“We truly believe we’re not systemically important,” says MetLife (MET) chief Steven Kandarian, who has embarked on a D.C. blitz to convince regulators not to label the insurer a SIFI, as has been done to AIG and Prudential.
Regulatory uncertainty - including not just the SIFI designation but what capital rules would follow - has helped make it tough to hit profit targets as a major share buyback continues to be on hold. MetLife, of course, exited its banking operation a couple of years ago, and never received a bailout during the financial crisis.
Dodd-Frank mandates that bank capital rules must also apply to insurers designated as SIFIs - an idea making little sense, but that never stopped D.C. Maine Senator Susan Collins - who wrote that part of the law - has even said this isn't what she intended, and has sponsored an amendment to revise. Congress has yet to vote on this.
Far more submissive in these matters is AIG, which knows better after receiving a massive D.C. bailout. "We’re being held to very high standards there and we welcome that," says Peter Hancock, the CEO of AIG's P&C operations.