MetLife ‘too big to fail’ briefing schedule revisited

MetLife Inc. and the U.S. federal government have asked a federal appeals court to set a new briefing schedule in litigation related to the insurer’s “too big to fail” designation.

In December 2014, the Financial Stability Oversight Council voted to designate New York-based MetLife as a systemically important financial institution, subjecting it to stricter oversight and stricter capital requirements. But the insurer won a court challenge against the designation in March 2016 — a decision under appeal by the government.

On Aug. 2, the U.S. Court of Appeals for the District of Columbia Circuit held the MetLife litigation in abeyance pending the issuance of a U.S. Treasury Department report about the FSOC’s designation process. The Aug. 2 order directed the parties to file motions to govern future proceedings in the case upon issuance of the report, which was released by the department on Nov. 17, according to court documents filed on Monday.

MetLife and the federal government have now asked the court for approval for a supplemental brief due from MetLife on Dec. 18, with the government’s response due on Jan. 18.

In its report, the Treasury Department recommended a different approach to evaluating the potential risks posed by nonbank financial companies rather than the current method that led to MetLife and other insurers being tagged as “too big to fail.”

“The council’s authority to designate nonbank financial companies is a blunt instrument for addressing potential risks to financial stability,” the Treasury Department said in its report. “Treasury recommends that the council prioritize its efforts to address risks to financial stability through a process that emphasizes an activities-based or industrywide approach.”