MetLife CEO Urges Insurance Executives to Lobby on New Rules
Stock Chart for MetLife Inc (MET)
MetLife Inc.’s Robert Henrikson, chief executive officer of the biggest U.S. life insurer, urged executives of rival carriers to lobby regulators and lawmakers as the financial-industry overhaul is implemented.
“It’s imperative to maintain presence with policy makers,” Henrikson, chairman of the American Council of Life Insurers, said today at the group’s annual meeting in Baltimore. “The game is only in the fourth quarter. The fourth quarter is when the game is won and lost. We’ve been very successful but we cannot afford to drop our focus.”
The Dodd-Frank law, passed in July to prevent a repeat of the 2008 crisis, is the biggest overhaul of Wall Street since the Great Depression. The new rules, which empower regulators to guard against systemic risk and dismantle failing firms, will tighten regulation of New York-based MetLife, the company said in its second-quarter report.
“People in Washington, policymakers, need our help,” Henrikson said. “They need us as a resource to understand the implications and the unintended consequences and the collateral damage that can be done by language that is not appropriate for our industry.”
Financial firms are seeking to assist regulators as they write the rules to implement the measure, which was sponsored by Connecticut Senator Christopher Dodd and Massachusetts Representative Barney Frank, both Democrats. Edward Yingling, president of the American Bankers Association, said in July his group was ready to provide information and work with regulators.
MetLife may be subject to a level of oversight not applied to smaller competitors as the U.S. boosts scrutiny of companies whose failure could threaten the financial system. MetLife, which owns a federally regulated bank, was the only insurer whose assets were reviewed by the federal government in its 2009 stress tests of the biggest U.S. lenders.
“MetLife Inc. will be subject to enhanced prudential standards imposed on systemically significant financial companies,” the insurer said in its 10-Q quarterly filing published in August. “If MetLife, Inc. were to become insolvent or were in danger of defaulting on its obligations, it could be compelled to undergo liquidation” with the Federal Deposit Insurance Corp. as receiver, the company said.
MetLife and Prudential, the second-biggest U.S. life insurer, are expanding outside the U.S. after sidestepping the worst of the crisis. MetLife agreed to pay $15.5 billion for an American International Group Inc. unit to add businesses from Japan and Russia to Poland to Chile.
MetLife and Prudential, based in Newark, New Jersey, are raising capital to grow as bailed-out rivals retreat. AIG, once the world’s biggest carrier, is selling businesses to repay a U.S. rescue valued at $182.3 billion. Hartford Financial Services Group Inc. is winding down operations in Japan, while Lincoln National Corp. sold a unit in the U.K.
MetLife returned to profit in the fourth quarter after derivative hedges contributed to losses in the first nine months of 2009. It had about $5.5 billion of operating revenue from outside the U.S. in 2009, for about 11 percent of its total.
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