Dive Brief:
- MetLife Inc., the largest U.S. life insurer, has successfully challenged its designation as a systemically important financial institution (SIFI), which would have brought the company tighter government scrutiny and required it to increase its reserves. SIFIs are considered capable of triggering a financial crisis in the event of their failure.
- The designation by the Financial Stability Oversight Council was overturned Wednesday by a federal judge in Washington, LifeHealthPro reports.
- The judge sealed the reasons behind the new ruling.
Dive Insight:
MetLife's challenge, which it filed in 2015, is the largest so far to the council that includes Federal Reserve Chairwoman Janet Yellen and Treasury Secretary Jacob Lew, LifeHealthPro notes.
The company had argued its designation was unjustified and noted the council had failed to follow up on plans to conduct a “vulnerability analysis” before making its decision. MetLife CEO Steve Kandarian had said previously the SIFI designation was a “significant competitive disadvantage” to the company and that as a result it would offload a portion of its domestic retail business.
MetLife's stock went up 6% to $45.01 Wednesday morning compared to up 4.3% to $74.59 for Prudential Financial Inc., the second-largest U.S. life insurer, which is desginated as a SIFI and has not challenged it.