Could MetLife Too Big To Fail!!

ELK GROVE, Calif. - March 16, 2015 - PRLog -- An article published back in December of 2014 in the Wall Street Journal highlighted this issue facing MetLife. In September of 2014 MetLife was notified by the Financial Stability Oversight Council (FSOC) that it had been designated "systematically important". This placed it in a category known as "too big to fail" which placed concern in the ears of it's policyholders.
     http://www.wsj.com/articles/metlifes-too-big-to-fail-fight-1409957282#livefyre-comment

It is very dangerous when bank regulators who are unfamiliar with insurance companies decide to regulate then like they would a bank. This regulation and capital requirements will affect insurance companies and their customers. The reason these capital requirements are an issues because "Insurance is fundamentally different - and more stable - than banking for a variety of reasons".

Banking capital requirements are completely different for insurance companies because insurance companies do not leverage off their deposits. Insurance companies receive a deposit for an annuity as example and those funds are invested once in strict discipline. If an insurance company does get into trouble "Regulators and other companies that pay into industry-financed, state-regulated rescue funds have decades to address the problem as claims roll in slowly over time".

MetLife joins the ranks with three other non banks who are now being treated as a "systematically important financial institution". AIG, Prudential Financial, and General Electric Capital Corp. have been labeled as "too big to fail". "The Systematically Important Financial Institution designation, part of the 2010 Dodd-Frank financial reform law, requires companies to hold more capital and rein in its riskier businesses, as well as face oversight from Yellen's Federal Reserve".

Just the other day MetLife announced they will continue to challenge the FSOC and their label of "too big to fail". So what does this mean for consumers? This unnecessary extra cost is a huge issue for insurance companies since they are not banks. With the low interest rates, the additional cost for MetLife, and other insurance companies wondering if they are next benefits in annuities and life insurance will be dropping. At a time when insurance company guarantees are needed more than ever this extra regulation could make it even harder for consumers to incorporate these type of plans in their financial life.


Matt Golab

Chief Advisor at Aaron Matthews Financial Resources

Matt Golab was recruited to write a chapter in Tom Hopkins recent book, Victory which became a National Best Seller. Matt also received the Editors Choice Award for his contribution to Victory, not every contributor is selected for this high honor.

Matt is an authority on creating innovative tax and investment solutions to help his clients succeed in their retirement years.  The strategies Matt Golab has established and passed on through successful financial planning with hundreds of clients over the years has launched him into the national spotlight.

He is often featured in Retirement Advisor Magazine, a publication which attracts the top financial planners in the country. Matt has been featured in newspapers around the country passing on the principals for a successful retirement. Golab is often asked by national websites that focus on the education of consumers to present his knowledge on the areas of retirement and retirement income plans.

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Golab is the Author of The Consumer's Guide to Planning Your Retirement: Your Guide to Mental Peace and Financial Well Being. Matt Golab continues to expand the geographic reach of his audience and desires to bring his expertise to a nationwide television audience. Matt emphatically states his mission, “I want to change the way Americans view their retirement. They can succeed (stay retired) regardless of what happens in the market".

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