* Gets FDIC, Fed approvals to deregister as bank holding co
* Approvals may allow co to return capital to shareholders
* Insurer might still be labeled "too big to fail"
By Aman Shah
Feb 14 (Reuters) - MetLife Inc, the largest U.S. life insurer, said it could remain subject to strict regulatory oversight even after deregistering as a bank holding company, sending its shares down as much as 4 percent.
MetLife received regulatory approval on Thursday to deregister as a bank holding company, which will reduce scrutiny from the Federal Reserve and free up capital to pay dividends or buy back shares.
As a result of this approval, the insurer would not be required to resubmit its capital plan and would not be subject to the Fed's next stress test, MetLife spokesman Chris Breslin said in an emailed statement.
The central bank blocked MetLife from buying back shares in late 2011, and the company failed a Fed stress test last March.
But Chief Executive Steve Kandarian said on a conference call with analysts that MetLife would have to assess the regulatory environment before finalizing plans for a buyback.
"Substantial uncertainty will still remain on the regulatory front as we face the possibility of a non-bank SIFI," he said.
If designated a non-bank SIFI - a systemically important financial institution - MetLife would be subject to continued Fed oversight as it would be deemed "too big to fail" because their collapse could have repercussions for the wider economy.
Insurer American International Group Inc said in November that it expected a federal panel to tag it a non-bank SIFI.
MetLife started the process of dropping its registration as a bank holding company after closing the sale of its deposit-taking business to General Electric Co's GE Capital unit last month.
The company said on Thursday it had received approvals to deregister as a bank from both the Fed and the Federal Deposit Insurance Corporation (FDIC).
The GE deal, struck in late 2011, had been held up by regulatory reviews, but the companies restructured the sale in September so that the Office of the Comptroller of the Currency (OCC) would be the regulator responsible for approving the deal.
The OCC approved the deal in December.
Shares of MetLife, which reported a fall in quarterly profit due to a net derivatives loss, closed down 2 percent at $36.69 on the New York Stock Exchange on Thursday.