MetLife, American International Group and Prudential are the three most likely U.S. insurers to be deemed as systemically important enough to be subject to federal as well as state regulation, says Moody’s Investors Service in a report.
Moody’s says its screening of 2010 year-end financial data indicates the three companies cross the metric thresholds cited in a new proposed regulation that will qualify the trio for additional scrutiny as potentially Systemically Important Financial Institutions (SIFI).
“Although Berkshire Hathaway also crosses certain metric thresholds, it may not be deemed a ‘nonbank financial company’ under the Dodd-Frank Act guidelines, and therefore, it may not be a candidate for SIFI evaluation,” the Moody’s report adds.
The Moody’s report says that only MetLife, AIG and Prudential will make the first cut.
It implies that even though they qualify for additional scrutiny, it cautions that any of those three may still not ultimately be viewed as SIFI because the guidelines as proposed would create a three-stage process for determining SIFIs.
The Moody’s report is somewhat different from the views of Eric Dinallo, former New York state insurance superintendent and now a lawyer at Debevoise & Plimpton.