Insurance company MetLife has won the case against the government after a federal judge has ruled that it should not be subjected to strict regulations.
District of Columbia Judge Rosemary Collyer's ruling on the case could have a major effect on large financial companies that are known as systemically important financial institutions or SIFI. Collyer's decision on the case has denied the FSOC's request to dismiss MetLife's case. She had already made a decision on the current case in behalf of MetLife.
The reason for her ruling was not yet divulged, however, she ordered both parties to have a meeting on April 6, 2016, to discuss whether any of the portions of her sealed decision should be kept from public knowledge as per USA Today.
Insurance Journal reports that Judge Collyer questioned Justice Department's attorney Eric Beckenhauer regarding the council's vulnerability analysis of MetLife which was not conducted before creating their determination. She also asked Beckenhauer why the FSOC already assumed that MetLife would be on the edge of collapse in the event of a financial crisis.
The Financial Stability Overhead Council was created by the Congress in order to address the financial crisis. It is directed to dwell into any potential threats to financial stability according to CNBC. The FSOC was also the one who said that MetLife could pose a possible threat to the stability of the U.S financial and, therefore, be subjected to stricter oversight by the central bank of the United States.
A month after the recommendation, MetLife filed a suit against FSOC, claiming the council's recommendations are baseless and only arbitrary. It added that the council also violated the Dodd-Frank Act of 2010 which delegates the FSOC in preventing another crisis. The company said the council's decision in 2014 has denied MetLife a due process and has violated the separation of powers of the constitution.
On the other hand, the U.S Treasury Spokesperson said they strongly disagree with the decision of the judge, adding they trust that the FSOC's recommendations are legal. There were no reports yet on whether they will appeal the court's decision.
