28/2008, Met Investors Series Trust-Lazard Mid Cap
Portfolio-Class B was exchanged into Met Investors Series Trust-Lazard Mid Cap
Portfolio-Class A.
Effective on or about 4/28/2008, Met Investors Series Trust-MFS(R) Value
Portfolio was reorganized into Metropolitan Series Fund, Inc.-MFS(R) Value
Portfolio.
A-24
APPENDIX B
- --------------------------------------------------------------------------------
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>
</Table>
<Table>
<Caption>
FORMER NAME NEW NAME
- --------------------------------------------- ---------------------------------------------
METROPOLITAN SERIES FUND, INC. METROPOLITAN SERIES FUND, INC.
Lehman Brothers(R) Aggregate Bond Index Barclays Capital Aggregate Bond Index
Portfolio -- Class A Portfolio -- Class A
JANUS ASPEN SERIES JANUS ASPEN SERIES
Mid Cap Growth Portfolio -- Service Enterprise Portfolio -- Service Shares
Shares
</Table>
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
- --------------------------------------------- ---------------------------------------------
MET INVESTORS SERIES TRUST METROPOLITAN SERIES FUND, INC.
Met/AIM Capital Appreciation BlackRock Legacy Large Cap Growth
Portfolio -- Class A Portfolio -- Class A
Legg Mason Partners Managed Assets BlackRock Diversified Portfolio -- Class A
Portfolio -- Class A
METROPOLITAN SERIES FUND, INC. MET INVESTORS SERIES TRUST
Capital Guardian U.S. Equity Pioneer Fund Portfolio -- Class A
Portfolio -- Class A
METROPOLITAN SERIES FUND, INC. METROPOLITAN SERIES FUND, INC.
FI Large Cap Portfolio -- Class A BlackRock Legacy Large Cap Growth
Portfolio -- Class A
</Table>
UNDERLYING FUND SUBSTITUTIONS
The following new Underlying Funds were replaced by the former Underlying Funds.
<Table>
<Caption>
FORMER UNDERLYING FUND NEW UNDERLYING FUND
- --------------------------------------------- ---------------------------------------------
LEGG MASON PARTNERS VARIABLE EQUITY TRUST METROPOLITAN SERIES FUND, INC.
Legg Mason Partners Variable Equity Index MetLife Stock Index Portfolio -- Class A
Portfolio -- Class II
PIMCO VARIABLE INSURANCE TRUST MET INVESTORS SERIES TRUST
PIMCO VIT Total Return PIMCO Total Return Portfolio -- Class B
Portfolio -- Administrative Class
VAN KAMPEN LIFE INVESTMENT TRUST MET INVESTORS SERIES TRUST
Van Kampen Life Investment Trust Comstock Van Kampen Comstock Portfolio -- Class B
Portfolio -- Class II
</Table>
B-1
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APPENDIX C
- --------------------------------------------------------------------------------
PORTFOLIO LEGAL AND MARKETING NAMES
<Table>
<Caption>
SERIES FUND/TRUST PORTFOLIO/SERIES MARKETING NAME
- --------------------------------- --------------------------------- ---------------------------------
American Funds Insurance Global Growth Fund American Funds Global Growth Fund
Series(R)
American Funds Insurance Growth-Income Fund American Funds Growth-Income Fund
Series(R)
American Funds Insurance Growth Fund American Funds Growth Fund
Series(R)
Janus Aspen Series Enterprise Portfolio Janus Aspen Series Enterprise
Portfolio
Metropolitan Series Fund, Inc. FI Value Leaders Portfolio FI Value Leaders Portfolio
(Fidelity)
Van Kampen Life Investment Trust Van Kampen Life Investment Trust Van Kampen LIT Enterprise
Enterprise Portfolio Portfolio
Fidelity(R) Variable Insurance Contrafund(R) Portfolio Fidelity VIP Contrafund(R)
Products Portfolio
Fidelity(R) Variable Insurance Dynamic Capital Appreciation Fidelity VIP Dynamic Capital
Products Portfolio Appreciation Portfolio
Fidelity(R) Variable Insurance Mid Cap Portfolio Fidelity VIP Mid Cap Portfolio
Products
</Table>
ANNUITY CONTRACT LEGAL AND MARKETING NAME
<Table>
<Caption>
ANNUITY CONTRACT MARKETING NAME
- --------------------------------- ---------------------------------
Registered Fixed Account Option Fixed Account
</Table>
C-1
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APPENDIX D
- --------------------------------------------------------------------------------
CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
The Statement of Additional Information contains more specific information and
financial statements relating to the Separate Account and the Company. A list of
the contents of the Statement of Additional Information is set forth below:
The Insurance Company
Principal Underwriter
Distribution and Principal Underwriting Agreement
Valuation of Assets
Calculation of Money Market Yield
ERISA
Taxes
Independent Registered Public Accounting Firms
Condensed Financial Information
Financial Statements
- --------------------------------------------------------------------------------
COPIES OF THE STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 2009 ARE
AVAILABLE WITHOUT CHARGE. TO REQUEST A COPY, PLEASE COMPLETE THE COUPON FOUND
BELOW AND MAIL IT TO: METLIFE INSURANCE COMPANY OF CONNECTICUT, 4700 WESTOWN
PARKWAY, STE. 200, WEST DES MOINES, IA 50266
Name:
Address:
Form SAI Book 21
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
- --------------------------------------------------------------------------------
COMPETING FUNDS
The Underlying Funds listed below are Competing Funds: defined as any investment
option under the Plan which, in our opinion consists primarily of fixed income
securities and/or money market instruments.
- Barclays Capital Aggregate Bond Index Portfolio
- BlackRock Money Market Portfolio
- Black Rock High Yield Portfolio
- BlackRock Bond Income Portfolio
- Legg Mason Partners Variable Adjustable Rate Income Portfolio
- Legg Mason Partners Variable High Income Portfolio
- Lord Abbett Bond Debenture Portfolio
- PIMCO Inflation Protection Bond Portfolio
- PIMCO Total Return Portfolio
- Western Asset Management U.S. Government Portfolio
F-1
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APPENDIX G
- --------------------------------------------------------------------------------
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 and associated credits made within a one-year period
before confinement in an eligible nursing home begins, less any Purchase
Payments and associated credits 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.
G-1
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APPENDIX H
- --------------------------------------------------------------------------------
MARKET VALUE ADJUSTMENT
(THIS SECTION IS APPLICABLE ONLY TO THE VARIABLE OR FIXED LIQUIDITY BENEFIT)
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 = [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.
H-1