Dennis Kelleher, president and CEO of Better Markets, Inc.
“In this landmark case, MetLife seeks to nullify the FSOC’s judgment that, as one of the world’s largest and most interconnected insurance conglomerates, MetLife should be designated for enhanced supervision to help avoid a recurrence of the 2008 financial crisis,” Dennis Kelleher, Better Markets’ president and chief executive officer, wrote in the papers filed on Thursday. “A decision in favor of MetLife will not only rescind that important new layer of oversight but also cripple the FSOC’s ability in future cases to identify and address systemic risks before they materialize.”
Gibson Dunn partner Eugene Scalia, a lawyer for MetLife, the largest publicly traded insurance company in the country, declined to comment Friday.
Better Markets told Collyer that MetLife opposes the organization’s request to intervene to unseal documents. The oversight council, established under the Dodd-Frank Wall Street Reform and Consumer Protection Act, “takes no position at this time, but reserves the right to oppose after reviewing the motions,” according to Better Markets.
The council could not immediately be reached for comment.
Better Markets, in its submission to the court, said MetLife and the financial oversight panel have “deprived the public of its presumptive right of access” to court proceedings. In a strongly worded 52-page filing, the consumer advocate cited the significance of the case, which marks the first challenge of a nonbank financial company’s designation as “too big to fail.” (The oversight council designated three other nonbanks as “systemically important financial institutions”: American International Group Inc., General Electric Capital Corp. and Prudential Financial Inc.)
“It is difficult to conceive of a matter in which the public has a greater interest in understanding both the full reasoning of this court and the factual basis on which the court relies,” Kelleher, a former Skadden, Arps, Slate, Meagher & Flom partner, wrote for Better Markets. “Yet more than half of the record has been sealed as a result of the parties’ privately negotiated agreements.”
MetLife’s suit challenges its designation as a “nonbank systemically important financial institution.” Such institutions face greater regulatory oversight by the Federal Reserve.
In MetLife’s suit, Scalia and his Gibson Dunn team said the oversight council failed to fully consider the “state insurance regulatory regime” that monitors the insurance company, despite requirements that the council consider existing regulatory scrutiny.
MetLife’s lawyers went on to argue that the oversight council focused on the company’s size at the expense of other considerations that weighed against designation as a systemically significant institution. And the company’s attorneys said the council’s only voting member with expertise in the insurance industry dissented from the designation, which also drew opposition from the council’s nonvoting insurance commissioner representative.
Mike Scarcella contributed to this report.
