MetLife Inc. Chief Executive Officer Steven Kandarian said the insurer shouldn’t be designated a systemically important financial institution by U.S. regulators because its failure wouldn’t threaten other companies.
“We don’t think we’re a SIFI,” Kandarian told reporters March 4 in Washington. “We don’t have the interconnectedness. If we go down, no other company goes down.”
The Financial Stability Oversight Council, a group of regulators created by the Dodd-Frank law, can choose companies to be subject to Federal Reserve oversight, including tougher standards for capital and liquidity. American International Group Inc., Prudential Financial Inc. and General Electric Co.’s finance unit have all said they are in the final stage of review by the council, or FSOC.
Mary Miller, the Treasury Department’s undersecretary for domestic finance, said she hopes the council will vote on designations in the next few months.
MetLife, the largest U.S. life insurer, raised capital with a share sale amid the 2008 worldwide financial crisis, and didn’t accept rescue funds from the U.S. government.
Being named systemically important would hurt both customers and shareholders of the New York-based company, Kandarian said this week. MetLife is “serving a need” for financial protection, he said.
MetLife said last month that it had won government approval to deregister as a bank-holding company, as it sought to reduce U.S. oversight. The insurer completed the sale of its deposit business to GE in January.
Bank holding companies with more than $50 billion in assets, including Citigroup Inc., Bank of America Corp. and Goldman Sachs Group Inc., are automatically subject to heightened supervision by the Fed. The council, led by Treasury Secretary Jacob J. Lew and including Fed Chairman Ben S. Bernanke, can designate non-bank financial companies such as insurers, hedge funds and asset managers.
The Treasury, in previous statements, has said it doesn’t intend to announce which companies are being evaluated for possible designation. Treasury spokeswoman Suzanne Elio declined to comment.
William Wheeler, president of the Americas for MetLife, said in testimony to a House panel in May that if the largest U.S. insurers are named SIFIs and face “costly requirements,” they would “either have to raise the price of the products they offer, reduce the amount of risk they take on, or stop offering certain products altogether.”