MetLife was designated a systemically important financial institution (SIFI) by the Financial Stability Oversight Council (FSOC) today. Steven A. Kandarian, MetLife chairman, president and CEO, immediately issued a statement saying the company “strongly disagrees” with the decision and said the company is “not ruling out any of the available remedies under Dodd-Frank to contest a SIFI designation.”
The ruling, however, was stronger than the FSOC designation of Prudential Financial, which prompted objections from two FSOC members. In this case, the FSOC said in a statement that the vote was unanimous, “with one member voting present.” That, most likely, was S. Roy Woodall, Jr., an independent member of the board with insurance expertise. He voted to oppose Prudential Financial’s designation.
The designation was preliminary, as the FSOC noted, with the company now having 30 days to request a hearing before the FSOC to contest the proposed determination. After any hearing, the FSOC may make a final determination regarding the company.
“As noted in the FSOC’s interpretive guidance, the Council does not intend to publicly announce the name of any non-bank financial company that is under evaluation before a final determination is made,” the statement said. Kandarian’s comment likely confirmed that MetLife plans to challenge the designation.
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If denied, under the law, MetLife would have the ability to challenge the designation in court. At the same time, a decision by the U.S. Circuit Court of Appeals for the District of Columbia, meeting en banc earlier in the day, cast a shadow on the likelihood of MetLife winning a court challenge. That, combined with the lack of “no” votes on the designation, will likely play a role in whether MetLife ultimately decides to initiate a court challenge if its appeal is denied.