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MetLife Continues Fight Against Risk Designation

MetLife will plead against being branded a systemically important financial firm at a meeting this week with regulators, a company spokesman said...
November 4, 2014

MetLife will plead against being branded a systemically important financial firm at a meeting this week with regulators, a company spokesman said. The Financial Stability Oversight Council (FSOC) last month proposed adding MetLife to a small group of non-banks subject to tougher supervision because of their critical role in the financial system.

MetLife has said it would contest the designation, which brings stricter capital requirements, arguing its business does not have the potential to destabilize the system and that it was a "source of strength" during the 2007-09 crisis. Once MetLife has made its case at the closed meeting, the FSOC must decide within 60 days. Eventually, MetLife could challenge that final designation in court. So far, the FSOC has tapped two insurers – Prudential and AIG – for the designation, which has subjected them to supervision by the Federal Reserve on top of existing oversight by state regulators.

"Based on my experience as an insurance regulator, and a regulator of one of MetLife's larger insurance subsidiaries, I do not believe that MetLife's businesses and corporate structure create the kind of systemic risk that Dodd-Frank's SIFI designation process was designed to address," said Delaware Insurance Commissioner Karen Weldin Stewart, in a letter to U.S. Treasury Secretary Jacob Lew.

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