Prudential Financial on Thursday advanced to the final stage ofthe government's process for designation as a non-bank systemicallyimportant institution (SIFI), according to several sources.

A Treasury spokesperson says, "The Financial Stability OversightCouncil (FSOC) does not intend to publicly announce the name of anynon-bank financial company that is under evaluation before a finaldetermination with respect to such a company."

But analysts at Washington Analysis say Prudential will likelyjoin American International Group (AIG), MetLife andpossibly the Hartford among insurance companies the FSOCis considering designating as SIFIs.

Ryan Schoen and other analysts at Washington Analysis say theyexpect the FSOC to name the first non-bank SIFIs "in the comingmonths."

Other non-banks likely to be considered for designation as SIFIsin the first FSOC action include GE Capital and BlackRock, theanalysts note.

Robert DeFillippo, Prudential spokesman, declined to comment.Prudential officials had previously said the firm met the FSOC'squantitative standards for consideration as a SIFI.

At the same time, DeFillippo says, "We continue to havediscussions with regulators to help them understand that insurancecompanies should not be treated like banks in the regulatoryprocess."

If designated a SIFI, insurers would have to submit to FederalReserve Board as well as state supervision. That wouldinclude stress tests and tougher standards for capital andliquidity. The U.S. spent, lent or committed as much as $12.8trillion to bolster financial firms and automakers amid thefinancial crisis.

The FSOC is proceeding under Sec. 113 of the Dodd-Frankfinancial services reform act. The law establishes a three-stageprocess for designating a non-bank as SIFI.

Schoen cites the minutes of the Sept. 28 meeting of the FSOC asindicating that "regulators are mindful of possible legalchallenges from companies that are designated, and are thereforelikely to be extremely deliberate in their selections."

The minutes indicated that the FSOC spent a lot of time at theSept. 28 meeting discussing how non-banks should be overseen by theFSOC.

Schoen says the minutes indicated that "there is significantinsurance regulation expertise" on the FSOC, and that "thisreinforces our view that new regulations of insurers are likely tobe tailored to their specific risks and business activities."

The group of insurance experts includes Roy Woodall, independentmember with insurance expertise; Michael McRaith, director of theFederal Insurance Office; and John Huff, director, MissouriDepartment of Insurance.

Besides other Treasury officials who participated in thediscussions, among those attending the meeting were staffers fromthe Missouri, Louisiana and North Carolina insurance departments,according the minutes of the meeting.