By Leslie Scism
MetLife. Inc. said its board has approved another $1 billion
purchase of its common stock, as the company expects to be named
"systemically important" by a new panel of federal regulators and
therefore potentially subject to stiff but yet-to-be-determined
capital rules.
The nation's largest U.S. life insurer by assets said its board
approved an increase in its authorization to repurchase its common
stock as the company has nearly completed a $1 billion common stock
buyback program that it initiated in June 2014.
Under the June program, a total of $967.1 million in MetLife
common stock has been repurchased as of Dec. 11, the company
said.
The company has told analysts in recent presentations that it is
generating ample excess capital as it awaits designation as a
potential "systemically important financial institution."
MetLife Chairman and Chief Executive Officer Steven A. Kandarian
said in a news release that the company's "approach to capital
management remains cautious in light of regulatory uncertainty,"
adding: "Our philosophy is that excess capital belongs to MetLife's
shareholders and we believe this new program is consistent with our
prudent capital management strategy."
MetLife is expected to receive the "systemic" label as early as
next week. The company maintains it doesn't pose a risk to the
financial system and that it holds ample capital under state
insurance-department regulation. As previously reported, MetLife is
pondering whether it would challenge such a "systemically
important" designation by filing suit in a federal court.
Met's new share-repurchase plan move comes as large insurance
companies overseen by the Federal Reserve won a major victory
Wednesday night when the U.S. House passed a measure granting the
regulator more flexibility in writing capital rules. The House
passed the measure by voice vote Wednesday. The bill has already
passed the Senate and is likely to be signed by the president.
The legislation affects big insurers that either own
Fed-regulated banks, such as State Farm Mutual Automobile Insurance
Co., or have been designated as "systemically important financial
institutions" subject to the Fed's oversight, such as American
International Group, Inc. and Prudential Financial Inc.
The House bill amends the 2010 Dodd-Frank financial law by
exempting insurance companies from minimum capital requirements
that the law requires of banks. Insurers spent months arguing that
they shouldn't be subject to banklike rules, and they won the
support of both the Fed and Sen. Susan Collins (R., Maine), the
original sponsor of the Dodd-Frank provision in question.
Write to Leslie Scism at leslie.scism@wsj.com
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