(Photo: Allison Bell/TA)

MetLife Inc. today asked a federal appeals court to give the Trump administration time to review the government’s process for designating systemically important financial institutions.

MetLife filed a motion seeking a freeze on the case, MetLife Inc. v. Financial Stability Oversight Council, while Treasury Secretary Steven Mnuchin conducts a 180-day review of the FSOC SIFI designation process. President Donald Trump issued the memorandum requesting the review Friday.

(Related: Insurers Get 180 Days of SIFI Designation Relief)

MetLife told the U.S. Court of Appeals for the D.C. Circuit that the Trump administration seems to share MetLife’s concerns about the transparency and fairness of the SIFI designation process. Mnuchin’s review could lead the administration to withdraw support for the process, and the court should give the administration a chance to change its position, MetLife said.

“As this court has recognized, ‘[a] change in administration brought about by the people casting their votes is a perfectly reasonable basis for an executive agency’s reappraisal’ of its positions,” MetLife said, citing a 2012 D.C. Circuit ruling.

Even if the administration continues to oppose MetLife, the Treasury secretary’s findings could shape how the court sees the case, MetLife said.

Eugene Scalia, a partner at Gibson, Dunn & Crutcher, led the legal team that filed the MetLife motion.

Dennis Kelleher, president of Better Markets, a group that supports the FSOC SIFI designation process, said he opposes the motion.

“MetLife is merely forum shopping and trying to substitute a political decision it is influencing for an independent judicial opinion that it cannot control and that will be based on the facts and law,” Kelleher said in a statement.

FSOC told MetLife it was a SIFI in December 2014.

Judge Rosemary Collyer of the U.S. District Court for the District of Columbia ruled against FSOC in March 2016. Collyer called FSOC’s decision to designate MetLife as a SIFI “arbitrary and capricious.” Obama administration lawyers appealed.

The SIFI designation has already had a direct effect on many agents and advisors: It was one of the factors that led MetLife to begin to spin off its retail life and annuity operations as separate company, Brighthouse Financial. 

FSOC

Congress began to work on the Dodd-Frank Act, legislation that created FSOC and the SIFI designation system, in 2009, in response to the credit default swaps meltdown that threatened the stability of the world financial system.

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FSOC is a committee that’s supposed to help U.S. financial services regulators notice, understand and manage problems that could bring down the country’s financial system, even if the problems occur at organizations other than banks.

The Treasury secretary is the FSOC chairman.

Congress tried to make FSOC flexible, in an effort to give it the ability to handle complicated, unexpected situations, and to try to reduce financial services companies’ ability to game the system.

MetLife, other financial services companies and some regulators say the SIFI selection process is too arbitrary and fails to give companies a meaningful chance to fight SIFI designation. 

— Read Bill to Be Introduced Exempting Insurers From SIFI Designation on ThinkAdvisor.