Sept. 4 (Bloomberg) — MetLife Inc. was deemed systemically important by a panel of regulators, a decision that would subject the biggest U.S. life insurer to stricter Federal Reserve oversight.
"MetLife strongly disagrees" with the Financial Stability Oversight Council's move today, Chief Executive Officer Steven Kandarian said in a statement. "MetLife has served as a source of financial strength and stability during times of economic distress, including the 2008 financial crisis."
Also read: Is MetLife a threat?
Recommended For You
The decision is a potential defeat for Kandarian, who worked to avoid the systemically important designation. Kandarian, who has called regulatory uncertainty the primary challenge to meeting profit targets, met with regulators and lawmakers and submitted thousands of pages of supporting documents in opposing the label.
MetLife isn't ruling out any available remedy to the FSOC's decision, the New York-based insurer said. Today's vote was a proposed designation. The company has 30 days to request a hearing before the FSOC to contest the decision. After a hearing, regulators would hold a final vote on whether to designate MetLife.
The council today also "continued its discussion regarding its ongoing assessment of the asset-management industry and received an update from staff on these efforts," according to a statement released today by the Treasury Department.
Asset Managers
The FSOC had said in July it would focus on asset managers' activities and products, moving away from designating the firms systemically important. The regulators had previously discussed whether asset firms such as BlackRock Inc. and Fidelity Investments should be designated.
The council, which has 10 voting members and is led by Treasury Secretary Jacob J. Lew, doesn't release the names of companies unless a designation is made. The Treasury said in the statement that the vote "was unanimous with one member voting present."
The FSOC has been criticized by lawmakers and industry groups that want more information on the council's deliberations.
Benjamin Lawsky, New York's superintendent of financial services, said in a July 30 letter to Lew that MetLife's insurance businesses already are "carefully regulated" by his department. The insurer "does not engage in non-traditional, non-insurance activities that create any appreciable systemic risk," he wrote.
Oversight Panel
The FSOC's voting members also include the heads of the Fed, the Securities and Exchange Commission and the Federal Deposit Insurance Corp.
The council has designated three non-bank financial companies systemically important: insurers American International Group Inc. and Prudential Financial Inc., and General Electric Co.'s finance arm. A two-thirds vote, including Lew's, is required.
AIG, which received and then repaid a $182.3 billion U.S. bailout after it was unable to meet obligations at its derivatives unit, is one of the main reasons the FSOC was formed.
Created by the 2010 Dodd-Frank law, the council is charged with monitoring potential threats to the financial system. Under Dodd-Frank, bank-holding companies with more than $50 billion in assets, such as Citigroup Inc. and JPMorgan Chase & Co., are overseen by the Fed.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
