One of the nation’s largest insurance companies said on Tuesday it will fight a government decision that makes its financial health important to the nation's eocnomy.
New York-based MetLife is asking a federal court to examine last month's decision by the Financial Stability Oversight Council (FSOC) designating the firm as systemically important and allowing for stricter oversight under the Dodd-Frank financial law.
“We had hoped to avoid litigation after we presented substantial and compelling evidence to FSOC demonstrating that MetLife is not systemically important,” said Steven Kandarian, MetLife’s president and CEO.
“Now we will take the next step in the process established by the Dodd-Frank Act and ask a federal judge to review FSOC’s decision," he said.
Regulators use the designation for large firms — mostly banks — that they decide could seriously harm the economy if they fail as part of future efforts to avoid the near-collaspe of the financial system in 2008.
MetLife argues that the designation will harm competition among life insurers and negatively affect availability and affordability of financial protection for consumers.
“MetLife has always supported robust regulation of the life insurance industry and has operated under a stringent state regulatory system for decades,” Kandarian said.
“However, adding a new federal standard for just the largest life insurers and retaining a different standard for everyone else will drive up the cost of financial protection for consumers without making the financial system any safer," he said.
MetLife filed an action in the U.S. District Court in Washington, D.C.
The FSOC, under Dodd-Frank rules, has been designating companies as “systemically important financial institution” or SIFI.
“FSOC’s designation of MetLife is premature," Kandarian said.
"The council should wait until the rules are in place and it knows the impact on designated firms."
In 2013, the council designated Prudential Financial, American International Group and General Electric Capital Corp.