METLIFE INC - 10-Q Quarterly Report

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO
--------------- ----------------

COMMISSION FILE NUMBER: 001-15787

METLIFE, INC.
(Exact name of registrant as specified in its charter)

Delaware 13-4075851
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

One Madison Avenue, New York, NY 10010
(Address of principal (Zip Code)
executive offices)

(212) 578-2211
(Registrant's telephone number,
including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

YES [X] NO [ ]

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

YES [X] NO [ ]

At May 3, 2004, 755,839,663 shares of the Registrant's Common Stock, $.01 par
value per share, were outstanding.

TABLE OF CONTENTS

2

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including the Management's Discussion
and Analysis of Financial Condition and Results of Operations, contains
statements which constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including statements relating
to trends in the operations and financial results and the business and the
products of the Registrant and its subsidiaries, as well as other statements
including words such as "anticipate," "believe," "plan," "estimate," "expect,"
"intend" and other similar expressions. "MetLife" or the "Company" refers to
MetLife, Inc., a Delaware corporation (the "Holding Company"), and its
subsidiaries, including Metropolitan Life Insurance Company ("Metropolitan
Life"). Forward-looking statements are made based upon management's current
expectations and beliefs concerning future developments and their potential
effects on the Company. Such forward-looking statements are not guarantees of
future performance.

Actual results may differ materially from those included in the
forward-looking statements as a result of risks and uncertainties including, but
not limited to, the following: (i) changes in general economic conditions,
including the performance of financial markets and interest rates; (ii)
heightened competition, including with respect to pricing, entry of new
competitors and the development of new products by new and existing competitors;
(iii) unanticipated changes in industry trends; (iv) MetLife, Inc.'s primary
reliance, as a holding company, on dividends from its subsidiaries to meet debt
payment obligations and the applicable regulatory restrictions on the ability of
the subsidiaries to pay such dividends; (v) deterioration in the experience of
the "closed block" established in connection with the reorganization of
Metropolitan Life; (vi) catastrophe losses; (vii) adverse results or other
consequences from litigation, arbitration or regulatory investigations; (viii)
regulatory, accounting or tax changes that may affect the cost of, or demand
for, the Company's products or services; (ix) downgrades in the Company's and
its affiliates' claims paying ability, financial strength or credit ratings; (x)
changes in rating agency policies or practices; (xi) discrepancies between
actual claims experience and assumptions used in setting prices for the
Company's products and establishing the liabilities for the Company's
obligations for future policy benefits and claims; (xii) discrepancies between
actual experience and assumptions used in establishing liabilities related to
other contingencies or obligations; (xiii) the effects of business disruption or
economic contraction due to terrorism or other hostilities; (xiv) the Company's
ability to identify and consummate on successful terms any future acquisitions,
and to successfully integrate acquired businesses with minimal disruption; and
(xv) other risks and uncertainties described from time to time in MetLife,
Inc.'s filings with the U.S. Securities and Exchange Commission, including its
S-1 and S-3 registration statements. The Company specifically disclaims any
obligation to update or revise any forward-looking statement, whether as a
result of new information, future developments or otherwise.

3

PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

METLIFE, INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2004 AND DECEMBER 31, 2003

(DOLLARS IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

SEE ACCOMPANYING NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS.

4

METLIFE, INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

SEE ACCOMPANYING NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS.

5

METLIFE, INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2004

(DOLLARS IN MILLIONS)

SEE ACCOMPANYING NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS.

6

METLIFE, INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

(DOLLARS IN MILLIONS)

SEE ACCOMPANYING NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS.

7

METLIFE, INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF ACCOUNTING POLICIES

BUSINESS

"MetLife" or the "Company" refers to MetLife, Inc., a Delaware corporation
(the "Holding Company"), and its subsidiaries, including Metropolitan Life
Insurance Company ("Metropolitan Life"). MetLife is a leading provider of
insurance and other financial services to a broad spectrum of individual and
institutional customers. The Company offers life insurance, annuities,
automobile and homeowners insurance and mutual funds and retail banking services
to individuals, as well as group insurance, reinsurance and retirement and
savings products and services to corporations and other institutions.

BASIS OF PRESENTATION

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America ("GAAP") requires
management to adopt accounting policies and make estimates and assumptions that
affect amounts reported in the unaudited interim condensed consolidated
financial statements. The most critical estimates include those used in
determining: (i) investment impairments; (ii) the fair value of investments in
the absence of quoted market values; (iii) the fair value of derivatives; (iv)
the capitalization and amortization of deferred policy acquisition costs; (v)
the liability for future policyholder benefits; (vi) the liability for
litigation matters; and (vii) accounting for reinsurance transactions,
derivatives and employee benefit plans. In applying these policies, management
makes subjective and complex judgments that frequently require estimates about
matters that are inherently uncertain. Many of these policies, estimates and
related judgments are common in the insurance and financial services industries;
others are specific to the Company's businesses and operations. Actual results
could differ from those estimates.

The accompanying unaudited interim condensed consolidated financial
statements include the accounts of (i) the Holding Company and its subsidiaries;
(ii) partnerships and joint ventures in which the Company has a majority voting
interest; and (iii) variable interest entities ("VIEs") for which the Company is
deemed to be the primary beneficiary. Closed block assets, liabilities, revenues
and expenses are combined on a line-by-line basis with the assets, liabilities,
revenues and expenses outside the closed block based on the nature of the
particular item (See Note 5). Effective January 1, 2004, assets, liabilities,
revenues and expenses relating to certain separate accounts are also combined
with the assets, liabilities, revenues and expenses of the general account. See
"-- Application of Recent Accounting Pronouncements". Intercompany accounts and
transactions have been eliminated.

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

Minority interest related to consolidated entities included in other
liabilities was $1,005 million and $950 million at March 31, 2004 and December
31, 2003, respectively.

Certain amounts in the prior year's unaudited interim condensed consolidated
financial statements have been reclassified to conform with the 2004
presentation.

The accompanying unaudited interim condensed consolidated financial
statements reflect all adjustments (including normal recurring adjustments)
necessary to present fairly the consolidated financial position of the Company
at March 31, 2004, its consolidated results of operations and its consolidated
cash flows for the three months ended March 31, 2004 and 2003 and its
consolidated statement of stockholders' equity for the three months ended March
31, 2004, in accordance with GAAP. Interim results are not necessarily
indicative of full year performance. These unaudited interim condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements of the Company for the year ended December 31,
2003 included in MetLife, Inc.'s 2003 Annual Report on Form 10-K filed with the
U.S. Securities and Exchange Commission ("SEC").

8

FEDERAL INCOME TAXES

Federal income taxes for interim periods have been computed using an
estimated annual effective income tax rate. This rate is revised, if necessary,
at the end of each successive interim period to reflect the current estimate of
the annual effective income tax rate.

APPLICATION OF RECENT ACCOUNTING PRONOUNCEMENTS

Effective January 1, 2004, the Company adopted Statement of Position 03-1,
Accounting and Reporting by Insurance Enterprises for Certain Nontraditional
Long-Duration Contracts and for Separate Accounts ("SOP 03-1"). SOP 03-1
provides guidance on (i) the classification and valuation of long-duration
contract liabilities; (ii) the accounting for sales inducements; and (iii)
separate account presentation and valuation. At adoption, the Company increased
future policyholder benefits for changes in the methodology relating to various
guaranteed death and annuitization benefits and for determining reserves for
certain universal life insurance contracts by approximately $68 million, which
has been reported as a cumulative effect of a change in accounting. This amount
is net of corresponding changes in deferred policy acquisition costs ("DAC")
including value of business acquired and unearned revenue liability ("offsets")
under certain variable annuity and life contracts and income taxes. Industry
standards and practices may continue to evolve relating to the valuation of
liabilities relating to these types of benefits and contracts, which may result
in further adjustments to the Company's measurement of such liabilities in
subsequent accounting periods. Certain other contracts sold by the Company
provide for a return through periodic crediting rates, surrender adjustments or
termination adjustments based on the total return of a contractually referenced
pool of assets owned by the Company. To the extent that such contracts are not
accounted for under the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging
Activities ("SFAS 133") and not already credited to the contract account
balance, under SOP 03-1 the change relating to the fair value of the referenced
pool of assets is recorded as a liability through net investment-related gains
(losses). Prior to the adoption of SOP 03-1, the Company recorded the change in
such liability as other comprehensive income. At adoption, this change decreased
net income and increased other comprehensive income by $63 million, net of
income taxes, which were recorded as cumulative effects of a change in
accounting. Effective with the adoption of SOP 03-1, costs associated with
enhanced or bonus crediting rates to contractholders must be deferred and
amortized over the life of the related contract using assumptions consistent
with the amortization of DAC. Since the Company followed a similar approach
prior to adoption of SOP 03-1, the provisions of SOP 03-1 relating to sales
inducements had no significant impact on the Company's unaudited interim
condensed consolidated financial statements. At adoption, the Company
reclassified $155 million of ownership in its own separate accounts from other
assets to fixed maturities, equity securities and cash and cash equivalents.
This reclassification had no significant impact on net income or other
comprehensive income at adoption. In accordance with SOP 03-1's guidance for the
reporting of certain separate accounts, at adoption the Company also
reclassified $1.7 billion of separate account assets to general account
investments and $1.7 billion of separate account liabilities to future policy
benefits and policyholder account balances. This reclassification decreased net
income and increased other comprehensive income by $27 million, net of income
taxes, which were reported as cumulative effects of a change in accounting. As a
result of the adoption of SOP 03-1, the Company reduced net income by $14
million, net of offsets and income taxes, for the three months ended March 31,
2004. (See Note 4)

Effective December 31, 2003, the Company adopted Emerging Issues Task Force
("EITF") Issue No. 03-1, The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments ("EITF 03-1"). EITF 03-1 provides guidance on
the disclosure requirements for other-than-temporary impairments of debt and
marketable equity investments that are accounted for under SFAS No. 115,
Accounting for Certain Investments in Debt and Equity Securities ("SFAS 115").
The adoption of EITF 03-1 requires the Company to include certain quantitative
and qualitative disclosures for debt and marketable equity securities classified
as available-for-sale or held-to-maturity under SFAS 115 that are impaired at
the balance sheet date but for which an other-than-temporary impairment has not
been recognized. The adoption of EITF 03-1 only required additional disclosures
and, therefore, did not impact the Company's unaudited interim condensed
consolidated financial statements.

In December 2003, the Financial Accounting Standards Board ("FASB") revised
SFAS No. 132, Employers' Disclosures about Pensions and Other Postretirement
Benefits -- an Amendment of FASB Statements No. 87, 88 and 106 ("SFAS 132(r)").
SFAS 132(r) retains most of the disclosure requirements of SFAS 132 and requires
additional disclosure about assets, obligations, cash flows and net periodic
benefit cost of defined benefit pension plans and other defined postretirement
plans. SFAS 132(r) was primarily effective for fiscal years ending after
December 15, 2003; however, certain disclosures about foreign plans and
estimated future benefit payments are effective for fiscal years ending after
June 15, 2004. The Company's adoption of SFAS 132(r) on December 31, 2003 did
not have a significant impact on its consolidated financial statements since it
only revised disclosure requirements. In January 2004, the FASB issued FASB
Staff Position ("FSP") No. 106-1, Accounting and Disclosure Requirements Related
to the Medicare Prescription Drug, Improvement and Modernization Act of 2003
("FSP 106-1"), which permits a sponsor of a postretirement health care plan that
provides a prescription drug benefit to make a one-time election to defer
accounting for the effects of the new

9

legislation. The Company has elected to defer the accounting until further
guidance is issued by the FASB. The measurements of the Company's postretirement
accumulated benefit plan obligation and net periodic benefit cost do not reflect
the effects of the new legislation. The guidance, when issued, could require the
Company to change previously reported information.

Effective October 1, 2003, the Company adopted Statement 133 Implementation
Issue No. B36, Embedded Derivatives: Modified Coinsurance Arrangements and Debt
Instruments That Incorporate Credit Risk Exposures That Are Unrelated or Only
Partially Related to the Creditworthiness of the Obligor under Those Instruments
("Issue B36"). Issue B36 concluded that (i) a company's funds withheld payable
and/or receivable under certain reinsurance arrangements, and (ii) a debt
instrument that incorporates credit risk exposures that are unrelated or only
partially related to the creditworthiness of the obligor include an embedded
derivative feature that is not clearly and closely related to the host contract.
Therefore, the embedded derivative feature is measured at fair value on the
balance sheet and changes in fair value are reported in income. As a result of
the adoption of Issue B36, the Company recognized investment-related losses and
related amortization of DAC of $13 million, net of income taxes, for the three
months ended March 31, 2004.

Effective July 1, 2003, the Company adopted SFAS No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities ("SFAS 149").
SFAS 149 amended and clarified the accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. Except for certain previously issued and
effective guidance that was incorporated in SFAS 149, SFAS 149 is effective for
contracts entered into or modified after June 30, 2003. The Company's adoption
of SFAS 149 did not have a significant impact on its unaudited interim condensed
consolidated financial statements.

During 2003, the Company adopted FASB Interpretation No. 46 Consolidation of
Variable Interest Entities -- An Interpretation of ARB No. 51 ("FIN 46") and its
December 2003 revision ("FIN 46(r)"). Certain of the Company's asset-backed
securitizations, collateralized debt obligations, structured investment
transactions, and investments in real estate joint ventures and other limited
partnership interests meet the definition of a VIE and must be consolidated, in
accordance with the transition rules and effective dates, if the Company is
deemed to be the primary beneficiary. A VIE is defined as (i) any entity in
which the equity investments at risk in such entity do not have the
characteristics of a controlling financial interest, or (ii) any entity that
does not have sufficient equity at risk to finance its activities without
additional subordinated support from other parties. Effective February 1, 2003,
the Company adopted FIN 46 for VIEs created or acquired on or after February 1,
2003 and, effective December 31, 2003, the Company adopted FIN 46(r) with
respect to interests in entities formerly considered special purpose entities
("SPEs"), including interests in asset-backed securities and collateralized debt
obligations. The adoption of FIN 46 as of February 1, 2003 did not have a
significant impact on the Company's unaudited interim condensed consolidated
financial statements. The adoption of the provisions of FIN 46(r) at December
31, 2003 did not require the Company to consolidate any additional VIEs that
were not previously consolidated. In accordance with the provisions of FIN
46(r), the Company elected to defer until March 31, 2004 the consolidation of
interests in VIEs for non SPEs acquired prior to February 1, 2003 for which it
is the primary beneficiary. As a result, effective March 31, 2004, the Company
had consolidated assets and liabilities relating to real estate joint ventures
of $78 million and $15 million, respectively, and assets and liabilities
relating to other limited partnerships of $29 million and $1 million,
respectively, for which the Company was deemed to be the primary beneficiary.
The transition effect recorded at March 31, 2004 as a result of these
consolidations was insignificant.

10

2. INVESTMENTS

NET INVESTMENT-RELATED GAINS (LOSSES)

Net investment-related gains (losses), including changes in valuation
allowances, and related policyholder amounts were as follows:

- ----------

(1) The amounts presented exclude net investment-related gains related to
sales of real estate held-for-sale presented as discontinued operations
in accordance with SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets ("SFAS 144") of $21 million and $90
million, respectively, for the three months ended March 31, 2004 and
2003.

(2) The amounts presented include net investment-related gains related to
scheduled periodic settlement payments on derivative instruments that
do not qualify for hedge accounting under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities ("SFAS 133") of $14
million and $8 million, respectively, for the three months ended March
31, 2004 and 2003.

Investment-related gains (losses) are net of related policyholder amounts.
The amounts netted against investment-related gains (losses) are (i)
amortization of deferred policy acquisition costs to the extent that such
amortization results from investment-related gains (losses); and (ii)
adjustments to the policyholder dividend obligation resulting from
investment-related gains (losses). This presentation may not be comparable to
presentations made by other insurers.

11

The following table shows the estimated fair values and gross unrealized
losses of the Company's fixed maturities in an unrealized loss position,
aggregated by sector and length of time that the securities have been in a
continuous unrealized loss position at March 31, 2004 and December 31, 2003:

At March 31, 2004 and December 31, 2003, the Company had gross unrealized
losses of $11 million and $6 million, respectively, from equity securities that
had been in an unrealized loss position for less than twelve months. The amount
of unrealized losses from equity securities that had been in an unrealized loss
position for twelve months or greater is less than $1 million at both March 31,
2004 and December 31, 2003. The fair value of those equity securities that had
been in an unrealized loss position for less than twelve months is $91 million
and $53 million at March 31, 2004 and December 31, 2003, respectively. The fair
value of those securities that had been in an unrealized loss position for
twelve months or greater is $9 million and $22 million at March 31, 2004 and
December 31, 2003, respectively.

STRUCTURED INVESTMENT TRANSACTIONS

The Company invests in structured notes and similar type instruments, which
generally provide equity-based returns on debt securities. The carrying value of
such investments was approximately $911 million and $880 million at March 31,
2004 and December 31, 2003, respectively. The related income recognized was $3
million and $6 million for the three months ended March 31, 2004 and 2003,
respectively.

12

VARIABLE INTEREST ENTITIES

As discussed in Note 1, the Company has adopted the provisions of FIN 46(r).
The adoption of FIN 46(r) required the Company to consolidate certain VIEs for
which it is the primary beneficiary. The following table presents the total
assets of and maximum exposure to loss relating to VIEs for which the Company
has concluded that (i) it is the primary beneficiary and which are consolidated
in the Company's unaudited interim condensed consolidated financial statements
at March 31, 2004, and (ii) it holds significant variable interests but it is
not the primary beneficiary and which have not been consolidated:

The notional amount at March 31, 2004 and December 31, 2003, includes $5,340
million and $5,177 million, respectively, related to synthetic guaranteed
investment product contracts that are not considered to be accounting hedges. In
all cases, the market value of such contracts at March 31, 2004 and December 31,
2003 exceeds the contract value.

During the three months ended March 31, 2004 and 2003, the Company
recognized net investment expense of $33 million and $3 million, respectively,
from the periodic settlement of interest rate caps and options and interest
rate, foreign currency and credit default swaps that qualify for hedge
accounting.

The following table represents fair value hedges for the:

There were no discontinued fair value hedges during the three months ended
March 31, 2004 or 2003.

14

The following table represents cash flow hedges for the:

The Company uses forward exchange contracts that provide an economic hedge
on portions of its net investments in foreign operations against adverse
movements in foreign currency exchange rates. For the three months ended March
31, 2004, the Company experienced net unrealized gains of $6 million related to
hedges of its investments in foreign operations. Unrealized losses of $4 million
and $10 million were recorded as components of accumulated other comprehensive
income at March 31, 2004 and December 31, 2003, respectively. There were no
foreign operations hedges at March 31, 2003.

For the three months ended March 31, 2004 and 2003, the Company recognized
as net investment-related gains the scheduled periodic settlement payments of
derivative instruments of $14 million and $8 million, respectively, and net
investment-related losses of $24 million and $34 million, respectively, from
derivatives not qualifying as accounting hedges. The use of these
non-speculative derivatives is permitted by the applicable insurance
departments.

4. INSURANCE

CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS

The Company issues variable annuity contracts which may include contractual
guarantees to the contractholder for: (i) return of no less than total deposits
made to the contract less any partial withdrawals ("return of net deposits") and
(ii) the highest contract value on a specified anniversary date minus any
withdrawals following the contract anniversary, or total deposits made to the
contract less any partial withdrawals plus a minimum return ("anniversary
contract value" or "minimum return"). The Company also issues annuity contracts
that apply a lower rate of funds deposited if the contractholder elects to
surrender the contract for cash and a higher rate if the contractholder elects
to annuitize ("two tier annuities"). These guarantees include benefits that are
payable in the event of death or at annuitization. The Company also issues
universal and variable life contracts where the Company contractually guarantees
to the contractholder a secondary guarantee or a guaranteed paid up benefit.

The assets supporting the variable portion of contracts with guarantees are
carried at fair value and reported in total separate account assets with an
equivalent amount reported in separate account liabilities in the unaudited
interim condensed consolidated balance sheets. Net investment income, net
realized gains (losses) and net unrealized gains (losses) relating to such
separate accounts accrue directly to the contractholders and, accordingly, are
not reflected in the Company's unaudited interim condensed consolidated
financial statements. Amounts assessed against the contractholders for
mortality, administrative, and other services are included in universal life and
investment-type policy fees. Liabilities for guarantees and changes in such
liabilities are included in future policy benefits and policyholder benefits and
claims in the unaudited interim condensed consolidated balance sheets and
statements of income, respectively.

15

The Company had the following types of guarantees relating to annuity and
universal and variable life contracts at:

- ----------

(1) The net amount at risk for guarantees of amounts in the event of death
is defined as the current guaranteed minimum death benefit in excess of
the current account balance at the balance sheet date.

(2) The net amount at risk for guarantees of amounts at annuitization is
defined as the present value of the minimum guaranteed annuity payments
available to the contractholder determined in accordance with the terms
of the contract in excess of the current account balance.

(3) The net amount at risk for two tier annuities is based on the excess of
the upper tier, adjusted for a profit margin, less the lower tier.

The net amount at risk is based on the direct amount at risk (excluding
reinsurance).

The Company's annuity and life contracts with guarantees may offer more than
one type of guarantee in each contract. Therefore, the amounts listed above may
not be mutually exclusive.

16

Liabilities for guarantees (excluding base policy liabilities) relating to
annuity and universal and variable life contracts are as follows:

The guaranteed death benefit liabilities are determined by estimating the
expected value of death benefits in excess of the projected account balance and
recognizing the excess ratably over the accumulation period based on total
expected assessments. The Company regularly evaluates estimates used and adjusts
the additional liability balance, with a related charge or credit to benefit
expense, if actual experience or other evidence suggests that earlier
assumptions should be revised. The assumptions used in estimating the liability
at March 31, 2004 are consistent with those used for amortizing DAC, including
the mean reversion assumption. The assumptions of investment performance and
volatility are consistent with historical S&P experience. The benefits used in
calculating the liabilities are based on the average benefits payable over a
range of scenarios, as required in SOP 03-1.

The guaranteed annuitization benefit liabilities are determined by
estimating the expected value of the annuitization benefits in excess of the
projected account balance at the date of annuitization and recognizing the
excess ratably over the accumulation period based on total expected assessments.
The Company regularly evaluates estimates used and adjusts the additional
liability balance, with a related charge or credit to benefit expense, if actual
experience or other evidence suggests that earlier assumptions should be
revised. The assumptions used for calculating such guaranteed annuitization
benefit liabilities at March 31, 2004 are consistent with those used for
calculating the guaranteed death benefit liabilities. In addition, the
calculation of the guaranteed annuitization benefit liabilities incorporates a
percentage of the potential annuitizations that may be elected by the
contractholder.

The liabilities for universal and variable life secondary guarantees and
paid-up guarantees are determined by estimating the expected value of death
benefits payable when the account balance is projected to be zero and
recognizing those benefits ratably over the accumulation period based on total
expected assessments. The Company regularly evaluates estimates used and adjusts
the additional liability balances, with a related charge or credit to benefit
expense, if actual experience or other evidence suggests that earlier
assumptions should be revised. The assumptions used in estimating the secondary
and paid up guarantee liabilities at March 31, 2004 are consistent with those
used for amortizing deferred acquisition costs. The assumptions of investment
performance and volatility for variable products are consistent with historical
S&P experience. The benefits used in calculating the liabilities are based on
the average benefits payable over a range of scenarios, as required by SOP 03-1.

SEPARATE ACCOUNTS

Account balances of contracts with guarantees are invested in separate
account asset classes as follows at:

At March 31, 2004, fixed maturities, equity securities and cash and cash
equivalents include $79 million, $68 million and $15 million, respectively, of
the Company's proportional interest in separate accounts.

17

During the three months ended March 31, 2004, there were no
investment-related gains (losses) on transfers of assets from the general
account to the separate account.

SALES INDUCEMENTS

The Company defers sales inducements and amortizes them over the life of the
policy using the same methodology and assumptions used to amortize DAC. The
Company has two different types of sales inducements: (i) a bonus whereby the
policyholder's initial account balance is increased by an amount equal to a
specified percentage of the customer's deposit and (ii) the policyholder
receives a higher interest rate than the normal general account interest rate
credited on money in the enhanced dollar cost averaging program. Changes in
deferred sales inducements are as follows:

18

5. CLOSED BLOCK

On April 7, 2000, (the "date of demutualization"), Metropolitan Life
converted from a mutual life insurance company to a stock life insurance company
and became a wholly-owned subsidiary of MetLife, Inc. The conversion was
pursuant to an order by the New York Superintendent of Insurance (the
"Superintendent") approving Metropolitan Life's plan of reorganization, as
amended (the "plan"). On the date of demutualization, Metropolitan Life
established a closed block for the benefit of holders of certain individual life
insurance policies of Metropolitan Life.

Liabilities and assets designated to the closed block are as follows:

19

Information regarding the policyholder dividend obligation is as follows:

Closed block revenues and expenses are as follows:

The change in maximum future earnings of the closed block is as follows:

Metropolitan Life charges the closed block with federal income taxes, state
and local premium taxes, and other additive state or local taxes, as well as
investment management expenses relating to the closed block as provided in the
plan of demutualization. Metropolitan Life also charges the closed block for
expenses of maintaining the policies included in the closed block.

20

Many of the derivative instrument strategies used by the Company are also
used for the closed block. The table below provides a summary of the notional
amount and fair value of derivatives by type of hedge designation at:

During the three months ended March 31, 2004 and 2003, net investment
expense and net investment income from the periodic settlement of interest rate,
foreign currency and credit default swaps that qualify for hedge accounting were
insignificant. During the three months ended March 31, 2004 and 2003, net
investment-related gains (losses) from ineffective fair value hedging activities
were insignificant. There were no discontinued fair value hedges during the
three months ended March 31, 2004 or 2003.

The following table represents cash flow hedges for the:

For the three months ended March 31, 2004 and 2003, net investment income
and net investment-related gains recognized from derivatives not qualifying as
accounting hedges were insignificant. The use of these non-speculative
derivatives is permitted by the applicable insurance department.

6. METLIFE CAPITAL TRUST I

In connection with MetLife, Inc.'s initial public offering in April 2000,
the Holding Company and MetLife Capital Trust I (the "Trust") issued equity
security units (the "units"). Each unit originally consisted of (i) a contract
to purchase, for $50, shares of the Holding Company's common stock (the
"purchase contracts") on May 15, 2003; and (ii) a capital security of the Trust,
with a stated liquidation amount of $50.

In accordance with the terms of the units, the Trust was dissolved on
February 5, 2003, and $1,006 million aggregate principal amount of 8.00%
debentures of the Holding Company (the "MetLife debentures"), the sole assets of
the Trust, were distributed to the owners of the Trust's capital securities in
exchange for their capital securities. The MetLife debentures were remarketed on
behalf of the debenture owners on February 12, 2003 and the interest rate on the
MetLife debentures was reset as of February 15, 2003 to 3.911% per annum for a
yield to maturity of 2.876%. As a result of the remarketing, the debenture
owners received $21 million ($0.03 per diluted common share) in excess of the
carrying value of the capital securities. This excess was recorded by the
Company as a

21

charge to additional paid-in capital and, for the purpose of calculating
earnings per share, is subtracted from net income to arrive at net income
available to common shareholders.

On May 15, 2003, the purchase contracts associated with the units were
settled. In exchange for $1,006 million, the Company issued 2.97 shares of
MetLife, Inc. common stock per purchase contract, or approximately 59.8 million
shares of treasury stock. The excess of the Company's cost of the treasury stock
($1,662 million) over the contract price of the stock issued to the purchase
contract holders ($1,006 million) was $656 million, which was recorded as a
direct reduction to retained earnings.

7. COMMITMENTS, CONTINGENCIES AND GUARANTEES

Sales Practices Claims

Over the past several years, Metropolitan Life, New England Mutual Life
Insurance Company ("New England Mutual") and General American Life Insurance
Company ("General American") have faced numerous claims, including class action
lawsuits, alleging improper marketing and sales of individual life insurance
policies or annuities. These lawsuits are generally referred to as "sales
practices claims."

In December 1999, a federal court approved a settlement resolving sales
practices claims on behalf of a class of owners of permanent life insurance
policies and annuity contracts or certificates issued pursuant to individual
sales in the United States by Metropolitan Life, Metropolitan Insurance and
Annuity Company or Metropolitan Tower Life Insurance Company between January 1,
1982 and December 31, 1997. The class includes owners of approximately six
million in-force or terminated insurance policies and approximately one million
in-force or terminated annuity contracts or certificates.

Similar sales practices class actions against New England Mutual, with which
Metropolitan Life merged in 1996, and General American, which was acquired in
2000, have been settled. In October 2000, a federal court approved a settlement
resolving sales practices claims on behalf of a class of owners of permanent
life insurance policies issued by New England Mutual between January 1, 1983
through August 31, 1996. The class includes owners of approximately 600,000
in-force or terminated policies. A federal court has approved a settlement
resolving sales practices claims on behalf of a class of owners of permanent
life insurance policies issued by General American between January 1, 1982
through December 31, 1996. An appellate court has affirmed the order approving
the settlement. The class includes owners of approximately 250,000 in-force or
terminated policies.

Certain class members have opted out of the class action settlements noted
above and have brought or continued non-class action sales practices lawsuits.
In addition, other sales practices lawsuits have been brought. As of March 31,
2004, there are approximately 330 sales practices lawsuits pending against
Metropolitan Life, approximately 40 sales practices lawsuits pending against New
England Mutual and approximately 55 sales practices lawsuits pending against
General American. Metropolitan Life, New England Mutual and General American
continue to defend themselves vigorously against these lawsuits. Some individual
sales practices claims have been resolved through settlement, won by dispositive
motions, or, in a few instances, have gone to trial. Most of the current cases
seek substantial damages, including in some cases punitive and treble damages
and attorneys' fees. Additional litigation relating to the Company's marketing
and sales of individual life insurance may be commenced in the future.

The Metropolitan Life class action settlement did not resolve two putative
class actions involving sales practices claims filed against Metropolitan Life
in Canada, and these actions remain pending.

The Company believes adequate provision has been made in its unaudited
interim condensed consolidated financial statements for all probable and
reasonably estimable losses for sales practices claims against Metropolitan
Life, New England Mutual and General American.

Regulatory authorities in a small number of states have had investigations
or inquiries relating to Metropolitan Life's, New England Mutual's or General
American's sales of individual life insurance policies or annuities. Over the
past several years, these and a number of investigations by other regulatory
authorities were resolved for monetary payments and certain other relief. The
Company may continue to resolve investigations in a similar manner.

Asbestos-Related Claims

Metropolitan Life is also a defendant in thousands of lawsuits seeking
compensatory and punitive damages for personal injuries allegedly caused by
exposure to asbestos or asbestos-containing products. Metropolitan Life has
never engaged in the business of

22

manufacturing, producing, distributing or selling asbestos or
asbestos-containing products nor has Metropolitan Life issued liability or
workers' compensation insurance to companies in the business of manufacturing,
producing, distributing or selling asbestos or asbestos-containing products.
Rather, these lawsuits have principally been based upon allegations relating to
certain research, publication and other activities of one or more of
Metropolitan Life's employees during the period from the 1920's through
approximately the 1950's and have alleged that Metropolitan Life learned or
should have learned of certain health risks posed by asbestos and, among other
things, improperly publicized or failed to disclose those health risks.
Metropolitan Life believes that it should not have legal liability in such
cases.

Legal theories asserted against Metropolitan Life have included negligence,
intentional tort claims and conspiracy claims concerning the health risks
associated with asbestos. Although Metropolitan Life believes it has meritorious
defenses to these claims, and has not suffered any adverse monetary judgments in
respect of these claims, due to the risks and expenses of litigation, almost all
past cases have been resolved by settlements. Metropolitan Life's defenses
(beyond denial of certain factual allegations) to plaintiffs' claims include
that: (i) Metropolitan Life owed no duty to the plaintiffs -- it had no special
relationship with the plaintiffs and did not manufacture, produce, distribute or
sell the asbestos products that allegedly injured plaintiffs; (ii) plaintiffs
cannot demonstrate justifiable detrimental reliance; and (iii) plaintiffs cannot
demonstrate proximate causation. In defending asbestos cases, Metropolitan Life
selects various strategies depending upon the jurisdictions in which such cases
are brought and other factors which, in Metropolitan Life's judgment, best
protect Metropolitan Life's interests. Strategies include seeking to settle or
compromise claims, motions challenging the legal or factual basis for such
claims or defending on the merits at trial. In 2002, 2003 and 2004, trial courts
in California, Utah, Texas and Georgia granted motions dismissing claims against
Metropolitan Life on some or all of the above grounds. Other courts have denied
motions brought by Metropolitan Life to dismiss cases without the necessity of
trial. There can be no assurance that Metropolitan Life will receive favorable
decisions on motions in the future. Metropolitan Life intends to continue to
exercise its best judgment regarding settlement or defense of such cases,
including when trials of these cases are appropriate.

See Note 12 of Notes to Consolidated Financial Statements for the year ended
December 31, 2003 included in the MetLife, Inc. Annual Report on Form 10-K filed
with the SEC for information regarding historical asbestos claims information
and the increase of its recorded liability at December 31, 2002.

Metropolitan Life continues to study its claims experience, review external
literature regarding asbestos claims experience in the United States and
consider numerous variables that can affect its asbestos liability exposure,
including bankruptcies of other companies involved in asbestos litigation and
legislative and judicial developments, to identify trends and to assess their
impact on the recorded asbestos liability.

Recent bankruptcies of other companies involved in asbestos litigation, as
well as advertising by plaintiffs' asbestos lawyers, may result in an increase
in the number of claims and the cost of resolving claims, as well as the number
of trials and possible adverse verdicts Metropolitan Life may experience.
Plaintiffs are seeking additional funds from defendants, including Metropolitan
Life, in light of such recent bankruptcies by certain other defendants. In
addition, publicity regarding legislative reform efforts may result in an
increase in the number of claims. As reported in MetLife, Inc.'s Annual Report
on Form 10-K, Metropolitan Life received approximately 60,300 asbestos-related
claims in 2003. During the first three months of 2004 and 2003, Metropolitan
Life received approximately 8,200 and 16,250 asbestos-related claims,
respectively.

The Company believes adequate provision has been made in its unaudited
interim condensed consolidated financial statements for all probable and
reasonably estimable losses for asbestos-related claims. The ability of
Metropolitan Life to estimate its ultimate asbestos exposure is subject to
considerable uncertainty due to numerous factors. The availability of data is
limited and it is difficult to predict with any certainty numerous variables
that can affect liability estimates, including the number of future claims, the
cost to resolve claims, the disease mix and severity of disease, the
jurisdiction of claims filed, tort reform efforts and the impact of any possible
future adverse verdicts and their amounts.

The number of asbestos cases that may be brought or the aggregate amount of
any liability that Metropolitan Life may ultimately incur is uncertain.
Accordingly, it is reasonably possible that the Company's total exposure to
asbestos claims may be greater than the liability recorded by the Company in its
unaudited interim condensed consolidated financial statements and that future
charges to income may be necessary. While the potential future charges could be
material in particular quarterly or annual periods in which they are recorded,
based on information currently known by management, it does not believe any such
charges are likely to have a material adverse effect on the Company's
consolidated financial position.

During 1998, Metropolitan Life paid $878 million in premiums for excess
insurance policies for asbestos-related claims. The excess insurance policies
for asbestos-related claims provide for recovery of losses up to $1,500 million,
which is in excess of a $400

23

million self-insured retention. The asbestos-related policies are also subject
to annual and per-claim sublimits. Amounts are recoverable under the policies
annually with respect to claims paid during the prior calendar year. Although
amounts paid by Metropolitan Life in any given year that may be recoverable in
the next calendar year under the policies will be reflected as a reduction in
the Company's operating cash flows for the year in which they are paid,
management believes that the payments will not have a material adverse effect on
the Company's liquidity.

Each asbestos-related policy contains an experience fund and a reference
fund that provides for payments to Metropolitan Life at the commutation date if
the reference fund is greater than zero at commutation or pro rata reductions
from time to time in the loss reimbursements to Metropolitan Life if the
cumulative return on the reference fund is less than the return specified in the
experience fund. The return in the reference fund is tied to performance of the
Standard & Poor's 500 Index and the Lehman Brothers Aggregate Bond Index. A
claim was made under the excess insurance policies in 2003 and 2004 for the
amounts paid with respect to asbestos litigation in excess of the retention. As
the performance of the indices impact the return in the reference fund, it is
possible that loss reimbursements to the Company and the recoverable with
respect to later periods may be less than the amount of the recorded losses.
Such foregone loss reimbursements may be recovered upon commutation depending
upon future performance of the reference fund. If at some point in the future,
the Company believes the liability for probable and reasonably estimable losses
for asbestos-related claims should be increased, an expense would be recorded
and the insurance recoverable would be adjusted subject to the terms, conditions
and limits of the excess insurance policies. Portions of the change in the
insurance recoverable would be recorded as a deferred gain and amortized into
income over the estimated remaining settlement period of the insurance policies.

Metropolitan Life also has been named as a defendant in a small number of
silicosis, welding and mixed dust cases. The cases are pending in Mississippi,
Texas, Ohio, Pennsylvania, West Virginia, Louisiana, Kentucky, Georgia, Alabama,
Illinois and Arkansas. The Company intends to defend itself vigorously against
these cases.

Property and Casualty Actions

A purported class action has been filed against Metropolitan Property and
Casualty Insurance Company's subsidiary, Metropolitan Casualty Insurance
Company, in Florida alleging breach of contract and unfair trade practices with
respect to allowing the use of parts not made by the original manufacturer to
repair damaged automobiles. Discovery is ongoing and a motion for class
certification is pending. During the first quarter of 2004, a purported class
action was filed against Metropolitan Property and Casualty Insurance Company in
Florida on behalf of medical practitioners who provide MRI services. The suit
claims breach of contract and unjust enrichment arising out of the alleged
failure to include a consumer price index adjustment when paying MRI provider
fees. Metropolitan Property and Casualty Insurance Company is vigorously
defending itself against this lawsuit. Two purported nationwide class actions
have been filed against Metropolitan Property and Casualty Insurance Company in
Illinois. One suit claims breach of contract and fraud due to the alleged
underpayment of medical claims arising from the use of a purportedly biased
provider fee pricing system. A motion for class certification has been filed and
discovery is ongoing. The second suit claims breach of contract and fraud
arising from the alleged use of preferred provider organizations to reduce
medical provider fees covered by the medical claims portion of the insurance
policy. A motion to dismiss has been filed. A purported class action has been
filed against Metropolitan Property and Casualty Insurance Company in Montana.
This suit alleges breach of contract and bad faith for not aggregating medical
payment and uninsured coverages provided in connection with the several vehicles
identified in insureds' motor vehicle policies. Metropolitan Property and
Casualty Insurance Company is vigorously defending itself against this lawsuit.
Certain plaintiffs' lawyers have alleged that the use of certain automated
databases to provide total loss vehicle valuation methods was improper.
Metropolitan Property and Casualty Insurance Company, along with a number of
other insurers, has tentatively agreed in January 2004 to resolve this issue in
a class action format. The amount to be paid in resolution of this matter will
not be material to Metropolitan Property and Casualty Insurance Company.

Demutualization Actions

Several lawsuits were brought in 2000 challenging the fairness of
Metropolitan Life's plan of reorganization, as amended (the "plan") and the
adequacy and accuracy of Metropolitan Life's disclosure to policyholders
regarding the plan. These actions name as defendants some or all of Metropolitan
Life, the Holding Company, the individual directors, the New York Superintendent
of Insurance (the "Superintendent") and the underwriters for MetLife, Inc.'s
initial public offering, Goldman Sachs & Company and Credit Suisse First Boston.
Five purported class actions pending in the New York State court in New York
County were consolidated within the commercial part. In addition, there remained
a separate purported class action in New York State court in New York County. On
February 21, 2003, the defendants' motions to dismiss both the consolidated
action and separate action were granted; leave to replead as a proceeding under
Article 78 of New York's Civil Practice Law and Rules has been granted in the
separate action. On April 27, 2004, the appellate court modified the trial
court's order by reinstating certain claims against Metropolitan Life, the
Holding

24

Company and the individual directors. Another purported class action in New York
State court in Kings County has been voluntarily held in abeyance by plaintiffs.
The plaintiffs in the state court class actions seek injunctive, declaratory and
compensatory relief, as well as an accounting and, in some instances, punitive
damages. Some of the plaintiffs in the above described actions also have brought
a proceeding under Article 78 of New York's Civil Practice Law and Rules
challenging the Opinion and Decision of the Superintendent who approved the
plan. In this proceeding, petitioners seek to vacate the Superintendent's
Opinion and Decision and enjoin him from granting final approval of the plan.
This case also is being held in abeyance by plaintiffs. Three purported class
actions were filed in the United States District Court for the Eastern District
of New York claiming violation of the Securities Act of 1933 in connection with
the plan. The plaintiffs in these actions, which have been consolidated, claim
that the Policyholder Information Booklets relating to the plan failed to
disclose certain material facts and seek rescission and compensatory damages.
Metropolitan Life's motion to dismiss these three cases was denied in 2001. On
February 4, 2003, plaintiffs filed a consolidated amended complaint adding a
fraud claim under the Securities Exchange Act of 1934. Plaintiffs served a
second consolidated amended complaint on April 2, 2004, and continue to assert
violations of the Securities Act of 1933 and the Securities Exchange Act of
1934. On April 9, 2004, Metropolitan Life served a motion to dismiss the claim
for violation of the Securities Exchange Act of 1934. Metropolitan Life, the
Holding Company and the individual defendants believe they have meritorious
defenses to the plaintiffs' claims and are contesting vigorously all of the
plaintiffs' claims in these actions.

In 2001, a lawsuit was filed in the Superior Court of Justice, Ontario,
Canada on behalf of a proposed class of certain former Canadian policyholders
against the Holding Company, Metropolitan Life, and Metropolitan Life Insurance
Company of Canada. Plaintiffs' allegations concern the way that their policies
were treated in connection with the demutualization of Metropolitan Life; they
seek damages, declarations, and other non-pecuniary relief. The defendants
believe they have meritorious defenses to the plaintiffs' claims and will
contest vigorously all of plaintiffs' claims in this matter.

Race-Conscious Underwriting Claims

Insurance departments in a number of states initiated inquiries in 2000
about possible race-conscious underwriting of life insurance. These inquiries
generally have been directed to all life insurers licensed in their respective
states, including Metropolitan Life and certain of its affiliates. The New York
Insurance Department has concluded its examination of Metropolitan Life
concerning possible past race-conscious underwriting practices. Four purported
class action lawsuits filed against Metropolitan Life in 2000 and 2001 alleging
racial discrimination in the marketing, sale, and administration of life
insurance policies have been consolidated in the United States District Court
for the Southern District of New York. On April 28, 2003, the United States
District Court approved a class action settlement of the consolidated actions.
Several persons filed notices of appeal from the order approving the settlement,
but subsequently the appeals were dismissed. Metropolitan Life also has entered
into settlement agreements to resolve the regulatory examination.

Twenty lawsuits involving approximately 140 plaintiffs were filed in federal
and state court in Alabama, Mississippi and Tennessee alleging federal and/or
state law claims of racial discrimination in connection with the sale,
formation, administration or servicing of life insurance policies. Metropolitan
Life has resolved the claims of some of these plaintiffs through settlement and
some additional plaintiffs have voluntarily dismissed their claims. Metropolitan
Life has resolved claims of some additional persons who opted out of the
settlement class referenced in the preceding paragraph but who had not filed
suit. Metropolitan Life is contesting vigorously plaintiffs' claims in the
actions that remain pending.

The Company believes that adequate provision has been made to cover the
costs associated with the resolution of these matters.

Other

In 2001, a putative class action was filed against Metropolitan Life in the
United States District Court for the Southern District of New York alleging
gender discrimination and retaliation in the MetLife Financial Services unit of
the Individual segment. The plaintiffs were seeking unspecified compensatory
damages, punitive damages, a declaration that the alleged practices were
discriminatory and illegal, injunctive relief requiring Metropolitan Life to
discontinue the alleged discriminatory practices, an order restoring class
members to their rightful positions (or appropriate compensation in lieu
thereof), and other relief. In August 2003, the court granted preliminary
approval to a settlement of the lawsuit. At the fairness hearing held on
November 6, 2003, the court approved the settlement of the lawsuit.
Implementation of the settlement has commenced in 2004.

A putative class action lawsuit is pending in the United States District
Court for the District of Columbia, in which plaintiffs allege that they were
denied certain ad hoc

25

pension increases awarded to retirees under the Metropolitan Life retirement
plan. The ad hoc pension increases were awarded only to retirees (i.e.,
individuals who were entitled to an immediate retirement benefit upon their
termination of employment) and not available to individuals like these
plaintiffs whose employment, or whose spouses' employment, had terminated before
they became eligible for an immediate retirement benefit. The plaintiffs seek to
represent a class consisting of former Metropolitan Life employees, or their
surviving spouses, who are receiving deferred vested annuity payments under the
retirement plan and who were allegedly eligible to receive the ad hoc pension
increases awarded in 1977, 1980, 1989, 1992, 1996 and 2001, as well as increases
awarded in earlier years. Metropolitan Life is vigorously defending itself
against these allegations.

As previously reported, the SEC is conducting a formal investigation of New
England Securities Corporation ("NES"), a subsidiary of New England Life
Insurance Company ("NELICO"), in response to NES informing the SEC that certain
systems and controls relating to one NES advisory program were not operating
effectively. NES is cooperating fully with the SEC.

Prior to filing the Company's June 30, 2003 Form 10-Q, MetLife announced a
$31 million after-tax charge resulting from certain improperly deferred expenses
at an affiliate, New England Financial. MetLife notified the SEC about the
nature of this charge prior to its announcement. The SEC is pursuing a formal
investigation of the matter and MetLife is fully cooperating with the
investigation.

The American Dental Association and two individual providers have sued
MetLife, Mutual of Omaha and Cigna in a purported class action lawsuit brought
in a Florida federal district court. The plaintiffs purport to represent a
nationwide class of in-network providers who allege that their claims are being
wrongfully reduced by downcoding, bundling, and the improper use and programming
of software. The complaint alleges federal racketeering and various state law
theories of liability. MetLife is vigorously defending the case and a motion to
dismiss has been filed and argued.

A purported class action in which a policyholder seeks to represent a class
of owners of participating life insurance policies is pending in state court in
New York. Plaintiff asserts that Metropolitan Life breached her policy in the
manner in which it allocated investment income across lines of business during a
period ending with the 2000 demutualization. In August 2003, an appellate court
affirmed the dismissal of fraud claims in this action. MetLife is vigorously
defending the case.

Regulatory bodies have contacted the Company and have requested information
relating to market timing and late trading of mutual funds and variable
insurance products. The Company believes that these inquiries are similar to
those made to many financial services companies as part of an industry-wide
investigation by various regulatory agencies into the practices, policies and
procedures relating to trading in mutual fund shares. State Street Research
Investment Services, one of the Company's indirect broker/dealer subsidiaries,
has entered into a settlement with the NASD resolving all outstanding issues
relating to its investigation. The SEC has commenced an investigation with
respect to market timing and late trading in a limited number of
privately-placed variable insurance contracts that were sold through General
American. The Company is in the process of responding and is fully cooperating
with regard to these information requests and investigations. The Company at the
present time is not aware of any systemic problems with respect to such matters
that may have a material adverse effect on the Company's consolidated financial
position.

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

Summary

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

26

COMMITMENTS TO FUND PARTNERSHIP INVESTMENTS

The Company makes commitments to fund partnership investments in the normal
course of business. The amounts of these unfunded commitments were approximately
$1.4 billion at both March 31, 2004 and December 31, 2003. The Company
anticipates that these amounts will be invested in the partnerships over the
next three to five years.

GUARANTEES

In the course of its business, the Company has provided certain indemnities,
guarantees and commitments to third parties pursuant to which it may be required
to make payments now or in the future.

In the context of acquisition, disposition, investment and other
transactions, the Company has provided indemnities and guarantees, including
those related to tax, environmental and other specific liabilities, and other
indemnities and guarantees that are triggered by, among other things, breaches
of representations, warranties or covenants provided by the Company. In
addition, in the normal course of business, the Company provides
indemnifications to counterparties in contracts with triggers similar to the
foregoing, as well as for certain other liabilities, such as third party
lawsuits. These obligations are often subject to time limitations that vary in
duration, including contractual limitations and those that arise by operation of
law, such as applicable statutes of limitation. In some cases, the maximum
potential obligation under the indemnities and guarantees is subject to a
contractual limitation ranging from less than $1 million to $800 million, while
in other cases such limitations are not specified or applicable. Since certain
of these obligations are not subject to limitations, the Company does not
believe that it is possible to determine the maximum potential amount due under
these guarantees in the future.

In addition, the Company indemnifies its directors and officers as provided
in its charters and by-laws. Also, the Company indemnifies other of its agents
for liabilities incurred as a result of their representation of the Company's
interests. Since these indemnities are generally not subject to limitation with
respect to duration or amount, the Company does not believe that it is possible
to determine the maximum potential amount due under these indemnities in the
future.

During the first quarter of 2004, the Company recorded liabilities of $6
million with respect to indemnities provided in certain dispositions. The
approximate term for this liability is 18 months. The maximum potential amount
of future payments that MetLife could be required to pay is $69 million. The
fair value of the remaining indemnities, guarantees and commitments entered into
was insignificant and thus, no liabilities were recorded. The Company's recorded
liability at March 31, 2004 and December 31, 2003 for indemnities, guarantees
and commitments provided to third parties, excluding amounts recorded in the
first quarter of 2004, is insignificant.

The Company writes credit default swap obligations requiring payment of
principal due in exchange for the reference credit obligation, depending on the
nature or occurrence of specified credit events for the referenced entities. In
the event of a specified credit event, the Company's maximum amount at risk,
assuming the value of the referenced credits become worthless, is $1.3 billion
at March 31, 2004. The credit default swaps expire at various times during the
next seven years.

8. EMPLOYEE BENEFIT PLANS

PENSION BENEFIT AND OTHER BENEFIT PLANS

The Company is both the sponsor and administrator of defined benefit pension
plans covering eligible employees and sales representatives of the Company.
Retirement benefits are based upon years of credited service and final average
or career average earnings history.

The Company also provides certain postemployment benefits and certain
postretirement health care and life insurance benefits for retired employees
through insurance contracts. Substantially all of the Company's employees may,
in accordance with the plans applicable to the postretirement benefits, become
eligible for these benefits if they attain retirement age, with sufficient
service, while working for the Company.

The Company uses December 31 as the measurement date for all of its pension
and postretirement benefit plans.

27

The components of net periodic benefit cost were as follows:

EMPLOYER CONTRIBUTIONS

The Company disclosed in Note 13 of Notes to Consolidated Financial
Statements for the year ended December 31, 2003 included in the MetLife, Inc.
Annual Report on Form 10-K filed with the SEC, that it expected to contribute
$450 million and $89 million, respectively, to its pension and postretirement
benefit plans in 2004. As of March 31, 2004, contributions of $475 million have
been made to the pension plans and the Company presently anticipates
contributing an additional $43 million to fund its pension plans in 2004 for a
total of $518 million. Contributions to the postretirement benefit plans are
still expected to be $89 million.

9. STOCK COMPENSATION PLANS

Under the MetLife, Inc. 2000 Stock Incentive Plan, as amended, (the "Stock
Incentive Plan"), awards granted may be in the form of non-qualified or
incentive stock options qualifying under Section 422A of the Internal Revenue
Code. Under the MetLife, Inc. 2000 Directors Stock Plan, as amended (the
"Directors Stock Plan"), awards granted may be in the form of stock awards or
non-qualified stock options or a combination of the foregoing to outside
Directors of the Company. The aggregate number of options to purchase shares of
stock that may be awarded under the Stock Incentive Plan and the Directors Stock
Plan is subject to a maximum limit of 37,823,333, of which no more than 378,233
may be awarded under the Directors Stock Plan. The Directors Stock Plan has a
maximum limit of 500,000 stock awards.

All options granted have an exercise price equal to the fair market value
price of the Company's common stock on the date of grant, and an option's
maximum term is ten years. Certain options under the Stock Incentive Plan become
exercisable over a three-year period commencing with the date of grant, while
other options become exercisable three years after the date of grant. Options
issued under the Directors Stock Plan are exercisable immediately.

28

The Company has elected to apply the fair value method of accounting for
stock options granted by the Company subsequent to December 31, 2002. Options
granted prior to January 1, 2003 continue to be accounted for under the
intrinsic value method. Had compensation costs for grants prior to January 1,
2003 been determined based on fair value at the date of grant, the Company's
earnings and earnings per share amounts would have been reduced to the following
pro forma amounts for the:

- ----------

(1) See Note 6 for a discussion of this charge included in the calculation of
net income available to common shareholders.

(2) The pro forma earnings disclosures are not necessarily representative of the
effects on net income and earnings per share in future years.

(3) Includes the Company's ownership share of stock compensation costs related
to the Reinsurance Group of America, Incorporated incentive stock plan and
the stock compensation costs related to the incentive stock plans at SSRM
Holdings, Inc. determined in accordance with the fair value method.

29

10. COMPREHENSIVE INCOME (LOSS)

The components of comprehensive income (loss) are as follows:

30

11. EARNINGS PER SHARE

The following table presents the weighted average shares used in calculating
basic earnings per share and those used in calculating diluted earnings per
share for each income category presented below:

- ----------

(1) See Note 6.

On February 19, 2002, the Holding Company's Board of Directors authorized a
$1 billion common stock repurchase program. Under this authorization, the
Holding Company may purchase common stock from the MetLife Policyholder Trust,
in the open market

31

and in privately negotiated transactions. The Holding Company acquired 1,849,500
shares of common stock for approximately $65 million during the three months
ended March 31, 2004. The Holding Company did not acquire any shares of common
stock during the three months ended March 31, 2003. The Holding Company issued
80,321 shares and 88,824 shares of common stock for $2 million and $3 million,
respectively, for the three months ended March 31, 2004 and 2003. At March 31,
2004, the Holding Company had approximately $644 million remaining on its
existing share repurchase program.

12. BUSINESS SEGMENT INFORMATION

The Company provides insurance and financial services to customers in the
United States, Canada, Central America, South America, South Africa, and Asia.
The Company's business is divided into six segments: Institutional, Individual,
Auto & Home, International, Reinsurance and Asset Management. These segments are
managed separately because they either provide different products and services,
require different strategies or have different technology requirements.

Institutional offers a broad range of group insurance and retirement and
savings products and services, including group life insurance, non-medical
health insurance, such as short and long-term disability, long-term care, and
dental insurance, and other insurance products and services. Individual offers a
wide variety of individual insurance and investment products, including life
insurance, annuities and mutual funds. Auto & Home provides insurance coverages,
including private passenger automobile, homeowners and personal excess liability
insurance. International provides life insurance, accident and health insurance,
annuities and retirement and savings products to both individuals and groups,
and auto and homeowners coverage to individuals. Reinsurance provides primarily
reinsurance of life and annuity policies in North America and various
international markets. Additionally, reinsurance of critical illness policies is
provided in select international markets. Asset Management provides a broad
variety of asset management products and services to individuals and
institutions.

Set forth in the tables below is certain financial information with respect
to the Company's operating segments for the three months ended March 31, 2004
and 2003 and at March 31, 2004 and December 31, 2003. The accounting policies of
the segments are the same as those of the Company, except for the method of
capital allocation and the accounting for gains (losses) from intercompany
sales, which are eliminated in consolidation. The Company allocates capital to
each segment based upon an internal capital allocation system that allows the
Company to more effectively manage its capital. The Company evaluates the
performance of each operating segment based upon net income excluding certain
net investment-related gains (losses), net of income taxes, and the impact from
the cumulative effect of changes in accounting, net of income taxes. Scheduled
periodic settlement payments on derivative instruments not qualifying for hedge
accounting are included in net investment-related gains (losses). The Company
allocates certain non-recurring items (e.g., expenses associated with the
resolution of proceedings alleging race-conscious underwriting practices, sales
practices claims and asbestos-related claims) to Corporate & Other.

32

The following amounts are reported as discontinued operations in accordance
with SFAS 144:

The following table presents assets with respect to the Company's operating
segments at:

Corporate & Other includes various start-up and run-off entities, as well as
the elimination of all intersegment amounts. The elimination of intersegment
amounts relates to intersegment loans, which bear interest rates commensurate
with related borrowings, as well as intersegment reinsurance transactions.

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

Revenues derived from any customer did not exceed 10% of consolidated
revenues. Revenues from U.S. operations were $8,549 million and $7,588 million
for the three months ended March 31, 2004 and 2003, respectively, which
represented 90% and 91%, respectively, of consolidated revenues.

33

13. DISCONTINUED OPERATIONS

The Company actively manages its real estate portfolio with the objective to
maximize earnings through selective acquisitions and dispositions. Income
related to real estate classified as held-for-sale is presented as discontinued
operations. These assets are carried at the lower of cost or market.

The following table presents the components of income from discontinued
operations:

The carrying value of real estate related to discontinued operations was
$704 million and $787 million at March 31, 2004 and December 31, 2003,
respectively.

In February of 2004, MetLife entered into a marketing agreement to sell one
of its real estate investments, the Sears Tower, and reclassified the property
from Real Estate -- Held-for-Investments to Real Estate -- Held-for-Sale. The
carrying value of the property as of March 31, 2004 was approximately $700
million. The sale, which occurred in April 2004, resulted in an after-tax gain
of approximately $90 million.

34

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

For purposes of this discussion, the terms "MetLife" or the "Company" refers
to MetLife, Inc., a Delaware corporation (the "Holding Company"), and its
subsidiaries, including Metropolitan Life Insurance Company ("Metropolitan
Life"). Following this summary is a discussion addressing the consolidated
results of operations and financial condition of the Company for the periods
indicated. This discussion should be read in conjunction with the Company's
unaudited interim condensed consolidated financial statements included elsewhere
herein.

SUMMARY OF CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America ("GAAP") requires
management to adopt accounting policies and make estimates and assumptions that
affect amounts reported in the unaudited interim condensed consolidated
financial statements. The critical accounting policies, estimates and related
judgments underlying the Company's unaudited interim condensed consolidated
financial statements are summarized below. In applying these policies,
management makes subjective and complex judgments that frequently require
estimates about matters that are inherently uncertain. Many of these policies,
estimates and related judgments are common in the insurance and financial
services industries; others are specific to the Company's businesses and
operations.

INVESTMENTS

The Company's principal investments are in fixed maturities, mortgage loans
and real estate, all of which are exposed to three primary sources of investment
risk: credit, interest rate and market valuation. The financial statement risks
are those associated with the recognition of impairments and income, as well as
the determination of fair values. The assessment of whether impairments have
occurred is based on management's case-by-case evaluation of the underlying
reasons for the decline in fair value. Management considers a wide range of
factors about the security issuer and uses its best judgment in evaluating the
cause of the decline in the estimated fair value of the security and in
assessing the prospects for near-term recovery. Inherent in management's
evaluation of the security are assumptions and estimates about the operations of
the issuer and its future earnings potential. Considerations used by the Company
in the impairment evaluation process include, but are not limited to: (i) the
length of time and the extent to which the market value has been below amortized
cost; (ii) the potential for impairments of securities when the issuer is
experiencing significant financial difficulties; (iii) the potential for
impairments in an entire industry sector or sub-sector; (iv) the potential for
impairments in certain economically depressed geographic locations; (v) the
potential for impairments of securities where the issuer, series of issuers or
industry has suffered a catastrophic type of loss or has exhausted natural
resources; (vi) unfavorable changes in forecasted cash flows on asset-backed
securities; and (vii) other subjective factors, including concentrations and
information obtained from regulators and rating agencies. In addition, the
earnings on certain investments are dependent upon market conditions, which
could result in prepayments and changes in amounts to be earned due to changing
interest rates or equity markets. The determination of fair values in the
absence of quoted market values is based on: (i) valuation methodologies; (ii)
securities the Company deems to be comparable; and (iii) assumptions deemed
appropriate given the circumstances. The use of different methodologies and
assumptions may have a material effect on the estimated fair value amounts. In
addition, the Company enters into certain structured investment transactions,
real estate joint ventures and limited partnerships for which the Company may be
deemed to be the primary beneficiary and, therefore, may be required to
consolidate such investments. The accounting rules for the determination of the
primary beneficiary are complex and require evaluation of the contractual rights
and obligations associated with each party involved in the entity, an estimate
of the entity's expected losses and expected residual returns and the allocation
of such estimates to each party.

DERIVATIVES

The Company enters into freestanding derivative transactions primarily to
manage the risk associated with variability in cash flows or changes in fair
values related to the Company's financial assets and liabilities or to changing
fair values. The Company also uses derivative instruments to hedge its currency
exposure associated with net investments in certain foreign operations. The
Company also purchases investment securities, issues certain insurance policies
and engages in certain reinsurance contracts that embed derivatives. The
associated financial statement risk is the volatility in net income which can
result from (i) changes in fair value of derivatives not qualifying as
accounting hedges; (ii) ineffectiveness of designated hedges; and (iii)
counterparty default. In addition, there is a risk that embedded derivatives
requiring bifurcation are not identified and reported at fair value in the
unaudited interim condensed consolidated financial statements. Accounting for
derivatives is complex, as evidenced by significant authoritative
interpretations of the primary accounting standards which continue to evolve, as
well as the significant judgments and estimates involved in determining fair
value in the absence of quoted market values. These estimates are based on
valuation methodologies and assumptions deemed appropriate in the circumstances.
Such assumptions include estimated volatility and interest rates used in the
determination of fair

35

value where quoted market values are not available. The use of different
assumptions may have a material effect on the estimated fair value amounts.

DEFERRED POLICY ACQUISITION COSTS

The Company incurs significant costs in connection with acquiring new and
renewal insurance business. These costs, which vary with and are primarily
related to the production of that business, are deferred. The recovery of such
costs is dependent upon the future profitability of the related business. The
amount of future profit is dependent principally on investment returns in excess
of the amounts credited to policyholders, mortality, morbidity, persistency,
interest crediting rates, expenses to administer the business, creditworthiness
of reinsurance counterparties and certain economic variables, such as inflation.
Of these factors, the Company anticipates that investment returns are most
likely to impact the rate of amortization of such costs. The aforementioned
factors enter into management's estimates of gross margins and profits, which
generally are used to amortize such costs. Revisions to estimates result in
changes to the amounts expensed in the reporting period in which the revisions
are made and could result in the impairment of the asset and a charge to income
if estimated future gross margins and profits are less than amounts deferred. In
addition, the Company utilizes the reversion to the mean assumption, a standard
industry practice, in its determination of the capitalization and amortization
of deferred policy acquisition costs ("DAC"), including value of business
acquired ("VOBA"). This practice assumes that the expectation for long-term
appreciation in equity markets is not changed by minor short-term market
fluctuations, but that it does change when large interim deviations have
occurred.

FUTURE POLICY BENEFITS

The Company establishes liabilities for amounts payable under insurance
policies, including traditional life insurance, annuities and disability
insurance. Generally, amounts are payable over an extended period of time and
liabilities are established based on methods and underlying assumptions in
accordance with GAAP and applicable actuarial standards. Principal assumptions
used in the establishment of liabilities for future policy benefits are
mortality, morbidity, expenses, persistency, investment returns and inflation.

The Company also establishes liabilities for unpaid claims and claims
expenses for property and casualty insurance. Liabilities for property and
casualty insurance are dependent on estimates of amounts payable for claims
reported but not settled and claims incurred but not reported. These estimates
are influenced by historical experience and actuarial assumptions with respect
to current developments, anticipated trends and risk management strategies.

Differences between the actual experience and assumptions used in pricing
these policies and in the establishment of liabilities result in variances in
profit and could result in losses.

REINSURANCE

The Company enters into reinsurance transactions as both a provider and a
purchaser of reinsurance. Accounting for reinsurance requires extensive use of
assumptions and estimates, particularly related to the future performance of the
underlying business and the potential impact of counterparty credit risks. The
Company periodically reviews actual and anticipated experience compared to the
aforementioned assumptions used to establish assets and liabilities relating to
ceded and assumed reinsurance and evaluates the financial strength of
counterparties to its reinsurance agreements using criteria similar to that
evaluated in the security impairment process discussed previously. Additionally,
for each of its reinsurance contracts, the Company must determine if the
contract provides indemnification against loss or liability relating to
insurance risk, in accordance with applicable accounting standards. The Company
must review all contractual features, particularly those that may limit the
amount of insurance risk to which the reinsurer is subject or features that
delay the timely reimbursement of claims. If the Company determines that a
reinsurance contract does not expose the reinsurer to a reasonable possibility
of a significant loss from insurance risk, the Company records the contract
using the deposit method of accounting.

LITIGATION

The Company is a party to a number of legal actions. Given the inherent
unpredictability of litigation, it is difficult to estimate the impact of
litigation on the Company's consolidated financial position. Liabilities are
established when it is probable that a loss has been incurred and the amount of
the loss can be reasonably estimated. Liabilities related to certain lawsuits,
including the Company's asbestos-related liability, are especially difficult to
estimate due to the limitation of available data and uncertainty regarding
numerous variables used to determine amounts recorded. The data and variables
that impact the assumption used to estimate the Company's

36

asbestos-related liability include the number of future claims, the cost to
resolve claims, the disease mix and severity of disease, the jurisdiction of
claims filed, tort reform efforts and the impact of any possible future adverse
verdicts and their amounts. It is possible that an adverse outcome in certain of
the Company's litigation, including asbestos-related cases, or the use of
different assumptions in the determination of amounts recorded could have a
material effect upon the Company's consolidated net income or cash flows in
particular quarterly or annual periods.

EMPLOYEE BENEFIT PLANS

The Company sponsors pension and other retirement plans in various forms
covering employees who meet specified eligibility requirements. The reported
expense and liability associated with these plans requires an extensive use of
assumptions which include the discount rate, expected return on plan assets and
rate of future compensation increases as determined by the Company. Management
determines these assumptions based upon currently available market and industry
data, historical performance of the plan and its assets, and consultation with
an independent consulting actuarial firm to aid it in selecting appropriate
assumptions and valuing its related liabilities. The actuarial assumptions used
in the calculation of the Company's aggregate projected benefit obligation may
vary and include an expectation of long-term market appreciation in equity
markets which is not changed by minor short-term market fluctuations, but does
change when large interim deviations occur. These assumptions used by the
Company may differ materially from actual results due to changing market and
economic conditions, higher or lower withdrawal rates or longer or shorter life
spans of the participants. These differences may have a significant effect on
the Company's unaudited interim condensed consolidated financial statements and
liquidity.

37

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2004 COMPARED WITH THE THREE MONTHS ENDED MARCH 31,
2003 -- THE COMPANY

EXECUTIVE SUMMARY

MetLife, Inc., through its affiliates and subsidiaries, is a leading
provider of insurance and other financial services to a broad spectrum of
individual and institutional customers. The Company offers life insurance,
annuities, automobile and homeowners insurance, and mutual funds and retail
banking services to individuals, as well as group insurance, reinsurance and
retirement and savings products and services to corporations and other
institutions. The MetLife companies serve approximately 13 million households in
the U.S. and provide benefits to approximately 37 million employees and family
members through their plan sponsors including 88 of the FORTUNE 100 largest
companies. MetLife, Inc. also has direct international insurance operations in
10 countries serving approximately 8 million customers. MetLife is organized
into six business segments: Institutional, Individual, Auto & Home,
International, Reinsurance and Asset Management.

The Company reported $523 million in net income and diluted earnings per
share of $0.69 for the three months ended March 31, 2004 compared to $362
million in net income and diluted earnings per share of $0.47 for the three
months ended March 31, 2003. Continued revenue growth across all of the
Company's segments and favorable claim experience were the leading contributors
to the 44% increase in net income in the first quarter of 2004 over the
comparable 2003 period. Total premiums and fees increased to $6.0 billion, up
12%, from the first quarter of 2003, which primarily stems from continued sales
growth across most of the Company's segments as well as the positive impact of
the U.S. financial markets on policy fees. Cash and invested assets grew to
$228.7 billion in the first quarter of 2004, while the yields on those assets
declined primarily as a result of the low interest rate environment. Assets
under management grew to $362.9 billion, an 18% increase over the comparable
2003 period, and Individual annuity deposits increased to 3.4 billion, or up
32%, over the comparable 2003 period. In addition an improvement in net
investment-related gains (losses), net of income taxes, of $229 million is
primarily attributable to lower credit related losses. These increases are
partially offset by a $158 million cumulative effect of a change in accounting
in accordance with Statement of Position 03-1, Accounting and Reporting by
Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for
Separate Accounts ("SOP 03-1").

INDUSTRY TRENDS

The Company's segments continue to be influenced by a variety of industry
trends and the Company continues to believe that each of its businesses is well
positioned to capitalize on those trends. In general, the Company continues to
see more employers, both large and small, outsourcing their benefits functions.
Further, companies are offering broader new arrays of voluntary benefits to help
retain employees while adding little to their overall benefits costs. These
trends will likely continue and in fact expand across companies of all sizes.
Employers are also demanding substantial online access for their employees for
various self-service functions. This functionality requires substantial
information technology investment that smaller companies will find difficult to
absorb. This will put pressure on those smaller and mid-size companies to gain
scale quickly or exit the business. Additionally, the Company is seeing a trend
of employers moving to defined contribution plans over defined benefit plans.

In addition, alternative benefit structures, such as simple fixed benefit
products, are becoming more popular as the traditional medical indemnity
products costs have continued to increase rapidly. These low cost fixed benefit
products can provide effective catastrophic protection for high cost illnesses
to supplement the basic health coverage provided by medical indemnity insurance.

From a demographics standpoint, the bulk of the U.S. population is moving
from an asset accumulation phase to an asset distribution phase. People within
ten years of retirement hold significant assets. With continually lengthening
lifespans and unstructured asset distribution, the Company believes many of
these people may outlive their retirement savings and/or require long-term care.
As a result, the Company expects that the demand for retirement payout solutions
with guarantees will increase dramatically over the next decade.

The combination of these trends will continue to favor those with scale,
breadth of distribution and product, ability to provide advice and financial
strength to support long-term guarantees.

38

DISCUSSION OF RESULTS

Income from continuing operations increased by $364 million, or 123%, to
$659 million for the three months ended March 31, 2004 from $295 million in the
comparable 2003 period. Improvement in net investment-related gains (losses),
net of income taxes, account for $229 million of this increase. Excluding the
impact of net investment-related gains (losses), the contribution to income from
continuing operations is primarily attributable to the Institutional, Auto &
Home and International segments. The decline in income from continuing
operations in the Reinsurance segment is largely attributable to the reduction
in the ownership interest in Reinsurance Group of America, Incorporated ("RGA").

Premiums, fees and other revenues increased 12% over the prior period
primarily resulting from the Institutional, Reinsurance, International and
Individual segments. The Institutional segment contributed 46% to the period
over period increase. This increase stems primarily from sales growth in the
group life, retirement and savings, and the non-medical health and other
businesses. The coinsurance agreement with Allianz Life Insurance Company of
North America ("Allianz Life") in the Reinsurance segment represents
approximately half of the Reinsurance segment's 38% contribution to the
Company's period over period increase, with the remaining increase being
generated through new and renewal business. The International segment represents
6% of the Company's growth over the prior year period. This increase is
primarily attributable to higher sales in Mexico, South Korea, Chile and Taiwan.
In addition, the Individual segment's growth accounted for 4% of the period over
period increase. This stems in part from policy fee income earned on annuity
deposits, which were $3.4 billion in 2004, increasing 32% from the prior year
period. In addition, the annuity separate account balance was $31.5 billion at
March 31, 2004, up 70.3% versus the prior year quarter end. Partially offsetting
these increases is a decline in traditional life premiums, which is largely
attributable to run off in the Company's closed block of business.

Investment margins, which represent the spread between net investment income
and interest credited to policyholder account balances, remained favorable for
the three months ended March 31, 2004 as the Company took appropriate crediting
rate reductions in most products in an effort to keep pace with the market
environment. In several product lines, where investment margins are a

39

substantial part of earnings, the Company still has a reasonable amount of
flexibility to further reduce crediting rates if portfolio yields were to
decline from the March 31, 2004 levels.

Underwriting results are varied in the first quarter of 2004. Group
disability's morbidity incurred loss ratio, which represents actual disability
claims as a percentage of assumed claims incurred used in the determination of
future policy benefits, was very strong at 93.3%, which is predominately due to
lower long term disability incidence and higher net claim closures within the
quarter. The group term life mortality incurred ratio, which represents actual
life claims as a percentage of assumed claims incurred used in the determination
of future policy benefits, increased to 95.7%, reflecting adverse mortality. The
Individual life mortality incurred ratio, which is calculated on the same basis
as the group term life incurred ratio, was favorable at 85.4%, which includes
the impact of a single large claim in the variable and universal product line.
The Auto & Home combined ratio, which is a measure of both the loss and loss
adjustment expense ratio, as well as the expense ratio, was favorable at 96.5%
excluding catastrophes.

Other expenses increased 7% over the prior year period primarily as a result
of an increase in non-deferrable volume related expenses associated with the
aforementioned business growth, including the impact of the coinsurance
agreement with Allianz Life. In addition, other expenses include costs
associated with office consolidations and related fixed asset write-offs in the
first quarter of 2004.

Net investment-related gains (losses) increased by $344 million, or 161%, to
$130 million for the three months ended March 31, 2004 from ($214) million for
the comparable 2003 period. This increase reflects total investment-related
gains, before offsets, of $98 million for the three months ended March 31, 2004.
The Company's investment-related gains (losses) are net of related policyholder
amounts. The amounts netted against investment-related gains (losses) are (i)
amortization of DAC, to the extent that such amortization results from
investment-related gains (losses), and (ii) adjustments to the policyholder
dividend obligation resulting from investment-related gains (losses). Offsets
include the amortization of DAC of ($13) million and $10 million for the three
months ended March 31, 2004 and 2003, respectively, and changes in the
policyholder dividend obligation of $45 million and $28 million for the three
months ended March 31, 2004 and 2003, respectively. The dollar amount of the
offsets may vary disproportionately with net investment-related gains (losses)
based on the relationship of the underlying securities sold to certain insurance
products. The improvement in net investment-related gains (losses) is primarily
due to lower credit-related losses, reflecting the improved market conditions.

The Company believes its policy of netting related policyholder amounts
against investment-related gains (losses) provides important information in
evaluating its performance. Investment-related gains (losses) are often excluded
by investors when evaluating the overall financial performance of insurers. The
Company believes its presentation enables readers to easily exclude
investment-related gains (losses) and the related effects on the consolidated
statements of income when evaluating its performance. The Company's presentation
of investment-related gains (losses), net of policyholder amounts, may be
different from the presentation used by other insurance companies and,
therefore, amounts in its consolidated statements of income may not be
comparable to amounts reported by other insurers.

Income tax expense for the three months ended March 31, 2004 was $304
million, or 32% of income from continuing operations before provision for income
taxes and cumulative effect of change in accounting, compared with $115 million,
or 28%, for the comparable 2003 period. The 2004 effective tax rate differs from
the corporate tax rate of 35% primarily due to the impact of non-taxable
investment income and tax credits for investments in low income housing. The
2003 effective tax rate differs from the corporate tax rate of 35% primarily due
to the impact of non-taxable investment income, tax credits for investments in
low income housing and a tax adjustment for a recovery of prior year tax
overpayments on tax-exempt bonds.

Income from discontinued operations declined $45 million, or 67%, to $22
million for the three months ended March 31, 2004 from $67 million in the
comparable prior year period. The decrease is primarily due to lower recognized
net investment-related gains from real estate properties sold in the three
months ended March 31, 2004 as compared to the prior 2003 period. The income
from discontinued operations is comprised of net investment income and net
investment-related gains related to properties that the Company has classified
as available-for-sale. For the three months ended March 31, 2004 and 2003, the
Company recognized $21 million and $90 million of net investment-related gains,
respectively, from discontinued operations related to real estate properties
sold or held-for-sale.

The Company recorded a $158 million cumulative effect of a change in
accounting in accordance with SOP 03-1, which provides guidance on (i) the
classification and valuation of long-duration contract liabilities; (ii) the
accounting for sales inducements; and (iii) separate account presentation and
valuation.

40

INSTITUTIONAL

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

THREE MONTHS ENDED MARCH 31, 2004 COMPARED WITH THE THREE MONTHS ENDED MARCH 31,
2003 -- INSTITUTIONAL

The Company's Institutional segment offers a broad range of group insurance
and retirement and savings products and services to corporations and other
institutions. Group insurance products are offered as either an employer-paid
benefit, or as a voluntary benefit with premiums paid by the employee.
Retirement and savings products and services include an array of annuity and
investment products, as well as bundled administrative and investment services
sold to sponsors of small- and mid-sized 401(k) and other defined contribution
plans.

Income from continuing operations increased by $221 million, or 149%, to
$369 million for the three months ended March 31, 2004 from $148 million for the
comparable 2003 period. Favorable interest margins, mostly relating to higher
investment income and overall asset growth were the primary contributors to the
earnings growth. Revenue growth, favorable underwriting results and favorable
expense margins also contributed to the increase in earnings.

Total revenues, excluding net investment-related gains (losses), increased
by $434 million, or 13%, to $3,849 million for the three months ended March 31,
2004 from $3,415 million for the comparable 2003 period. The increase is
attributable to both the group insurance and retirement and savings product
lines. Within group insurance, life insurance premiums, fees and other revenues
grew 10%. This increase was primarily due to large case activity, as well as the
acquisition of the John Hancock block of group life business which contributed
$24 million to this increase. Non-medical health insurance premiums, fees and
other revenues increased 10% due to continued growth in the dental and long-term
care products. Retirement and savings premiums, fees and other revenues
increased 47% primarily due to a sale for a significant single premium contract
during the three months ended March 31, 2004 as well as higher structured
settlement premiums. Premiums, fees and other revenues from retirement and
savings products are significantly influenced by large transactions and as a
result can fluctuate from period to period.

41

Total expenses increased by $304 million, or 10%, to $3,382 million for the
three months ended March 31, 2004 from $3,078 million for the comparable 2003
period. Policyholder related expenses increased $289 million primarily as a
function of growth in the business. In addition, unfavorable mortality
experience in the group life segment contributed to this increase. This is
partially offset by favorable underwriting results in our retirement and savings
segment. Other operating expenses increased $15 million over the prior period.
This increase is primarily due to higher expenses in the non-medical health
segment consistent with growth in revenue.

42

INDIVIDUAL

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

THREE MONTHS ENDED MARCH 31, 2004 COMPARED WITH THE THREE MONTHS ENDED MARCH 31,
2003 -- INDIVIDUAL

MetLife's Individual segment offers a wide variety of protection and asset
accumulation products aimed at serving the financial needs of its customers
throughout their entire life cycle. Products offered by Individual include
insurance products, such as traditional, universal and variable life insurance
and variable and fixed annuities. In addition, Individual sales representatives
distribute disability insurance and long-term care insurance products offered
through the Institutional segment, investment products, such as mutual funds, as
well as other products offered by the Company's other businesses.

Income from continuing operations increased by $71 million, or 62%, to $185
million for the three months ended March 31, 2004 from $114 million for the
comparable 2003 period. The increase period over period is primarily
attributable to the growth in the separate account asset base, which increased
fee income. Partially offsetting the increased fee income was reduced net
investment income driven by lower bond yields, increased expenses primarily due
to expenses associated with office consolidations and related fixed asset
write-offs and reduced policyholder benefits and dividends due primarily to a
reduction in the dividend scale.

Total revenues, excluding net investment-related gains (losses), decreased
by $10 million, or less than 1%, to $3,032 million for the three months ended
March 31, 2004 from $3,042 million for the comparable 2003 period. Fees from
universal life and investment-type products grew approximately 17% over the
prior year period largely due to a higher asset base. The growth in the separate
account asset base is largely attributable to two factors: (i) increased sales
of variable annuities and (ii)improvements in the financial markets. The
increase in fee income was offset by declines in premiums in the traditional
life products as well as a decrease in net investment income. Premiums
associated with the Company's closed block of business continued to decline in
the expected range of 3% to 6%, as this business continues to run-off. Premiums
also decreased slightly due to reduced paid-up additions resulting from a

43

reduction in the dividend scale. The decline in net investment income was due to
a decline in bond yields, consistent with the current market environment.

Total expenses decreased by $42 million, or 2%, to $2,761 million for the
three months ended March 31, 2004 from $2,803 million for the comparable 2003
period. The decrease is primarily attributed to a $43 million decrease in the
policyholder benefits and dividends precipitated by a reduction in the scale,
which reduced paid-up addition reserves and the dividend expense. In addition
the amount of interest credited to the policyholder account balance declined due
to a reduction of rates on the in-force block of business and the sales of new
business at lower rates, a pricing strategy commensurate with the reduced earned
rate on the general account assets. Offsetting the decline in interest expense,
other expenses, net of DAC, increased $34 million comparatively due in part to
expenses associated with office consolidations and related fixed asset
write-offs.

44

AUTO & HOME

The following table presents consolidated financial information for the Auto
& Home segment for the periods indicated:

THREE MONTHS ENDED MARCH 31, 2004 COMPARED WITH THE THREE MONTHS ENDED MARCH 31,
2003 -- AUTO & HOME

Auto & Home, operating through Metropolitan Property and Casualty Insurance
Company and its subsidiaries, offers personal lines property and casualty
insurance directly to employees through employer-sponsored programs, as well as
through a variety of retail distribution channels. Auto & Home primarily sells
auto and homeowners insurance.

Net income increased by $19 million, or 70%, to $46 million for the three
months ended March 31, 2004 from $27 million for the comparable 2003 period. The
increase in earnings period over period is mainly due to an improvement in
adverse claims development related to prior accident years and higher investment
income resulting from the prepayment of a preferred stock.

Total revenues, excluding net investment-related gains (losses), increased
by $32 million, or 4%, to $792 million for the three months ended March 31, 2004
from $760 million for the comparable 2003 period. This variance is mainly due to
increases in average earned premium from continued rate increases.

Total expenses were essentially flat at $734 million for the three months
ended March 31, 2004 and $733 million for the comparable 2003 period.
Improvement in adverse claims development related to prior accident years, of
$37 million and an $11 million reduction in the cost of the New York assigned
risk plan contributed to a decline in expenses. However, this decline was
essentially offset by increases in average claim costs for the current accident
year in bodily injury, uninsured motorists and homeowners coverages, as well as
a slight increase in catastrophes. The combined ratio, excluding catastrophes,
declined to 96.5% for the three months ended March 31, 2004 versus 101.2% for
the comparable 2003 period.

45

INTERNATIONAL

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

THREE MONTHS ENDED MARCH 31, 2004 COMPARED WITH THE THREE MONTHS ENDED MARCH 31,
2003 -- INTERNATIONAL

International provides life insurance, accident and health insurance,
annuities and savings and retirement products to both individuals and groups.
The Company focuses on emerging markets in the Latin America and Asia/Pacific
regions.

Net income increased by $8 million, or 29%, to $36 million for the three
months ended March 31, 2004 from $28 million for the comparable 2003 period.
Included in the current period is a charge for the cumulative effect of a change
in accounting of $30 million partially offset by realized gains of $29 million
primarily due to the sale of the Spanish operation, which was completed during
the three months ended March 31, 2004.

Total revenues, excluding net investment-related gains (losses), increased
by $45 million, or 8% to $622 million for the three months ended March 31, 2004
from $577 million for the comparable 2003 period. The sale of the Spanish
operation reduced revenues by $51 million over the comparable 2003 period.
Excluding this, revenues increased by $96 million, or 18%, of which 3% was
caused by currency fluctuation. Mexico, South Korea, Chile and Taiwan's revenues
increased by $31 million, $22 million, $20 million and $10 million,
respectively, due primarily to planned growth in the business, as well as better
investment earnings.

Total expenses increased by $22 million, or 4%, to $557 million for the
three months ended March 31, 2004 from $535 million for the comparable 2003
period. The sale of the Spanish operation reduced expenses by $50 million over
the comparable 2003 period. Excluding this, expenses increased by $72 million,
or 15%, of which 3% was caused by currency fluctuation. South Korea, Chile and
Taiwan's expenses increased by $19 million, $19 million and $9 million,
respectively, commensurate with the revenue increase in each country. Mexico's
expenses increased by $12 million primarily due to the aforementioned revenue
increase, partially offset by the impact of the change in reserve methodology
that was introduced subsequent to March 31, 2003.

46

REINSURANCE

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

THREE MONTHS ENDED MARCH 31, 2004 COMPARED WITH THE THREE MONTHS ENDED MARCH 31,
2003 -- REINSURANCE

MetLife's Reinsurance segment is comprised of the life reinsurance business
of RGA, a publicly traded company, and MetLife's ancillary life reinsurance
business. RGA has operations in North America and has subsidiary companies,
branch offices, or representative offices in Australia, Barbados, Hong Kong,
India, Ireland, Japan, Mexico, South Africa, South Korea, Spain, Taiwan and the
United Kingdom.

Net income increased by $7 million, or 35%, to $27 million for the three
months ended March 31, 2004 from $20 million for the comparable 2003 period. The
increase in earnings period over period is primarily attributable to an increase
in net investment-related gains, business growth in RGA's U.S. traditional
business and the cumulative effect of the change in accounting. The increase was
partially offset by additional minority interest expense as MetLife's beneficial
ownership in RGA decreased from 59% to 52% in the respective periods and
favorable claims experience (favorable mortality) in RGA's U.S. traditional
business in the prior-year quarter compared to higher claims levels in the
current quarter. Growth in RGA's U.S. traditional business included a large
coinsurance agreement with Allianz Life under which RGA assumed 100% of Allianz
Life's U.S. traditional life reinsurance business. This transaction closed
during the fourth quarter of 2003 and was effective retroactive to July 1, 2003.

Total revenues, excluding net investment-related gains (losses), increased
by $284 million, or 42%, to $958 million for the three months ended March 31,
2004 from $674 million for the comparable 2003 period. This increase is
primarily due to a $129 million increase in revenues due to the transaction with
Allianz Life, as well as new premiums from facultative and automatic treaties
and renewal premiums on existing blocks of business, particularly in the U.S.
and certain international reinsurance operations, primarily in the United
Kingdom and Asia/Pacific region.

Total expenses increased by $299 million, or 47%, to $939 million for the
three months ended March 31, 2004 from $640 million for the comparable 2003
period. This increase is consistent with the growth in revenues and is primarily
attributable to policyholder benefits and claims and allowances paid on assumed
reinsurance associated with the aforementioned transaction with Allianz Life.

47

ASSET MANAGEMENT

The following table presents consolidated financial information for the
Asset Management segment for the periods indicated:

THREE MONTHS ENDED MARCH 31, 2004 COMPARED WITH THE THREE MONTHS ENDED MARCH 31,
2003 -- ASSET MANAGEMENT

Asset Management, through SSRM Holdings, Inc. ("State Street Research"),
provides a broad variety of asset management products and services to MetLife,
third-party institutions and individuals. State Street Research offers
investment management services in all major investment disciplines through
multiple channels of distribution in both the retail and institutional
marketplaces.

Net income decreased by $1 million, or 17%, to $5 million for the three
months ended March 31, 2004 from $6 million for the comparable 2003 period. The
decrease period over period is mainly due to higher expenses primarily
attributable to a regulatory settlement and associated legal costs which were
recorded during the first quarter of 2004, in addition to expense increases
resulting from higher assets under management.

Total revenues, excluding net investment-related gains (losses), increased
by $13 million, or 29%, to $58 million for the three months ended March 31, 2004
from $45 million for the comparable 2003 period. This increase is primarily
attributable to an increase in revenues earned on higher average assets under
management. Assets under management increased 16% to $50.4 billion as of March
31, 2004 from $43.6 billion for the comparable 2003 period.

Other expenses increased by $6 million, or 14%, to $49 million for the three
months ended March 31, 2004 from $43 million for the comparable 2003 period.
This increase was primarily attributable to a regulatory settlement and
associated legal costs amounting to approximately $4 million and higher
variable expenses as a result of higher average assets under management.

48

CORPORATE & OTHER

THREE MONTHS ENDED MARCH 31, 2004 COMPARED WITH THE THREE MONTHS ENDED MARCH 31,
2003 -- CORPORATE & OTHER

Corporate & Other contains the excess capital not allocated to the business
segments, as well as expenses associated with the resolution of certain legal
proceedings and interest expense related to the majority of the Company's
outstanding debt.

Loss from continuing operations decreased by $12 million, or 25%, to $36
million for the three months ended March 31, 2004 from $48 million for the
comparable 2003 period. The decrease in losses is mainly due to lower net
investment-related losses.

Total revenues, excluding net investment-related gains (losses), decreased
by $1 million, or 2%, to $62 million for the three months ended March 31, 2004
from $63 million for the comparable 2003 period. Higher net investment income
from long-term bonds and securities lending were almost entirely offset by an
increase in interest paid on allocated capital.

Total expenses decreased by $2 million, or 2%, to $118 million for the three
months ended March 31, 2004 from $120 million for the comparable 2003 period.
The decrease is due to lower legal expenses partially offset by higher interest
credited to bank customer deposits as a result of growth in MetLife Bank's
business.

49

METLIFE CAPITAL TRUST I

In connection with MetLife, Inc.'s initial public offering in April 2000,
the Holding Company and MetLife Capital Trust I (the "Trust") issued equity
security units (the "units"). Each unit originally consisted of (i) a contract
to purchase, for $50, shares of the Holding Company's common stock (the
"purchase contracts") on May 15, 2003; and (ii) a capital security of the Trust,
with a stated liquidation amount of $50.

In accordance with the terms of the units, the Trust was dissolved on
February 5, 2003, and $1,006 million aggregate principal amount of 8.00%
debentures of the Holding Company (the "MetLife debentures"), the sole assets of
the Trust, were distributed to the owners of the Trust's capital securities in
exchange for their capital securities. The MetLife debentures were remarketed on
behalf of the debenture owners on February 12, 2003 and the interest rate on the
MetLife debentures was reset as of February 15, 2003 to 3.911% per annum for a
yield to maturity of 2.876%. As a result of the remarketing, the debenture
owners received $21 million ($0.03 per diluted common share) in excess of the
carrying value of the capital securities. This excess was recorded by the
Company as a charge to additional paid-in capital and, for the purpose of
calculating earnings per share, is subtracted from net income to arrive at net
income available to common shareholders.

On May 15, 2003, the purchase contracts associated with the units were
settled. In exchange for $1,006 million, the Company issued 2.97 shares of
MetLife, Inc. common stock per purchase contract, or approximately 59.8 million
shares of treasury stock. The excess of the Company's cost of the treasury stock
($1,662 million) over the contract price of the stock issued to the purchase
contract holders ($1,006 million) was $656 million, which was recorded as a
direct reduction to retained earnings.

LIQUIDITY AND CAPITAL RESOURCES

THE HOLDING COMPANY

CAPITAL

Restrictions and Limitations on Bank Holding Companies and Financial Holding
Companies -- Capital. MetLife, Inc. and its insured depository institution
subsidiary, MetLife Bank, N.A. ("MetLife Bank"), a national bank, are subject to
risk-based and leverage capital guidelines issued by the federal banking
regulatory agencies for banks and financial holding companies. The federal
banking regulatory agencies are required by law to take specific prompt
corrective actions with respect to institutions that do not meet minimum capital
standards. At March 31, 2004, MetLife, Inc. and MetLife Bank were in compliance
with the aforementioned guidelines.

LIQUIDITY

Liquidity refers to a company's ability to generate adequate amounts of cash
to meet its needs. It is managed to preserve stable, reliable and cost-effective
sources of cash to meet all current and future financial obligations and is
provided by a variety of sources, including a portfolio of liquid assets, a
diversified mix of short and long-term funding sources from the wholesale
financial markets and the ability to borrow through committed credit facilities.
The Holding Company is an active participant in the global financial markets
through which it obtains a significant amount of funding. These markets, which
serve as cost-effective sources of funds, are critical components of the Holding
Company's liquidity management. Decisions to access these markets are based upon
relative costs, prospective views of balance sheet growth and a targeted
liquidity profile. A disruption in the financial markets could limit the Holding
Company's access to liquidity.

The Holding Company's ability to maintain regular access to competitively
priced wholesale funds is fostered by its current debt ratings from the major
credit rating agencies. Management views its capital ratios, credit quality,
stable and diverse earnings streams, diversity of liquidity sources and its
liquidity monitoring procedures as critical to retaining high credit ratings.

Liquidity is monitored through the use of internal liquidity risk metrics,
including the composition and level of the liquid asset portfolio, timing
differences in short-term cash flow obligations access to the financial markets
for capital and term-debt transactions and exposure to contingent draws on the
Holding Company's liquidity.

50

LIQUIDITY SOURCES

Dividends. The primary source of the Holding Company's liquidity is
dividends it receives from Metropolitan Life. Under the New York Insurance Law,
Metropolitan Life is permitted, without prior insurance regulatory clearance, to
pay a cash dividend to the Holding Company as long as the aggregate amount of
all such dividends in any calendar year does not exceed the lesser of (i) 10% of
its statutory surplus as of the immediately preceding calendar year; and (ii)
its statutory net gain from operations for the immediately preceding calendar
year (excluding realized capital gains). Metropolitan Life will be permitted to
pay a cash dividend to the Holding Company in excess of the lesser of such two
amounts only if it files notice of its intention to declare such a dividend and
the amount thereof with the New York Superintendent of Insurance (the
"Superintendent") and the Superintendent does not disapprove the distribution.
Under the New York Insurance Law, the Superintendent has broad discretion in
determining whether the financial condition of a stock life insurance company
would support the payment of such dividends to its stockholders. The New York
Insurance Department (the "Department") has established informal guidelines for
such determinations. The guidelines, among other things, focus on the insurer's
overall financial condition and profitability under statutory accounting
practices. Management of the Holding Company cannot provide assurance that
Metropolitan Life will have statutory earnings to support payment of dividends
to the Holding Company in an amount sufficient to fund its cash requirements and
pay cash dividends or that the Superintendent will not disapprove any dividends
that Metropolitan Life must submit for the Superintendent's consideration. In
addition, the Holding Company receives dividends from its other subsidiaries.
The Holding Company's other insurance subsidiaries are also subject to similar
restrictions on the payment of dividends to their respective parent companies.

The dividend limitation is based on statutory financial results. Statutory
accounting practices, as prescribed by insurance regulators of various states in
which the Company conducts business, differ in certain respects from accounting
principles used in financial statements prepared in conformity with GAAP. The
significant differences relate to the treatment of DAC, certain deferred income
taxes, required investment reserves, reserve calculation assumptions, goodwill
and surplus notes.

Liquid Assets. An integral part of the Holding Company's liquidity
management is the amount of liquid assets that it holds. Liquid assets include
cash, cash equivalents, short-term investments and marketable fixed maturity and
equity securities. Liquid assets exclude assets relating to securities lending
and dollar roll activities. At March 31, 2004 and December 31, 2003, the Holding
Company had $1,159 million and $1,320 million in liquid assets, respectively.

Global Funding Sources. Liquidity is also provided by a variety of both
short and long-term instruments, including repurchase agreements, commercial
paper, medium and long-term debt, capital securities and stockholders' equity.
The diversification of the Holding Company's funding sources enhances funding
flexibility and limits dependence on any one source of funds, and generally
lowers the cost of funds.

At March 31, 2004, the Holding Company had no short-term debt outstanding as
compared to $106 million at December 31, 2003. At both March 31, 2004 and
December 31, 2003, the Holding Company had $3.96 billion in long-term debt
outstanding, respectively.

The Holding Company filed a $5.0 billion shelf registration statement with
the U.S. Securities and Exchange Commission ("SEC"), which became effective on
March 4, 2004. The shelf registration will permit the registration and issuance
of a wide range of debt and equity securities. Approximately $44 million of
registered but unissued securities remaining from the Company's 2001 $4.0
billion shelf registration statement has been carried over to this shelf
registration.

The Holding Company issued and remarketed senior debt and debentures,
respectively, in the aggregate amount of $3.96 billion under the 2001 $4.0
billion shelf registration statement. Under this shelf registration statement,
the Holding Company remarketed $1,006 million aggregate principal amount of
debentures previously issued in connection with the issuance of equity security
units in February of 2003. See "-- MetLife Capital Trust I." The following table
summarizes the Holding Company's senior debt issuances:

51

Other sources of the Holding Company's liquidity include programs for short
and long-term borrowing, as needed, arranged through Metropolitan Life.

Credit Facilities. The Holding Company maintains committed and unsecured
credit facility aggregating $2.25 billion ($1 billion expiring in 2004 and $1.25
billion expiring in 2005) which it shares with Metropolitan Life and MetLife
Funding, Inc. ("MetLife Funding"). Drawdowns under these facilities bear
interest at varying rates stated in the agreements. These facilities are
primarily used for general corporate purposes and as back-up lines of credit for
the borrowers' commercial paper programs. At March 31, 2004, neither the Holding
Company, Metropolitan Life nor MetLife Funding had drawn against these credit
facilities. In April 2004, the Company replaced the $2.25 billion credit
facilities expiring in 2004 and 2005, with a $1.0 billion 364-day facility
expiring in 2005 and a $1.5 billion five-year credit facility expiring in 2009.

Liquidity Uses

The primary uses of liquidity of the Holding Company include cash dividends
on common stock, service on debt, capital contributions to subsidiaries, payment
of general operating expenses and the repurchase of the Holding Company's common
stock.

Dividends. On October 21, 2003, the Holding Company's Board of Directors
approved an annual dividend for 2003 of $0.23 per share. The dividend was paid
on December 15, 2003 to shareholders of record on November 7, 2003. The 2003
dividend represents an increase of $0.02 per share from the 2002 annual dividend
of $0.21 per share. Future dividend decisions will be determined by the Holding
Company's Board of Directors after taking into consideration factors such as the
Holding Company's current earnings, expected medium and long-term earnings,
financial condition, regulatory capital position, and applicable governmental
regulations and policies.

Capital Contributions to Subsidiaries. During the three months ended March
31, 2004 and 2003, the Holding Company contributed an aggregate of $75 million
and $10 million to various subsidiaries, respectively.

Share Repurchase. On February 19, 2002, the Holding Company's Board of
Directors authorized a $1 billion common stock repurchase program. Under this
authorization, the Holding Company may purchase its common stock from the
MetLife Policyholder Trust, in the open market and in privately negotiated
transactions. The following table summarizes the three months ended March 31,
2004 and 2003 repurchase activity:

At March 31, 2004, the Holding Company had approximately $644 million
remaining on its existing share repurchase program. See Part II, Item 2,
"Changes in Securities, Use of Proceeds, and Issuer Purchases of Equity
Securities."

In the fourth quarter of 2003, RGA offered to the public 12,075,000 shares
of its common stock at $36.65 per share. MetLife and its affiliates purchased
3,000,000 shares of the common stock being offered by RGA. As a result of this
offering, MetLife's ownership percentage of outstanding shares of RGA common
stock was reduced from approximately 59% at December 31, 2002 to approximately
52% at December 31, 2003.

Support Agreements. In 2002, the Holding Company entered into a net worth
maintenance agreement with three of its insurance subsidiaries, MetLife
Investors Insurance Company, First MetLife Investors Insurance Company and
MetLife Investors Insurance Company of California. Under the agreements, the
Holding Company agreed, without limitation as to the amount, to cause each of
these subsidiaries to have a minimum capital and surplus of $10 million (or,
with respect to MetLife Investors Insurance Company of California, $5 million),
total adjusted capital at a level not less than 150% of the company action level
RBC, as defined by state insurance statutes, and liquidity necessary to enable
it to meet its current obligations on a timely basis. At March 31, 2004, the
capital

52

and surplus of each of these subsidiaries was in excess of the minimum capital
and surplus amounts referenced above, and their total adjusted capital was in
excess of the most recent referenced RBC-based amount calculated at December 31,
2003.

Based on management's analysis and comparison of its current and future cash
inflows from the dividends it receives from subsidiaries, including Metropolitan
Life, that are permitted to be paid without prior insurance regulatory approval
and its portfolio of liquid assets and other anticipated cash flows, management
believes there will be sufficient liquidity to enable the Holding Company to
make payments on debt, make cash dividend payments on its common stock,
contribute capital to its subsidiaries, pay all operating expenses, repurchase
common stock and meet its other obligations.

THE COMPANY

Capital

RBC. Section 1322 of the New York Insurance Law requires that New York
domestic life insurers report their RBC based on a formula calculated by
applying factors to various asset, premium and statutory reserve items; similar
rules apply to each of the Company's domestic insurance subsidiaries. The
formula takes into account the risk characteristics of the insurer, including
asset risk, insurance risk, interest rate risk and business risk. Section 1322
gives the Superintendent explicit regulatory authority to require various
actions by, or to take various actions against, insurers whose total adjusted
capital does not exceed certain RBC levels. At December 31, 2003, Metropolitan
Life's and each of the Holding Company's domestic insurance subsidiaries' total
adjusted capital was in excess of each of the RBC levels required by each state
of domicile.

The National Association of Insurance Commissioners ("NAIC") adopted
Codification of Statutory Accounting Principles ("Codification"), which is
intended to standardize regulatory accounting and reporting to state insurance
departments and became effective January 1, 2001. However, statutory accounting
principles continue to be established by individual state laws and permitted
practices. The Department required adoption of Codification with certain
modifications for the preparation of statutory financial statements of insurance
companies domiciled in New York effective January 1, 2001. Effective December
31, 2002, the Department adopted a modification to its regulations to be
consistent with Codification with respect to the admissibility of deferred
income taxes by New York insurers, subject to certain limitations. The adoption
of Codification, as modified by the Department, did not adversely affect
Metropolitan Life's statutory capital and surplus. Further modifications by
state insurance departments may impact the effect of Codification on the
statutory capital and surplus of Metropolitan Life and the Holding Company's
other insurance subsidiaries.

Liquidity Sources

Cash Flow from Operations. The Company's principal cash inflows from its
insurance activities come from insurance premiums, annuity considerations and
deposit funds. A primary liquidity concern with respect to these cash inflows is
the risk of early contractholder and policyholder withdrawal. The Company seeks
to include provisions limiting withdrawal rights on many of its products,
including general account institutional pension products (generally group
annuities, including guaranteed interest contracts and certain deposit fund
liabilities) sold to employee benefit plan sponsors.

The Company's principal cash inflows from its investment activities come
from repayments of principal, proceeds from maturities and sales of invested
assets and investment income. The primary liquidity concerns with respect to
these cash inflows are the risk of default by debtors and market volatilities.
The Company closely monitors and manages these risks through its credit risk
management process.

Liquid Assets. An integral part of the Company's liquidity management is the
amount of liquid assets it holds. Liquid assets include cash, cash equivalents,
short-term investments and marketable fixed maturity and equity securities.
Liquid assets exclude assets relating to securities lending and dollar roll
activities. At March 31, 2004 and December 31, 2003, the Company had $131
billion and $125 billion in liquid assets, respectively.

Global Funding Sources. Liquidity is also provided by a variety of both
short and long-term instruments, including repurchase agreements, commercial
paper, medium and long-term debt, capital securities and stockholders' equity.
The diversification of the Company's funding sources enhances funding
flexibility, limits dependence on any one source of funds and generally lowers
the cost of funds.

At March 31, 2004 and December 31, 2003, the Company had $3,068 million and
$3,642 million in short-term debt outstanding and $5,707 million and $5,703
million in long-term debt outstanding, respectively. On November 1, 2003, the
Company redeemed the

53

$300 million of 7.45% Surplus Notes outstanding scheduled to mature on November
1, 2023 at a redemption price of $311 million.

MetLife Funding serves as a centralized finance unit for Metropolitan Life.
Pursuant to a support agreement, Metropolitan Life has agreed to cause MetLife
Funding to have a tangible net worth of at least one dollar. At both March 31,
2004 and December 31, 2003, MetLife Funding had a tangible net worth of $10.8
million, respectively. MetLife Funding raises funds from various funding sources
and uses the proceeds to extend loans, through MetLife Credit Corp., a
subsidiary of Metropolitan Life, to the Holding Company, Metropolitan Life and
other affiliates. MetLife Funding manages its funding sources to enhance the
financial flexibility and liquidity of Metropolitan Life and other affiliated
companies. At March 31, 2004 and December 31, 2003, MetLife Funding had total
outstanding liabilities, including accrued interest payable, of $1,044 million
and $1,042 million, respectively, consisting primarily of commercial paper.

Credit Facilities. The Company maintains committed and unsecured credit
facilities aggregating $2.5 billion ($1 billion expiring in 2004, $1.3 billion
expiring in 2005 and $175 million expiring in 2006). If these facilities were
drawn upon, they would bear interest at varying rates in accordance with the
respective agreements. The facilities can be used for general corporate purposes
and also as back-up lines of credit for the Company's commercial paper programs.
At March 31, 2004, the Company had drawn approximately $55 million under the
facilities expiring in 2005 at interest rates ranging from 4.77% to 6.16% and
approximately $50 million under a facility expiring in 2006 at an interest rate
of 1.63%. In April 2004, the Company replaced $2.25 billion credit facilities
expiring in 2004 and 2005, with a $1.0 billion 364-day facility expiring in 2005
and a $1.5 billion five-year credit facility expiring in 2009.

LIQUIDITY USES

Insurance Liabilities. The Company's principal cash outflows primarily
relate to the liabilities associated with its various life insurance, property
and casualty, annuity and group pension products, operating expenses and income
taxes, as well as principal and interest on its outstanding debt obligations.
Liabilities arising from its insurance activities primarily relate to benefit
payments under the aforementioned products, as well as payments for policy
surrenders, withdrawals and loans.

Investment and Other. Additional cash outflows include those related to
obligations of securities lending and dollar roll activities, investments in
real estate, limited partnerships and joint ventures, as well as
litigation-related liabilities.

The following table summarizes the Company's major contractual obligations
as of March 31, 2004:

- ----------

(1) Other long-term liabilities include guaranteed interest contracts,
structured settlements, pension closeouts and certain annuity policies.

(2) Amounts differ from the balances presented on the consolidated balance
sheets. The amounts above do not include related premiums and discounts or
capital leases which are presented separately.

(3) The Company anticipates that these amounts could be invested in these
partnerships any time over the next five years, but are presented in the
current period, as the timing of the fulfillment of the obligation cannot be
predicted.

As of March 31, 2004, the Company had no material, individually or in the
aggregate, purchase obligations and pension and other postretirement benefit
obligations.

On April 11, 2003, an affiliate of the Company elected not to make future
payments required by the terms of a non-recourse loan obligation. The book value
of this loan was approximately $16 million at March 31, 2004. The Company's
exposure under the terms of the applicable loan agreement is limited solely to
its investment in certain securities held by an affiliate.

54

Letters of Credit. At March 31, 2004 and December 31, 2003, the Company had
outstanding approximately $779 million and $828 million, respectively, in
letters of credit from various banks, all of which expire within one year. Since
commitments associated with letters of credit and financing arrangements may
expire unused, these amounts do not necessarily reflect the actual future cash
funding requirements.

Support Agreements. In addition to the support agreements described above,
Metropolitan Life entered into a net worth maintenance agreement with New
England Life Insurance Company ("NELICO") at the time Metropolitan Life merged
with New England Mutual Life Insurance Company. Under the agreement,
Metropolitan Life agreed, without limitation as to the amount, to cause NELICO
to have a minimum capital and surplus of $10 million, total adjusted capital at
a level not less than the company action level RBC, as defined by state
insurance statutes, and liquidity necessary to enable it to meet its current
obligations on a timely basis. At March 31, 2004, the capital and surplus of
NELICO was in excess of the minimum capital and surplus amount referenced above,
and its total adjusted capital was in excess of the most recent referenced
RBC-based amount calculated at December 31, 2003.

In connection with the Company's acquisition of GenAmerica Financial
Corporation ("GenAmerica"), Metropolitan Life entered into a net worth
maintenance agreement with General American Life Insurance Company ("General
American"). Under the agreement, Metropolitan Life agreed, without limitation as
to amount, to cause General American to have a minimum capital and surplus of
$10 million, total adjusted capital at a level not less than 180% of the company
action level RBC, as defined by state insurance statutes, and liquidity
necessary to enable it to meet its current obligations on a timely basis. The
agreement was subsequently amended to provide that, for the five year period
from 2003 through 2007, total adjusted capital must be maintained at a level not
less than 200% of the company action level RBC, as defined by state insurance
statutes. At March 31, 2004, the capital and surplus of General American was in
excess of the minimum capital and surplus amount referenced above, and its total
adjusted capital was in excess of the most recent referenced RBC-based amount
calculated at December 31, 2003.

Metropolitan Life has also entered into arrangements for the benefit of some
of its other subsidiaries and affiliates to assist such subsidiaries and
affiliates in meeting various jurisdictions' regulatory requirements regarding
capital and surplus and security deposits. In addition, Metropolitan Life has
entered into a support arrangement with respect to a subsidiary under which
Metropolitan Life may become responsible, in the event that the subsidiary
becomes the subject of insolvency proceedings, for the payment of certain
reinsurance recoverables due from the subsidiary to one or more of its cedents
in accordance with the terms and conditions of the applicable reinsurance
agreements.

General American has agreed to guarantee the contractual obligations of its
subsidiary, Paragon Life Insurance Company, and certain contractual obligations
of its former subsidiaries, MetLife Investors Insurance Company ("MetLife
Investors"), First MetLife Investors Insurance Company and MetLife Investors
Insurance Company of California. In addition, General American has entered into
a contingent reinsurance agreement with MetLife Investors. Under this agreement,
in the event that MetLife Investors' statutory capital and surplus is less than
$10 million or total adjusted capital falls below 150% of the company action
level RBC, as defined by state insurance statutes, General American would assume
as assumption reinsurance, subject to regulatory approvals and required
consents, all of MetLife Investors' life insurance policies and annuity contract
liabilities. At March 31, 2004, the capital and surplus of MetLife Investors was
in excess of the minimum capital and surplus amount referenced above, and its
total adjusted capital was in excess of the most recent referenced RBC-based
amount calculated at December 31, 2003.

Management does not anticipate that these arrangements will place any
significant demands upon the Company's liquidity resources.

Litigation. Various litigation, claims and assessments against the Company
have arisen in the course of the Company's business, including, but not limited
to, in connection with its activities as an insurer, employer, investor,
investment advisor and taxpayer. Further, state insurance regulatory authorities
and other federal and state authorities regularly make inquiries and conduct
investigations concerning the Company's compliance with applicable insurance and
other laws and regulations.

It is not feasible to predict or determine the ultimate outcome of all
pending investigations and legal proceedings or provide reasonable ranges of
potential losses except with respect to certain matters. In some of the matters,
very large and/or indeterminate amounts, including punitive and treble damages,
are sought. Although in light of these considerations, it is possible that an
adverse outcome in certain cases could have a material adverse effect upon the
Company's consolidated financial position, based on information currently known
by the Company's management, in its opinion, the outcomes of such pending
investigations and legal proceedings are not likely to have such an effect.
However, given the large and/or indeterminate amounts sought in certain of these

55

matters and the inherent unpredictability of litigation, it is possible that an
adverse outcome in certain matters could, from time to time, have a material
adverse effect on the Company's consolidated net income or cash flows in
particular quarterly or annual periods.

Based on management's analysis of its expected cash inflows from operating
activities, the dividends it receives from subsidiaries, including Metropolitan
Life, that are permitted to be paid without prior insurance regulatory approval
and its portfolio of liquid assets and other anticipated cash flows, management
believes there will be sufficient liquidity to enable the Company to make
payments on debt, make cash dividend payments on its common stock, pay all
operating expenses, repurchase common stock and meet its other obligations. The
nature of the Company's diverse product portfolio and customer base lessen the
likelihood that normal operations will result in any significant strain on
liquidity.

Consolidated cash flows. Net cash provided by operating activities was
$1,116 million and $976 million for the three months ended March 31, 2004 and
2003, respectively. The $140 million increase in operating cash flows in 2004
over the comparable 2003 period is primarily attributable to sales growth in the
group life, dental, disability and long-term care businesses, as well as higher
sales in retirement and savings' structured settlement products. The late 2003
acquisition of John Hancock's group business also contributed to sales growth in
the 2004 period. In addition, growth in MetLife Bank's customer deposits
contributed to the increase in operating cash flows.

Net cash used in investing activities was $2,993 million and $1,721 million
for the three months ended March 31, 2004 and 2003, respectively. The $1,272
million increase in net cash used in investing activities in 2004 over the
comparable 2003 period is primarily attributable to an increase in the purchases
of equity securities and a decrease in the proceeds from sales of fixed
maturities. In addition, the Company increased cash outflows by reducing the net
payable under securities loaned transactions. These items were partially offset
by cash inflows due to a net change in short-term investments.

Net cash provided by financing activities was $1,290 million and $3,360
million for the three months ended March 31, 2004 and 2003, respectively. The
$2,070 million decrease in net cash provided by financing activities in 2004
over the comparable 2003 period is primarily attributable to the repayment of
short-term debt issued related to dollar roll activity and commercial paper
which was used to pre-fund the issuance of guaranteed interest contracts in
April 2003. In addition, the Company had an increase in cash outflows to acquire
treasury stock in the stock repurchase program during 2004 over the comparable
2003 period.

EFFECTS OF INFLATION

The Company does not believe that inflation has had a material effect on its
consolidated results of operations, except insofar as inflation may affect
interest rates.

APPLICATION OF RECENT ACCOUNTING STANDARDS

Effective January 1, 2004, the Company adopted Statement of Position 03-1,
Accounting and Reporting by Insurance Enterprises for Certain Nontraditional
Long-Duration Contracts and for Separate Accounts ("SOP 03-1"). SOP 03-1
provides guidance on (i) the classification and valuation of long-duration
contract liabilities; (ii) the accounting for sales inducements; and (iii)
separate account presentation and valuation. At adoption, the Company increased
future policyholder benefits for changes in the methodology relating to various
guaranteed death and annuitization benefits and for determining reserves for
certain universal life insurance contracts by approximately $68 million, which
has been reported as a cumulative effect of a change in accounting. This amount
is net of corresponding changes in DAC and unearned revenue liability
("offsets") under certain variable annuity and life contracts and income taxes.
Industry standards and practices may continue to evolve relating to the
valuation of liabilities relating to these types of benefits and contracts,
which may result in further adjustments to the Company's measurement of such
liabilities in subsequent accounting periods. Certain other contracts sold by
the Company provide for a return through periodic crediting rates, surrender
adjustments or termination adjustments based on the total return of a
contractually referenced pool of assets owned by the Company. To the extent that
such contracts are not accounted for under the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS 133") and not already credited to the
contract account balance, under SOP 03-1 the change relating to the fair value
of the referenced pool of assets is recorded as a liability through net
investment-related gains (losses). Prior to the adoption of SOP 03-1, the
Company recorded the change in such liability as other comprehensive income. At
adoption, this change decreased net income and increased other comprehensive
income by $63 million, net of income taxes, which were recorded as cumulative
effects of a change in accounting. Effective with the adoption of SOP 03-1,
costs associated with enhanced or bonus crediting rates to contractholders must
be deferred and amortized over the life of the related contract using
assumptions consistent with the amortization of DAC. Since the Company followed
a similar approach prior to adoption of SOP 03-1, the provisions of SOP 03-1
relating to sales inducements had no significant impact on the Company's
unaudited interim condensed consolidated financial statements. At adoption,

56

the Company reclassified $155 million of ownership in its own separate accounts
from other assets to fixed maturities, equity securities and cash and cash
equivalents. This reclassification had no significant impact on net income or
other comprehensive income at adoption. In accordance with SOP 03-1's guidance
for the reporting of certain separate accounts, at adoption, the Company also
reclassified $1.7 billion of separate account assets to general account
investments and $1.7 billion of separate account liabilities to future policy
benefits and policyholder account balances. This reclassification decreased net
income and increased other comprehensive income by $27 million, net of income
taxes, which were reported as cumulative effects of a change in accounting. As a
result of the adoption of SOP 03-1, the Company reduced net income by $14
million, net of offsets and income taxes, for the three months ended March 31,
2004.

Effective December 31, 2003, the Company adopted Emerging Issues Task Force
("EITF") Issue No. 03-1, The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments, ("EITF 03-1"). EITF 03-1 provides guidance
on the disclosure requirements for other-than-temporary impairments of debt and
marketable equity investments that are accounted for under SFAS No. 115,
Accounting for Certain Investments in Debt and Equity Securities ("SFAS 115").
The adoption of EITF 03-1 requires the Company to include certain quantitative
and qualitative disclosures for debt and marketable equity securities classified
as available-for-sale or held-to-maturity under SFAS 115 that are impaired at
the balance sheet date but for which an other-than-temporary impairment has not
been recognized. The adoption of EITF 03-1 only required additional disclosures
and, therefore, did not impact the Company's unaudited interim condensed
consolidated financial statements.

In December, 2003, the Financial Accounting Standards Board ("FASB") revised
SFAS No. 132, Employers' Disclosures about Pensions and Other Postretirement
Benefits -- an Amendment of FASB Statements No. 87, 88 and 106 ("SFAS 132(r)").
SFAS 132(r) retains most of the disclosure requirements of SFAS 132 and requires
additional disclosure about assets, obligations, cash flows and net periodic
benefit cost of defined benefit pension plans and other defined postretirement
plans. SFAS 132(r) was primarily effective for fiscal years ending after
December 15, 2003; however, certain disclosures about foreign plans and
estimated future benefit payments are effective for fiscal years ending after
June 15, 2004. The Company's adoption of SFAS 132(r) on December 31, 2003 did
not have a significant impact on its consolidated financial statements since it
only revised disclosure requirements. In January 2004, the FASB issued FASB
Staff Position ("FSP") No. 106-1, Accounting and Disclosure Requirements Related
to the Medicare Prescription Drug, Improvement and Modernization Act of 2003
("FSP 106-1"), which permits a sponsor of a postretirement health care plan that
provides a prescription drug benefit to make a one-time election to defer
accounting for the effects of the new legislation. The Company has elected to
defer the accounting until further guidance is issued by the FASB. The
measurements of the Company's postretirement accumulated benefit plan obligation
and net periodic benefit cost do not reflect the effects of the new legislation.
The guidance, when issued, could require the Company to change previously
reported information.

Effective October 1, 2003, the Company adopted Statement 133 Implementation
Issue No. B36, Embedded Derivatives: Modified Coinsurance Arrangements and Debt
Instruments That Incorporate Credit Risk Exposures That Are Unrelated or Only
Partially Related to the Creditworthiness of the Obligor under Those Instruments
("Issue B36"). Issue B36 concluded that (i) a company's funds withheld payable
and/or receivable under certain reinsurance arrangements, and (ii) a debt
instrument that incorporates credit risk exposures that are unrelated or only
partially related to the creditworthiness of the obligor include an embedded
derivative feature that is not clearly and closely related to the host contract.
Therefore, the embedded derivative feature is measured at fair value on the
balance sheet and changes in fair value are reported in income. As a result of
the adoption of Issue B36, the Company recognized investment-related losses and
related amortization of DAC of $13 million, net of income tax, for the three
months ended March 31, 2004.

Effective July 1, 2003, the Company adopted SFAS No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities ("SFAS 149").
SFAS 149 amended and clarified the accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. Except for certain previously issued and
effective guidance that was incorporated in SFAS 149, SFAS 149 is effective for
contracts entered into or modified after June 30, 2003. The Company's adoption
of SFAS 149 did not have a significant impact on its unaudited interim condensed
consolidated financial statements.

During 2003, the Company adopted FASB Interpretation No. 46 Consolidation of
Variable Interest Entities -- An Interpretation of ARB No. 51 ("FIN 46") and its
December 2003 revision ("FIN 46(r)"). Certain of the Company's asset-backed
securitizations, collateralized debt obligations, structured investment
transactions, and investments in real estate joint ventures and other limited
partnership interests meet the definition of a VIE and must be consolidated, in
accordance with the transition rules and effective dates, if the Company is
deemed to be the primary beneficiary. A VIE is defined as (i) any entity in
which the equity investments at risk in such entity do not have the
characteristics of a controlling financial interest, or (ii) any entity that
does not have sufficient equity at risk to finance its activities without
additional subordinated support from other parties. Effective February 1, 2003,
the Company

57

adopted FIN 46 for VIEs created or acquired on or after February 1, 2003 and,
effective December 31, 2003, the Company adopted FIN 46(r) with respect to
interests in entities formerly considered special purpose entities ("SPEs"),
including interests in asset-backed securities and collateralized debt
obligations. The adoption of FIN 46 as of February 1, 2003 did not have a
significant impact on the Company's unaudited interim condensed consolidated
financial statements. The adoption of the provisions of FIN 46(r) at December
31, 2003 did not require the Company to consolidate any additional VIEs that
were not previously consolidated. In accordance with the provisions of FIN
46(r), the Company elected to defer until March 31, 2004 the consolidation of
interests in VIEs for non SPEs acquired prior to February 1, 2003 for which it
is the primary beneficiary. As a result, effective March 31, 2004, the Company
had consolidated assets and liabilities relating to real estate joint ventures
of $78 million and $15 million, respectively, and assets and liabilities
relating to other limited partnerships of $29 million and $1 million,
respectively, for which the Company was deemed to be the primary beneficiary.
The transition effect recorded at March 31, 2004 as a result of these
consolidations was insignificant.

INVESTMENTS

The Company had total cash and invested assets at March 31, 2004 and
December 31, 2003 of $228.7 billion and $221.8 billion, respectively. In
addition, the Company had $78.3 billion and $75.8 billion held in its separate
accounts, for which the Company generally does not bear investment risk, as of
March 31, 2004 and December 31, 2003, respectively.

The following table summarizes the Company's cash and invested assets at:

INVESTMENT RESULTS

Net investment income, including net investment income from discontinued
operations and scheduled periodic settlement payments on derivative instruments
that do not qualify for hedge accounting under SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, as amended ("SFAS 133"), on
general account cash and invested assets totaled $3,006 million, and $2,899
million for the three months ended March 31, 2004 and 2003, respectively. The
annualized yields on general account cash and invested assets, including net
investment income from discontinued operations and scheduled periodic settlement
payments on derivative instruments that do not qualify for hedge accounting
under SFAS 133, and excluding all net investment-related gains (losses), were
6.43% and 6.95% for the three months ended March 31, 2004 and 2003,
respectively. The decline in annualized yields is due primarily to the decline
in interest rates during these periods.

58

The following table illustrates the net investment income and annualized
yields on average assets for each of the components of the Company's investment
portfolio for the three months ended March 31, 2004 and 2003:

- ----------

(1) Yields are based on quarterly average asset carrying values, excluding
recognized and unrealized gains (losses), and for yield calculation
purposes, average assets exclude collateral associated with the Company's
securities lending program.

(2) Included in fixed maturities are equity-linked notes of $911 million and
$798 million at March 31, 2004 and 2003, respectively, which include an
equity-like component as part of the notes' return. Investment income for
fixed maturities includes prepayment fees and income from the securities
lending program. Fixed maturity investment income has been reduced by
rebates paid under the securities lending program.

59

(3) Investment income from mortgage loans on real estate includes prepayment
fees.

(4) Real estate and real estate joint venture income is shown net of
depreciation of $44 million and $45 million for the three months ended
March 31, 2004 and 2003, respectively. Real estate and real estate joint
venture income includes amounts classified as discontinued operations of
$16 million and $17 million for the three months ended March 31, 2004 and
2003, respectively. These amounts are net of depreciation of $2 million and
$6 million for the three months ended March 31, 2004 and 2003,
respectively. Net investment-related gains (losses) include $21 million and
$90 million of gains classified as discontinued operations for the three
months ended March 31, 2004 and 2003, respectively.

(5) Investment income from other invested assets includes scheduled periodic
settlement payments on derivative instruments that do not qualify for hedge
accounting under SFAS 133 of $14 million and $8 million for the three
months ended March 31, 2004 and 2003, respectively. These amounts are
excluded from net investment-related gains (losses).

(6) Adjustments to investment-related gains (losses) of $32 million and $38
million for the three months ended March 31, 2004 and 2003, respectively,
include amortization of DAC and adjustments to the policyholder dividend
obligation resulting from investment-related gains (losses).

(7) Included in net investment-related gains (losses) for the three months
ended March 31, 2004 is a $23 million gain from the sale of a subsidiary.

FIXED MATURITIES

Fixed maturities consist principally of publicly traded and privately placed
debt securities, and represented 76.2% and 75.6% of total cash and invested
assets at March 31, 2004 and December 31, 2003, respectively. Based on estimated
fair value, public fixed maturities represented $153,704 million, or 88.3% and
$147,489 million, or 87.9%, of total fixed maturities at March 31, 2004 and
December 31, 2003, respectively. Based on estimated fair value, private fixed
maturities represented $20,396 million, or 11.7% and $20,263 million, or 12.1%,
of total fixed maturities at March 31, 2004 and December 31, 2003, respectively.

The Securities Valuation Office of the NAIC evaluates the fixed maturity
investments of insurers for regulatory reporting purposes and assigns securities
to one of six investment categories called "NAIC designations." The NAIC ratings
are similar to the rating agency designations of the Nationally Recognized
Statistical Rating Organizations for marketable bonds. NAIC ratings 1 and 2
include bonds generally considered investment grade (rated "Baa3" or higher by
Moody's Investors Services ("Moody's"), or rated "BBB-" or higher by Standard &
Poor's ("S&P")) by such rating organizations. NAIC ratings 3 through 6 include
bonds generally considered below investment grade (rated "Ba1" or lower by
Moody's, or rated "BB+" or lower by S&P).

The following table presents the Company's total fixed maturities by
Nationally Recognized Statistical Rating Organizations designation and the
equivalent ratings of the NAIC, as well as the percentage, based on estimated
fair value, that each designation is comprised of at:

- ----------

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(1) Amounts presented are based on rating agency designations. Comparisons
between NAIC ratings and rating agency designations are published by the
NAIC. The rating agency designations are based on availability and the lower
of the applicable ratings between Moody's and S&P. The current period
ratings are presented so that the consolidated rating is equal to the
Moody's or S&P rating, whichever is more conservative. If no rating is
available from a rating agency, then the MetLife rating will be used.

61

The fixed maturities portfolio is diversified across a broad range of asset
sectors, and the sector mix did not change significantly in the first quarter of
2004. The following tables set forth the amortized cost, gross unrealized gain
and loss, and estimated fair value of the Company's fixed maturities by sector,
as well as the percentage of the total fixed maturities holdings that each
sector is comprised of at:

Fixed Maturity Impairment. The Company classifies all of its fixed
maturities as available-for-sale and marks them to market through other
comprehensive income. All securities with gross unrealized losses at the
consolidated balance sheet date are subjected to the Company's process for
identifying other-than-temporary impairments. The Company writes down to fair
value securities that it deems to be other-than-temporarily impaired in the
period the securities are deemed to be so impaired. The assessment of whether
such impairment has occurred is based on management's case-by-case evaluation of
the underlying reasons for the decline in fair value. Management considers a
wide range of factors, as described below, about the security issuer and uses
its best judgment in evaluating the cause of the decline in the estimated fair
value of the security and in assessing the prospects for near-term recovery.
Inherent in management's evaluation of the security are assumptions and
estimates about the operations of the issuer and its future earnings potential.

Considerations used by the Company in the impairment evaluation process
include, but are not limited to, the following:

o length of time and the extent to which the market value has been below
amortized cost;

o potential for impairments of securities when the issuer is experiencing
significant financial difficulties, including a review of all securities
of the issuer, including its known subsidiaries and affiliates,
regardless of the form of the Company's ownership;

62

o potential for impairments in an entire industry sector or sub-sector;

o potential for impairments in certain economically depressed geographic
locations;

o potential for impairments of securities where the issuer, series of
issuers or industry has suffered a catastrophic type of loss or has
exhausted natural resources; and

o other subjective factors, including concentrations and information
obtained from regulators and rating agencies.

The Company's review of its fixed maturities for impairments includes an
analysis of the total gross unrealized losses by three categories of securities:
(i) securities where the estimated fair value had declined and remained below
amortized cost by less than 20%; (ii) securities where the estimated fair value
had declined and remained below amortized cost by 20% or more for less than six
months; and (iii) securities where the estimated fair value had declined and
remained below amortized cost by 20% or more for six months or greater. While
all of these securities are monitored for potential impairment, the Company's
experience indicates that the first two categories do not present as great a
risk of impairment, and often, fair values recover over time as the factors that
caused the declines improve.

The Company records writedowns as investment-related losses and adjusts the
cost basis of the fixed maturities accordingly. The Company does not change the
revised cost basis for subsequent recoveries in value. Writedowns of fixed
maturities were $6 million and $176 million for the three months ended March 31,
2004 and 2003, respectively. The Company's three largest writedowns totaled $5
million and $101 million for the three months ended March 31, 2004 and 2003,
respectively. The circumstances that gave rise to these impairments were either
financial restructurings or bankruptcy filings. During the three months ended
March 31, 2004 and 2003, the Company sold fixed maturities with a fair value of
$2,958 million and $4,209 million, respectively, at a loss of $65 million for
both periods.

The following table presents the total gross unrealized losses for fixed
maturities where the estimated fair value had declined and remained below
amortized cost by:

The gross unrealized loss related to the Company's fixed maturities at March
31, 2004 was $422 million. These fixed maturities mature as follows: 2% due in
one year or less; 21% due in greater than one year to five years; 17% due in
greater than five years to ten years; and 60% due in greater than ten years
(calculated as a percentage of amortized cost). Additionally, such securities
are concentrated by sector in U.S. corporates (33%), foreign corporates (12%)
and mortgage-backed (10%); and are concentrated by industry in utilities (12%),
mortgage-backed (10%) and services (9%) (calculated as a percentage of gross
unrealized loss). Non-investment grade securities represent 10% of the $15,505
million fair value and 29% of the $422 million gross unrealized loss.

63

The following table presents the amortized cost, gross unrealized losses and
number of securities for fixed maturities where the estimated fair value had
declined and remained below amortized cost by less than 20%, or 20% or more for:

The category of fixed maturity securities where the estimated fair value has
declined and remained below amortized cost by less than 20% matures as follows:
2% due in one year or less; 21% due in greater than one year to five years; 17%
due in greater than five years to ten years; and 60% due in greater than ten
years (calculated as a percentage of amortized cost). Additionally, such
securities are concentrated by sector in U.S. corporates (34%), mortgage-backed
(11%) and foreign corporates (9%); and are concentrated by industry in utilities
(12%), mortgage-backed (11%), and services (8%) (calculated as a percentage of
gross unrealized loss). Non-investment grade securities represent 9% of the
$15,377 million fair value and 21% of the $364 million gross unrealized loss.

The category of fixed maturity securities where the estimated fair value has
declined and remained below amortized cost by 20% or more for less than six
months matures as follows: 20% due in greater than one year to five years; 47%
due in greater than five years to ten years; and 33% due in greater than ten
years (calculated as a percentage of amortized cost). Additionally, such
securities are concentrated by sector in foreign corporates (29%), foreign
governments (25%) and asset-backed (23%); and are concentrated by industry in
asset-backed (23%), manufacturing (17%), and utilities (15%) (calculated as a
percentage of gross unrealized loss). Non-investment grade securities represent
81% of the $113 million fair value and 86% of the $52 million gross unrealized
loss.

The category of fixed maturity securities where the estimated fair value has
declined and remained below amortized cost by 20% or more for six months or
greater matures as follows: 31% due in greater than five years to ten years; and
69% due in greater than ten years (calculated as a percentage of amortized
cost). Additionally, such securities are concentrated by sector in U.S.
corporates (39%) and mortgage-backed (8%); and are concentrated by industry in
finance (49%), transportation (39%) and mortgage-backed (8%) (calculated as a
percentage of gross unrealized loss). Non-investment grade securities represent
27% of the $15 million fair value and 43% of the $6 million gross unrealized
loss.

The Company held one fixed maturity security with a gross unrealized loss at
March 31, 2004 greater than $10 million. This security represents 21% of the
gross unrealized loss on fixed maturities where the estimated fair value had
declined and remained below amortized cost by 20% or more for less than six
months.

64

Corporate Fixed Maturities. The table below shows the major industry types
that comprise the corporate bond holdings at:

- ----------

(1) Includes publicly traded, U.S. dollar-denominated debt obligations of
foreign obligors, known as Yankee bonds, and other foreign investments.

The Company maintains a diversified corporate bond portfolio across
industries and issuers. The portfolio does not have exposure to any single
issuer in excess of 1% of the total invested assets of the portfolio. At March
31, 2004, the Company's combined holdings in the ten issuers to which it had the
greatest exposure totaled $4,759 million, which was less than 3% of the
Company's total invested assets at such date. The exposure to the largest single
issuer of corporate bonds held at March 31, 2004 was $656 million.

The Company has hedged all of its material exposure to foreign currency risk
in its invested assets. In the Company's international insurance operations,
both its assets and liabilities are generally denominated in local currencies.

Structured Securities. The following table shows the types of structured
securities the Company held at:

The majority of the residential mortgage-backed securities are guaranteed or
otherwise supported by the Federal National Mortgage Association, the Federal
Home Loan Mortgage Corporation or the Government National Mortgage Association.
At March 31, 2004 and December 31, 2003, $31,511 million and $31,210 million,
respectively, or 99.0% and 99.2%, respectively, of the residential
mortgage-backed securities were rated Aaa/AAA by Moody's or S&P.

65

At March 31, 2004 and December 31, 2003, $7,920 million and $6,992 million,
respectively, or 66.2% and 63.4%, respectively of the commercial mortgage-backed
securities were rated Aaa/AAA by Moody's or S&P.

Asset-backed securities, which include home equity loans, credit card
receivables, collateralized debt obligations and automobile receivables, are
purchased both to diversify the overall risks of the Company's fixed maturity
assets and to provide income. The Company's asset-backed securities are
diversified both by sector and by issuer. Credit card and home equity loan
securitizations, each accounting for about 28% of the total holdings, constitute
the largest exposures in the Company's asset-backed securities portfolio.
Asset-backed securities generally have limited sensitivity to changes in
interest rates. Approximately $7,784 million and $7,528 million, or 63.1% and
63.5%, of total asset-backed securities were rated Aaa/AAA by Moody's or S&P at
March 31, 2004 and December 31, 2003, respectively.

Structured Investment Transactions. The Company participates in structured
investment transactions, primarily asset securitizations and structured notes.
These transactions enhance the Company's total return of the investment
portfolio principally by generating management fee income on asset
securitizations and by providing equity-based returns on debt securities through
structured notes and similar instruments.

The Company sponsors financial asset securitizations of high yield debt
securities, investment grade bonds and structured finance securities and also is
the collateral manager and a beneficial interest holder in such transactions. As
the collateral manager, the Company earns management fees on the outstanding
securitized asset balance, which are recorded in income as earned. When the
Company transfers assets to a bankruptcy-remote SPE and surrenders control over
the transferred assets, the transaction is accounted for as a sale. Gains or
losses on securitizations are determined with reference to the carrying amount
of the financial assets transferred, which is allocated to the assets sold and
the beneficial interests retained based on relative fair values at the date of
transfer. Beneficial interests in securitizations are carried at fair value in
fixed maturities. Income on these beneficial interests is recognized using the
prospective method in accordance with EITF Issue No. 99-20, Recognition of
Interest Income and Impairment on Certain Investments ("EITF 99-20"). The SPEs
used to securitize assets are not consolidated by the Company because the
Company has determined that it is not the primary beneficiary of these entities
based on the framework provided in FASB Interpretation No. 46 (revised December
31, 2003), Consolidation of Variable Interest Entities, An Interpretation of ARB
No. 51 ("FIN 46(r)"). Prior to the adoption of FIN 46(r), such SPEs were not
consolidated because they did not meet the criteria for consolidation under
previous accounting guidance.

The Company purchases or receives beneficial interests in SPEs, which
generally acquire financial assets, including corporate equities, debt
securities and purchased options. The Company has not guaranteed the
performance, liquidity or obligations of the SPEs and the Company's exposure to
loss is limited to its carrying value of the beneficial interests in the SPEs.
The Company uses the beneficial interests as part of its risk management
strategy, including asset-liability management. These SPEs are not consolidated
by the Company because the Company has determined that it is not the primary
beneficiary of these entities based on the framework provided in FIN 46(r).
Prior to the adoption of FIN 46(r), such SPEs were not consolidated because they
did not meet the criteria for consolidation under previous accounting guidance.
These beneficial interests are generally structured notes, as defined by EITF
Issue No. 96-12, Recognition of Interest Income and Balance Sheet Classification
of Structured Notes, which are included in fixed maturities, and their income is
recognized using the retrospective interest method or the level yield method, as
appropriate. Impairments of these beneficial interests are included in net
investment-related gains (losses).

66

MORTGAGE LOANS ON REAL ESTATE

The Company's mortgage loans on real estate are collateralized by
commercial, agricultural and residential properties. Mortgage loans on real
estate comprised 11.6% and 11.8% of the Company's total cash and invested assets
at March 31, 2004 and December 31, 2003, respectively. The carrying value of
mortgage loans on real estate is stated at original cost net of repayments,
amortization of premiums, accretion of discounts and valuation allowances. The
following table shows the carrying value of the Company's mortgage loans on real
estate by type at:

Commercial Mortgage Loans. The Company diversifies its commercial mortgage
loans by both geographic region and property type. The following table presents
the distribution across geographic regions and property types for commercial
mortgage loans at:

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Restructured, Delinquent or Under Foreclosure and Potentially Delinquent.
The Company monitors its mortgage loan investments on an ongoing basis,
including reviewing loans that are restructured, delinquent or under foreclosure
and potentially delinquent. These loan classifications are consistent with those
used in industry practice.

The Company defines potentially delinquent loans as loans that, in
management's opinion, have a high probability of becoming delinquent. The
Company defines delinquent mortgage loans, consistent with industry practice, as
loans in which two or more interest or principal payments are past due. The
Company defines mortgage loans under foreclosure as loans in which foreclosure
proceedings have formally commenced. The Company defines restructured mortgage
loans as loans in which the Company, for economic or legal reasons related to
the debtor's financial difficulties, grants a concession to the debtor that it
would not otherwise consider.

The Company reviews all mortgage loans on an ongoing basis. These reviews
may include an analysis of the property financial statements and rent roll,
lease rollover analysis, property inspections, market analysis and tenant
creditworthiness. The Company also reviews loan-to-value ratios and debt
coverage ratios for restructured loans, delinquent loans, loans under
foreclosure, potentially delinquent loans, loans with an existing valuation
allowance, loans maturing within two years and loans with a loan-to-value ratio
greater than 90% as determined in the prior year.

The Company establishes valuation allowances for loans that it deems
impaired, as determined through its mortgage review process. The Company's
valuation allowance is established both on a loan specific basis for those loans
where a property or market specific risk has been identified that could likely
result in a future default, as well as for pools of loans with similar high risk
characteristics where a property specific or market risk has not been
identified. Loans that are individually reviewed are evaluated based on the
definition of impaired loans consistent with SFAS No. 114, Accounting by
Creditors for Impairments of a Loan ("SFAS 114"), as loans on which it probably
will not collect all amounts due according to applicable contractual terms of
the agreement. The Company bases valuation allowances upon the present value of
expected future cash flows discounted at the loan's original effective interest
rate or the value of the loan's collateral. The Company records valuation
allowances as investment-related losses. The Company records subsequent
adjustments to allowances as investment-related gains (losses). The allowance
for loan loss for pools of other loans with similar characteristics is
established in accordance with SFAS No. 5, Accounting for Contingencies ("SFAS
5"), when a loss contingency exists. SFAS 5 works in conjunction with, but does
not overlap with, SFAS 114. The Company applies SFAS 5 to groups of loans with
similar characteristics based on property types and loan-to-value risk factors.
The Company records adjustments to its loan loss allowance as investment-related
losses.

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The following table presents the amortized cost and valuation allowance for
commercial mortgage loans distributed by loan classification at:

- ----------

(1) Amortized cost is equal to carrying value before valuation allowances.

The following table presents the changes in valuation allowances for
commercial mortgage loans for the:

Agricultural Mortgage Loans. The Company diversifies its agricultural
mortgage loans by both geographic region and product type.

Approximately 67.4% of the $5,226 million of agricultural mortgage loans
outstanding at March 31, 2004 were subject to rate resets prior to maturity. A
substantial portion of these loans generally is successfully renegotiated and
remain outstanding to maturity. The process and policies for monitoring the
agricultural mortgage loans and classifying them by performance status are
generally the same as those for the commercial loans.

The following table presents the amortized cost and valuation allowances for
agricultural mortgage loans distributed by loan classification at:

- ----------

(1) Amortized cost is equal to carrying value before valuation allowances.

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The following table presents the changes in valuation allowances for
agricultural mortgage loans for the:

REAL ESTATE AND REAL ESTATE JOINT VENTURES

The Company's real estate and real estate joint venture investments consist
of commercial properties located primarily throughout the U.S. At March 31, 2004
and December 31, 2003, the carrying value of the Company's real estate, real
estate joint ventures and real estate held-for-sale was $4,699 million and
$4,680 million, respectively, or 2.0%, and 2.2% of total cash and invested
assets, respectively. The carrying value of real estate is stated at depreciated
cost net of impairments and valuation allowances. The carrying value of real
estate joint ventures is stated at the Company's equity in the real estate joint
ventures net of impairments and valuation allowances. The following table
presents the carrying value of the Company's real estate, real estate joint
ventures, real estate held-for-sale and real estate acquired upon foreclosure
at:

Ongoing management of these investments includes quarterly valuations, as
well as an annual market update and review of each property's budget, financial
returns, lease rollover status and the Company's exit strategy.

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The Company's carrying value of real estate held-for-sale, including real
estate acquired upon foreclosure of commercial and agricultural mortgage loans,
in the amounts of $704 million and $787 million at March 31, 2004 and December
31, 2003, respectively, are net of valuation allowances of $0 million and $12
million, respectively. There were no impairments at March 31, 2004 and $2
million at December 31, 2003.

The Company records real estate acquired upon foreclosure of commercial and
agricultural mortgage loans at the lower of estimated fair value or the carrying
value of the mortgage loan at the date of foreclosure.

Certain of the Company's investments in real estate joint ventures meet the
definition of a VIE under FIN 46(r). See "-- Variable Interest Entities."

On August 28, 2003, the Company (through one of its subsidiaries) acquired
the Sears Tower building through the acquisition of a controlling interest in a
partnership holding title to the building. In February of 2004, MetLife entered
into a marketing agreement to sell the Sears Tower building and reclassified the
property from Real Estate -- Held-for-Investment to Real Estate --
Held-for-Sale. The carrying value of the property as of March 31, 2004 was
approximately $700 million. The sale, which occurred in April 2004, resulted in
an after-tax gain of approximately $90 million.

EQUITY SECURITIES AND OTHER LIMITED PARTNERSHIP INTERESTS

The Company's carrying value of equity securities, which primarily consist
of investments in common and preferred stocks and mutual fund interests, was
$1,756 million and $1,598 million at March 31, 2004 and December 31, 2003,
respectively. Equity securities include private equity securities with an
estimated fair value of $529 million and $432 million at March 31, 2004 and
December 31, 2003, respectively. The carrying value of the other limited
partnership interests (which primarily represent ownership interests in pooled
investment funds that make private equity investments in companies in the U.S.
and overseas) was $2,549 million and $2,600 million at March 31, 2004 and
December 31, 2003, respectively. The Company classifies its investments in
common stocks as available-for-sale and marks them to market, except for
non-marketable private equities, which are generally carried at cost. The
Company uses the equity method of accounting for investments in limited
partnership interests in which it has more than a minor interest, has influence
over the partnership's operating and financial policies and does not have a
controlling interest. The Company uses the cost method for minor interest
investments and when it has virtually no influence over the partnership's
operating and financial policies. The Company's investments in equity securities
excluding partnerships represented 0.8% and 0.7% of cash and invested assets at
March 31, 2004 and December 31, 2003, respectively.

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Some of the Company's investments in other limited partnership interests
meet the definition of a VIE under FIN 46(r). See " -- Variable Interest
Entities."

The following tables set forth the cost, gross unrealized gain or loss and
estimated fair value of the Company's equity securities, as well as the
percentage of the total equity securities at:

Equity Security Impairment. The Company classifies all of its equity
securities as available-for-sale and marks them to market through other
comprehensive income. All securities with gross unrealized losses at the
consolidated balance sheet date are subjected to the Company's process for
identifying other-than-temporary impairments. The Company writes down to fair
value securities that it deems to be other-than-temporarily impaired in the
period the securities are deemed to be so impaired. The assessment of whether
such impairment has occurred is based on management's case-by-case evaluation of
the underlying reasons for the decline in fair value. Management considers a
wide range of factors, as described below, about the security issuer and uses
its best judgment in evaluating the cause of the decline in the estimated fair
value of the security and in assessing the prospects for near-term recovery.
Inherent in management's evaluation of the security are assumptions and
estimates about the operations of the issuer and its future earnings potential.

Considerations used by the Company in the impairment evaluation process
include, but are not limited to, the following:

o length of time and the extent to which the market value has been below
cost;

o potential for impairments of securities when the issuer is experiencing
significant financial difficulties, including a review of all securities
of the issuer, including its known subsidiaries and affiliates, regardless
of the form of the Company's ownership;

o potential for impairments in an entire industry sector or sub-sector;

o potential for impairments in certain economically depressed geographic
locations;

o potential for impairments of securities where the issuer, series of
issuers or industry has suffered a catastrophic type of loss or has
exhausted natural resources; and

o other subjective factors, including concentrations and information
obtained from regulators and rating agencies.

Equity securities or other limited partnership interests which are deemed to
be other-than-temporarily impaired are written down to fair value. The Company
records writedowns as investment-related losses and adjusts the cost basis of
the equity securities accordingly. The Company does not change the revised cost
basis for subsequent recoveries in value. Writedowns of equity securities and
other limited partnership interests were $6 million and $77 million for the
three months ended March 31, 2004 and 2003,

72

respectively. During the three months ended March 31, 2004 and 2003, the Company
sold equity securities with an estimated fair value of $83 million and $20
million, at a loss of $11 million and $5 million, respectively.

The gross unrealized loss related to the Company's equity securities at
March 31, 2004 was $11 million. Such securities are concentrated by security
type in common stock (79%) and preferred stock (21%); and are concentrated by
industry in technology (27%) and financial (21%) (calculated as a percentage of
gross unrealized loss).

The following table presents the cost, gross unrealized losses and number of
securities for equity securities where the estimated fair value had declined and
remained below cost by less than 20%, or 20% or more for:

The Company's review of its equity security exposure includes the analysis
of total gross unrealized losses by three categories of securities: (i)
securities where the estimated fair value had declined and remained below cost
by less than 20%; (ii) securities where the estimated fair value had declined
and remained below cost by 20% or more for less than six months; and (iii)
securities where the estimated fair value had declined and remained below cost
by 20% or more for six months or greater. While all of these securities are
monitored for potential impairment, the Company's experience indicates that the
first two categories do not present as great a risk of impairment, and often,
fair values recover over time as the factors that caused the declines improve.

The following table presents the total gross unrealized losses for equity
securities at March 31, 2004 where the estimated fair value had declined and
remained below cost by:

Equity securities where the estimated fair value has declined and remained
below cost by less than 20% are concentrated by security type in common stock
(52%) and preferred stock (47%); and concentrated by industry in financial (44%)
and manufacturing (14%) (calculated as a percentage of gross unrealized loss).

Equity securities where the estimated fair value has declined and remained
below cost by 20% or more for less than six months are concentrated by security
type in common stock (100%); and concentrated by industry in technology (39%)
and health care (22%) (calculated as a percentage of gross unrealized loss). The
significant factors considered at March 31, 2004 in the review of equity
securities for other-than-temporary impairment were a result of generally
difficult economic and market conditions.

The Company did not hold any equity securities with a gross unrealized loss
at March 31, 2004 greater than $5 million.

OTHER INVESTED ASSETS

The Company's other invested assets consist principally of leveraged leases
and funds withheld at interest of $4.1 billion and $3.9 billion at March 31,
2004 and December 31, 2003, respectively. The leveraged leases are recorded net
of non-recourse debt. The Company participates in lease transactions, which are
diversified by industry, asset type and geographic area. The Company regularly

73

reviews residual values and writes down residuals to expected values as needed.
Funds withheld represent amounts contractually withheld by ceding companies in
accordance with reinsurance agreements. For agreements written on a modified
coinsurance basis and certain agreements written on a coinsurance basis, assets
supporting the reinsured policies equal to the net statutory reserves are
withheld and continue to be legally owned by the ceding company. Other invested
assets also include the fair value of embedded derivatives related to funds
withheld and modified coinsurance contracts. Interest accrues to these funds
withheld at rates defined by the treaty terms and may be contractually specified
or directly related to the investment portfolio. The Company's other invested
assets represented 2.2% and 2.1% of cash and invested assets at March 31, 2004
and December 31, 2003, respectively.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses derivative instruments to manage risk through one of five
principal strategies, the hedging of: (i) liabilities; (ii) invested assets;
(iii) portfolios of assets or liabilities; (iv) net investments in certain
foreign operations; and (v) firm commitments and forecasted transactions.
Additionally, the Company enters into income generation and replication
derivative transactions as permitted by its insurance subsidiaries' Derivatives
Use Plans approved by the applicable state insurance departments. The Company's
derivative hedging strategy employs a variety of instruments, including
financial futures, financial forwards, interest rate swaps, caps and floors,
credit default and foreign currency swaps and foreign currency forwards and
options.

The table below provides a summary of the notional amount and fair value of
derivative financial instruments held at:

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VARIABLE INTEREST ENTITIES

The Company has adopted the provisions of FIN 46 and FIN 46(r). See "--
Application of Recent Accounting Standards." The adoption of FIN 46(r) required
the Company to consolidate certain VIEs for which it is the primary beneficiary.

The following table presents the total assets of and maximum exposure to
loss relating to VIEs for which the Company has concluded that (i) it is the
primary beneficiary and which are consolidated in the Company's unaudited
interim condensed consolidated financial statements at March 31, 2004, and (ii)
it holds significant variable interests but it is not the primary beneficiary
and which have not been consolidated:

- ----------

(1) The assets of the asset-backed securitizations and collateralized debt
obligations are reflected at fair value as of March 31, 2004. The assets
of the real estate joint ventures and other limited partnerships are
reflected at the carrying amounts at which such assets would have been
reflected on the Company's balance sheet had the Company consolidated
the VIE from the date of its initial investment in the entity.

(2) The maximum exposure to loss of the asset-backed securitizations and
collateralized debt obligations is equal to the carrying amounts of
retained interests. In addition, the Company provides collateral
management services for certain of these structures for which it
collects a management fee. The maximum exposure to loss relating to real
estate joint ventures and other limited partnerships is equal to the
carrying amounts plus any unfunded commitments, reduced by amounts
guaranteed by other partners.

(3) Real estate joint ventures include partnerships and other ventures,
which engage in the acquisition, development, management and disposal of
real estate investments.

(4) Other limited partnerships include partnerships established for the
purpose of investing in public and private debt and equity securities,
as well as limited partnerships established for the purpose of investing
in low-income housing that qualifies for federal tax credits.

SECURITIES LENDING

The Company participates in a securities lending program whereby blocks of
securities, which are included in investments, are loaned to third parties,
primarily major brokerage firms. The Company requires a minimum of 102% of the
fair value of the loaned securities to be separately maintained as collateral
for the loans. Securities with a cost or amortized cost of $25,547 million and
$25,121 million and an estimated fair value of $27,309 million and $26,387
million were on loan under the program at March 31, 2004 and December 31, 2003,
respectively. The Company was liable for cash collateral under its control of
$28,045 million and $27,083 million at March 31, 2004 and December 31, 2003,
respectively. Security collateral on deposit from customers may not be sold or
repledged and is not reflected in the consolidated financial statements.

75

SEPARATE ACCOUNTS

The Company manages each separate account's assets in accordance with the
prescribed investment policy that applies to that specific separate account. The
Company establishes separate accounts on a single client and multi-client
commingled basis in conformity with insurance laws. Effective with the adoption
of SOP 03-1, the Company reports separately, as assets and liabilities,
investments held in separate accounts and liabilities of the separate accounts
if (i) such separate accounts are legally recognized; (ii) assets supporting the
contract liabilities are legally insulated from the Company's general account
liabilities; (iii) investments are directed by the contractholder; and (iv) all
investment performance, net of contract fees and assessments, is passed through
to the contractholder. The Company reports separate account assets meeting such
criteria at their fair value. Investment performance (including investment
income, net investment-related gains (losses) and changes in unrealized gains
and losses) and the corresponding amounts credited to contractholders are offset
within the same line in the unaudited interim condensed consolidated statements
of income. The Company's revenues reflect fees charged to the separate accounts,
including mortality charges, risk charges, policy administration fees,
investment management fees and surrender charges. Separate accounts not meeting
the above criteria are combined on a line-by-line basis with the Company's
general account assets, liabilities, revenues and expenses. Effective January 1,
2004, in accordance with the SOP 03-1 separate account reporting criteria,
separate account assets with a fair value of $1.7 billion were reclassified to
general account investments with a corresponding transfer of separate account
liabilities to future policy benefits and policyholder account balances. See
"--Application of Recent Accounting Standards."

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company has material exposure to interest rate, equity market and
foreign currency exchange risk. The Company analyzes interest rate risk using
various models including multi-scenario cash flow projection models that
forecast cash flows of the liabilities and their supporting investments,
including derivative instruments. The Company's market risk exposure at March
31, 2004 is relatively unchanged in amount from that reported on December 31,
2003, a description of which may be found in the 2003 Annual Report on Form
10-K.

ITEM 4. CONTROLS AND PROCEDURES

The Holding Company's management, with the participation of the Holding
Company's Chief Executive Officer and Chief Financial Officer, has evaluated the
effectiveness of the design and operation of the Holding Company's disclosure
controls and procedures as defined in Exchange Act Rule 13a-15(e) as of the end
of the period covered by this report. Based on that evaluation, the Chief
Executive Officer and Chief Financial Officer have concluded that these
disclosure controls and procedures are effective. There were no changes in the
Holding Company's internal control over financial reporting during the quarter
ended March 31, 2004 that have materially affected, or are reasonably likely to
materially affect, the Holding Company's internal control over financial
reporting.

PART II - OTHER INFORMATION

ITEM I. LEGAL PROCEEDINGS

The following should be read in conjunction with Note 7 to unaudited interim
condensed consolidated financial statements in Part I of this Report.

Sales Practices Claims

As previously disclosed, over the past several years, Metropolitan Life, New
England Mutual Life Insurance Company ("New England Mutual") and General
American Life Insurance Company ("General American") have faced numerous claims,
including class action lawsuits, alleging improper marketing and sales of
individual life insurance policies or annuities. These lawsuits are generally
referred to as "sales practices claims." Settlements have been reached in the
sales practices class actions against Metropolitan Life, New England Mutual and
General American.

Certain class members have opted out of these class action settlements and
have brought or continued non-class action sales practices lawsuits. In
addition, other sales practices lawsuits have been brought. As of March 31,
2004, there are approximately 330 sales practices lawsuits pending against
Metropolitan Life, approximately 40 sales practices lawsuits pending against New
England Mutual and approximately 55 sales practices lawsuits pending against
General American.

The Company believes adequate provision has been made in its unaudited
interim condensed consolidated financial statements for all probable and
reasonably estimable losses for sales practices claims against Metropolitan
Life, New England Mutual and General American.

Asbestos-Related Claims

As previously reported, Metropolitan Life received approximately 60,300
asbestos-related claims in 2003. During the first three months of 2004 and 2003,
Metropolitan Life received approximately 8,200 and 16,250 asbestos-related
claims, respectively. Metropolitan Life also has been named as a defendant in a
small number of silicosis, welding and mixed dust cases, as previously reported.
The cases are pending in Mississippi, Texas, Ohio, Pennsylvania, West Virginia,
Louisiana, Kentucky, Georgia, Alabama, Illinois and Arkansas. The Company
intends to defend itself vigorously against these cases.

Metropolitan Life continues to study its claims experience, review external
literature regarding asbestos claims experience in the United States and
consider numerous variables that can affect its asbestos liability exposure,
including bankruptcies of other companies involved in asbestos litigation and
legislative and judicial developments, to identify trends and to assess their
impact on the recorded asbestos liability.

77

The Company believes adequate provision has been made in its unaudited
interim condensed consolidated financial statements for all probable and
reasonably estimable losses for asbestos-related claims. The ability of
Metropolitan Life to estimate its ultimate asbestos exposure is subject to
considerable uncertainty due to numerous factors. The availability of data is
limited and it is difficult to predict with any certainty numerous variables
that can affect liability estimates, including the number of future claims, the
cost to resolve claims, the disease mix and severity of disease, the
jurisdiction of claims filed, tort reform efforts and the impact of any possible
future adverse verdicts and their amounts.

The number of asbestos cases that may be brought or the aggregate amount of
any liability that Metropolitan Life may ultimately incur is uncertain.
Accordingly, it is reasonably possible that the Company's total exposure to
asbestos claims may be greater than the liability recorded by the Company in its
unaudited interim condensed consolidated financial statements and that future
charges to income may be necessary. While the potential future charges could be
material in particular quarterly or annual periods in which they are recorded,
based on information currently known by management, it does not believe any such
charges are likely to have a material adverse effect on the Company's
consolidated financial position.

Property and Casualty Actions

During the first quarter of 2004, a purported class action was filed against
Metropolitan Property and Casualty Insurance Company in Florida on behalf of
medical practitioners who provide MRI services. The suit claims breach of
contract and unjust enrichment arising out of the alleged failure to include a
consumer price index adjustment when paying MRI provider fees. Metropolitan
Property and Casualty Insurance Company is vigorously defending itself against
this lawsuit.

Demutualization Actions

Several lawsuits were brought in 2000 challenging the fairness of
Metropolitan Life's plan of reorganization, as amended (the "plan") and the
adequacy and accuracy of Metropolitan Life's disclosure to policyholders
regarding the plan. These actions name as defendants some or all of Metropolitan
Life, the Holding Company, the individual directors, the New York Superintendent
of Insurance (the "Superintendent") and the underwriters for MetLife, Inc.'s
initial public offering, Goldman Sachs & Company and Credit Suisse First Boston.
Five purported class actions pending in the New York State court in New York
County were consolidated within the commercial part. In addition, there remained
a separate purported class action in New York State court in New York County. On
February 21, 2003, the defendants' motions to dismiss both the consolidated
action and separate action were granted; leave to replead as a proceeding under
Article 78 of New York's Civil Practice Law and Rules has been granted in the
separate action. On April 27, 2004, the appellate court modified the trial
court's order by reinstating certain claims against Metropolitan Life, the
Holding Company and the individual directors.

Three purported class actions were filed in the United States District Court
for the Eastern District of New York claiming violation of the Securities Act
of 1933 in connection with the plan. The plaintiffs in these actions, which have
been consolidated, claim that the Policyholder Information Booklets relating to
the plan failed to disclose certain material facts and seek rescission and
compensatory damages. Metropolitan Life's motion to dismiss these cases was
denied in 2001. On February 4, 2003, plaintiffs filed a consolidated amended
complaint adding a fraud claim under the Securities Exchange Act of 1934.
Plaintiffs served a second consolidated amended complaint on April 2, 2004, and
continue to assert violations of the Securities Act of 1933 and the Securities
Exchange Act of 1934. On April 9, 2004, Metropolitan Life served a motion to
dismiss the claim for violation of the Securities Exchange Act of 1934.
Metropolitan Life, the Holding Company and the individual defendants believe
they have meritorious defenses to the plaintiffs' claims and are contesting
vigorously all of the plaintiffs' claims in these actions.

Race-Conscious Underwriting Claims

As previously reported, Insurance Departments in a number of states
initiated inquiries in 2000 about possible race-conscious underwriting of life
insurance. These inquiries generally have been directed to all life insurers
licensed in their respective states, including Metropolitan Life and certain of
its affiliates. The New York Insurance Department has concluded its examination
of Metropolitan Life concerning possible past race-conscious underwriting
practices. Four purported class action lawsuits filed against Metropolitan Life
in 2000 and 2001 alleging racial discrimination in the marketing, sale, and
administration of life insurance policies have been consolidated in the United
States District Court for the Southern District of New York. On April 28, 2003,
the United States District Court approved a class action settlement of the
consolidated actions. Several persons filed notices of appeal from the order
approving the settlement, but subsequently the appeals were dismissed.
Metropolitan Life has entered into settlement agreements to resolve the
regulatory examination.

78

Twenty lawsuits involving approximately 140 plaintiffs were filed in federal
and state court in Alabama, Mississippi and Tennessee alleging federal and/or
state law claims of racial discrimination in connection with the sale,
formation, administration or servicing of life insurance policies. Metropolitan
Life has resolved the claims of some of these plaintiffs through settlement and
some additional plaintiffs have voluntarily dismissed their claims. Metropolitan
Life has resolved claims of some additional persons who opted out of the
settlement class referenced in the preceding paragraph but who had not filed
suit. Metropolitan Life is contesting vigorously plaintiffs' claims in the
actions that remain pending.

The Company believes that adequate provision has been made to cover the
costs associated with the resolution of these matters.

Other

As previously reported, the SEC is conducting a formal investigation of New
England Securities Corporation ("NES"), a subsidiary of New England Life
Insurance Company ("NELICO"), in response to NES informing the SEC that certain
systems and controls relating to one NES advisory program were not operating
effectively. NES is cooperating fully with the SEC.

Prior to filing the Company's June 30, 2003 Form 10-Q, MetLife announced a
$31 million after-tax charge resulting from certain improperly deferred expenses
at an affiliate, New England Financial. MetLife notified the SEC about the
nature of this charge prior to its announcement. The SEC is pursuing a formal
investigation of the matter and MetLife is fully cooperating with the
investigation.

Regulatory bodies have contacted the Company and have requested information
relating to market timing and late trading of mutual funds and variable
insurance products. The Company believes that these inquiries are similar to
those made to many financial services companies as part of an industry-wide
investigation by various regulatory agencies into the practices, policies and
procedures relating to trading in mutual fund shares. State Street Research
Investment Services, one of the Company's indirect broker/dealer subsidiaries,
has entered into a settlement with the NASD resolving all outstanding issues
relating to its investigation. The SEC has commenced an investigation with
respect to market timing and late trading in a limited number of
privately-placed variable insurance contracts that were sold through General
American. The Company is in the process of responding and is fully cooperating
with regard to these information requests and investigations. The Company at the
present time is not aware of any systemic problems with respect to such matters
that may have a material adverse effect on the Company's consolidated financial
position.

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

Summary

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

79

ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY
SECURITIES

Purchases of common stock made by or on behalf of the Holding Company during
the three months ended March 31, 2004 are set forth below:

ISSUER PURCHASES OF EQUITY SECURITIES

(1) During the periods reported above, there were no shares of Common Stock
which were repurchased by the Holding Company other than through a
publicly announced plan or program.

(2) On February 19, 2002, the Holding Company's Board of Directors
authorized a $1 billion common stock repurchase program. Under this
authorization, the Holding Company may purchase its common stock from
the MetLife Policyholder Trust, in the open market and in privately
negotiated transactions.

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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company's annual meeting of stockholders was held on April 27, 2004 (the
"2004 Annual Meeting"). The matters that were voted upon at the meeting, and the
number of votes cast for, against or withheld, as well as the number of
abstentions and broker non-votes, as to each such matter, as applicable, are set
forth below:

(1) Election of Directors - The stockholders elected five Class II directors,
each for a term expiring at the Company's 2007 annual meeting.

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The directors whose terms continued after the 2004 Annual Meeting and the years
their terms expire are as follows:

Class III Directors - Term Expires in 2005

Cheryl W. Grise
James R. Houghton
Helene L. Kaplan
Sylvia M. Mathews
Stewart G. Nagler(1)
William C. Steere, Jr.

Class I Directors - Term Expires in 2006

Robert H. Benmosche
John M. Keane
Hugh B. Price
Kenton J. Sicchitano

- ----------

(1) Mr. Nagler has announced his planned retirement from the Boards of Directors
of MetLife, Inc. and Metropolitan Life effective in 2004.

It was reported in MetLife Inc.'s proxy statement for the 2004 Annual Meeting
(the "Proxy Statement") that all members of MetLife Inc.'s Board of Directors,
except Catherine Kinney, attended 75% or more of all meetings of the Board of
Directors and the Committees on which they served during 2003. Ms. Kinney did,
in fact, attend 75% or more of all meetings of the Board of Directors and the
Committees on which she served during 2003. As stated in the Proxy Statement,
Ms. Kinney resigned from the Board of Directors of MetLife, Inc. and
Metropolitan Life effective March 23, 2004.

82

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

10.1 MetLife Annual Variable Incentive Plan, effective as of January 1,
2004, as adopted April 27, 2004.

10.2 MetLife, Inc. 2005 Stock and Incentive Compensation Plan,
effective April 15, 2005, as adopted April 27, 2004.

10.3 MetLife, Inc. 2005 Non-Management Director Stock Compensation
Plan, effective April 15, 2005, as adopted April 27, 2004.

31.1 Certification of Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.

32.1 Certification of Chief Executive Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.

32.2 Certification of Chief Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

During the three months ended March 31, 2004, the following current
reports were filed on Form 8-K:

1. Form 8-K filed February 19, 2004 (dated February 19, 2004)
attaching a press release of State Street Research & Management
Company, a subsidiary of Metlife, Inc., announcing the settlement
of an NASD investigation.

2. Form 8-K filed February 27, 2004 (dated February 27, 2004)
attaching a press release announcing a new member of the Board of
Directors.

3. Form 8-K filed March 12, 2004 (dated March 11, 2004) attaching a
press release announcing a contract to sell Sears Tower.

83

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

METLIFE, INC.

By: /s/ Joseph J. Prochaska, Jr.
-----------------------------------
Name: Joseph J. Prochaska, Jr.
Title: Senior Vice-President,
Finance Operations and Chief
Accounting Officer (Authorized
Signatory and Chief Accounting
Officer)

Date: May 5, 2004

84

EXHIBIT INDEX