METLIFE INC - 10-Q Quarterly Report

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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, 2005

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
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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)

200 PARK AVENUE, NEW YORK, NY 10166-0188
(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 2, 2005, 733,324,360 shares of the Registrant's Common Stock, $.01
par value per share, were outstanding.
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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 Company 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. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

3

PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

METLIFE, INC.

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2005 (UNAUDITED) AND DECEMBER 31, 2004

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

SEE ACCOMPANYING NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
4

METLIFE, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004 (UNAUDITED)

(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

SEE ACCOMPANYING NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
5

METLIFE, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2005 (UNAUDITED)

(DOLLARS IN MILLIONS)

SEE ACCOMPANYING NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
6

METLIFE, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004 (UNAUDITED)

(DOLLARS IN MILLIONS)

SEE ACCOMPANYING NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
7

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. SUMMARY OF ACCOUNTING POLICIES

BUSINESS

"MetLife" or the "Company" refers to MetLife, Inc., a Delaware corporation
incorporated in 1999 (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 individual and
institutional customers. The Company offers life insurance, annuities,
automobile and homeowner's insurance and retail banking services to individuals,
as well as group insurance, reinsurance and retirement & 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) application of the consolidation
rules to certain investments; (iv) the fair value of and accounting for
derivatives; (v) the capitalization and amortization of deferred policy
acquisition costs ("DAC"), including value of business acquired ("VOBA"); (vi)
the liability for future policyholder benefits; (vii) the liability for
litigation and regulatory matters; and (viii) accounting for reinsurance
transactions 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 control; 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 4).

The Company uses the equity method of accounting for investments in equity
securities in which it has more than a 20% interest and for real estate joint
ventures and other limited partnership interests in which it has more than a
minor equity interest or more than 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 real estate
joint ventures and other limited partnership 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 $1,168 million and $1,145 million at March 31, 2005 and December
31, 2004, respectively.

Certain amounts in the prior year period's consolidated financial
statements have been reclassified to conform with the 2005 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, 2005, its consolidated results of operations for the three months
ended March 31, 2005 and 2004, its consolidated cash flows for the three months
ended March 31, 2005 and 2004 and its consolidated statement of stockholders'
equity for the three months ended March 31, 2005, in accordance with GAAP.
Interim results are not necessarily indicative of full year performance. These
unaudited interim

8

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements of the Company for the year ended December
31, 2004 included in MetLife, Inc.'s 2004 Annual Report on Form 10-K filed with
the U.S. Securities and Exchange Commission ("SEC").

On January 31, 2005, the Holding Company entered into an agreement to
acquire Travelers Insurance Company, excluding certain assets, most
significantly, Primerica, from Citigroup Inc., and substantially all of
Citigroup Inc.'s international insurance businesses ("Travelers") for a purchase
price of $11.5 billion, subject to adjustment as described in the acquisition
agreement. As a condition to closing, Citigroup Inc. and the Holding Company
will enter into ten-year agreements under which the Company will expand its
distribution by making products available through certain Citigroup distribution
channels, subject to appropriate suitability and other standards. On March 30,
2005, the Holding Company announced the termination of the 30-day waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transaction
is expected to close in the summer of 2005. Approximately $1 billion to $3
billion of the purchase price will be paid in MetLife stock with the remainder
paid in cash which will be financed through a combination of cash on hand, debt,
mandatorily convertible and perpetual preferred securities and selected asset
sales depending on market conditions, timing, valuation considerations and the
relative attractiveness of funding alternatives.

TRADING SECURITIES

During the first quarter of 2005, the Company established a trading
securities portfolio to support investment strategies that involve the active
and frequent purchases and sales of securities. Trading securities are recorded
at fair value with subsequent changes in fair value recognized in net investment
income.

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

In December 2004, the Financial Accounting Standards Board ("FASB") issued
Staff Position Paper ("FSP") 109-2, Accounting and Disclosure Guidance for the
Foreign Earnings Repatriation Provision within the American Jobs Creation Act of
2004 ("AJCA"). The AJCA introduced a one-time dividend received deduction on the
repatriation of certain earnings to a U.S. taxpayer. FSP 109-2 provides
companies additional time beyond the financial reporting period of enactment to
evaluate the effects of the AJCA on their plans to repatriate foreign earnings
for purposes of applying Statement of Financial Accounting Standards ("SFAS")
No. 109, Accounting for Income Taxes. The Company is currently evaluating the
repatriation provision of the AJCA. If the repatriation provision is implemented
by the Company, the impact on the Company's income tax expense and deferred
income tax assets and liabilities would be immaterial.

In December 2004, the FASB issued SFAS No. 153, Exchange of Nonmonetary
Assets, an amendment of Accounting Principles Board ("APB") Opinion No. 29
("SFAS 153"). SFAS 153 amends prior guidance to eliminate the exception for
nonmonetary exchanges of similar productive assets and replaces it with a
general exception for exchanges of nonmonetary assets that do not have
commercial substance. A nonmonetary exchange has commercial substance if the
future cash flows of the entity are expected to change significantly as a result
of the exchange. The provisions of SFAS 153 are effective for nonmonetary asset
exchanges occurring in fiscal periods beginning after June 15, 2005 and must be
applied prospectively. SFAS 153 is not expected to have a material impact on the
Company's unaudited interim condensed consolidated financial statements.

9

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

In December 2004, the FASB revised SFAS No. 123, Accounting for Stock-Based
Compensation ("SFAS 123") and issued SFAS 123(r), Share-Based Payment ("SFAS
123(r)"). SFAS 123(r) provides additional guidance on determining whether
certain financial instruments awarded in share-based payment transactions are
liabilities. SFAS 123(r) also requires that the cost of all share-based
transactions be measured at fair value and recognized over the period during
which an employee is required to provide service in exchange for an award. The
revised pronouncement must be adopted by the Company by January 1, 2006. As
permitted under SFAS 148, Accounting for Stock-Based Compensation -- Transition
and Disclosure -- An Amendment of FASB Statement No. 123, the Company elected to
use the prospective method of accounting for stock options granted subsequent to
December 31, 2002. Options granted prior to January 1, 2003 will continue to be
accounted for under the intrinsic value method until the adoption of SFAS
123(r), and the pro forma impact of accounting for these options at fair value
will continue to be accounted for under the intrinsic value method until the
last of those options vest in 2005. As all stock options currently accounted for
under the intrinsic value method will vest prior to the effective date,
implementation of SFAS 123(r) will not have a significant impact on the
Company's unaudited interim condensed consolidated financial statements. See
Note 7.

In May 2004, the FASB issued FSP No. 106-2, Accounting and Disclosure
Requirements Related to the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 ("FSP 106-2"), which provides accounting guidance to a
sponsor of a postretirement health care plan that provides prescription drug
benefits. The Company expects to receive subsidies on prescription drug benefits
beginning in 2006 under the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 based on the Company's determination that the
prescription drug benefits offered under certain postretirement plans are
actuarially equivalent to the benefits offered under Medicare Part D. FSP 106-2
was effective for interim periods beginning after June 15, 2004 and provides for
either retroactive application to the date of enactment of the legislation or
prospective application from the date of adoption of FSP 106-2. Effective July
1, 2004, the Company adopted FSP 106-2 prospectively and the postretirement
benefit plan assets and accumulated benefit obligation were remeasured to
determine the effect of the expected subsidies on net periodic postretirement
benefit cost. FSP 106-2 did not have a material impact on the Company's
unaudited interim condensed consolidated financial statements.

In March 2004, the Emerging Issues Task Force ("EITF") reached further
consensus on Issue No. 03-1, The Meaning of Other-Than-Temporary Impairment and
Its Application to Certain Investments ("EITF 03-1"). EITF 03-1 provides
accounting guidance regarding the determination of when an impairment of debt
and marketable equity securities and investments accounted for under the cost
method should be considered other-than-temporary and recognized in income. An
EITF 03-1 consensus reached in November 2003 also requires certain quantitative
and qualitative disclosures for debt and marketable equity securities classified
as available-for-sale or held-to-maturity under SFAS No. 115, Accounting for
Certain Investments in Debt and Equity Securities, that are impaired at the
balance sheet date but for which an other-than-temporary impairment has not been
recognized. The Company has complied with the disclosure requirements of EITF
03-1, which were effective December 31, 2003. The accounting guidance of EITF
03-1 relating to the recognition of investment impairment which was to be
effective in the third quarter of 2004 has been delayed pending the development
of additional guidance. The Company is actively monitoring the deliberations
relating to this issue at the FASB and currently is unable to determine the
ultimate impact, if any, EITF 03-1 will have on its unaudited interim condensed
consolidated financial statements.

In March 2004, the EITF reached consensus on Issue No. 03-6, Participating
Securities and the Two -- Class Method under FASB Statement No. 128 ("EITF
03-6"). EITF 03-6 provides guidance on determining whether a security should be
considered a participating security for purposes of computing earnings per share
and how earnings should be allocated to the participating security. EITF 03-6
did not have an impact on the Company's earnings per share calculations or
amounts.

In March 2004, the EITF reached consensus on Issue No. 03-16, Accounting
for Investments in Limited Liability Companies ("EITF 03-16"). EITF 03-16
provides guidance regarding whether a limited liability

10

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

company should be viewed as similar to a corporation or similar to a partnership
for purposes of determining whether a noncontrolling investment should be
accounted for using the cost method or the equity method of accounting. EITF
03-16 did not have a material impact on the Company's unaudited interim
condensed consolidated financial statements.

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"), as interpreted
by Technical Practices Aids issued by the American Institute of Certified Public
Accountants. 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. In June
2004, the FASB released FSP No. 97-1, Situations in Which Paragraphs 17(b) and
20 of FASB Statement No. 97, Accounting and Reporting by Insurance Enterprises
for Certain Long-Duration Contracts and for Realized Gains and Losses from the
Sale of Investments, Permit or Require Accrual of an Unearned Revenue
Liability("FSP 97-1") which included clarification that unearned revenue
liabilities should be considered in determining the necessary insurance benefit
liability required under SOP 03-1. Since the Company had considered unearned
revenue in determining its SOP 03-1 benefit liabilities, FSP 97-1 did not impact
its unaudited interim condensed consolidated financial statements. As a result
of the adoption of SOP 03-1, effective January 1, 2004, the Company decreased
the liability for future policyholder benefits for changes in the methodology
relating to various guaranteed death and annuitization benefits and for
determining liabilities for certain universal life insurance contracts by $4
million, which has been reported as a cumulative effect of a change in
accounting. This amount is net of corresponding changes in DAC, including VOBA
and unearned revenue liability ("offsets") under certain variable annuity and
life contracts and income taxes. 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 as derivatives under the provisions of 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 with
the change in the liability recorded as policyholder benefits and claims. 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 changes 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.
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 changes in accounting. Upon adoption of SOP 03-1, the Company
recorded a cumulative effect of a change in accounting of $86 million, net of
income taxes of $46 million, for the three months March 31, 2004.

11

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

2. INVESTMENTS

NET INVESTMENT GAINS (LOSSES)

The Company periodically disposes of fixed maturity and equity securities
at a loss. Generally, such losses are insignificant in amount or in relation to
the cost basis of the investment or are attributable to declines in fair value
occurring in the period of disposition.

12

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

UNREALIZED LOSSES FOR FIXED MATURITIES AND EQUITY SECURITIES
AVAILABLE-FOR-SALE

The following tables show the estimated fair values and gross unrealized
losses of the Company's fixed maturities (aggregated by sector) and equity
securities available-for-sale in an unrealized loss position, aggregated by
length of time that the securities have been in a continuous unrealized loss
position at March 31, 2005 and December 31, 2004:

13

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

TRADING SECURITIES

Net investment income for the three months ended March 31, 2005 includes
$779 thousand of holding gains (losses) on securities classified as trading. Of
this amount, $515 thousand relates to trading securities still held at March 31,
2005. The Company did not have any trading securities during the three months
ended March 31, 2004.

14

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

3. DERIVATIVE FINANCIAL INSTRUMENTS

TYPES OF DERIVATIVE INSTRUMENTS

The following table provides a summary of the notional amounts and current
market or fair value of derivative financial instruments held at:

The Company previously disclosed in its consolidated financial statements
for the year ended December 31, 2004, its types and uses of derivative
instruments. During the three months ended March 31, 2005, the Company began
using swap spread locks to hedge invested assets against the risk of changes in
credit spreads. Swap spread locks are included in financial forwards in the
preceding table. This information should be read in conjunction with Note 3 of
Notes to Consolidated Financial Statements for the year ended December 31, 2004
included in MetLife, Inc.'s 2004 Annual Report on Form 10-K filed with the SEC.

HEDGING

The table below provides a summary of the notional amount and fair value of
derivatives by type of hedge designation at:

15

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

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

FAIR VALUE HEDGES

The Company designates and accounts for the following as fair value hedges
when they have met the requirements of SFAS 133: (i) interest rate swaps to
convert fixed rate investments to floating rate investments; (ii) foreign
currency swaps to hedge the foreign currency fair value exposure of foreign
currency denominated investments and liabilities; and (iii) treasury futures to
hedge against changes in value of fixed rate securities.

The Company recognized net investment gains (losses) representing the
ineffective portion of all fair value hedges as follows:

All components of each derivative's gain or loss were included in the
assessment of hedge ineffectiveness. There were no instances in which the
Company discontinued fair value hedge accounting due to a hedged firm commitment
no longer qualifying as a fair value hedge.

CASH FLOW HEDGES

The Company designates and accounts for the following as cash flow hedges,
when they have met the requirements of SFAS 133: (i) interest rate swaps to
convert floating rate investments to fixed rate investments; (ii) interest rate
swaps to convert floating rate liabilities into fixed rate liabilities; (iii)
foreign currency swaps to hedge the foreign currency cash flow exposure of
foreign currency denominated investments and liabilities; (iv) treasury futures
to hedge against changes in value of securities to be acquired; (v) treasury
futures to hedge against changes in interest rates on liabilities to be issued;
and (vi) financial forwards to gain exposure to the investment risk and return
of securities not yet available.

For the three months ended March 31, 2005 and 2004, the Company recognized
net investment gains (losses) of ($42) million and $19 million, respectively,
which represent the ineffective portion of all cash flow hedges. All components
of each derivative's gain or loss were included in the assessment of hedge
ineffectiveness. In certain instances the Company discontinued cash flow hedge
accounting because the

16

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

forecasted transactions did not occur on the anticipated date or in the
additional time period permitted by SFAS 133. The net amounts reclassified into
net investment gains (losses) for the three months ended March 31, 2005 and 2004
due to discontinuance of the cash flow hedge because the transaction did not
occur on the anticipated date or in the additional time period permitted by SFAS
133 were losses of $25 million and $32 million, respectively. There were no
hedged forecasted transactions, other than the receipt or payment of variable
interest payments.

Presented below is a roll forward of the components of other comprehensive
income (loss), before income taxes, related to cash flow hedges:

HEDGES OF NET INVESTMENTS IN FOREIGN OPERATIONS

The Company uses forward exchange contracts and foreign currency swaps to
hedge portions of its net investment in foreign operations against adverse
movements in exchange rates. The Company measures ineffectiveness on the forward
exchange contracts based upon the change in forward rates. There was no
ineffectiveness recorded for the three months ended March 31, 2005 and 2004.

In the Company's consolidated statements of stockholders' equity for the
three months ended March 31, 2005, gains of approximately $4 million were
recorded on foreign currency contracts used to hedge its net investments in
foreign operations. At March 31, 2005 and December 31, 2004, the cumulative
foreign currency translation loss recorded in accumulated other comprehensive
income (loss)("AOCI") related to these hedges was approximately $53 million and
$57 million, respectively. When substantially all of net investments in foreign
operations are sold or liquidated, the amounts in AOCI are reclassified to the
consolidated statements of income, while a pro rata portion is reclassified upon
partial sale of the net investments in foreign operations.

NON-QUALIFYING DERIVATIVES AND DERIVATIVES FOR PURPOSES OTHER THAN HEDGING

The Company enters into the following derivatives that do not qualify for
hedge accounting under SFAS 133 or for purposes other than hedging: (i) interest
rate swaps, purchased caps and floors, and Treasury futures to minimize its
exposure to interest rate volatility; (ii) foreign currency forwards and swaps
are used to minimize its exposure to adverse movements in exchange rates; (iii)
swaptions to sell embedded call options in fixed rate liabilities; (iv) credit
default swaps to minimize its exposure to adverse movements in credit; (v)
equity futures and equity options which are used to economically hedge
liabilities embedded in certain variable annuity products; (vi) swap spread
locks to hedge invested assets against the risk of changes in credit

17

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

spreads; (vii) synthetic guaranteed investment contracts ("GICs") to
synthetically create traditional GICs; and (viii) replication synthetic asset
transactions ("RSATs") and total rate of return swaps ("TRRs") to synthetically
create investments.

For the three months ended March 31, 2005 and 2004, the Company recognized
as net investment gains (losses) changes in fair value of $40 million and ($3)
million, respectively, related to derivatives not qualifying as accounting
hedges. For the three months ended March 31, 2005, the Company recorded changes
in fair value of $2 million, as interest credited to policyholder account
balances related to derivatives that do not qualify for hedge accounting. The
Company did not have such derivatives for the three months ended March 31, 2004.

EMBEDDED DERIVATIVES

The Company has certain embedded derivatives which are required to be
separated from their host contracts and accounted for as derivatives. These host
contracts include guaranteed rate of return contracts, guaranteed minimum
withdrawal benefit contracts, modified coinsurance contracts and investments
with make whole provisions. The fair value of the Company's embedded derivative
assets was $68 million and $46 million at March 31, 2005 and December 31, 2004,
respectively. The fair value of the Company's embedded derivative liabilities
was $14 million and $26 million at March 31, 2005 and December 31, 2004,
respectively. The amounts included in net investment gains (losses) during the
three months ended March 31, 2005 and 2004, were gains of $34 million and losses
of $10 million, respectively.

4. 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.

18

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

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

19

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

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

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

5. COMMITMENTS, CONTINGENCIES AND GUARANTEES

LITIGATION

The Company is a defendant in a large number of litigation matters. In some
of the matters, very large and/or indeterminate amounts, including punitive and
treble damages, are sought. Modern pleading practice in the United States
permits considerable variation in the assertion of monetary damages or other
relief. Jurisdictions may permit claimants not to specify the monetary damages
sought or may permit claimants to state only that the amount sought is
sufficient to invoke the jurisdiction of the trial court. In addition,
jurisdictions may permit plaintiffs to allege monetary damages in amounts well
exceeding reasonably possible verdicts in the jurisdiction for similar matters.
This variability in pleadings, together with the actual experience of the
Company in litigating or resolving through settlement numerous claims over an
extended period of time, demonstrate to management that the monetary relief
which may be specified in a lawsuit or claim bears little relevance to its
merits or disposition value. Thus, unless stated below, the specific monetary
relief sought is not noted.

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

On a quarterly and yearly basis, the Company reviews relevant information
with respect to liabilities for litigation and contingencies to be reflected in
the Company's consolidated financial statements. The review includes senior
legal and financial personnel. Unless stated below, estimates of possible
additional losses or ranges of loss for particular matters cannot in the
ordinary course be made with a reasonable degree of certainty. Liabilities are
established when it is probable that a loss has been incurred and the amount of
the loss can be reasonably estimated. It is possible that some of the matters
could require the Company to pay damages or make other expenditures or establish
accruals in amounts that could not be estimated as of March 31, 2005.

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 generally are 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
21

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

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,
2005, there are approximately 328 sales practices lawsuits pending against
Metropolitan Life; approximately 49 sales practices lawsuits pending against New
England Mutual, New England Life Insurance Company, and New England Securities
Corporation (collectively, "New England"); and approximately 54 sales practices
lawsuits pending against General American. Metropolitan Life, New England 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 consolidated
financial statements for all probable and reasonably estimable losses for sales
practices claims against Metropolitan Life, New England and General American.

Regulatory authorities in a small number of states have had investigations
or inquiries relating to Metropolitan Life's, New England'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 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 principally have 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

22

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

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. Since 2002, trial courts in California, Utah, Georgia, New
York, Texas, and Ohio 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 10 of Notes to Consolidated Financial Statements for the year
ended December 31, 2004 included in the MetLife, Inc. Annual Report on Form 10-K
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.

Bankruptcies of other companies involved in asbestos litigation, as well as
advertising by plaintiffs' asbestos lawyers, may be resulting in an increase in
the cost of resolving claims and could result in an increase in 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 bankruptcies by certain other defendants. In addition,
publicity regarding legislative reform efforts may result in an increase or
decrease in the number of claims. As reported in MetLife, Inc.'s Annual Report
on Form 10-K, Metropolitan Life received approximately 23,500 asbestos-related
claims in 2004. During the first three months of 2005 and 2004, Metropolitan
Life received approximately 5,900 and 7,185 asbestos-related claims,
respectively.

The Company believes adequate provision has been made in its 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 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.

23

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

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 with respect to the prior year was made under the excess insurance
policies in 2003, 2004 and 2005 for the amounts paid with respect to asbestos
litigation in excess of the retention. As the performance of the indices impacts
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. The foregone loss reimbursements
were approximately $8.3 million with respect to 2002 claims, $15.5 million with
respect to 2003 claims and $15.1 million with respect to 2004 claims and
estimated as of March 31, 2005, to be approximately $73 million in the
aggregate, including future years.

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. 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. A recent decision by the Montana Supreme Court in a suit involving
another insurer determined that aggregation is required. Metropolitan Property
and Casualty Insurance Company has recorded a liability in an amount the Company
believes is adequate to resolve the claims underlying this matter. The amount to
be paid will not be material to Metropolitan Property and Casualty Insurance
Company. Certain plaintiffs' lawyers in another action 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, 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 named as defendants some or all of
Metropolitan Life, MetLife, Inc. (the "Holding Company"), the individual
directors, the New York Superintendent of Insurance
24

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

(the "Superintendent") and the underwriters for MetLife, Inc.'s initial public
offering, Goldman Sachs & Company and Credit Suisse First Boston. In 2003, a
trial court within the commercial part of the New York State court granted the
defendants' motions to dismiss two purported class actions. In 2004, the
appellate court modified the trial court's order by reinstating certain claims
against Metropolitan Life, the Holding Company and the individual directors.
Plaintiffs in these actions have filed a consolidated amended complaint.
Defendants' motion to dismiss part of the consolidated amended complaint, and
plaintiffs' motion to certify a litigation class are pending. Another purported
class action filed in New York State court in Kings County has been consolidated
with this action. The plaintiffs in the state court class actions seek
compensatory relief and punitive damages. Five persons 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. Respondents have moved
to dismiss the proceeding. In a purported class action against Metropolitan Life
and the Holding Company pending in the United States District Court for the
Eastern District of New York, plaintiffs served a second consolidated amended
complaint in 2004. In this action, plaintiffs assert violations of the
Securities Act of 1933 and the Securities Exchange Act of 1934 in connection
with the plan, claiming that the Policyholder Information Booklets failed to
disclose certain material facts. They seek rescission and compensatory damages.
On June 22, 2004, the court denied the defendants' motion to dismiss the claim
of violation of the Securities Exchange Act of 1934. The court had previously
denied defendants' motion to dismiss the claim for violation of the Securities
Act of 1933. In 2004, the court reaffirmed its earlier decision denying
defendants' motion for summary judgment as premature. 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.

On April 30, 2004, a lawsuit was filed in New York state court in New York
County against the Holding Company and Metropolitan Life on behalf of a proposed
class comprised of the settlement class in the Metropolitan Life sales practices
class action settlement approved in December 1999 by the United States District
Court for the Western District of Pennsylvania. In July 2004, the plaintiffs
served an amended complaint. The amended complaint challenges the treatment of
the cost of the sales practices settlement in the demutualization of
Metropolitan Life and asserts claims of breach of fiduciary duty, common law
fraud, and unjust enrichment. Plaintiffs seek compensatory and punitive damages,
as well as attorneys' fees and costs. The Holding Company and Metropolitan Life
have moved to dismiss the amended complaint. In 2003, the United States District
Court for the Western District of Pennsylvania dismissed plaintiffs' similar
complaint alleging that the demutualization breached the terms of the 1999
settlement agreement and unjustly enriched the Holding Company and Metropolitan
Life. The Holding Company and Metropolitan Life intend to contest this matter
vigorously.

Other

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 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
25

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

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 MetLife, Inc.'s June 30, 2003 Form 10-Q, MetLife announced
a $31 million charge, net of income taxes, 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 opened a
formal investigation of the matter and, in December 2004, NELICO received a
"Wells Notice" in connection with the SEC investigation. The staff of the SEC
recently notified NELICO that no enforcement action has been recommended against
NELICO.

The American Dental Association and three individual providers have sued
MetLife 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 granted in part and further pleadings and discovery will ensue.

In 2004, a New York state court granted plaintiffs' motion to certify a
litigation class of owners of certain participating life insurance policies and
a sub-class of New York owners of such policies in an action asserting that
Metropolitan Life breached their policies and violated New York's General
Business Law in the manner in which it allocated investment income across lines
of business during a period ending with the 2000 demutualization. Metropolitan
Life has filed a notice of appeal from the order granting this motion. In 2003,
an appellate court affirmed the dismissal of fraud claims in this action.
Plaintiffs seek compensatory damages. Metropolitan Life 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 and, generally, the marketing of products. The Company
believes that many of these inquiries are similar to those made to many
financial services companies as part of industry-wide investigations by various
regulatory agencies. The 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. As previously
reported, in May 2004, General American received a Wells Notice stating that the
SEC staff is considering recommending that the SEC bring a civil action alleging
violations of the U.S. securities laws against General American. Under the SEC
procedures, General American can avail itself of the opportunity to respond to
the SEC staff before it makes a formal recommendation regarding whether any
action alleging violations of the U.S. securities laws should be considered.
General American has responded to the "Wells Notice". The Company is fully
cooperating with regard to these information requests and investigations. The
Company at the present time is not aware of any systemic problems with respect
to such matters that may have a material adverse effect on the Company's
consolidated financial position.

As anticipated, the SEC issued a formal order of investigation related to
certain sales by a former MetLife sales representative to the Sheriff's
Department of Fulton County, Georgia. The Company is fully cooperating with
respect to inquiries from the SEC.

The Company has received a number of subpoenas and other requests from the
Office of the Attorney General of the State of New York seeking, among other
things, information regarding and relating to
26

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

compensation agreements between insurance brokers and the Company, whether
MetLife has provided or is aware of the provision of "fictitious" or "inflated"
quotes and information regarding tying arrangements with respect to reinsurance.
Based upon an internal review, the Company advised the Attorney General for the
State of New York that MetLife was not aware of any instance in which MetLife
had provided a "fictitious" or "inflated" quote. MetLife also has received
subpoenas, including sets of interrogatories, from the Office of the Attorney
General of the State of Connecticut seeking information and documents including
contingent commission payments to brokers and MetLife's awareness of any "sham"
bids for business. MetLife also has received a Civil Investigative Demand from
the Office of the Attorney General for the State of Massachusetts seeking
information and documents concerning bids and quotes that the Company submitted
to potential customers in Massachusetts, the identity of agents, brokers, and
producers to whom the Company submitted such bids or quotes, and communications
with a certain broker. The Company has received a subpoena from the District
Attorney of the County of San Diego, California. The subpoena seeks numerous
documents including incentive agreements entered into with brokers. The Florida
Department of Financial Services and the Florida Office of Insurance Regulation
also have served subpoenas on the Company asking for answers to interrogatories
and document requests concerning topics that include compensation paid to
intermediaries. MetLife is continuing to conduct an internal review of its
commission payment practices. The Company continues to fully cooperate with
these inquiries and is responding to the subpoenas and other requests.

Approximately fifteen broker-related lawsuits have been received. Two class
action lawsuits were filed in the United States District Court for the Southern
District of New York on behalf of proposed classes of all persons who purchased
the securities of MetLife, Inc. between April 5, 2000 and October 19, 2004
against MetLife, Inc. and certain officers of MetLife, Inc. In the context of
contingent commissions, the complaints allege that defendants violated the
federal securities laws by issuing materially false and misleading statements
and failing to disclose material facts regarding MetLife, Inc.'s financial
performance throughout the class period that had the effect of artificially
inflating the market price of MetLife Inc.'s securities. Three class action
lawsuits were filed in the United States District Court for the Southern
District of New York on behalf of proposed classes of participants in and
beneficiaries of Metropolitan Life Insurance Company's Savings and Investment
Plan against MetLife, Inc., the MetLife, Inc. Employee Benefits Committee,
certain officers of Metropolitan Life Insurance Company, and members of MetLife,
Inc.'s board of directors. In the context of contingent commissions, the
complaints allege that defendants violated their fiduciary obligations under
ERISA by failing to disclose to plan participants who had the option of
allocating funds in the plan to the MetLife Company Stock Fund material facts
regarding MetLife, Inc.'s financial performance. The plaintiffs in these actions
seek compensatory and other relief. Two cases have been brought in California
state court against MetLife, Inc., other companies, and an insurance broker. One
of these cases alleges that the insurers and the broker violated Section 17200
of the California Business and Professions Code by engaging in unfair trade
practices concerning contingent commissions and fees paid to the broker; the
Company has been advised that the plaintiff intends to dismiss the action
without prejudice. The other case has been brought by the California Insurance
Commissioner and alleges that the defendants violated certain provisions of the
California Insurance Code. Additionally, two civil RICO and antitrust-related
class action lawsuits have been brought against MetLife, Inc., and other
companies in California federal court with respect to issues concerning
contingent commissions and fees paid to one or more brokers. Three class action
lawsuits have been brought in Illinois federal court against MetLife, Inc. and
other companies alleging that insurers and brokers violated antitrust laws or
engaged in civil RICO violations. One of the actions was dismissed and filed in
the United States District Court in the District of New Jersey. A multi-district
proceeding has been established in the Federal District Court in the District of
New Jersey, which will coordinate, for pre-trial purposes, many of these federal
court actions. A number of federal court actions already have been transferred
for pre-trial purposes to the Federal District Court in the District of New
Jersey. The Company intends to vigorously defend these cases.

27

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

In addition to those discussed above, regulators and others have made a
number of inquiries of the insurance industry regarding industry brokerage
practices and related matters and others may begin. It is reasonably possible
that MetLife will receive additional subpoenas, interrogatories, requests and
lawsuits. MetLife will fully cooperate with all regulatory inquiries and intends
to vigorously defend all lawsuits.

Metropolitan Life also has been named as a defendant in a number of
silicosis, welding and mixed dust cases in various states. The Company intends
to defend itself vigorously against these cases.

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

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.

COMMITMENTS TO FUND PARTNERSHIP INVESTMENTS

The Company makes commitments to fund partnership investments in the normal
course of business. The amounts of these unfunded commitments were $1,253
million and $1,324 million at March 31, 2005 and December 31, 2004,
respectively. The Company anticipates that these amounts will be invested in
partnerships over the next 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,

28

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

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 2005, the Company recorded a liability of $4
million with respect to indemnities provided in a certain disposition. The
approximate term for this liability is 18 months. The maximum potential amount
of future payments that MetLife could be required to pay is $500 million. Due to
the uncertainty in assessing changes to the liability over the term, the
liability on the balance sheet will remain until either expiration or settlement
of the guarantee unless evidence clearly indicates that the estimates should be
revised. The Company's recorded liabilities at March 31, 2005 and December 31,
2004 for indemnities, guarantees and commitments were $14 million and $10
million, respectively.

In conjunction with replication synthetic asset transactions, 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 $1.1 billion at March 31,
2005. The credit default swaps expire at various times during the next seven
years.

6. 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 a December 31 measurement date for all of its pension and
postretirement benefit plans.

The components of net periodic benefit cost were as follows:

- ---------------

(1) The Company adopted FSP 106-2 in the third quarter of 2004. Therefore, these
2004 figures do not reflect the impact of FSP 106-2.
29

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

EMPLOYER CONTRIBUTIONS

As disclosed in Note 11 of Notes to Consolidated Financial Statements for
the year ended December 31, 2004 included in the MetLife, Inc. Annual Report on
Form 10-K filed with the SEC, the Company expects to contribute $32 million and
$93 million to its pension and other benefit plans in 2005, respectively. During
the three months ended March 31, 2005, contributions of $11 million and $25
million were made to the pension and other benefit plans, respectively.

7. STOCK COMPENSATION PLANS

The MetLife, Inc. 2000 Stock Incentive Plan, as amended, (the "Stock
Incentive Plan"), authorized the granting of awards in the form of non-qualified
or incentive stock options qualifying under Section 422A of the Internal Revenue
Code. The MetLife, Inc. 2000 Directors Stock Plan, as amended (the "Directors
Stock Plan"), authorized the granting of awards in the form of stock awards,
non-qualified stock options, or a combination of the foregoing to outside
Directors of the Company. Under the MetLife, Inc. 2005 Stock and Incentive
Compensation Plan, as amended (the "2005 Stock Plan"), awards granted may be in
the form of non-qualified or incentive stock options qualifying under Section
422A of the Internal Revenue Code, Stock Appreciation Rights, Restricted Stock
or Restricted Stock Units, Performance Shares or Performance Share Units,
Cash-Based Awards, and Stock-Based Awards (each as defined in the 2005 Stock
Plan). Under the MetLife, Inc. 2005 Non-Management Director Stock Compensation
Plan (the "2005 Directors Stock Plan"), awards granted may be in the form of
non-qualified stock options, Stock Appreciation Rights, Restricted Stock or
Restricted Stock Units, or Stock-Based Awards (each as defined in the 2005
Directors Stock Plan). The aggregate number of shares reserved for issuance
under the 2005 Stock Plan is 68,000,000 plus those shares available but not
utilized under the Stock Incentive Plan and those shares utilized under the
Stock Incentive Plan that are recovered due to forfeiture of stock options. At
the commencement of the 2005 Stock Plan, additional shares carried forward from
the Stock Incentive Plan and available for issuance under the 2005 Stock Plan
were 11,917,472. Each share issued under the 2005 Stock Plan in connection with
an option or Stock Appreciation Right reduces the number of shares remaining for
issuance under that plan by one, and each share issued under the 2005 Stock Plan
in connection with awards other than stock options or Stock Appreciation Rights
reduces the number of shares remaining for issuance under that plan by 1.179.
The number of shares reserved for issuance under the 2005 Directors Stock Plan
is 2,000,000.

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 granted under the Stock Incentive
Plan and the 2005 Stock 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. Options issued under the 2005 Directors Stock Plan will
be exercisable at the times determined at the time they are granted.

Effective January 1, 2003, the Company elected to prospectively apply the
fair value method of accounting for stock options granted by the Holding Company
subsequent to December 31, 2002. As permitted under SFAS 148, options granted
prior to January 1, 2003 will continue to be accounted for under APB 25. Had
compensation expense for grants awarded prior to January 1, 2003 been determined
based on

30

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

fair value at the date of grant in accordance with SFAS 123, the Company's
earnings and earnings per share amounts would have been reduced to the following
pro forma amounts:

- ---------------

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

The Company also awards long-term stock-based compensation to certain
members of management. Under the Company's Long Term Performance Compensation
Plan ("LTPCP"), awards are payable in their entirety at the end of a three-year
performance period. Each participant is assigned a target compensation amount at
the inception of the performance period with the final compensation amount
determined based on the total shareholder return on the Holding Company's stock
over the three-year performance period, subject to limited further adjustment
approved by the Holding Company's Board of Directors. Final awards may be paid
in whole or in part with shares of the Holding Company's stock, as approved by
the Holding Company's Board of Directors. Beginning in 2005, no further LTPCP
target compensation amounts were set. Instead, certain members of management
were awarded Performance Shares under the 2005 Stock Plan. Participants are
awarded an initial target number of Performance Shares with the final number of
Performance Shares payable being determined by the product of the initial target
multiplied by a factor of 0.0 to 2.0. The factor applied is based on the Holding
Company's performance with respect to net operating earnings and total
shareholder return over the three-year performance period relative to other
companies in the Standard and Poor's Insurance Index over the same three-year
period. Performance Share awards vest in their entirety at the end of the
three-year performance period and will be payable entirely in shares of the
Holding Company's stock. Compensation expense related to the LTPCP and
Performance Shares was $13 million for the three months ended March 31, 2005 and
compensation expense related to the LTPCP was $10 million for the three months
ended March 31, 2004.

For the three months ended March 31, 2005 and 2004, the aggregate
stock-based compensation expense related to the Company's Stock Incentive Plan,
Directors Stock Plan and LTPCP was $23 million and $19 million, respectively,
including stock-based compensation for non-employees of $55 thousand and $274
thousand, respectively.

31

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

8. COMPREHENSIVE INCOME (LOSS)

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

32

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

9. 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:

On October 26, 2004, the Holding Company's Board of Directors authorized a
$1 billion common stock repurchase program. This program began after the
completion of the February 19, 2002 and March 28, 2001 repurchase programs, each
of which authorized the repurchase of $1 billion of common stock. 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. As a result of the Holding Company's agreement to acquire
Travelers, the Holding Company has currently suspended its share repurchase
activity. Future share repurchases will be dependent upon several factors,
including the Company's capital position, its financial strength and credit
ratings, general market conditions and the price of the Company's common stock.
See "-- Summary of Accounting Policies -- Basis of Presentation."

On December 16, 2004, the Holding Company repurchased 7,281,553 shares of
its outstanding common stock at an aggregate cost of approximately $300 million
under an accelerated share repurchase agreement

33

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

with a major bank. The bank borrowed the stock sold to the Holding Company from
third parties and purchased the shares in the open market to return to the
lenders. The Holding Company received a cash adjustment based on the actual
amount paid by the bank to purchase the shares of approximately $7 million. The
Holding Company recorded the initial repurchase of shares as treasury stock and
recorded the amount received as an adjustment to the cost of the treasury stock.

The Company did not acquire any shares of the Holding Company's common
stock during the three months ended March 31, 2005. The Company acquired
1,849,500 shares of the Holding Company's common stock for $65 million during
the three months ended March 31, 2004. During the three months ended March 31,
2005 and 2004, 643,332 and 80,321 shares of common stock were issued from
treasury stock for $21 million and $2 million, respectively. At March 31, 2005,
the Holding Company had $710 million remaining on its existing share repurchase
authorization.

10. BUSINESS SEGMENT INFORMATION

The Company provides insurance and financial services to customers in the
United States, Canada, Central America, South America, Asia and various other
international markets. The Company's business is divided into five operating
segments: Institutional, Individual, Auto & Home, International and Reinsurance,
as well as Corporate & Other. 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 &
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 protection and asset accumulation products, including life
insurance, annuities and mutual funds. Auto & Home provides personal lines
property and casualty insurance, including private passenger automobile,
homeowner's and personal excess liability insurance. International provides life
insurance, accident and health insurance, annuities and retirement & savings
products to both individuals and groups. 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.

Corporate & Other contains the excess capital not allocated to the business
segments, various start-up entities, including MetLife Bank, N.A. ("MetLife
Bank"), a national bank, and run-off entities, as well as interest expense
related to the majority of the Company's outstanding debt and expenses
associated with certain legal proceedings and income tax audit issues. Corporate
& Other also includes the elimination of all intersegment amounts, which
generally relate to intersegment loans, which bear interest rates commensurate
with related borrowings, as well as intersegment transactions. Additionally, the
Company's asset management business, including amounts reported as discontinued
operations, is included in the results of operations for Corporate & Other. See
Note 11 for disclosures regarding discontinued operations, including real
estate.

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, 2005
and 2004. 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 effectively manage its capital. The
Company evaluates the performance of each operating segment based upon net
income excluding certain net investment 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 gains (losses).
The Company

34

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

allocates certain non-recurring items, such as expenses associated with certain
legal proceedings, to Corporate & Other.

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

Net investment income and net investment gains (losses) are based upon the
actual results of each segment's specifically identifiable asset portfolio
adjusted for allocated 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 one customer did not exceed 10% of consolidated
revenues. Revenues from U.S. operations were $9,155 million and $8,476 million
for the three months ended March 31, 2005 and 2004, respectively, which
represented 89% and 90%, respectively, of consolidated revenues.

35

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

11. DISCONTINUED OPERATIONS

REAL ESTATE

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 or sold is presented as
discontinued operations. These assets are carried at the lower of depreciated
cost or fair value less expected disposition costs.

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

The carrying value of real estate related to discontinued operations was
$848 million and $953 million at March 31, 2005 and December 31, 2004,
respectively.

The following table shows the real estate discontinued operations by
segment:

On March 29, 2005, the Company entered into a contract to sell its One
Madison Avenue property in Manhattan for $918 million. The sale, which occurred
on April 29, 2005, is expected to result in a gain in

36

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

excess of $420 million, net of income taxes. On April 1, 2005, the Company
entered into a contract to sell its 200 Park Avenue property above Grand Central
Station in Manhattan for $1.72 billion. The sale, which occurred on May 4, 2005,
is expected to result in a gain in excess of $750 million, net of income taxes.
Both properties are included in Real Estate -- Held-for-Sale in the accompanying
unaudited interim condensed consolidated financial statements.

OPERATIONS

On January 31, 2005, the Holding Company completed the sale of SSRM
Holdings, Inc. ("SSRM") to a third party for $328 million in cash and stock. As
a result of the sale of SSRM, the Company recognized income from discontinued
operations of approximately $157 million, net of income taxes, comprised of a
realized gain of $165 million, net of income taxes, and an operating expense
related to a lease abandonment of $8 million, net of income taxes. Under the
terms of the agreement, MetLife will have an opportunity to receive, prior to
the end of 2006, additional payments aggregating up to approximately 25% of the
base purchase price, based on, among other things, certain revenue retention and
growth measures. The purchase price is also subject to reduction over five
years, depending on retention of certain MetLife-related business. The Company
reclassified the assets, liabilities and operations of SSRM into discontinued
operations for the period ended December 31, 2004. Additionally, the sale of
SSRM resulted in the elimination of the Company's Asset Management segment. The
remaining asset management business, which is insignificant, has been
reclassified into Corporate & Other. The Company's discontinued operations for
the three months ended March 31, 2005 also includes expenses of approximately $6
million, net of income taxes, related to the sale of SSRM.

The operations of SSRM include affiliated revenues of $5 million and $15
million for the three months ended March 31, 2005 and 2004, related to asset
management services provided by SSRM to the Company that have not been
eliminated from discontinued operations as these transactions will continue
after the sale of SSRM. The following tables present the amounts related to
operations of SSRM that have been combined with the discontinued real estate
operations in the consolidated income statements:

37

METLIFE, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)

12. OTHER EXPENSES

38

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" refer
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.

This 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 Company and its subsidiaries,
as well as other statements including words such as "anticipate," "believe,"
"plan," "estimate," "expect," "intend" and other similar expressions.
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 United States Securities and Exchange Commission
("SEC"), 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.

DISPOSITIONS

On January 31, 2005, the Holding Company completed the sale of SSRM
Holdings, Inc. ("SSRM") to a third party for $328 million in cash and stock. As
a result of the sale of SSRM, the Company recognized income from discontinued
operations of approximately $157 million, net of income taxes, comprised of a
realized gain of $165 million, net of income taxes, and an operating expense
related to a lease abandonment of $8 million, net of income taxes. Under the
terms of the agreement, MetLife will have an opportunity to receive, prior to
the end of 2006, additional payments aggregating up to approximately 25% of the
base purchase price, based on, among other things, certain revenue retention and
growth measures. The purchase price is also subject to reduction over five
years, depending on retention of certain MetLife-related business. The Company
reclassified the assets, liabilities and operations of SSRM into discontinued
operations for the period ended December 31, 2004. Additionally, the sale of
SSRM resulted in the elimination of the Company's Asset Management segment. The
remaining asset management business, which is insignificant, has been
reclassified into Corporate & Other. The Company's discontinued operations for
the three months
39

ended March 31, 2005 also includes expenses of approximately $6 million, net of
income taxes, related to the sale of SSRM.

SUMMARY OF CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with GAAP requires
management to adopt accounting policies and make estimates and assumptions that
affect amounts reported in the 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) application of the consolidation
rules to certain investments; (iv) the fair value of and accounting for
derivatives; (v) the capitalization and amortization of deferred policy
acquisition costs ("DAC"), including value of business acquired ("VOBA"); (vi)
the liability for future policyholder benefits; (vii) the liability for
litigation and regulatory matters; and (viii) accounting for reinsurance
transactions 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.

INVESTMENTS

The Company's principal investments are in fixed maturities, mortgage and
consumer 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 cost or amortized cost; (ii) the potential for
impairments of securities when the issuer is experiencing significant financial
difficulties; (iii) the potential for impairments in an entire industry sector
or sub-sector; (iv) the potential for impairments in certain economically
depressed geographic locations; (v) the potential for impairments of securities
where the issuer, series of issuers or industry has suffered a catastrophic type
of loss or has exhausted natural resources; (vi) the Company's ability and
intent to hold the security for a period of time sufficient to allow for the
recovery of its value to an amount equal to or greater than cost or amortized
cost; (vii) unfavorable changes in forecasted cash flows on asset-backed
securities; and (viii) other subjective factors, including concentrations and
information obtained from regulators and rating agencies. 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.

40

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 have embedded 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 under the circumstances. Such assumptions include estimated
volatility and interest rates used in the determination of fair 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 common
industry practice, in its determination of the amortization of DAC, including
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.

LIABILITY FOR FUTURE POLICY BENEFITS AND UNPAID CLAIMS AND CLAIM EXPENSES

The Company establishes liabilities for amounts payable under insurance
policies, including traditional life insurance, traditional annuities and
non-medical health insurance. Generally, amounts are payable over an extended
period of time and 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 claim
expenses for property and casualty claim insurance which represent the amount
estimated for claims that have been reported but not settled and claims incurred
but not reported. Liabilities for unpaid claims are estimated based upon the
Company's historical experience and other actuarial assumptions that consider
the effects of current developments, anticipated trends and risk management
programs, reduced for anticipated salvage and subrogation.

Differences between actual experience and the assumptions used in pricing
these policies and in the establishment of liabilities result in variances in
profit and could result in losses. The effects of changes in such estimated
reserves are included in the results of operations in the period in which the
changes occur.

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

41

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 and regulatory
investigations. Given the inherent unpredictability of these matters, it is
difficult to estimate the impact on the Company's unaudited interim condensed
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
assumptions used to estimate the Company's 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. On a
quarterly and annual basis the Company reviews relevant information with respect
to liabilities for litigation, regulatory investigations and litigation-related
contingencies to be reflected in the Company's consolidated financial
statements. The review includes senior legal and financial personnel. It is
possible that an adverse outcome in certain of the Company's litigation and
regulatory investigations, 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. 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.

RESULTS OF OPERATIONS

EXECUTIVE SUMMARY

MetLife, Inc., through its subsidiaries and affiliates, is a leading
provider of insurance and other financial services to individual and
institutional customers. The Company offers life insurance, annuities,
automobile and homeowner's insurance and retail banking services to individuals,
as well as group insurance, reinsurance, and retirement & savings products and
services to corporations and other institutions. The MetLife companies serve
individuals in approximately 13 million households in the United States and
provide benefits to 37 million employees and family members through their plan
sponsors. Outside the United States, the MetLife companies serve approximately 9
million customers through direct insurance operations in Argentina, Brazil,
Chile, China, Hong Kong, India, Indonesia, Mexico, South Korea, Taiwan and
Uruguay. MetLife is

42

organized into five operating segments: Institutional, Individual, Auto & Home,
International and Reinsurance, as well as Corporate & Other.

On January 31, 2005, the Holding Company entered into an agreement to
acquire Travelers Insurance Company, excluding certain assets, most
significantly, Primerica, from Citigroup Inc., and substantially all of
Citigroup Inc.'s international insurance businesses ("Travelers") for a purchase
price of $11.5 billion, subject to adjustment as described in the acquisition
agreement. As a condition to closing, Citigroup Inc. and the Holding Company
will enter into ten-year agreements under which the Company will expand its
distribution by making products available through certain Citigroup distribution
channels, subject to appropriate suitability and other standards. On March 30,
2005, the Holding Company announced the termination of the 30-day waiting period
under the Hart-Scott-Rodino Anitrust Improvements Act of 1976. The transaction
is expected to close in the summer of 2005. Approximately $1 billion to $3
billion of the purchase price will be paid in MetLife stock with the remainder
paid in cash which will be financed through a combination of cash on hand, debt,
mandatorily convertible and perpetual preferred securities and selected asset
sales depending on market conditions, timing, valuation considerations and the
relative attractiveness of funding alternatives.

THREE MONTHS ENDED MARCH 31, 2005 COMPARED WITH THE THREE MONTHS ENDED MARCH
31, 2004

The Company reported $987 million in net income and diluted earnings per
share of $1.33 for the three months ended March 31, 2005 compared to $598
million in net income and diluted earnings per share of $0.79 for the three
months ended March 31, 2004. Continued top-line revenue growth, strong interest
rate spreads and the increase in income from discontinued operations due to the
sale of SSRM in the first quarter of 2005 are the leading contributors to the
65% increase in net income for the three months ended March 31, 2005 over the
comparable 2004 period. Total premiums, fees and other revenues increased to
$7.1 billion, up 11%, from the three months ended March 31, 2004, primarily from
continued sales growth across most of the Company's business segments, as well
as the positive impact of the U.S. financial markets on policy fees. Policy fees
from variable life and annuity and investment-type products are typically
calculated as a percentage of the average assets in policyholder accounts. The
value of these assets can fluctuate depending on equity performance. Continued
strong investment spreads are largely due to higher than expected net investment
income from corporate joint venture income and bond and commercial mortgage
prepayment fees. In addition, there was an $86 million charge, net of income
taxes, cumulative effect of a change in accounting principle in 2004 recorded 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"). These increases are partially offset by an $83
million, net of income taxes, decrease in net investment gains (losses) due to
the repositioning of the portfolio and a higher interest rate environment.

INDUSTRY TRENDS

The Company's segments continue to be influenced by a variety of industry
trends and the Company believes that each of its businesses is well positioned
to capitalize on those trends. In general, the Company sees more employers, both
large and small, outsourcing their benefits functions. Further, companies are
offering broader arrays of voluntary benefits to help retain employees while
adding little to their overall benefits costs. The Company believes that 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
continuing 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 cost of traditional medical indemnity
products has 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.

43

From a demographics standpoint, the bulk of the United States 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. In each of these demographic scenarios, the quality of the guarantee
will be a key driver of growth. The Company believes that these guarantees will
be evaluated through balance sheet strength, the claims paying ability and
financial strength ratings of the guarantor, as well as the reputation of the
Company. The Company believes that in each of these comparisons, it will be at a
distinct advantage versus the industry on average.

The Company expects that 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.

44

DISCUSSION OF RESULTS

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

THREE MONTHS ENDED MARCH 31, 2005 COMPARED WITH THE THREE MONTHS ENDED MARCH
31, 2004 -- THE COMPANY

Income from continuing operations increased by $161 million, or 25%, to
$799 million for the three months ended March 31, 2005 from $638 million in the
comparable 2004 period. The Individual segment contributed $169 million, net of
income taxes, to the increase, as a result of an improvement in net investment
gains (losses) and interest rate spreads, increased income from policy fees on
investment-type products, favorable underwriting and lower expenses due to a
reduction in certain commission and expense liabilities. In addition, the Auto &
Home segment's earnings increased by $30 million, net of income taxes, primarily
due to an improved combined ratio and favorable claim development related to
prior accident years. These increases are partially offset by a decline in
Corporate & Other and the Institutional segment. The decrease in Corporate &
Other of $32 million, net of income taxes, is primarily due to an increase in
net investment losses, as well as higher interest expense, legal fees and
interest credited to bank deposits partially offset by higher net investment
income. The decrease in the Institutional segment of $23 million, net of income
taxes, is primarily due to a decline in net investment gains (losses), net of
adjustments to policyholder benefits and claims related to net investment gains
(losses).

Premiums, fees and other revenues increased by $730 million, or 11%, to
$7,092 million for the three months ended March 31, 2005 from $6,362 million
from the comparable 2004 period. The Institutional segment contributed $413
million, or 57%, to the period over period increase. This increase stems largely
from an increase in pension close outs and structured settlement sales, as well
as sales growth and the acquisition of

45

new business in the non-medical health & other business. In addition, the group
life business increased primarily due to improved sales and favorable
persistency. The International segment contributed $135 million, or 19%, to the
period over period increase primarily due to business growth through increased
sales and renewal business. The Individual segment contributed $103 million, or
14%, to the period over period increase primarily due to higher fee income,
active marketing of income annuity products and growth in the business in
traditional products. The growth in traditional products more than offset the
decline in premiums in the Company's closed block business as this business
continues to run-off. The Reinsurance segment contributed $90 million, or 12%,
to the Company's period over period increase in premiums, fees and other
revenues. This growth is primarily attributable to new and renewal premiums on
existing blocks of business, as well as favorable exchange rate movements. These
increases are partially offset by a $9 million, or 1%, decrease in the Auto &
Home segment mainly due to a reduction in earned exposures.

Interest rate margins, which generally represent the margin between net
investment income and interest credited to policyholder account balances,
increased by $55 million, net of income taxes, in the Institutional and
Individual segments for the three months ended March 31, 2005 compared to the
prior year period. Earnings from interest rate spreads are influenced by several
factors, including business growth, movement in interest rates, and certain
investment and investment-related transactions, such as corporate joint venture
income and bond and commercial mortgage prepayment fees for which the timing and
amount are generally unpredictable, and as a result, can fluctuate from period
to period. If interest rates remain low, it could result in compression of the
Company's interest rate spreads on several of its products, which provide
guaranteed minimum rates of return to policyholders. This compression could
adversely impact the Company's future financial results.

Underwriting results in the Institutional segment remained flat while the
Individual segment had favorable underwriting for the three months ended March
31, 2005. Underwriting results are significantly influenced by mortality and
morbidity trends, claim experience and the reinsurance activity related to
certain blocks of business, and, as a result, can fluctuate from period to
period. Underwriting results in the Auto & Home segment were favorable for the
three months ended March 31, 2005 as the combined ratio declined to 90.9%,
excluding catastrophes, from 96.5% in the prior year period. This result is
largely due to improved auto severities and continued improvement in homeowner
claim frequency.

Other expenses increased by $122 million, or 7%, to $1,973 million for the
three months ended March 31, 2005 from $1,851 million for the comparable 2004
period. Corporate & Other contributed $50 million, or 41%, to the period over
period variance primarily due to higher interest expense and legal fees, as well
as growth in the business at MetLife Bank, N.A. ("MetLife Bank"). The
International segment contributed $45 million, or 37%, to the period over period
variance primarily due to business growth commensurate with the revenue growth
discussed above. In addition, $42 million, or 34%, of this increase is primarily
attributable to the unfavorable variance resulting from a benefit related to
interest received on a settlement of federal income taxes recorded in the first
quarter of 2004 and an increase in non-deferrable volume-related expenses
associated with general business growth in the Institutional segment. The
Reinsurance segment contributed $23 million, or 19%, to this increase primarily
due to higher policy related costs and minority interest expense resulting from
growth in earnings. These increases were partially offset by $39 million, or a
32%, decline in the Individual segment. The Individual decline is primarily due
to lower expenses due to a reduction in certain commission and expense
liabilities.

Net investment gains (losses) decreased by $131 million, or 113%, to a net
investment loss of $15 million for the three months ended March 31, 2005 from a
net investment gain of $116 million for the comparable 2004 period. This
decrease is primarily due to continued portfolio repositioning in a higher
interest rate environment versus the prior year period.

Income tax expense for the three months ended March 31, 2005 is $350
million, or 30% of income from continuing operations before provision for income
taxes, compared with $290 million, or 31%, for the comparable 2004 period. The
2005 and 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.

46

Income from discontinued operations is comprised of the operations of SSRM
and net investment income and net investment gains related to real estate
properties that the Company has classified as available-for-sale. As previously
discussed, SSRM was sold effective January 31, 2005. Income from discontinued
operations, net of income taxes, increased by $142 million, or 309%, to $188
million for the three months ended March 31, 2005 from $46 million for the
comparable 2004 period. The increase is primarily due to the gain of $165
million, net of income taxes, on the sale of SSRM.

During the three months ended March 31, 2004, the Company recorded an $86
million charge, net of income taxes, for a 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. This charge is primarily related to those long-duration contract
liabilities where the amount of the liability is indexed to the performance of a
target portfolio of investment securities.

INSTITUTIONAL

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

THREE MONTHS ENDED MARCH 31, 2005 COMPARED WITH THE THREE MONTHS ENDED MARCH
31, 2004 -- INSTITUTIONAL

The Company's Institutional segment offers a broad range of group insurance
and retirement & savings products and services to corporations and other
institutions. Group insurance products are offered as either employer-paid
benefits, or as voluntary benefits where all or a portion of the premiums are
paid by the employee. Retirement & savings products and services include an
array of annuity and investment products, as

47

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 decreased by $23 million, or 6%, to $342
million for the three months ended March 31, 2005 from $365 million for the
comparable 2004 period. A decline of $24 million, net of income taxes, in net
investment gains (losses), net of adjustments of $34 million to policyholder
benefits and claims related to net investment gains (losses), is a significant
component of the decrease. Management attributes an $11 million increase, net of
income taxes, to an improvement in interest margins compared to the prior year
period, with the retirement & savings products and the non-medical health and
other products generating $5 million and $6 million, both net of income taxes,
respectively, of this increase. Higher earnings from growth in the asset base
and net variable items are the primary drivers of the period over period
increase, partially offset by generally lower investment spreads. These spreads
are generally the percentage point difference between the yield earned on
invested assets and the interest rate the Company uses to credit on certain
liabilities. Therefore, given a constant value of assets and liabilities, an
increase in interest rate spreads would result in higher income to the Company.
Interest rate spreads for the three months ended March 31, 2005 decreased to
1.99% and 1.47% from 2.17% and 1.64% in the comparable prior year period, for
the group life and retirement & savings businesses, respectively. The interest
rate spread for the non-medical health & other business increased to 1.89% from
1.61% in the comparable prior year period. Management generally expects these
spreads to be in the range of 1.60% to 1.80%, 1.20% to 1.35%, and 1.30% to 1.60%
for the group life, retirement & savings, and the non-medical health & other
businesses, respectively. Earnings from interest rate spreads are influenced by
several factors, including business growth, movement in interest rates, and
certain investment and investment-related transactions, such as corporate joint
venture income and bond and commercial mortgage prepayment fees for which the
timing and amount are generally unpredictable. As a result, income from these
investment transactions may fluctuate from period to period. Underwriting
results were mixed among the businesses, but flat overall compared to the prior
year period. The remaining variance is attributable to higher premiums, fees and
other revenues, which stem from general business growth, which were more than
offset by higher operating expenses.

Total revenues, excluding net investment gains (losses), increased by $522
million, or 14%, to $4,372 million for the three months ended March 31, 2005
from $3,850 million for the comparable 2004 period. Growth of $413 million in
premiums, fees, and other revenues contributed to the revenue increase.
Retirement & savings' premiums, fees and other revenues increased by $230
million, which is largely due to growth in premiums, resulting primarily from an
increase of $132 million in pension close-outs and $98 million in structured
settlement sales. Premiums, fees and other revenues from retirement & savings
products are significantly influenced by large transactions, and as a result,
can fluctuate from period to period. A $155 million increase in premiums, fees
and other revenues in the non-medical health & other business compared to the
prior year period is partly due to the continued growth in long-term care of $41
million, of which $17 million is related to the 2004 acquisition of TIAA/CREF's
long-term care business. Growth in the small market products, disability
business, and dental business contributed $105 million to the period over period
increase. Group life insurance premiums, fees and other revenues increased by
$28 million, net of $102 million in experience rated refunds, which management
primarily attributes to improved sales and favorable persistency. In addition,
net investment income increased $109 million primarily due to higher income from
growth in the asset base and net variable items, partially offset by generally
lower investment spreads. This increase is a component of the favorable interest
rate margins discussed above.

Total expenses increased by $470 million, or 14%, to $3,877 million for the
three months ended March 31, 2005 from $3,407 million for the comparable 2004
period. Policyholder benefits and claims increased by $369 million to $3,098
million for the three months ended March 31, 2005 from $2,729 million for the
comparable prior year period. This increase is primarily attributable to a $257
million and a $115 million increase in the retirement & savings and the
non-medical health & other businesses, respectively. These increases are
predominately attributable to the business growth referenced in the revenue
discussion above. The increases in the non-medical health & other business
include the impact of the acquisition of TIAA/CREF of approximately $15 million.
Partially offsetting these increases is a decline in group life of $3 million.
Interest credited to policyholder account balances increased by $59 million over
the prior year

48

period primarily as a result of the impact of growth in guaranteed interest
contracts within the retirement & savings business. Other operating expenses
increased $42 million. This increase is attributable to the unfavorable variance
resulting from a $21 million benefit recorded in the first quarter of 2004
related to interest received on a settlement of federal income taxes and a $21
million increase primarily due to an increase in non-deferrable volume related
expenses, which are associated with general growth in the business.

INDIVIDUAL

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

THREE MONTHS ENDED MARCH 31, 2005 COMPARED WITH THE THREE MONTHS ENDED MARCH
31, 2004 -- 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 $169 million, or 92%, to
$353 million for the three months ended March 31, 2005 from $184 million for the
comparable 2004 period. Included in this increase is an improvement in net
investment gains (losses) of $50 million, net of income taxes. Improvements in
interest rate spreads contributed $44 million, net of income taxes, to the
period over period increase. These spreads are generally the percentage point
difference between the yield earned on invested assets and the interest rate the
Company uses to credit on certain liabilities. Therefore, given a constant value
of assets and liabilities, an

49

increase in interest rate spreads would result in higher income to the Company.
Interest rate spreads are influenced by several factors, including business
growth, movement in interest rates, and certain investment and
investment-related transactions, such as corporate joint venture income and bond
and commercial mortgage prepayment fees, for which the timing and amount are
generally unpredictable. As a result, income from these investment transactions
may fluctuate from period to period. These types of investment transactions
contributed $16 million, net of income taxes, to the improvement in interest
rate spreads. Additionally, fee income increased by $40 million, net of income
taxes, primarily related to separate account products. Favorable underwriting
results in the traditional life products of $12 million, net of income taxes,
also added to the increase. These underwriting results are significantly
influenced by mortality experience and the reinsurance activity related to
certain blocks of business, and as a result can fluctuate from period to period.
Lower expenses of $30 million, net of income taxes, due to a reduction in
certain commission and expense liabilities and lower policyholder dividends of
$6 million, net of income taxes, contributed to the increase in income from
continuing operations. These increases in income from continuing operations are
partially offset by lower net investment income on traditional life products of
$5 million, net of income taxes and higher DAC amortization of $3 million, net
of income taxes.

Total revenues, excluding net investment gains (losses), increased by $144
million, or 5%, to $3,172 million for the three months ended March 31, 2005 from
$3,028 million for the comparable 2004 period. This increase includes higher fee
income primarily from separate account products of $60 million resulting from a
combination of growth in the business and improved overall market performance.
Policy fees from variable life and annuity and investment-type products are
typically calculated as a percentage of the average assets in policyholder
accounts. The value of these assets can fluctuate depending on equity
performance. In addition, management attributes higher premiums of $41 million
in 2005 to the active marketing of income annuity products and higher net
investment income of $41 million resulting from higher variable income and asset
base partially offset by a decline in bond yields. Although premiums associated
with the Company's closed block of business continue to decline as expected, the
growth in premiums of other traditional life products more than offset the
decline. Management attributes the increase in the other traditional products to
growth in the business.

Total expenses decreased by $40 million, or 1%, to $2,688 million for the
three months ended March 31, 2005 from $2,728 million for the comparable 2004
period. Lower expenses are primarily the result of a reduction in certain
commission and expense liabilities of $45 million and a $16 million decline in
interest credited to policyholder account balances due to lower crediting rates.
Also favorable underwriting results in the traditional life products of $18
million and lower policyholder dividends of $9 million resulting from reductions
in the dividend scale also contributed to the decline. Partially offsetting
these decreases in expenses is an increase in future policy benefits
commensurate with the increase in income annuity premiums of $41 million and
higher DAC amortization of $5 million. The increase in DAC amortization is a
result of growth in the business and management's update of assumptions in prior
periods used to determine estimated gross profits and margins. In addition, the
decline in policyholder benefits associated with the company's closed block were
more than offset by the increase in other traditional life products. Management
attributes the increase in the other traditional products to growth in the
business.

50

AUTO & HOME

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

THREE MONTHS ENDED MARCH 31, 2005 COMPARED WITH THE THREE MONTHS ENDED MARCH
31, 2004 -- 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 insurance and homeowner's insurance.

Net income increased by $30 million, or 65%, to $76 million for the three
months ended March 31, 2005 from $46 million for the comparable 2004 period.
This increase is primarily attributable to an improved non-catastrophe combined
ratio which resulted from favorable automobile severity and non-catastrophe
homeowner frequency of $12 million and $5 million, respectively, both net of
income taxes. Additionally, a decrease in catastrophes versus the prior year
period contributed $3 million, net of income taxes, and an improvement in the
development of prior year claims contributed $14 million, net of income taxes to
the 2005 period.

Total revenues decreased by $12 million, or 2%, to $780 million for the
three months ended March 31, 2005 from $792 million for the comparable 2004
period. This decrease is primarily attributable to a $9 million decrease in
premiums, resulting primarily from a reduction in earned exposures for the
automobile and homeowners line. The remainder of the decrease is due to a
reduction in net investment income.

Total expenses decreased by $57 million, or 8%, to $677 million for the
three months ended March 31, 2005 from $734 million for the comparable 2004
period. This decrease is predominantly related to improved automobile claim
severity of $19 million, improved non-catastrophe homeowners claim frequencies
of $8 million, fewer claims due to a smaller exposure base of $14 million, fewer
catastrophe claims of $5 million and favorable development of claims reported in
prior years of $22 million versus the prior year period. Offsetting these
improvements are increases in automobile claim frequency and homeowners claim
severity of $11 million. The combined ratio excluding catastrophes declined to
90.9% for the three months ended March 31, 2005 versus 96.5% for the comparable
2004 period.

51

INTERNATIONAL

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

THREE MONTHS ENDED MARCH 31, 2005 COMPARED WITH THE THREE MONTHS ENDED MARCH
31, 2004 -- INTERNATIONAL

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

Income from continuing operations increased by $10 million, or 15%, to $76
million for the three months ended March 31, 2005 from $66 million for the
comparable 2004 period. Included in the prior period were realized capital gains
of $20 million, net of income taxes, primarily due to the sale of the Spanish
operations. Excluding the sale of the Spanish operations, income from continuing
operations increased by $30 million, net of income taxes, over the comparable
2004 period. Mexico increased by $22 million, net of income taxes, primarily due
to growth in the business and higher investment income. Additionally, a decrease
in unrealized investment gains (losses) supporting certain policyholder
liabilities in Mexico resulted in a reduction in such liabilities. South Korea
increased by $7 million, net of income taxes, primarily due to higher sales of
its variable universal life product and better expense margins.

Total revenues, excluding net investment gains (losses), increased by $162
million, or 26%, to $774 million for the three months ended March 31, 2005 from
$612 million for the comparable 2004 period. This increase is primarily the
result of continued growth in the business through increased sales and renewal
business as well as higher investment income within South Korea, Mexico, Chile,
Taiwan and Brazil of $60 million, $47 million, $22 million, $13 million and $11
million, respectively. Additionally, a component of

52

this business growth and higher net investment income is due to changes in
foreign currency exchange rates of $20 million. The remainder of the increase
can be attributed to business growth in other countries.

Total expenses increased by $112 million, or 21%, to $656 million for the
three months ended March 31, 2005 from $544 million for the comparable 2004
period. Commensurate with the business growth discussed above, expenses grew by
$50 million, $20 million, $10 million and $8 million for the operations in South
Korea, Chile, Taiwan and Brazil, respectively. Mexico's expenses increased by
$22 million, primarily due to the growth discussed above, which was partially
offset by a reduction in certain policyholder liabilities of $11 million as
explained above. Additionally, a component of this business growth is due to
changes in foreign currency exchange rates of $19 million. The remainder of the
increase can be attributed to business growth in other countries.

REINSURANCE

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

THREE MONTHS ENDED MARCH 31, 2005 COMPARED WITH THE THREE MONTHS ENDED MARCH
31, 2004 -- REINSURANCE

MetLife's Reinsurance segment is comprised of the life reinsurance business
of Reinsurance Group of America, Incorporated ("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.

Income from continuing operations increased by $7 million, or 29%, to $31
million for the three months ended March 31, 2005 from $24 million for the
comparable 2004 period. This increase is attributable to a 13%

53

increase in revenues, primarily due to premium growth across all of RGA's
geographical segments, particularly in Canada, the U.K. and South Africa.
Additionally, net investment income increased $21 million, net of income taxes,
or 24%, primarily related to an increase in the invested asset base. The growth
in income from continuing operations is partially offset by poor mortality
experience as a result of adverse claim experience in RGA's U.S. operation.

Total revenues, excluding net investment gains (losses), increased by $121
million, or 13%, to $1,079 million for the three months ended March 31, 2005
from $958 million for the comparable 2004 period primarily due to a $91 million,
or 11%, increase in premiums and a $31 million, or 24%, increase in net
investment income. The premium increase during the three months ended March 31,
2005 is mainly the result of new premiums from facultative and automatic
treaties and renewal premiums on existing blocks of business in the various
markets in which RGA operates. Favorable exchange rate movements also
contributed approximately $13 million to the increase. Premium levels are
significantly influenced by large transactions and reporting practices of ceding
companies, and as a result, can fluctuate from period to period. The growth in
net investment income is the result of the growth in RGA's operations and asset
base.

Total expenses increased by $118 million, or 13%, to $1,061 million for the
three months ended March 31, 2005 from $943 million for the comparable 2004
period. This increase is primarily attributable to an increase of $92 million in
policyholder benefits and claims, primarily associated with RGA's growth in
insurance in force of approximately $178 billion, and the aforementioned adverse
large claim experience in the U.S. Other expenses increased $23 million, or 10%.
Other expenses include policy related costs and therefore the increase is
generally consistent with premium growth. Additionally, other expenses include
minority interest expense which increased $4 million over the prior year period
due to growth in RGA's earnings.

CORPORATE & OTHER

The following table presents consolidated financial information for
Corporate & Other for the periods indicated:

54

THREE MONTHS ENDED MARCH 31, 2005 COMPARED WITH THE THREE MONTHS ENDED MARCH
31, 2004 -- CORPORATE & OTHER

Corporate & Other contains the excess capital not allocated to the business
segments, various start-up entities, including MetLife Bank and run-off
entities, as well as interest expense related to the majority of the Company's
outstanding debt and expenses associated with certain legal proceedings and
income tax audit issues. Additionally, the Company's asset management business,
including amounts reported as discontinued operations, is included in the
results of operations for Corporate & Other.

Loss from continuing operations increased by $32 million, or 68%, to $79
million for the three months ended March 31, 2005 from $47 million for the
comparable 2004 period. The decrease in earnings in 2005 over the prior year
period is primarily attributable to an increase in net investment losses of $63
million, as well as higher interest expense, legal fees and interest credited to
bank deposits at MetLife Bank of $17 million, $12 million and $7 million,
respectively, all of which are net of income taxes. This is partially offset by
an increase in net investment income of $46 million, net of income taxes. In
addition, the tax benefit increased by $19 million as a result of a change in
the Company's allocation of tax expense among segments.

Total revenues, excluding net investment gains (losses), increased by $71
million, or 116%, to $132 million for the three months ended March 31, 2005 from
$61 million for the comparable 2004 period. The increase in revenue is primarily
attributable to increases in income on fixed maturities due to a higher asset
base and higher yields from lengthening the duration of the maturities, as well
as increased income from corporate joint ventures and mortgage loans on real
estate.

Total expenses increased by $53 million, or 40%, to $186 million for the
three months ended March 31, 2005 from $133 million for the comparable 2004
period. This increase is attributable to higher interest expense of $27 million
as a result of the issuance of senior notes throughout 2004, as well as higher
legal expenses of $19 million. In addition, as a result of growth in the
business, interest credited to bank deposits increased by $11 million.

LIQUIDITY AND CAPITAL RESOURCES

For purposes of this discussion, the terms "MetLife" or the "Company" refer
to MetLife, Inc., a Delaware corporation (the "Holding Company"), and its
subsidiaries, including Metropolitan Life Insurance Company ("Metropolitan
Life").

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 New York Superintendent of Insurance (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, 2004, 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 NAIC adopted the Codification of Statutory Accounting Principles
("Codification") in 2001. Codification was intended to standardize regulatory
accounting and reporting to state insurance departments. However, statutory
accounting principles continue to be established by individual state laws and
permitted practices. The New York State Department of Insurance (the
"Department") has adopted Codification with certain modifications for the
preparation of statutory financial statements of insurance companies domiciled
in New York. Modifications by the various 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.
55

ASSET/LIABILITY MANAGEMENT

The Company actively manages its assets using an approach that balances
quality, diversification, asset/liability matching, liquidity and investment
return. The goals of the investment process are to optimize, net of income
taxes, risk-adjusted investment income and risk-adjusted total return while
ensuring that the assets and liabilities are managed on a cash flow and duration
basis. The asset/liability management process is the shared responsibility of
the Portfolio Management Unit, the Business Finance Asset/Liability Management
Unit, and the operating business segments under the supervision of the various
product line specific Asset/Liability Management Committees ("A/LM Committees").
The A/LM Committees' duties include reviewing and approving target portfolios on
a periodic basis, establishing investment guidelines and limits and providing
oversight of the asset/liability management process. The portfolio managers and
asset sector specialists, who have responsibility on a day-to-day basis for risk
management of their respective investing activities, implement the goals and
objectives established by the A/LM Committees.

The Company establishes target asset portfolios for each major insurance
product, which represent the investment strategies used to profitably fund its
liabilities within acceptable levels of risk. These strategies include
objectives for effective duration, yield curve sensitivity, convexity,
liquidity, asset sector concentration and credit quality. In executing these
asset/liability-matching strategies, management regularly re-evaluates the
estimates used in determining the approximate amounts and timing of payments to
or on behalf of policyholders for insurance liabilities. Many of these estimates
are inherently subjective and could impact the Company's ability to achieve its
asset/liability management goals and objectives.

LIQUIDITY

Liquidity refers to a company's ability to generate adequate amounts of
cash to meet its needs. The Company's liquidity position (cash and cash
equivalents and short-term investments, excluding securities lending) was $5.2
billion and $5.4 billion at March 31, 2005 and December 31, 2004, respectively.
Liquidity needs are determined from a rolling 12-month forecast by portfolio and
are monitored daily. Asset mix and maturities are adjusted based on forecast.
Cash flow testing and stress testing provide additional perspectives on
liquidity. The Company believes that it has sufficient liquidity to fund its
cash needs under various scenarios that include the potential risk of early
contractholder and policyholder withdrawal. The Company includes provisions
limiting withdrawal rights on many of its products, including general account
institutional pension products (generally group annuities, including guaranteed
investment contracts ("GICs"), and certain deposit funds liabilities) sold to
employee benefit plan sponsors. Certain of these provisions prevent the customer
from making withdrawals prior to the maturity date of the product.

In the event of significant unanticipated cash requirements beyond normal
liquidity, the Company has multiple liquidity alternatives available based on
market conditions and the amount and timing of the liquidity need. These options
include cash flows from operations, the sale of liquid assets, global funding
sources and various credit facilities.

The Company's ability to sell investment assets could be limited by
accounting rules including rules relating to the intent and ability to hold
impaired securities until the market value of those securities recovers.

In extreme circumstances, all general account assets within a statutory
legal entity are available to fund any obligation of the general account within
that legal entity.

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
includes provisions limiting withdrawal rights on many of its products,
including general account institutional pension products (generally group
annuities, including GICs and certain deposit fund liabilities) sold to employee
benefit plan sponsors.

56

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, marketable fixed maturity and equity
securities. Liquid assets exclude assets relating to securities lending and
dollar roll activities. At March 31, 2005 and December 31, 2004, the Company had
$139 billion and $136 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, 2005 and December 31, 2004, the Company had $1.1 billion and
$1.4 billion in short-term debt outstanding, and long-term debt outstanding
remained at $7.4 billion for both periods.

MetLife Funding, Inc. ("MetLife Funding"), a subsidiary of Metropolitan
Life, serves as a centralized finance unit for the Company. Pursuant to a
support agreement, the Company has agreed to cause MetLife Funding to have a
tangible net worth of at least one dollar. At March 31, 2005 and December 31,
2004, MetLife Funding had a tangible net worth of $11.1 million and $10.9
million, respectively. MetLife Funding raises funds from various funding sources
and uses the proceeds to extend loans, through MetLife Credit Corp., another
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, 2005 and December 31, 2004, MetLife Funding had total
outstanding liabilities, including accrued interest payable, of $1,125 million
and $1,448 million, respectively, consisting primarily of commercial paper.

Credit Facilities. The Company maintains committed and unsecured credit
facilities aggregating $2.8 billion ($1.1 billion expiring in 2005, $175 million
expiring in 2006 and $1.5 billion expiring in 2009). 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 $2.5 billion of the facilities also serve as back-up lines of credit for the
Company's commercial paper programs. At March 31, 2005, the Company had drawn
approximately $55.4 million under the facilities expiring in 2005 at interest
rates ranging from 5.38% to 6.08% and approximately $50 million under a facility
expiring in 2006 at an interest rate of 3.48%. In March 2005, the Company
entered into a $250 million letter of credit facility expiring in 2015. In April
2005, the Company replaced the $1 billion credit facility expiring in 2005 with
a $1.5 billion five-year credit facility expiring in 2010. See "-- Subsequent
Events."

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.

57

The following table summarizes the Company's major contractual obligations
as of March 31, 2005:

- ---------------

(1) Other long-term liabilities include various investment-type products with
contractually scheduled maturities, including guaranteed interest contracts,
structured settlements, pension closeouts, certain annuity policies and
certain indemnities.

(2) Other long-term liabilities include benefit and claim liabilities for which
the Company believes the amount and timing of the payment is essentially
fixed and determinable. Such amounts generally relate to (i) policies or
contracts where the Company is currently making payments and will continue
to do so until the occurrence of a specific event, such as death, and (ii)
life insurance and property and casualty incurred and reported claims.
Liabilities for future policy benefits of approximately $71.2 billion and
policyholder account balances of approximately $80.3 billion at March 31,
2005, have been excluded from this table. Amounts excluded from the table
are generally comprised of policies or contracts where (i) the Company is
not currently making payments and will not make payments in the future until
the occurrence of an insurable event, such as death or disability, or (ii)
the occurrence of a payment triggering event, such as a surrender of a
policy or contract, is outside of the control of the Company. The
determination of these liability amounts and the timing of payment are not
reasonably fixed and determinable since the insurable event or payment
triggering event has not yet occurred. Such excluded liabilities primarily
represent future policy benefits of approximately $60.7 billion relating to
traditional life, health and disability insurance products and policyholder
account balances of approximately $29.3 billion relating to deferred
annuities, approximately $22.0 billion for group and universal life products
and approximately $16.4 billion for funding agreements without fixed
maturity dates. Significant uncertainties relating to these liabilities
include mortality, morbidity, expenses, persistency, investment returns,
inflation and the timing of payments. See "-- Liquidity and Capital
Resources -- The Company -- Asset/Liability Management."

Amounts included in other long-term liabilities reflect estimated cash
payments to be made to policyholders. Such cash outflows reflect adjustments
for the estimated timing of mortality, retirement, and other appropriate
factors, but are undiscounted with respect to interest. The amount shown in
the more than five years column represents the sum of cash flows, also
adjusted for the estimated timing of mortality, retirement and other
appropriate factors and undiscounted with respect to interest, extending for
more than 100 years from the present date. As a result, the sum of the cash
outflows shown for the three months ended in the table of $81.7 billion
exceeds the corresponding liability amounts of $36.9 billion included in the
unaudited interim condensed consolidated financial statements at March 31,
2005. The liability amount in the unaudited interim condensed consolidated
financial statements reflects the discounting for interest, as well as
adjustments for the timing of other factors as described above.

(3) 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.

58

(4) 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, 2005, and relative to its liquidity program, the Company
had no material (individually or in the aggregate) purchase obligations or
material (individually or in the aggregate) unfunded pension or other
postretirement benefit obligations due within one year.

Letters of Credit. At March 31, 2005 and December 31, 2004, the Company
had outstanding $1,121 million and $961 million, respectively, in letters of
credit from various banks. The letters of credit outstanding at March 31, 2005
and December 31, 2004, all expire within one year except for $250 million in the
current period which expires in ten years. 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. 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, 2005, 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, 2004.

In connection with the Company's acquisition of GenAmerica Financial
Corporation ("GenAmerica"), Metropolitan Life entered into a net worth
maintenance agreement with 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, 2005, 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, 2004.

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, 2005, 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, 2004.

59

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
in addition to those discussed elsewhere herein 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.

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 elsewhere herein in connection with specific
matters. In some of the matters referred to herein, 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
unaudited interim condensed 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.

Other. 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, and meet its cash needs. The nature of the
Company's diverse product portfolio and customer base lessens the likelihood
that normal operations will result in any significant strain on liquidity.

Pending Acquisition. See "-- The Holding Company -- Liquidity
Uses -- Pending Acquisition."

Consolidated cash flows. Net cash provided by operating activities was
$1,978 million and $1,126 million for the three months ended March 31, 2005 and
2004, respectively. The $852 million increase in operating cash flows in 2005
over the comparable 2004 period is primarily attributable to continued growth in
the traditional, variable and universal life and annuity businesses. In
addition, an increase in MetLife Bank's customer deposits, particularly in
personal and business savings accounts, contributed to the increase in operating
cash flows.

Net cash used in investing activities was $3,963 million and $2,975 million
for the three months ended March 31, 2005 and 2004, respectively. The $988
million increase in net cash used in investing activities in 2005 over the
comparable 2004 period is primarily due to an increase in the purchases of fixed
maturities. This was partially offset by proceeds from the sale of fixed
maturities and mortgage and consumer loans, an increase in the amount of
securities lending cash collateral invested in connection with the program and a
decrease in cash used for the purpose of short-term investments.

Net cash provided by financing activities was $1,804 million and $1,262
million for the three months ended March 31, 2005 and 2004, respectively. The
$542 million increase in net cash provided by financing activities in 2005 over
the comparable 2004 period is primarily attributable to a decrease in repayments
of short-term debt related to dollar roll activity and an increase in net cash
provided by policyholder account balances. In addition, the 2004 period includes
the purchase of treasury stock under the authorization of the Holding Company's
common stock repurchase program.

60

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, 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, 2005,
MetLife, Inc. and MetLife Bank were in compliance with the aforementioned
guidelines.

LIQUIDITY

Liquidity 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 credit 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 debt transactions and exposure to contingent draws on the
Holding Company's liquidity.

LIQUIDITY SOURCES

Dividends. The primary source of the Holding Company's liquidity is
dividends it receives from Metropolitan Life. Under New York State Insurance
Law, Metropolitan Life is permitted, without prior insurance regulatory
clearance, to pay dividends 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 surplus to policyholders 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 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 Superintendent and the
Superintendent does not disapprove the distribution. Under New York State
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 State Department of
Insurance 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

61

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, marketable fixed maturity and
equity securities. Liquid assets exclude assets relating to securities lending
and dollar roll activities. At March 31, 2005 and December 31, 2004, the Holding
Company had $1,782 million and $2,090 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, 2005 and December 31, 2004, the Holding Company had no
short-term debt outstanding. At both March 31, 2005 and December 31, 2004, the
Holding Company had $5.7 billion in long-term debt outstanding.

As of March 31, 2005, the Holding Company has issued an aggregate principal
amount of senior debt of $1.2 billion under the Company's shelf registration
statement filed in the first quarter of 2004 (the "2004 Registration Statement")
.. Approximately $44 million of registered but unissued securities remaining from
the Company's 2001 $4.0 billion shelf registration statement ("2001 Registration
Statement") was carried over to 2004 Registration Statement. The Holding Company
issued senior debt in the aggregate principal amount of $2.95 billion under the
2001 Registration Statement from November 2001 through November 2003. In
addition, under this 2001 Registration Statement, in February 2003, the Holding
Company remarketed debentures in the aggregate principal amount of $1.01 billion
in accordance with the terms of the then-outstanding equity security units.

On December 9, 2004, the Holding Company issued 350 million pounds sterling
aggregate principal amount of 5.375% senior notes due December 9, 2024. The
senior notes were initially offered and sold outside the United States in
reliance upon Regulation S under the Securities Act of 1933, as amended. Up to
35 million pounds sterling, or $66.8 million (translated from pounds sterling to
U.S. dollars using the noon buying rate for pound sterling on November 30, 2004
as announced by the Federal Reserve Bank of New York) of the senior notes
initially offered and sold outside the United States may be resold in the United
States pursuant to the Company's shelf registration statement.

The following table summarizes the Holding Company's senior debt issuances:

- ---------------

(1) This amount represents the translation of 350 million pounds sterling into
U.S. Dollars using the noon buying rate on March 31, 2005 of $1.889 as
announced by the Federal Reserve Bank of New York.

62

(2) On July 23, 2004, the Holding Company reopened its June 3, 2004 senior notes
offering and increased the principal outstanding on the 5.50% notes due June
2014, from $200 million to $350 million and on the 6.38% notes due June
2034, from $400 million to $750 million.

(3) This table excludes the remarketed debentures of $1.01 billion and any
premium or discount on the senior debt issuances.

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 facilities aggregating $2.5 billion ($1 billion expiring in 2005 and $1.5
billion expiring in 2009, which it shares with Metropolitan Life and MetLife
Funding). Borrowings 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, 2005, none of the Holding Company, Metropolitan
Life or MetLife Funding had borrowed against these credit facilities. In April
2005, the Holding Company replaced the $1 billion credit facility expiring in
2005 with a $1.5 billion five-year credit facility expiring in 2010. See
"-- Subsequent Events."

LIQUIDITY USES

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

Dividends. On September 28, 2004, the Holding Company's Board of Directors
approved an annual dividend for 2004 of $0.46 per share payable on December 13,
2004 to shareholders of record on November 5, 2004. The 2004 dividend represents
a 100% increase from the 2003 annual dividend of $0.23 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/Loans to Affiliates. During the three months ended
March 31, 2005 and 2004, the Holding Company contributed an aggregate of $430
million and $75 million to various subsidiaries, respectively.

Share Repurchase. On October 26, 2004, the Holding Company's Board of
Directors authorized a $1 billion common stock repurchase program. This program
began after the completion of the February 19, 2002 and March 28, 2001
repurchase programs, each of which authorized the repurchase of $1 billion of
common stock. 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.

On December 16, 2004, the Holding Company repurchased 7,281,553 shares of
its outstanding common stock at an aggregate cost of approximately $300 million
under an accelerated share repurchase agreement with a major bank. The bank
borrowed the stock sold to the Holding Company from third parties and purchased
the shares in the open market to return to the lenders. The Holding Company
received a cash adjustment based on the actual amount paid by the bank to
purchase the shares of approximately $7 million. The Holding Company recorded
the initial repurchase of shares as treasury stock and recorded the amount
received as an adjustment to the cost of the treasury stock.

The following table summarizes the share repurchase activity of the Holding
Company for the three months ended March 31, 2005 and 2004:

63

At March 31, 2005, the Holding Company had approximately $710 million
remaining on its existing share repurchase program. As a result of the Holding
Company's agreement to acquire Travelers from Citigroup Inc., the Holding
Company has currently suspended its share repurchase activity. Future share
repurchases will be dependent upon several factors, including the Company's
capital position, its financial strength and credit ratings, general market
conditions and the price of the Company's common stock.

Letters of Credit. At March 31, 2005 and December 31, 2004, the Holding
Company had outstanding $161 million and $369 million, respectively, in the
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 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, as
subsequently amended, 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, 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, 2005, the capital and surplus of each of these subsidiaries
is 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, 2004.

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, its portfolio of liquid assets, anticipated securities
issuances 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, and meet its cash needs.

Pending Acquisition. On January 31, 2005, the Holding Company entered into
an agreement to acquire Travelers for a purchase price of $11.5 billion, subject
to adjustment as described in the acquisition agreement. As a condition to
closing, Citigroup Inc. and the Holding Company will enter into ten-year
agreements under which the Company will expand its distribution by making
products available through certain Citigroup distribution channels, subject to
appropriate suitability and other standards. On March 30, 2005, the Holding
Company announced the termination of the 30-day waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transaction is
expected to close in the summer of 2005. Approximately $1 billion to $3 billion
of the purchase price will be paid in MetLife stock with the remainder paid in
cash which will be financed through a combination of cash on hand, debt,
mandatorily convertible and perpetual preferred securities and selected asset
sales depending on market conditions, timing, valuation considerations and the
relative attractiveness of funding alternatives.

SUBSEQUENT EVENTS

On May 4, 2005, the Holding Company signed a commitment letter with term
sheet (the "Commitment Letter") with Bank of America, N.A. (the "Administrative
Agent"), Banc of America Securities LLC ("BAS") and Goldman Sachs Credit
Partners L.P. ("Goldman Sachs," and together with BAS, collectively, the "Lead
Arrangers"). Pursuant to the Commitment Letter, the Administrative Agent and
Goldman Sachs each agreed to provide up to $3.5 billion of a $7.0 billion
unsecured senior bridge credit facility (the "Bridge Facility"), and the Lead
Arrangers agreed, on a best efforts basis, to syndicate the Bridge Facility (the
lenders in such syndication, collectively, the "Lenders").

The Holding Company may determine to utilize some or all of the Bridge
Facility to finance a portion of the purchase price, as well as costs and
expenses, of the acquisition of Travelers. Funding under the Bridge Facility, if
it occurs, will occur on the same date as the closing of the Acquisition, but in
no event later than the first business day of February 2006 ("Funding").
Definitive loan documentation for the Bridge Facility is expected to be executed
in May 2005.
64

Conditions precedent to closing of the Bridge Facility are typical for
transactions of this type, including no material adverse change since December
31, 2004 in the business, assets, or condition of the Holding Company and its
subsidiaries, as a whole ("Material Adverse Change"). Conditions precedent to
Funding include (i) no Material Adverse Change, (ii) availability of all other
funds necessary to consummate the acquisition, (iii) review and acceptance by
the Administrative Agent and Lead Arrangers of the agreement relating to the
Acquisition, including amendments thereto and waivers therefrom, (iv) receipt of
assurances that the senior unsecured debt ratings will remain at or above a
specified level before and after the Acquisition, and (v) satisfaction of
certain financial covenants also found in other credit facilities of the Holding
Company.

On April 27, 2005, the Holding Company filed a universal shelf registration
statement (the "2005 Registration Statement") with the U.S. Securities and
Exchange Commission ("SEC"), covering $11 billion of securities. Approximately
$3.9 billion of additional registered but unissued securities remaining from the
2004 Registration Statement is being included in the 2005 Registration
Statement. The 2005 Registration Statement, once it has been declared effective
by the SEC, will permit the offer and sale, from time to time, of a wide range
of debt and equity securities. The terms of any offering will be established at
the time of the offering.

On April 25, 2005, the Holding Company entered into a $2.0 billion amended
and restated five-year letter of credit and reimbursement agreement (the "L/C
Agreement") under which the Holding Company agreed to unconditionally guarantee
reimbursement obligations of The Travelers Life and Annuity Reinsurance Company
("TLARC") with respect to reinsurance letters of credit issued pursuant to the
L/C Agreement. The L/C Agreement amends an agreement under which Citigroup
Insurance Holding Company, the parent of TLARC, is the guarantor of TLARC's
reimbursement obligations, but the Holding Company does not replace Citigroup
Insurance Holding Company as guarantor, and letters of credit continue to be
issued under the existing unamended agreement, until the closing of the
acquisition by the Holding Company of Travelers. The L/C Agreement expires five
years after the closing of the acquisition.

On April 22, 2005, the Holding Company and MetLife Funding (collectively,
the "Borrowers") entered into a $1.5 billion five-year credit agreement, the
proceeds of which will be used for general corporate purposes and to support the
Borrowers' commercial paper programs. All borrowings under the credit agreement
must be repaid by April 22, 2010, except that letters of credit outstanding on
that date may remain outstanding until April 22, 2011.

On April 22, 2005, the Holding Company publicly announced that it is no
longer considering selling some or all of the shares of RGA common stock
beneficially owned by it for the purpose of financing the acquisition of
Travelers. As of April 22, 2005, the Holding Company beneficially owned
approximately 51.5% of RGA's outstanding common shares.

OFF-BALANCE SHEET ARRANGEMENTS

There have been no material changes to the Company's off-balance sheet
arrangements since the filing of the Company's 2004 Annual Report on Form 10-K,
except the settlement of the Company's accelerated share repurchase agreement
and certain other items. See "-- The Holding Company-Liquidity Uses -- Share
Repurchase" and "-- Subsequent Events."

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 PRONOUNCEMENTS

In December 2004, the Financial Accounting Standards Board ("FASB") issued
Staff Position Paper ("FSP") 109-2, Accounting and Disclosure Guidance for the
Foreign Earnings Repatriation Provision within the American Jobs Creation Act of
2004 ("AJCA"). The AJCA introduced a one-time dividend received deduction on the
repatriation of certain earnings to a U.S. taxpayer. FSP 109-2 provides
companies additional

65

time beyond the financial reporting period of enactment to evaluate the effects
of the AJCA on their plans to repatriate foreign earnings for purposes of
applying Statement of Financial Accounting Standards ("SFAS") No. 109,
Accounting for Income Taxes. The Company is currently evaluating the
repatriation provision of the AJCA. If the repatriation provision is implemented
by the Company, the impact on the Company's income tax expense and deferred
income tax assets and liabilities would be immaterial.

In December 2004, the FASB issued SFAS No. 153 Exchange of Nonmonetary
Assets, an amendment of Accounting Principles Board ("APB") Opinion No. 29
("SFAS 153"). SFAS 153 amends prior guidance to eliminate the exception for
nonmonetary exchanges of similar productive assets and replaces it with a
general exception for exchanges of nonmonetary assets that do not have
commercial substance. A nonmonetary exchange has commercial substance if the
future cash flows of the entity are expected to change significantly as a result
of the exchange. The provisions of SFAS 153 are effective for nonmonetary asset
exchanges occurring in fiscal periods beginning after June 15, 2005 and must be
applied prospectively. SFAS 153 is not expected to have a material impact on the
Company's unaudited interim condensed consolidated financial statements.

In December 2004, the FASB revised SFAS No. 123, Accounting for Stock-Based
Compensation ("SFAS 123") and issued SFAS 123(r) Share-Based Payment ("SFAS
123(r)"). SFAS 123(r) provides additional guidance on determining whether
certain financial instruments awarded in share-based payment transactions are
liabilities. SFAS 123(r) also requires that the cost of all share-based
transactions be measured at fair value and recognized over the period during
which an employee is required to provide service in exchange for an award. The
revised pronouncement must be adopted by the Company by January 1, 2006. As
permitted under SFAS 148, Accounting for Stock-Based Compensation -- Transition
and Disclosure -- An Amendment of FASB Statement No. 123, the Company elected to
use the prospective method of accounting for stock options granted subsequent to
December 31, 2002. Options granted prior to January 1, 2003 will continue to be
accounted for under the intrinsic value method until the adoption of SFAS
123(r), and the pro forma impact of accounting for these options at fair value
will continue to be accounted for under the intrinsic value method until the
last of those options vest in 2005. As all stock options currently accounted for
under the intrinsic value method will vest prior to the effective date,
implementation of SFAS 123(r) will not have a significant impact on the
Company's unaudited interim condensed consolidated financial statements.

In May 2004, the FASB issued FSP No. 106-2, Accounting and Disclosure
Requirements Related to the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 ("FSP 106-2"), which provides accounting guidance to a
sponsor of a postretirement health care plan that provides prescription drug
benefits. The Company expects to receive subsidies on prescription drug benefits
beginning in 2006 under the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 based on the Company's determination that the
prescription drug benefits offered under certain postretirement plans are
actuarially equivalent to the benefits offered under Medicare Part D. FSP 106-2
was effective for interim periods beginning after June 15, 2004 and provides for
either retroactive application to the date of enactment of the legislation or
prospective application from the date of adoption of FSP 106-2. Effective July
1, 2004, the Company adopted FSP 106-2 prospectively and the postretirement
benefit plan assets and accumulated benefit obligation were remeasured to
determine the effect of the expected subsidies on net periodic postretirement
benefit cost. FSP 106-2 did not have a material impact on the Company's
unaudited interim condensed consolidated financial statements.

In March 2004, the Emerging Issues Task Force ("EITF") reached further
consensus on Issue No. 03-1, The Meaning of Other-Than-Temporary Impairment and
Its Application to Certain Investments ("EITF 03-1"). EITF 03-1 provides
accounting guidance regarding the determination of when an impairment of debt
and marketable equity securities and investments accounted for under the cost
method should be considered other-than-temporary and recognized in income. An
EITF 03-1 consensus reached in November 2003 also requires certain quantitative
and qualitative disclosures for debt and marketable equity securities classified
as available-for-sale or held-to-maturity under SFAS No. 115, Accounting for
Certain Investments in Debt and Equity Securities, that are impaired at the
balance sheet date but for which an other-than-temporary impairment has not been
recognized. The Company has complied with the disclosure requirements of EITF
03-1 which were effective December 31, 2003. The accounting guidance of EITF
03-1 relating to the
66

recognition of investment impairment which was to be effective in the third
quarter of 2004 has been delayed pending the development of additional guidance.
The Company is actively monitoring the deliberations relating to this issue at
the FASB and currently is unable to determine the ultimate impact, if any, EITF
03-1 will have on its unaudited interim condensed consolidated financial
statements.

In March 2004, the EITF reached consensus on Issue No. 03-6, Participating
Securities and the Two-Class Method under FASB Statement No. 128 ("EITF 03-6").
EITF 03-6 provides guidance on determining whether a security should be
considered a participating security for purposes of computing earnings per share
and how earnings should be allocated to the participating security. EITF 03-6
did not have an impact on the Company's earnings per share calculations or
amounts.

In March 2004, the EITF reached consensus on Issue No. 03-16, Accounting
for Investments in Limited Liability Companies ("EITF 03-16"). EITF 03-16
provides guidance regarding whether a limited liability company should be viewed
as similar to a corporation or similar to a partnership for purposes of
determining whether a noncontrolling investment should be accounted for using
the cost method or the equity method of accounting. EITF 03-16 did not have a
material impact on the Company's unaudited interim condensed consolidated
financial statements.

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"), as interpreted
by Technical Practices Aids issued by the American Institute of Certified Public
Accountants. 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. In June
2004, the FASB released FSP No. 97-1, Situations in Which Paragraphs 17(b) and
20 of FASB Statement No. 97, Accounting and Reporting by Insurance Enterprises
for Certain Long-Duration Contracts and for Realized Gains and Losses from the
Sale of Investments, Permit or Require Accrual of an Unearned Revenue Liability
("FSP 97-1") which included clarification that unearned revenue liabilities
should be considered in determining the necessary insurance benefit liability
required under SOP 03-1. Since the Company had considered unearned revenue in
determining its SOP 03-1 benefit liabilities, FSP 97-1 did not impact its
unaudited interim condensed consolidated financial statements. As a result of
the adoption of SOP 03-1, effective January 1, 2004, the Company decreased the
liability for future policyholder benefits for changes in the methodology
relating to various guaranteed death and annuitization benefits and for
determining liabilities for certain universal life insurance contracts by $4
million, which has been reported as a cumulative effect of a change in
accounting. This amount is net of corresponding changes in DAC, including VOBA
and unearned revenue liability ("offsets") under certain variable annuity and
life contracts and income taxes. 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 as derivatives under the provisions of 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 with
the change in the liability recorded as policyholder benefits and claims. 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 changes 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.
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 changes in accounting. Upon adoption of SOP 03-1, the Company

67

recorded a cumulative effect of a change in accounting of $86 million, net of
income taxes of $46 million, for the three months March 31, 2004.

INVESTMENTS

The Company's primary investment objective is to optimize, net of income
taxes, risk-adjusted investment income and risk-adjusted total return while
ensuring that assets and liabilities are managed on a cash flow and duration
basis. The Company is exposed to three primary sources of investment risk:

- Credit risk, relating to the uncertainty associated with the continued
ability of a given obligor to make timely payments of principal and
interest;

- Interest rate risk, relating to the market price and cash flow
variability associated with changes in market interest rates; and

- Market valuation risk.

The Company manages risk through in-house fundamental analysis of the
underlying obligors, issuers, transaction structures and real estate properties.
The Company also manages credit risk and market valuation risk through industry
and issuer diversification and asset allocation. For real estate and
agricultural assets, the Company manages credit risk and valuation risk through
geographic, property type and product type diversification and asset allocation.
The Company manages interest rate risk as part of its asset and liability
management strategies, product design, such as the use of market value
adjustment features and surrender charges, and proactive monitoring and
management of certain non-guaranteed elements of its products, such as the
resetting of credited interest and dividend rates for policies that permit such
adjustments.

COMPOSITION OF PORTFOLIO AND INVESTMENT RESULTS

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 at or for the three months ended March 31, 2005 and 2004:

- ---------------

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

(2) Fixed maturities includes $134 million and $1 million in ending assets and
investment income, respectively, relating to trading securities for the
three months ended March 31, 2005.

(3) Investment income from mortgage and consumer loans includes prepayment fees.

(4) Real estate and real estate joint venture income includes amounts classified
as discontinued operations of $39 million and $48 million for the three
months ended March 31, 2005 and 2004, respectively. Net investment gains
(losses) include $18 million and $20 million of gains classified as
discontinued operations for the three months ended March 31, 2005 and 2004,
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 $24 million and $14 million for the three
months ended March 31, 2005 and 2004, respectively. These amounts are
excluded from net investment gains (losses).

FIXED MATURITIES AND EQUITY SECURITIES AVAILABLE FOR SALE

Fixed maturities consist principally of publicly traded and privately
placed debt securities, and represented 74.5% and 73.9% of total cash and
invested assets at March 31, 2005 and December 31, 2004, respectively. Based on
estimated fair value, public fixed maturities represented $160,496 million, or
87.9%, and $154,456 million, or 87.4%, of total fixed maturities at March 31,
2005 and December 31, 2004, respectively. Based on estimated fair value, private
fixed maturities represented $22,023 million, or 12.1%, and $22,307 million, or
12.6%, of total fixed maturities at March 31, 2005 and December 31, 2004,
respectively.

69

In cases where quoted market prices are not available, fair values are
estimated using present value or valuation techniques. The fair value estimates
are made at a specific point in time, based on available market information and
judgments about the financial instruments, including estimates of the timing and
amounts of expected future cash flows and the credit standing of the issuer or
counterparty. Factors considered in estimating fair value include: coupon rate,
maturity, estimated duration, call provisions, sinking fund requirements, credit
rating, industry sector of the issuer and quoted market prices of comparable
securities.

The 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:

- ---------------

(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.

70

The following tables set forth the cost or amortized cost, gross unrealized
gain and loss, and estimated fair value of the Company's fixed maturities by
sector and equity securities, as well as the percentage of the total fixed
maturities holdings that each sector represents and the percentage of the total
equity securities at:

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(1) Equity securities primarily consist of investments in common and preferred
stocks and mutual fund interests. Such securities include private equity
securities with an estimated fair value of $475 million and $332 million at
March 31, 2005 and December 31, 2004, respectively.

Fixed Maturity and Equity Security Impairment. The Company classifies all
of its fixed maturities and equity securities as available-for-sale and marks
them to market through other comprehensive income, except for non-marketable
private equities, which are generally carried at cost. 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 in "Summary of
Critical Accounting Estimates -- Investments," 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.

The Company's review of its fixed maturities and equity securities for
impairments includes an analysis of the total gross unrealized losses by three
categories of securities: (i) securities where the estimated fair value had
declined and remained below cost or amortized cost by less than 20%; (ii)
securities where the estimated fair value had declined and remained below cost
or amortized cost by 20% or more for less than six months; and (iii) securities
where the estimated fair value had declined and remained below cost or amortized
cost by 20% or more for six months or greater. 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 impairments as investment losses and adjusts the cost
basis of the fixed maturities and equity securities accordingly. The Company
does not change the revised cost basis for subsequent recoveries in value.
Impairments of fixed maturities and equity securities were $19 million and $6
million for the three months ended March 31, 2005 and 2004, respectively. The
Company's three largest impairments totaled $18 million and $5 million for the
three months ended March 31, 2005 and 2004, respectively. The circumstances that
gave rise to these impairments were either financial restructurings or
bankruptcy filings. For the three months ended March 31, 2005 and 2004, the
Company sold or disposed of fixed maturities and equity securities at a loss
that had a fair value of $21,428 million and $3,041 million, respectively. Gross
losses excluding impairments for fixed maturities and equity securities were
$229 million and $76 million for the three months ended March 31, 2005 and 2004,
respectively.

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

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The gross unrealized loss related to the Company's fixed maturities and
equity securities at March 31, 2005 was $1,252 million. These securities are
concentrated by sector in U.S. corporates (29%); residential mortgage-backed
(23%); and foreign corporates (13%); and are concentrated by industry in
mortgage-backed (34%); finance (9%); and services (9%) (calculated as a
percentage of gross unrealized loss). Non-investment grade securities represent
5% of the $73,615 million fair value and 9% of the $1,252 million gross
unrealized loss.

The Company held four fixed maturities and equity securities with a gross
unrealized loss at March 31, 2005 greater than $10 million. These securities
represent 6% of the gross unrealized loss on fixed maturities and equity
securities where the estimated fair value had declined and remained below
amortized cost by less than 20% for less than six months.

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

- ---------------

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

The Company maintains a diversified corporate fixed maturity 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, 2005 and December 31, 2004, the Company's combined holdings in the ten
issuers to which it had the greatest exposure totaled $4,776 million and $4,967
million, respectively, which were less than 2% and less than 3%, respectively,
of the Company's total invested assets at such dates. The exposure to the
largest single issuer of corporate fixed maturities held at March 31, 2005 and
December 31, 2004 was $614 million and $631 million, respectively.

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:

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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, 2005 and December 31, 2004, $34,508 million and $31,768 million,
respectively, or 99.6% and 98.6%, respectively, of the residential
mortgage-backed securities were rated Aaa/AAA by Moody's or S&P.

At March 31, 2005 and December 31, 2004, $9,800 million and $8,750 million,
respectively, or 73.3% and 70.0%, respectively, of the commercial
mortgage-backed securities were rated Aaa/AAA by Moody's or S&P.

The Company's asset-backed securities are diversified both by sector and by
issuer. Credit card and home equity loan securitizations, accounting for about
28% and 27% of the total holdings, respectively, constitute the largest
exposures in the Company's asset-backed securities portfolio. Approximately
$6,899 million and $6,775 million, or 63.7% and 62.3%, of total asset-backed
securities were rated Aaa/AAA by Moody's or S&P at March 31, 2005 and December
31, 2004, 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 special purpose entities
("SPEs") 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. 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.

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. These beneficial interests are generally
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 gains (losses).

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 $339 million and $666 million at March 31,
2005 and December 31, 2004, respectively. The related net investment income
recognized was $4 million and $3 million for the three months ended March 31,
2005 and 2004, respectively.

TRADING SECURITIES

During the first quarter of 2005, the Company established a trading
securities portfolio to support investment strategies that involve the active
and frequent purchases and sales of securities. Trading securities are recorded
at fair value with subsequent changes in fair value recognized in net investment
income. Net investment income for the three months ended March 31, 2005 includes
$779 thousand of holding gains (losses) on securities classified as trading. Of
this amount, $515 thousand relates to trading securities still held at March 31,
2005. The Company did not have any trading securities during the three months
ended March 31, 2004.

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MORTGAGE AND CONSUMER LOANS

The Company's mortgage and consumer loans are principally collateralized by
commercial, agricultural and residential properties, as well as automobiles.
Mortgage and consumer loans comprised 13.1% and 13.6% of the Company's total
cash and invested assets as of March 31, 2005 and December 31, 2004,
respectively. The carrying value of mortgage and consumer loans 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 and consumer loans 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:

Restructured, Potentially Delinquent, Delinquent or Under Foreclosure. The
Company monitors its mortgage loan investments on an ongoing basis, including
reviewing loans that are restructured, potentially

75

delinquent, delinquent or under foreclosure. These loan classifications are
consistent with those used in industry practice.

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 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 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 records valuation allowances for loans that it deems impaired.
The Company's valuation allowances are 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. Such valuation allowances are established for the excess
carrying value of the mortgage loan over the present value of expected future
cash flows discounted at the loan's original effective interest rate, the value
of the loan's collateral or the loan's market value if the loan is being sold.
The Company records valuation allowances as investment losses. The Company
records subsequent adjustments to allowances as investment gains (losses).

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 69% of the $5,929 million of agricultural mortgage loans
outstanding at March 31, 2005 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

76

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.

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

Consumer Loans. Consumer loans consist of residential mortgages and auto
loans.

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 United States. At
March 31, 2005 and December 31, 2004, the carrying value of the Company's real
estate, real estate joint ventures and real estate held-for-sale was $4,306
million and $4,233 million, respectively, or 1.7%, and 1.8% 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

77

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:

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 $848 million and $953 million at March 31, 2005 and December
31, 2004, respectively, are net of valuation allowances of $0 million and $4
million, respectively, and net of prior year impairments of $6 million at both
March 31, 2005 and December 31, 2004.

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 "-- Investments -- Variable Interest
Entities."

On March 29, 2005, the Company entered into a contract to sell its One
Madison Avenue property in Manhattan for $918 million. The sale, which occurred
on April 29, 2005, is expected to result in a gain in excess of $420 million,
net of income taxes. On April 1, 2005, the Company entered into a contract to
sell its 200 Park Avenue property above Grand Central Station in Manhattan for
$1.72 billion. The sale, which occurred on May 4, 2005, is expected to result in
a gain in excess of $750 million, net of income taxes. Both properties are
included in Real Estate -- Held-for-Sale in the accompanying unaudited interim
condensed consolidated financial statements.

OTHER LIMITED PARTNERSHIP INTERESTS

The carrying value of other limited partnership interests (which primarily
represent ownership interests in pooled investment funds that make private
equity investments in companies in the United States and overseas) was $3,051
million and $2,907 million at March 31, 2005 and December 31, 2004,
respectively. 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 other limited
partnerships represented 1.2% of cash and invested assets at both March 31, 2005
and December 31, 2004.

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

OTHER INVESTED ASSETS

The Company's other invested assets consist principally of leveraged leases
and funds withheld at interest of $3,883 million and $3,916 million at March 31,
2005 and December 31, 2004, respectively. The leveraged

78

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 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 2.0% and
2.1% of cash and invested assets at March 31, 2005 and December 31, 2004,
respectively.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses a variety of derivatives, including swaps, forwards,
future and option contracts, to manage its various risks. 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 table below provides a summary of the notional amount and current
market or fair value of derivative financial instruments held at:

Credit Risk. The Company may be exposed to credit related losses in the
event of nonperformance by counterparties to derivative financial instruments.
Generally, the current credit exposure of the Company's derivative contracts is
limited to the fair value at the reporting date. The credit exposure of the
Company's derivative transactions is represented by the fair value of contracts
with a net positive fair value at the reporting date. Because exchange traded
futures and options are effected through regulated exchanges, and positions are
marked to market on a daily basis, the Company has minimal exposure to credit
related losses in the event of nonperformance by counterparties to such
derivative financial instruments.

The Company manages its credit risk by entering into derivative
transactions with creditworthy counterparties. In addition, the Company enters
into over-the-counter derivatives pursuant to master agreements that provide for
a single net payment to be made by one counterparty to another at each due date
and upon termination. Likewise, the Company effects exchange traded futures and
options through regulated exchanges and these positions are marked to market and
margined on a daily basis.

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VARIABLE INTEREST ENTITIES

The following table presents the total assets of and maximum exposure to
loss relating to VIEs for which the Company has concluded that (i) it is the
primary beneficiary and which are consolidated in the Company's unaudited
interim condensed consolidated financial statements at March 31, 2005, 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 at March 31, 2005. The assets of the
real estate joint ventures, other limited partnerships and other structured
investments are reflected at the carrying amounts at which such assets would
have been reflected on the Company's balance sheet had the Company
consolidated the VIE from the date of its initial investment in the entity.

(2) The maximum exposure to loss of the asset-backed securitizations 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, other
limited partnerships and other structured investments is equal to the
carrying amounts plus any unfunded commitments, reduced by amounts
guaranteed by other partners.

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

(4) Other limited partnerships include partnerships established for the purpose
of investing in real estate funds, 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.

(5) Other structured investments include an offering of a collateralized fund of
funds based on the securitization of a pool of private equity funds.

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 $29,938 million and
$26,564 million and an estimated fair value of $30,870 million and $27,974
million were on loan under the program at March 31, 2005 and December 31, 2004,
respectively. The Company was liable for cash collateral under its control of
$31,713 million and $28,678 million at March 31, 2005 and December 31, 2004,
respectively. Security collateral on deposit from customers may not be sold or
repledged and is not reflected in the unaudited interim condensed consolidated
financial statements.

SEPARATE ACCOUNTS

The Company had $85.8 billion and $86.8 billion held in its separate
accounts, for which the Company generally does not bear investment risk, at
March 31, 2005 and December 31, 2004, respectively. The Company manages each
separate account's assets in accordance with the prescribed investment policy
that

80

applies to that specific separate account. The Company establishes separate
accounts on a single client and multi-client commingled basis in compliance with
insurance laws. Effective with the adoption of SOP 03-1, on January 1, 2004, the
Company reports separately, as assets and liabilities, investments held in
separate accounts and liabilities of the separate accounts if (i) such separate
accounts are legally recognized; (ii) assets supporting the contract liabilities
are legally insulated from the Company's general account liabilities; (iii)
investments are directed by the contractholder; and (iv) all investment
performance, net of contract fees and assessments, is passed through to the
contractholder. The Company reports separate account assets meeting such
criteria at their fair value. Investment performance (including investment
income, net investment gains (losses) and changes in unrealized gains (losses))
and the corresponding amounts credited to contractholders of such separate
accounts are offset within the same line in the consolidated statements of
income.

The Company's revenues reflect fees charged to the separate accounts,
including mortality charges, risk charges, policy administration fees,
investment management fees and surrender charges. Separate accounts not meeting
the above criteria are combined on a line-by-line basis with the Company's
general account assets, liabilities, revenues and expenses.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company regularly analyzes its exposure to interest rate, equity market
and foreign currency exchange risk. As a result of that analysis, the Company
has determined that the fair value of its interest rate sensitive invested
assets is materially exposed to changes in interest rates, and that the amount
of that risk has changed from that reported on December 31, 2004. The equity and
foreign currency portfolios do not expose the Company to material market risk,
nor has the Company's exposure to those risks materially changed from that
reported on December 31, 2004.

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.
As disclosed in the 2004 Annual Report on Form 10-K, the Company uses a variety
of strategies to manage interest rate, equity, and foreign currency exchange
risk, including the use of derivative instruments.

RISK MEASUREMENT; SENSITIVITY ANALYSIS

The Company measures market risk related to its holdings of invested assets
and other financial instruments, including certain market risk sensitive
insurance contracts, based on changes in interest rates, equity prices and
currency exchange rates, utilizing a sensitivity analysis. This analysis
estimates the potential changes in fair value, cash flows and earnings based on
a hypothetical 10% change (increase or decrease) in interest rates, equity
prices and currency exchange rates. The Company believes that a 10% change
(increase or decrease) in these market rates and prices is reasonably possible
in the near-term. In performing this analysis, the Company used market rates at
March 31, 2005 to re-price its invested assets and other financial instruments.
The sensitivity analysis separately calculated each of MetLife's market risk
exposures (interest rate, equity price and foreign currency exchange rate)
related to its trading and non-trading invested assets and other financial
instruments. The sensitivity analysis performed included the market risk
sensitive holdings described above. The Company modeled the impact of changes in
market rates and prices on the fair values of its invested assets, earnings and
cash flows as follows:

Fair values. The Company bases its potential change in fair values on an
immediate change (increase or decrease) in:

- the net present values of its interest rate sensitive exposures resulting
from a 10% change (increase or decrease) in interest rates;

- the U.S. dollar equivalent balances of the Company's currency exposures
due to a 10% change (increase or decrease) in currency exchange rates;
and

- the market value of its equity positions due to a 10% change (increase or
decrease) in equity prices.

81

Earnings and cash flows. MetLife calculates the potential change in
earnings and cash flows on the change in its earnings and cash flows over a
one-year period based on an immediate 10% change (increase or decrease) in
market rates and equity prices. The following factors were incorporated into the
earnings and cash flows sensitivity analyses:

- the reinvestment of fixed maturity securities;

- the reinvestment of payments and prepayments of principal related to
mortgage-backed securities;

- the re-estimation of prepayment rates on mortgage-backed securities for
each 10% change (increase or decrease) in the interest rates; and

- the expected turnover (sales) of fixed maturities and equity securities,
including the reinvestment of the resulting proceeds.

The sensitivity analysis is an estimate and should not be viewed as
predictive of the Company's future financial performance. The Company cannot
assure that its actual losses in any particular year will not exceed the amounts
indicated in the table below. Limitations related to this sensitivity analysis
include:

- the market risk information is limited by the assumptions and parameters
established in creating the related sensitivity analysis, including the
impact of prepayment rates on mortgages;

- for derivatives which qualify as hedges, the impact on reported earnings
may be materially different from the change in market values;

- the analysis excludes other significant real estate holdings and
liabilities pursuant to insurance contracts; and

- the model assumes that the composition of assets and liabilities remains
unchanged throughout the year.

Accordingly, the Company uses such models as tools and not substitutes for
the experience and judgment of its corporate risk and asset/liability management
personnel. Based on its analysis of the impact of a 10% change (increase or
decrease) in market rates and prices, MetLife has determined that such a change
could have a material adverse effect on the fair value of its interest rate
sensitive invested assets. The equity and foreign currency portfolios do not
expose the Company to material market risk.

The table below illustrates the potential loss in fair value of the
Company's interest rate sensitive financial instruments at March 31, 2005. In
addition, the potential loss with respect to the fair value of currency exchange
rates and the Company's equity price sensitive positions at March 31, 2005 is
set forth in the table below.

The potential loss in fair value for each market risk exposure of the
Company's portfolio as of the period indicated was:

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The table below provides additional detail regarding the potential loss in
fair value of the Company's non-trading interest sensitive financial instruments
at March 31, 2005 by type of asset or liability.

This quantitative measure of risk has increased 25%, or ($919) million,
from ($3,650) million as of December 31, 2004. The primary reason for the
increase, accounting for ($569) million of the increase, is the rise in the
yield curve as of March 31, 2005 as compared to December 31, 2004. This measure
is based on a hypothetical 10% increase from the existing yield curve, so the
nominal increase in interest rates tested as of March 31, 2005 is larger than
the 10% increase tested as of December 31, 2004. The remainder of the change is
due to increased holdings, in particular additional interest rate floors.

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 as defined in
Exchange Act Rule 13a-15(f) during the quarter ended March 31, 2005 that have
materially affected, or are reasonably likely to materially affect, the Holding
Company's internal control over financial reporting.

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PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The following should be read in conjunction with Note 5 to the unaudited
interim condensed consolidated financial statements in Part I of this report.

The Company is a defendant in a large number of litigation matters. In some
of the matters, very large and/or indeterminate amounts, including punitive and
treble damages, are sought. Modern pleading practice in the United States
permits considerable variation in the assertion of monetary damages or other
relief. Jurisdictions may permit claimants not to specify the monetary damages
sought or may permit claimants to state only that the amount sought is
sufficient to invoke the jurisdiction of the trial court. In addition,
jurisdictions may permit plaintiffs to allege monetary damages in amounts well
exceeding reasonably possible verdicts in the jurisdiction for similar matters.
This variability in pleadings, together with the actual experience of the
Company in litigating or resolving through settlement numerous claims over an
extended period of time, demonstrate to management that the monetary relief
which may be specified in a lawsuit or claim bears little relevance to its
merits or disposition value. Thus, unless stated below, the specific monetary
relief sought is not noted.

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

On a quarterly and yearly basis, the Company reviews relevant information
with respect to liabilities for litigation and contingencies to be reflected in
the Company's consolidated financial statements. The review includes senior
legal and financial personnel. Unless stated below, estimates of possible
additional losses or ranges of loss for particular matters cannot in the
ordinary course be made with a reasonable degree of certainty. Liabilities are
established when it is probable that a loss has been incurred and the amount of
the loss can be reasonably estimated. It is possible that some of the matters
could require the Company to pay damages or make other expenditures or establish
accruals in amounts that could not be estimated as of March 31, 2005.

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 generally are referred to as "sales
practices claims."

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,
2005, there are approximately 328 sales practices lawsuits pending against
Metropolitan Life; approximately 49 sales practices lawsuits pending against New
England Mutual, New England Life Insurance Company, and New England Securities
Corporation (collectively, "New England"); and approximately 54 sales practices
lawsuits pending against General American. Metropolitan Life, New England 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.

84

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

Asbestos-Related Claims

Metropolitan Life received approximately 23,500 asbestos-related claims in
2004. During the first three months of 2005 and 2004, Metropolitan Life received
approximately 5,900 and 7,185 asbestos-related claims, respectively.

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.

The Company believes adequate provision has been made in its 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 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 with respect to the prior year was made under the excess insurance
policies in 2003, 2004 and 2005 for the amounts paid with respect to asbestos
litigation in excess of the retention. As the performance of the indices impacts
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. The foregone loss reimbursements
were approximately $8.3 million with respect to 2002 claims, $15.5 million with
respect
85

to 2003 claims and $15.1 million with respect to 2004 claims and estimated as of
March 31, 2005, to be approximately $73 million in the aggregate, including
future years.

Other

Prior to filing MetLife, Inc.'s June 30, 2003 Form 10-Q, MetLife announced
a $31 million charge, net of income taxes, 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 opened a
formal investigation of the matter and, in December 2004, NELICO received a
"Wells Notice" in connection with the SEC investigation. The staff of the SEC
recently notified NELICO that no enforcement action has been recommended against
NELICO.

The American Dental Association and three individual providers have sued
MetLife 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 granted in part and further pleadings and discovery will ensue.

As anticipated, the SEC issued a formal order of investigation related to
certain sales by a former MetLife sales representative to the Sheriff's
Department of Fulton County, Georgia. The Company is fully cooperating with
respect to inquiries from the SEC.

The Company has received a number of subpoenas and other requests from the
Office of the Attorney General of the State of New York seeking, among other
things, information regarding and relating to compensation agreements between
insurance brokers and the Company, whether MetLife has provided or is aware of
the provision of "fictitious" or "inflated" quotes and information regarding
tying arrangements with respect to reinsurance. Based upon an internal review,
the Company advised the Attorney General for the State of New York that MetLife
was not aware of any instance in which MetLife had provided a "fictitious" or
"inflated" quote. MetLife also has received subpoenas, including sets of
interrogatories, from the Office of the Attorney General of the State of
Connecticut seeking information and documents including contingent commission
payments to brokers and MetLife's awareness of any "sham" bids for business.
MetLife also has received a Civil Investigative Demand from the Office of the
Attorney General for the State of Massachusetts seeking information and
documents concerning bids and quotes that the Company submitted to potential
customers in Massachusetts, the identity of agents, brokers, and producers to
whom the Company submitted such bids or quotes, and communications with a
certain broker. The Company has received a subpoena from the District Attorney
of the County of San Diego, California. The subpoena seeks numerous documents
including incentive agreements entered into with brokers. The Florida Department
of Financial Services and the Florida Office of Insurance Regulation also have
served subpoenas on the Company asking for answers to interrogatories and
document requests concerning topics that include compensation paid to
intermediaries. MetLife is continuing to conduct an internal review of its
commission payment practices. The Company continues to fully cooperate with
these inquiries and is responding to the subpoenas and other requests.

Approximately fifteen broker-related lawsuits have been received. Two class
action lawsuits were filed in the United States District Court for the Southern
District of New York on behalf of proposed classes of all persons who purchased
the securities of MetLife, Inc. between April 5, 2000 and October 19, 2004
against MetLife, Inc. and certain officers of MetLife, Inc. In the context of
contingent commissions, the complaints allege that defendants violated the
federal securities laws by issuing materially false and misleading statements
and failing to disclose material facts regarding MetLife, Inc.'s financial
performance throughout the class period that had the effect of artificially
inflating the market price of MetLife Inc.'s securities. Three class action
lawsuits were filed in the United States District Court for the Southern
District of New York on behalf of proposed classes of participants in and
beneficiaries of Metropolitan Life Insurance Company's Savings and Investment
Plan against MetLife, Inc., the MetLife, Inc. Employee Benefits Committee,
certain officers of Metropolitan Life Insurance Company, and members of MetLife,
Inc.'s board of directors. In the context of contingent commissions, the
complaints allege that defendants violated their fiduciary obligations under

86

ERISA by failing to disclose to plan participants who had the option of
allocating funds in the plan to the MetLife Company Stock Fund material facts
regarding MetLife, Inc.'s financial performance. The plaintiffs in these actions
seek compensatory and other relief. Two cases have been brought in California
state court against MetLife, Inc., other companies, and an insurance broker. One
of these cases alleges that the insurers and the broker violated Section 17200
of the California Business and Professions Code by engaging in unfair trade
practices concerning contingent commissions and fees paid to the broker; the
Company has been advised that the plaintiff intends to dismiss the action
without prejudice. The other case has been brought by the California Insurance
Commissioner and alleges that the defendants violated certain provisions of the
California Insurance Code. Additionally, two civil RICO and antitrust-related
class action lawsuits have been brought against MetLife, Inc., and other
companies in California federal court with respect to issues concerning
contingent commissions and fees paid to one or more brokers. Three class action
lawsuits have been brought in Illinois federal court against MetLife, Inc. and
other companies alleging that insurers and brokers violated antitrust laws or
engaged in civil RICO violations. One of the actions was dismissed and filed in
the United States District Court in the District of New Jersey. A multi-district
proceeding has been established in the Federal District Court in the District of
New Jersey, which will coordinate, for pre-trial purposes, many of these federal
court actions. A number of federal court actions already have been transferred
for pre-trial purposes to the Federal District Court in the District of New
Jersey. The Company intends to vigorously defend these cases.

In addition to those discussed above, regulators and others have made a
number of inquiries of the insurance industry regarding industry brokerage
practices and related matters and others may begin. It is reasonably possible
that MetLife will receive additional subpoenas, interrogatories, requests and
lawsuits. MetLife will fully cooperate with all regulatory inquiries and intends
to vigorously defend all lawsuits.

Metropolitan Life also has been named as a defendant in a number of
silicosis, welding and mixed dust cases in various states. The Company intends
to defend itself vigorously against these cases.

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

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.

87

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of common stock made by or on behalf of the Holding Company
during the three months ended March 31, 2005 are set forth below:

- ---------------

(1) During the periods January 1 -- January 31, 2005, February 1 -- February 28,
2005 and March 1 -- March 31, 2005, separate account affiliates of the
Holding Company purchased 0 shares, 7,857 shares and 1,278 shares,
respectively, of Common Stock on the open market in nondiscretionary
transactions to rebalance index funds. Except as disclosed 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 October 26, 2004, the Holding Company's Board of Directors authorized a
$1 billion common stock repurchase program. This program began after the
completion of the February 19, 2002 and March 28, 2001 repurchase programs,
each of which authorized the repurchase of $1 billion of common stock. 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. As a result of the Holding Company's agreement to
acquire Travelers Insurance Company, excluding certain assets, most
significantly, Primerica, from Citigroup Inc., and substantially all of
Citigroup Inc.'s international insurance businesses ("Travelers"), the
Holding Company has currently suspended its share repurchase activity.
Future share repurchases will be dependent upon several factors, including
the Company's capital position, its financial strength and credit ratings,
general market conditions and the price of the Company's common stock.

On December 16, 2004, the Holding Company repurchased 7,281,553 shares of
its outstanding common stock at an aggregate cost of approximately $300
million under an accelerated share repurchase agreement with a major bank.
The bank borrowed the stock sold to the Holding Company from third parties
and purchased the shares in the open market to return to the lenders. The
Holding Company received a cash adjustment based on the actual amount paid
by the bank to purchase the shares of approximately $7 million. The Holding
Company recorded the initial repurchase of shares as treasury stock and
recorded the amount received as an adjustment to the cost of the treasury
stock.

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

The Holding Company's annual meeting of stockholders was held on April 26,
2005 (the "2005 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 III directors,
each for a term expiring at the Holding Company's 2008 annual meeting.

The directors whose terms continued after the 2005 Annual Meeting and the
years their terms expire are as follows:

Class I Directors -- Term Expires in 2006*

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

Class II Directors -- Term Expires in 2007

Curtis H. Barnette
Burton A. Dole, Jr.
Harry P. Kamen
James M. Kilts
Charles M. Leighton
- ---------------
* The Board of Directors elected C. Robert Henrikson to serve as a Class I
Director on April 26, 2005.

It was reported in MetLife Inc.'s proxy statement for the 2005 Annual
Meeting that all members of MetLife Inc.'s Board of Directors attended 75% or
more of all meetings of the Board of Directors and the Committees on which they
served during 2004.

ITEM 5. OTHER INFORMATION

On May 4, 2005, pursuant to its terms, the plan administrator (the
"Administrator") of the MetLife Deferred Compensation Plan for Officers (the
"Plan") amended such Plan to facilitate its overall administration and to allow
the Administrator to incorporate into the Plan other elective and non-elective
nonqualified deferred compensation arrangements with persons eligible to
participate in the Plan. Such arrangements will generally be subject to the
standard terms and conditions of the Plan, except to the extent specified in the
Plan or an annex thereto or as otherwise specified in writing by the
Administrator. To prevent any amount deferred under any such arrangement from
potentially becoming subject to certain additional taxes imposed on deferred
compensation

89

arrangements, the amended Plan expressly provides that no distributions will be
made in respect of any such non-qualified deferred compensation arrangements
pursuant to the distribution provisions of Sections 12, 13 or 14 of the Plan,
unless such arrangement otherwise provided on October 3, 2004.

The foregoing description of the Plan amendment is not complete and is
qualified in its entirety by reference to the complete text of the Plan
amendment, which is filed as Exhibit 10.1 hereto and incorporated herein by
reference.

On May 4, 2005, the plan administrator for the Metropolitan Life Auxiliary
Savings and Investment Plan (the "Auxiliary SIP") amended and restated the
Auxiliary SIP to merge the Metropolitan Life Supplemental Auxiliary Savings and
Investment Plan (the "Supplemental Auxiliary SIP") into the Auxiliary SIP.
Participants' interests formerly governed by the Supplemental Auxiliary SIP will
now be governed by the amended and restated Auxiliary SIP. In addition, the
Auxiliary SIP has been amended to add a limitations period for submitting claims
and a six-month limitations period for bringing suit challenging the denial of a
claim, following exhaustion of the plan's claims and review procedures. The
Auxiliary SIP is a nonqualified deferred compensation plan into which
Metropolitan Life makes contributions equal to the Company matching
contributions that would have been made under the Metropolitan Life Savings and
Investment Plan had certain tax law limitations not applied. Such contributions
are treated as if they had been invested in certain investments ("Simulated
Investments"). The merger of the Supplemental Auxiliary SIP into the Auxiliary
SIP is being done to allow participants greater flexibility in Simulated
Investments choices, as well as to consolidate two plans providing similar
benefits into one plan.

The foregoing description of the amended and restated Auxiliary SIP is not
complete and is qualified in its entirety by reference to the complete text of
the plan, which is filed as Exhibit 10.2 hereto and incorporated herein by
reference.

On May 4, 2005, the Holding Company signed a commitment letter with term
sheet (the "Commitment Letter") with Bank of America, N.A. (the "Administrative
Agent"), Banc of America Securities LLC ("BAS") and Goldman Sachs Credit
Partners L.P. ("Goldman Sachs," and together with BAS, collectively, the "Lead
Arrangers"). Pursuant to the Commitment Letter, the Administrative Agent and
Goldman Sachs each agreed to provide up to $3.5 billion of a $7.0 billion
unsecured senior bridge credit facility (the "Bridge Facility"), and the Lead
Arrangers agreed, on a best efforts basis, to syndicate the Bridge Facility (the
lenders in such syndication, collectively, the "Lenders").

The Holding Company may determine to utilize some or all of the Bridge
Facility to finance a portion of the purchase price, as well as costs and
expenses, of the acquisition of Travelers. Funding under the Bridge Facility, if
it occurs, will occur on the same date as the closing of the Acquisition, but in
no event later than the first business day of February 2006 ("Funding").
Definitive loan documentation for the Bridge Facility is expected to be executed
in May 2005.

Conditions precedent to closing of the Bridge Facility are typical for
transactions of this type, including no material adverse change since December
31, 2004 in the business, assets, or condition of the Holding Company and its
subsidiaries, as a whole ("Material Adverse Change"). Conditions precedent to
Funding include (i) no Material Adverse Change, (ii) availability of all other
funds necessary to consummate the acquisition, (iii) review and acceptance by
the Administrative Agent and Lead Arrangers of the agreement relating to the
Acquisition, including amendments thereto and waivers therefrom, (iv) receipt of
assurances that the senior unsecured debt ratings will remain at or above a
specified level before and after the Acquisition, and (v) satisfaction of
certain financial covenants also found in other credit facilities of the Holding
Company.

The foregoing description of the Commitment Letter is not complete and is
qualified in its entirety by reference to the Commitment Letter which is filed
hereto as Exhibit 10.3 and incorporated herein by reference.

90

Increases in the base salaries of certain senior executive officers of the
Company were approved by the Company's Compensation Committee. Each increase
became effective March 1, 2005. The increases are described in further detail
below:

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ITEM 6. EXHIBITS

10.1 Amendment Number One to the MetLife Deferred Compensation
Plan for Officers, dated May 4, 2005.
10.2 Metropolitan Life Auxiliary Savings and Investment Plan, as
amended and restated, effective May 4, 2005.
10.3 Commitment Letter, dated May 3, 2005, from Bank of America,
N.A., Banc of America Securities LLC and Goldman Sachs
Credit Partners L.P. to MetLife, Inc.
31.1 Certification of Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

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

METLIFE, 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 6, 2005

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EXHIBIT INDEX