Insurer MetLife Inc. won a major regulatory and legal battle on Wednesday when a federal judge struck down the U.S. government's determination that it is "too big to fail."

MetLife had argued in court that the Financial Stability Oversight Council (FSOC), made up of the heads of the country's financial regulatory agencies, used a secretive and flawed process when in 2014 it designated the company as a systemically important financial institution.

The designation meant regulators believed a collapse of the insurer could devastate the U.S. financial system just as much as failure of a major bank, and triggered possible requirements for it to hold more capital and for stricter oversight.

"From the beginning, MetLife has said that its business model does not pose a threat to the financial stability of the United States," the company's chief executive, Steven Kandarian, said in a statement.

A representative for the U.S. Treasury said the agency disagreed with the decision and would vigorously defend the council’s designations process.

"FSOC conducted a rigorous analysis of MetLife, including extensive engagement with the company, and determined that material financial distress at MetLife could pose ... a threat to the financial system," said spokesman Adam Hodge.

The ruling by the judge, U.S. District Judge Rosemary Collyer, is currently sealed, but parts may be made public next month, according to Wednesday's order, which also said the federal government may appeal.

During a hearing last month, Collyer expressed concerns about the process and the analyses that the council, which includes the Treasury secretary and Federal Reserve chair, uses to make designations.

In the order, Collyer granted three of the reasons, or counts, that MetLife gave when it argued against the designation. The company had said there were flaws in how the FSOC assessed its vulnerabilities, that some of the FSOC's assumptions and speculations were arbitrary and capricious, and that the FSOC had not given enough consideration of the designation's economic effects on MetLife.

Welcomed By Wall Street