Prudential Financial Inc. is the No.2 US life insurer. It wil be contesting a US finding that it is potential risk to the financial system of the US. It will be the first company to take on the label that requires increased oversight.
Prudential has requested a hearing to clarify why it is not considered a systemically important institution in the financial system and 1 day car insurance.
Prudential spokesperson has issued the following statement, “We will continue to work closely with regulators to demonstrate our belief that the company does not meet the requirements of the SIFI designation.”
The Dodd-Frank Act allows for increased supervision and designates non-bank firms with extra oversight. The Label may imply imposed limits on capital and liquidity. This act was was made to prevent a repeat of the 2008 bailouts.
The label could have a great impact on Prudential daily work activities. It might require them to hold capital at a level that might put them at a disadvantage to other insurance companies.