Non-banks deemed systemically significant will be federally regulated at the holding-company level—so-called “consolidated regulation”—and they must also comply with state regulations.

Moreover, expectations from stakeholders such as analysts, shareholders and customers will be different, potentially setting these companies apart from their competitors.

The insurers also might be subject to strict Basel 3 minimum capital requirements unless insurers are able to get a fix for a seemingly intractable part of Dodd-Frank statute Section 171.

Under the process for designating non-banks as systemically important financial institutions (SIFI), a two-thirds vote of the FSOC was required, in addition to support from the FSOC chairman, Treasury Secretary Jacob Lew.

If a company does not request a hearing contesting the designation, the FSOC has 10 days to make a final determination.

AIG confirmed the proposed designation without comment on whether it would seek a hearing, but the company had anticipated decision. Robert Benmosche, president and CEO of AIG, said in an August earnings call with analysts that the company viewed the designation as a positive because it would help AIG handle what he downplayed as the 2008 “bump in the night”—the circumstances that led to a federal rescue of the insurance giant.

“We really don't know when we will be regulated but we do believe we will be regulated by the Federal Reserve probably,” Benmosche said then. “That seems the most likely candidate and we're putting an enormous amount of effort and cost to make sure that we are Fed-ready…,” he added.

Prudential Financial said in a statement that it is evaluating whether to contest the proposed designation.

Russell Wilkerson, a spokesman for GE Capital, said the firm had received notice from the regulatory group and was “currently reviewing the details.”

The FSOC decision was immediately criticized by a P&C industry official, J. Stephen Zielezienski, senior vice president and general counsel for the American Insurance Association, who contended that “property and casualty insurers engaged in regulated insurance activities do not pose a threat to financial stability and therefore should be screened out of the SIFI designation process.”

Just a few minutes before AIG confirmed that it was preliminarily designated as a SIFI, Standard & Poor's announced that AIG will join the S&P 100 index. In the S&P announcement, AIG replaced Baker Hughes Inc.

This article was originally posted at PropertyCasualty360.com, a sister site of Credit Union Times.