MetLife Inc. Chief Executive Officer Steven Kandarian was accompanied by Washington lawyer Eugene Scalia at a hearing Monday to challenge regulators’ proposal to subject the insurer to Federal Reserve oversight, a person with knowledge of the matter said.
MetLife Chief Financial Officer John Hele and General Counsel Ricardo Anzaldua also attended the hearing before the Financial Stability Oversight Council, said the person, who asked not to be identified because the meeting was private. Scalia, a partner at Gibson Dunn & Crutcher LLP, has filed several cases seeking to overturn regulations in the Dodd-Frank financial law.
The FSOC doesn’t publicly announce the names of companies it is evaluating until a final SIFI designation is made, the Treasury Department said in a statement.
The council also heard a presentation from the Commodity Futures Trading Commission on activity in the Treasury futures market the morning of Oct. 15, the Treasury said in its statement.
Treasuries surged Oct. 15, with benchmark 10-year yields falling the most since March 2009. Treasury trading volume reached the highest on record as about $924.3 billion in U.S. government debt changed hands, according to ICAP Plc, the world’s largest interdealer broker. The council didn’t give details on the CFTC’s presentation.
The stability council, which is led by Treasury Secretary Jacob J. Lew and includes Fed Chair Janet Yellen, proposed in September to designate New York-based MetLife a systemically important non-bank financial company. The council has 60 days to decide whether to confirm its proposed designation. If it does, MetLife could appeal in court.
Kandarian is pushing back against increased U.S. oversight that he has said could weigh on profits at the insurer. Designation as a systemically important non-bank financial institution would subject MetLife to regulation by the Fed, which hasn’t yet crafted final rules for such supervision.
Today’s MetLife hearing lasted 90 minutes, according to the person with knowledge of the matter. A Treasury official who requested anonymity said the meeting was about two hours long, without elaborating.
MetLife shares rose 0.1 percent today to $54.30, the highest closing price since Sept. 24.
The FSOC also decided not to rescind the designation of Prudential Financial Inc., the Treasury said. The council must reevaluate all designated firms annually. Prudential was designated in September 2013.
American International Group Inc. and General Electric Co.’s finance unit also were designated last year.
Prudential’s challenge to its designation was rejected by FSOC, and the Newark, New Jersey-based insurer opted against contesting the risk label in court. AIG and GE Capital didn’t request hearings.
The council, or FSOC, on Sept. 4 proposed designating MetLife by a 9-0 vote, with council member Roy Woodall, a former Kentucky insurance regulator, voting “present.” The panel has 10 voting members.
FSOC was created by the Dodd-Frank Act and given the authority to subject non-bank firms to extra oversight.
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