The giant insurer MetLife said on Tuesday that it was exploring spinning off its retail life and annuity business in the United States because of financial pressures it is facing under regulations put in place in the wake of the financial crisis.
The decision was made two years after the Financial Stability Oversight Council, a group created by the 2010 Dodd-Frank regulatory legislation, named MetLife a systemically important nonbank financial institution, or SiFi. That designation carries requirements to set aside more capital as a cushion against a substantial decline in the nation’s financial markets as occurred in 2008, potentially limiting its earnings.
MetLife is considering several options, including an initial public offering to create a company that would, presumably, be better able to compete with smaller life insurance and annuity providers who are not subject to the same regulatory restrictions.
MetLife is the largest life insurance company in the United States, with $880 billion in assets, including $240 billion of retail assets that would be part of the new company.
American International Group, Prudential Financial and General Electric Capital Corporation, the financing arm of General Electric, have also received the designation, which was largely bestowed on companies deemed so large that their failure would damage the American economy.
In a statement on Tuesday, Steven A. Kandarian, MetLife’s chairman, president and chief executive, said the risk of increased capital requirements contributed to the decision to explore breaking up the business, although exact plans have not been completed.
“An independent company would benefit from greater focus, more flexibility in products and operations, and a reduced capital and compliance burden,” he said.