CHICAGO--(BUSINESS WIRE)--Fitch Ratings views the federal court decision to strike down MetLife's designation as a non-bank systemically important financial institution (SIFI) as having no impact on the ratings assigned to MetLife (senior debt rated 'A-'). As a non-bank SIFI, MetLife has been subject to additional regulatory oversight by the Federal Reserve.
MetLife was designated in 2014 by the Financial Stability Oversight Council (FSOC) as a non-bank SIFI subject to regulation by the Federal Reserve and to enhanced supervision and prudential standards. Today's federal court decision was in response to MetLife's appeal of the SIFI designation, which argued that the SIFI designation process was flawed.
Fitch viewed the SIFI designation as neutral to the ratings assigned to MetLife as details regarding the enhanced supervision and prudential standards, including capital requirements, have been unclear. While enhanced capital standards can lead to a stronger balance sheet, which can be a ratings positive, they also can hurt competitiveness, which can be a ratings negative. Accordingly, Fitch views today's federal court decision as having no impact on MetLife's ratings.
Fitch does not expect today's court ruling to impact MetLife's plan to spin-off a substantial portion of its U.S. Retail business and, as a result, the ratings on MetLife's insurance subsidiaries that will be included in the spin-off remain on Rating Watch Negative.
Additional information is available at 'www.fitchratings.com'.