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Aug. 15 — MetLife Inc. asked a federal appeals court to uphold a lower court's March decision stripping the insurer of its “systemically important” status imposed by a panel of federal regulators ( MetLife, Inc. v. Fin. Stability Oversight Council, D.C. Cir., No. 16-5086, appellee brief 8/15/16 ).
The Financial Stability Oversight Council veered from its own standards, made “unreasonable assumptions” and ignored insurance regulators when it tagged MetLife, the insurer said in an Aug. 15 brief to the U.S. Court of Appeals for the District of Columbia Circuit.
The regulators “consistently embraced unreasonable assumptions and counterfactual conjecture in the face of contrary historical examples,” MetLife argued.
The FSOC is attempting to overturn a decision by Judge Rosemary Collyer of the U.S. District Court for the District of Columbia, whose March decision was a setback for financial regulations enacted in the wake of the crisis (62 SLD, 3/31/16).
Collyer held that the FSOC didn't follow its own procedures when it applied the “systemically important financial institution” tag to the country's largest insurer, a decision that would subject it to additional regulation.
In July, the FSOC said Collyer was “profoundly mistaken” in undoing the SIFI designation and left “one of the largest, most complex, and most interconnected financial companies in the country without the regulatory oversight that Congress found essential” (122 SLD, 6/24/16) (118 SLD, 6/20/16).
The FSOC has designated three other nonbanks: American International Group Inc., Prudential Financial Inc., and GE Capital Inc. The first two didn't take any legal action, and the FSOC in June removed the SIFI tag from GE (126 SLD, 6/30/16).
The FSOC's voting members include the heads of the Federal Reserve, Securities and Exchange Commission, Federal Deposit Insurance Corporation and Commodity Futures Trading Commission. The council was established by Title I of the Dodd-Frank Act.
MetLife's reply brief is due Sept. 9. MetLife's attorney, Eugene Scalia of Gibson, Dunn & Crutcher LLP in Washington, has asked the court not to schedule oral argument between mid-October and mid-December, court records show.
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