By Douwe Miedema
WASHINGTON (Reuters) - U.S. regulators on Tuesday asked for more time to react to a complaint by MetLife (N:MET) over their decision to subject the insurer to tougher oversight, and requested a judgment in the lawsuit early next year.
Critics of the Financial Stability Oversight Council's move to label MetLife "systemically important" are watching the case to see if it sheds light on why the regulator gave the insurer a tag many in the industry fear is harmful to business.
MetLife in January sued the FSOC after it subjected the insurer to tougher oversight because it said the insurer harbors enough risk to endanger the financial system should there be another crisis.
In a court document, the two parties asked the court to agree to give FSOC, which groups together the heads of the country's financial regulators, until May 7, rather than March 16, to respond to the insurer's complaint.
"FSOC anticipates filing a motion to dismiss and/or motion for summary judgment on or before the extended deadline," said the document, filed in the federal court in Washington.
The parties were asking the court for a decision in the case in the first few months of 2016, the document said.
The FSOC wields vast powers after the 2007-09 financial crisis because of its ability to designate companies as 'systemically important," subjecting them to oversight by the U.S. Federal Reserve.
Industry critics say that level of supervision for an insurer like MetLife puts needless constraints on its business. Some politicians question the powers the FSOC has gained and say it shows a lack of transparency in how it designates systemically important institutions.