MetLife Inc. beat back a U.S.attempt to label it too big to fail, which would’ve put America’sbiggest life insurer under tougher government scrutiny and forcedit to put more money in reserves.

A federal judge in Washington struck down the designation onWednesday, rejecting the Financial Stability Oversight Council’srationale for classifying the company as a systemically importantfinancial institution. The reasons for the ruling were sealed bythe judge.

The ruling undercuts the foundation of the Obamaadministration’s plan to more heavily regulate four non-bankbusinesses it determined had the potential to destabilize theAmerican financial system. MetLife had called thedesignation arbitrary and unjustified. Chief Executive OfficerSteve Kandarian said earlier this year that his New York-basedcompany will shed much of its domestic retail business because SIFIput it at a “significant competitive disadvantage.”

MetLife jumped 6 percent to$45.01 at 10:41 a.m. in New York trading. Prudential FinancialInc., which is the second-largest U.S. life insurer and was alsonamed a non-bank SIFI, advanced 4.3 percent to $74.59.

Randy Clerihue, a spokesman for New York-based MetLife, didn’timmediately respond to a message seeking comment.

Filed last year, the MetLife suit is the biggest challenge yetto the council that includes Federal Reserve Chairwoman JanetYellen and Treasury Secretary Jacob Lew. Other non-banks bearingits SIFI designation are American International Group Inc. andPrudential, neither of which have brought challenges. GeneralElectric Co. has said it will divest its U.S. financial operationsand then ask FSOC to rescind the classification.

At a February hearing, Collyer sharply questioned JusticeDepartment attorney Eric Beckenhauer, asking why the council saidit would conduct a “vulnerability analysis” of MetLife beforemaking its determination, then failed to do so.

She also asked the government’s lawyer why FSOC assumed thatMetLife would be at the brink of collapse. in the event of a fiscalcrisis.

“That’s not risk analysis,” she said. “That’s assuming the worstof the worst of the worst.”

The case is MetLife Inc. v. Financial Stability OversightCouncil, 15-cv-00045, U.S. District Court, District of Columbia(Washington).