MetLife is no longer too big to fail.
On Wednesday, one of the country's largest insurance company won a case against the Financial Stability Oversight Council in a Washington D.C. federal court, after a judge struck down its designation as a systematically important financial institution, or SIFI. The judge sealed the rationale for the ruling.
“Today’s ruling validates MetLife’s decision to seek judicial review of our SIFI designation. From the beginning, MetLife has said that its business model does not pose a threat to the financial stability of the United States," said MetLife CEO Steven Kandarian in a statement.
It's a major win for the company, which has been fighting the designation for months now. Earlier this year, the insurance company unveiled a break up in part to avoid the too big to fail designation. There is no word from the company, which has not yet made a statement on the ruling, on whether it still plans to pursue a break up. The federal government first introduced the concept of a special SIFI designation as part of the Dodd-Frank Act in order to impose special rules on the nation's biggest financial firms, and keep the banking system safe.
Since then regulators have attached the label to a number of non-bank financial firms, includes Prudential Financial (prudential.financial), General Electric Capital, and American International Group (aig).
The status is not a popular one. General Electric has been in the process of removing the designation by selling off parts of the company in 2014, while analysts say Prudential is likely to be the next non-bank SIFI to launch a lawsuit. AIG, on the hand, which has been pressed by Carl Icahn and others to break up, has argued that the benefits of its size outweigh the negative of the extra regulation.
But the ruling could set a precedent, making it harder for the Obama administration to tag other non-bank institutions as SIFIs in the future, said Art Wilmarth, a professor of law at George Washington University.
But it's highly likely that the case is not closed yet.
"I'm sure FSOC will go up to the Court of Appeals," Wilmarth said. The MetLife case was heard at the district court.
MetLife did not respond to immediate requests for comment.
This story has been updated to include comments from MetLife CEO Steven Kandarian.