Tangled up in Pru
September 23, 2013 by Elizabeth Festa
Domestic insurers and reinsurers other than Prudential Insurance could face consolidated regulation by the Federal Reserve Board, judging from the Sept. 19 majority opinion of the Financial Stability Oversight Council (FSOC) on the SIFI-designated insurer, although members would be quick to point out under the Dodd-Frank Act (DFA) that each case is judged upon its merits and will not create any spillover effect.
However, others point out that the sheer size of Prudential, and its interconnectedness, rather than its activities, are part of the basis for the FSOC’s 7-2 vote that the Newark, N.J.-based behemoth is a systemically important financial institution (SIFI).
This rationale of looking at the totality of the enterprise tees up other large insurance firms for similar scrutiny, from Berkshire Hathaway with its huge insurance holdings to private equity firms gaining control of annuity providers to even the large mutual life insurers. Click here to read…
