WASHINGTON—An appeal of a trial judge's decision to rescind federal regulators' oversight of MetLife Inc. will be heard next month by a panel largely consisting of judges appointed by President Barack Obama, a result analysts say doesn't bode well for the insurance company.

The U.S. Court of Appeals for the District of Columbia Circuit said Monday the three-judge panel would consist of judges Sri Srinivasan and Patricia Millett—both nominated by Mr. Obama—and A. Raymond Randolph, a nominee of George H.W. Bush.

Analysts said the move is a positive outcome for the Financial Stability Oversight Council, which is asking the appellate court to overturn Judge Rosemary Collyer's March decision that the FSOC acted arbitrarily and capriciously in designating the insurer as a "systemically important financial institution," or SIFI. Regulators apply the label to financial giants whose failure they believe would threaten the economy, and the designation submits them to much tougher rules on capital and use of borrowed money to reduce their risks.

The appeal is set to be heard Oct. 24. Judge Collyer, who serves on the District Court for the District of Columbia, was appointed by President George W. Bush.

Edward Mills, an analyst at investment bank FBR & Co., said the panel was a "bad draw" for MetLife, as the two Democratically appointed judges "are likely to be more deferential to FSOC and the government's authority in the case."

In a research note, Mr. Mills said, "While it was not a great result for MET, the deck was 'stacked' against MET as seven of the Court's 11 judges are Clinton or Obama appointees."

Robert Jackson of Columbia Law School also said the move is unfavorable to the insurer. "If MetLife was hoping for this to be affirmed, they've got to be disappointed in this panel," he said.

A MetLife spokesman declined to comment on the appellate panel but said the insurer "looks forward to oral argument where we will continue to vigorously defend the lower court's carefully reasoned opinion."

Write to Andrew Ackerman at andrew.ackerman@wsj.com

 

(END) Dow Jones Newswires

September 26, 2016 15:25 ET (19:25 GMT)

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