WASHINGTON (Reuters) - A panel of U.S. regulators will next week discuss whether insurer Prudential Financial Inc (PRU.N) should continue to be subject to stringent oversight, according to a public notice and a company statement.
The U.S. Financial Stability Oversight Council (FSOC), which designates which financial companies would pose a risk to the country’s financial system if they failed, said on Wednesday it would hold a meeting on Feb. 21 to discuss the “annual re-evaluation of the designation of a non-bank financial company”.
Prudential said in a statement on Thursday that it was the company under review. The insurer has said it does not merit the “too big to fail” designation it was pinned with in the wake of the financial crisis.
“We have and continue to maintain that we do not meet the standard for designation and that flaws in the designation process led to this outcome,” said the company said in a statement. “We look forward to making our case to FSOC as part of our annual designation review, which is now underway.”
Prudential is the only non-bank financial company currently designated as a “systemically important financial institution” by FSOC. The panel last year released rival insurer AIG (AIG.N) from the label, and agreed this month to drop its earlier appeal against a court decision releasing MetLife from the label.
The FSOC meeting is the first step toward Prudential also potentially being released from the label, which demands more stringent oversight and higher capital requirements.
Brian Gardner, an analyst with Keefe, Bruyette and Woods, said a decision on Prudential’s label was not likely after the upcoming meeting, as regulators were just beginning the review.
“It is still relatively early in that process. If FSOC is to de-designate PRU, we expect it to be later in 2018,” he said in an analyst note.
Reporting by Michelle Price; Editing by David Gregorio and Rosalba O'Brien