U.S. regulators are close to a final decision to label MetLife Inc. systemically important, two people with knowledge of the matter said, setting up a potential legal battle with the country’s largest life insurer.

The Financial Stability Oversight Council is planning to meet Dec. 18 to vote on whether todesignate MetLife and subject it to Federal Reserve oversight, according to the people, who requested anonymity because the information isn’t public. The council first proposed the designation in September by a 9-0 vote, with one member voting “present.” MetLife challenged the decision at a Nov. 3 hearing before the panel.

MetLife Chief Executive Officer Steven Kandarian has lobbied to avoid the extra oversight and called regulatory uncertainty the primary challenge to meeting profit targets. After the September decision, he said the company “is not ruling out any of the available remedies” under the Dodd-Frank law, without being specific.

Treasury spokeswoman Suzanne Elio declined to comment, as did Chris Stern, a MetLife spokesman.

The FSOC meeting date could still be changed, though the council has 60 days from the Nov. 3 hearing to take a final vote.

If MetLife is designated, it can appeal in U.S. district court within 30 days of receiving the decision.

MetLife shares, which have risen about 3 percent this year, fell 0.7 percent to $55.02 at 3:24 p.m. in New York. MetLife had $909 billion in assets as of Sept. 30.

Stricter Oversight

Under FSOC’s ruling, MetLife could be subjected to stricter capital, leverage and liquidity requirements as a result of Fed supervision. It would also have to file so-called living wills – – annual hypothetical plans for a fast and orderly bankruptcy.

The company has insisted that it wouldn’t pose a risk to the broader financial system even if it were to fail, and Kandarian has called the insurance industry a source of stability. The New York-based insurer didn’t take a bailout during the 2008 financial crisis.

The FSOC, which has 10 voting members and is led by Treasury Secretary Jacob J. Lew, doesn’t release the names of companies until at least one business day after the final designation is made. Voting members also include the heads of the Fed, the Securities and Exchange Commission and the Federal Deposit Insurance Corp.

The council publicly announces the dates of its meetings one week in advance.

AIG, Prudential

The council has designated three non-bank financial companies systemically important: insurers American International Group Inc. and Prudential Financial Inc., and General Electric Co.’s finance arm. A two-thirds vote, including Lew’s, is required.

AIG, the insurer that required a $182.3 billion bailout in the financial crisis, and GE Capital opted against challenging the risk tag. Prudential, the second-largest U.S. life insurer, lost its challenge to the council’s ruling last year. The Newark, New Jersey-based companyopted against appealing the ruling in federal court.

Created by the 2010 Dodd-Frank law, the council is charged with monitoring potential threats to the financial system. Under Dodd-Frank, bank-holding companies with more than $50 billion in assets, such as Citigroup Inc. and JPMorgan Chase & Co., are overseen by the Fed.

MetLife faces “regulatory headwinds” as lawmakers and the Fed weigh what capital standards should apply to the largest non-bank financial firms, Kandarian said Oct. 30. He has urged Congress to pass legislation that would spare insurers from regulations intended for banks. Insurers have said their products are less vulnerable to client redemption than bank accounts.

–With assistance from Zachary Tracer in New York.