METLIFE RULING COULD SEE AIG SHAREHOLDERS PUSH ON SIFI

The recent federal court ruling that rescinded MetLife’s designation as a systemically important financial institution (SIFI) may encourage shareholders at AIG and Prudential - the other two insurer SIFI designees - to pressure those companies to make efforts to shed the label, Moody’s Investors Service said Tuesday. MetLife’s court victory removes the company from heightened oversight by the Federal Reserve, including stress-testing and more rigorous requirements for capital adequacy, liquidity and solvency. Moody’s said that AIG and Prudential could face calls from shareholders to challenge their SIFi designations to lower their costs of compliance and reduce uncertainty over capital levels. “Under the regulation, insurers can contest the designation during the annual re-evaluation - which would require the FSOC to issue an explanation of the decision - and, additionally, they can also pursue removal of the designation in court,” said Moody’s associate managing director Scott Robinson.