WASHINGTON — The Financial Stability Oversight Council said Wednesday that it would not rescind its designation of the insurance giant MetLife as a systemically important financial institution, a move that comes as the firm's legal challenge to that label is being mulled in federal court.

In a summary of a closed-door executive session of the 15-member council, FSOC said that it had reviewed "recent developments" at the company but decided not to withdraw the designation. The council said the discussion was part of an annual review process.

"Following a discussion of recent developments at the company, the Council voted not to rescind the designation of MetLife," the report said. "As a general matter, if the Council determines in an annual review that a company has addressed the key factors in the Council's basis for its designation, the Council would rescind the designation."

FSOC voted to designate MetLife as a SIFI in December 2014, making the insurer one of only four nonbanks to be assigned the label. As a SIFI, MetLife and the other three designated nonbanks — fellow insurers American International Group and Prudential and the financial services firm GE Capital — are subject to enhanced prudential requirements and oversight by the Federal Reserve. Those standards have not been specified yet, but a draft proposal by the Fed for GE Capital would subject the firm to capital and stress testing requirement similar to that of bank holding companies of similar size.

MetLife almost immediately challenged its designation in court, filing a lawsuit against FSOC in January 2015 arguing that the agency had violated administrative procedures and the right of due process in its reasoning behind the designation. The agency and the firm last month participated in oral arguments in the DC District Court, and the decision is expected sometime in the coming months.

MetLife announced in January of this year that it would split itself up, separating roughly $260 billion in assets into a separate entity, either by sale, IPO or spinoff into a separate company. During oral argument, attorney Eugene Scalia, representing MetLife, suggested that the split was influenced at least in part by its SIFI designation, though the company itself was more taciturn in its announcement, with vague allusions to the "regulatory environment."

Despite MetLife's announced plan to split up, FSOC's decision comes as little surprise, since those plans have not yet been implemented and little else has changed in the company's outlook to warrant de-designation. But observers will likely be keenly interested in whether FSOC opts to de-designate GE Capital whenever it reconsiders its designation, since that company announced its intention to sell off its financial arm entirely in order to shed its SIFI label.

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