The U.S. Department of Justice has made a non-public motion to have a lawsuit dismissed that was filed by MetLife four months ago over the "too big to fail" tag which the government applied to the New York-based global insurance provider, according to media reports.
The Justice Department did not immediately respond to a request for comment on why it is trying to have the lawsuit dismissed. The non-public motion was filed under seal; the DOJ has until May 18 to file a redacted public version of the motion, according to reports.
"Far from presenting systemic risk to the U.S. economy, MetLife is a source of financial stability," a spokesman from MetLife said in an email to DS News. "We strongly disagree with the arguments laid out by the government in its brief and look forward to responding in court next month."
MetLife sued the Financial Stability Oversight Council (FSOC) in the U.S. District Court for the District of Columbia in January to have the designation of "nonbank systemically important financial institution (SIFI)" removed. The FSOC notified MetLife in December 2014 that it had received the nonbank SIFI designation. MetLife is trying to have the designation removed because as a nonbank SIFI, it is subject to heightened regulation which the company says will increase compliance costs, hence increasing costs to consumers without any added safety benefit for the financial system.
"The company continues to believe that MetLife is not systemically important under the Dodd-Frank Act's criteria and has asked the U.S. District Court for the District of Columbia to review the decision," MetLife wrote on its website.
Roy Woodall, the Independent Member having insurance expertise on the FSOC, dissented from the Council's designation of MetLife as a nonbank SIFI because he did not believe that Metlife "could pose a threat the financial stability of the United States if it were to suddenly and inexplicably be in material financial distress and face imminent failure."
According to reports, other nonbanks to receive the SIFI designation were American International Group (AIG), Prudential Financial, and General Electric. MetLife is the first institution to challenge the SIFI designation.
MetLife has set up a portion of its website devoted to providing a "central point for information related to the judicial review of FSOC's designation."