MetLife to meet skeptical regulators in bid to escape rules
By Douwe Miedema
WASHINGTON (Reuters) - MetLife, the largest U.S. insurer, will make a final plea on Monday to a group of U.S. regulators determined to subject it to tougher oversight as they probe which firms could pose a risk to the larger financial system.
MetLife will meet behind closed doors the heads of the agencies grouped together in the Financial Stability Oversight Council (FSOC), who want the Federal Reserve to oversee MetLife's business and force it to meet higher capital standards.
Metlife, unlike counterparts AIG and Prudential which have already been deemed "systemic" by FSOC, has vigorously fought the tag.
After FSOC in September proposed to add MetLife to that group, the insurer's chief executive Steven Kandarian hit back. He issued a statement saying MetLife was a source of strength during the 2008 financial crisis and that the insurer was "not ruling out any of the available remedies."
But observers say MetLife faces an uphill battle, especially after an international body of regulators had already deemed MetLife systemic on a global level in July 2013.
"MetLife has a strong case on the substance ... but the FSOC is not likely to listen," said Phillip Swagel, a professor at the University of Maryland School of Public Policy who was a senior Treasury official during the recent credit crisis.
FSOC is housed within the Treasury Department, which also chairs the group, and is comprised of the leaders of all the major U.S. financial regulators.
After hearing from MetLife on Monday, the first such in-person meeting between the insurer and the top regulators after months of staff-level talks, regulators will have 60 days for a final decision. MetLife can challenge the decision in court. Continued...