The Financial Stability Oversight Council will meet Thursdayamid signs that the first designation of an insurer as systemicallysignificant is imminent.

The public meeting will be held at 2:30 p.m. but the keydecision by the FSOC will likely be made later in private session,and perhaps not announced for several days.

The implication is historic, because, according to officials ofthe Congressional Research Service, insurance has been regulatedexclusively by the states for 150 years.

Indeed, a provision of the Gramm-Leach-Bliley Act of 1999specifically bars the Federal Reserve from overseeing insuranceholding companies.

“The FSOC is finally nearing a decision to name several largenonbank financial institutions as nonbank SystemicallyImportant Financial Institutions (SIFIs),” Ryan Schoen ofWashington Analysis, which advises institutional investors andhedge funds, said in an investor's note Tuesday.

“We continue to expect that AIG, General Electric, andPrudential, will comprise the first round of designations,” Schoensaid.

“We also expect MetLife to be designated shortly thereafter,possibly as early as the third quarter of this year, Schoensaid.

Schoen said that under the SIFI designation, the companies willbe overseen by the Fed. He said they will be held to minimumcapital and liquidity standards, in addition to counterparty creditexposure limits.

“However, it is not clear how tailored these standards will befor a given type of institution.

John Nadel, of Sterne Agee & Leach in New York, also dealtwith the latter issue in interpreting a decision this week byMetLife to raise its dividend as a potential sign that MetLife,which has aggressively lobbied against designation as a SIFI, iscoming to a meeting of the Fed.

“We start with this premise – that it is highly unlikely in ourview that MetLife's management and board would raise the dividendwithout some form of discussion with the Fed, recognizing thatthere is a high probability the Fed will in fact again be MetLife'sregulator assuming a non-bank SIFI designation,” Nadel said.

“If our assumption is accurate (we'd hope for some clarity onthis from MetLife's first quarter conference call next week), thenit might follow that the Fed is indeeddemonstrating it both: 1) recognizes insurance companies aredifferent and 2) is willing (several officials have alreadyacknowledged this in public events) to stress-test insurancecompany SIFIs under a unique (as opposed to bank) set ofstandards,” Nadel said.

“And of course if this is the case, then itseems logical that all three potential insurance company SIFIswould have a significantly better chance of passing than they mightotherwise if simply subjected to the bank model,” Nadel said.

“Yes, we may very well be reading too deeply between the lines,but with MetLife and Prudential trading at just 6.7x and 6.6x 2014EEPS currently, the upside appears much greater than the downside,”Nadel said.

Amongst other signs of impending action, the Treasury Departmenthas advertised on USAJobs, a website used to advertise federaljobs, for a policy analyst who would work for the FSOC.

The job is seen as an effort to provide a professional aide toRoy Woodall, the independent member with insurance expertise who isa voting member of the FSOC.

“We are recruiting to fill a key policy analyst position toassist this member,” the job description said.

Another sign was comments in a Bloomberg article Monday byDebbie Matz, who is an FSOC member because she is the chairman ofthe National Credit Union Administration.

She said a credit union is unlikely to be designated assystemically significant.

Even the largest credit union wouldn't draw the council'soversight because it's already federally regulated, she said.

And, last Thursday, Mary J. Miller, U.S. Treasury undersecretaryfor domestic finance, said at a financial conference in New York,that the government “is nearing the end of the process” ofdesignating which non-banks such as insurers will be deemedsystemically significant and therefore subject to federalregulation.