MetLife to Buy Back $1 Billion More in Shares as Ruling Awaits

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 [e-mail]

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