The Federal Reserve Board is on the case.

And the days when insurance company officials can shoot firstand aim later are going to end, AIG CEO Robert Benmoschesubtly warned the insurance industry Tuesday.

The CEO spoke to Maria Bartiromo, anchor of the CNBC"Newsmakers" program, just 24 hours after the Financial StabilityOversight Council designated AIG as one of the first two insurancecompanies to be federally regulated.

Benmosche said AIG has been preparing for federal regulation formonths, and "we're well on our way."

"We've been preparing for it, as we've said, over the lastyear-and-a-half, so it's not even the last few months," he said."So this has been a long preparation time and the Fed has been withus now since September of last year" when government ownership ofthe AIG fell below 50 percent and the Fed began regulating itsthrift, which is based in Wilton, Conn.

In his remarks, Benmosche implied that federal oversight is afait accompli for insurers in general, not just AIG.

"The Fed is going to put in a banking discipline, and that isthey want things to be done exactly what your policies are; whatyour procedures are; how you demonstrate you're followingyour procedures," Benmosche said. "So, they're going to bring us toa whole new level of discipline around policies, procedures andauditing what we do and accomplish." 

Benmosche said the difference between banks andinsurers is, "Banks are very particular about reconcilingand balancing all the time, especially before they do things;insurance companies have a tendency to do things and reconcileafter the fact."

"The Fed is looking for banking discipline and the insuranceindustry is what they're going to start moving towards,"Benmosche said, although he did not say how the Fed wouldgo about putting its discipline into effect at other insurersbecause it has taken federal agencies more than two years after theDodd-Frank financial services reform law was enacted to get to thepoint of designating two insurers, nevertheless the entireindustry.

MORE BENMOSCHE OBSERVATIONS:

– As far as he is concerned, AIG's deal to sell its airlineleasing unit to a Chinese consortium is still on, although thegroup missed a deadline last week to come up with 10 percentearnest money.

"We're working towards getting to that point [sale of theleasing unit]; we have not terminated, although we have a rightto," Benmosche said. "We're proceeding to work with them andnegotiate through this period of time."

– The CEO said the economy is not growing at an idealpace. Society is "going through a huge psychologicalchange" because people don't have the confidence in the economythey should have, a confidence driven by the fact that rules are inplace to prevent the kind of things that got AIG, and othercompanies, into big trouble four years ago.

"People are nervous about investing for the long haul, becausethe investors don't want to wait for the long haul," he toldBartiromo. "You have regulators who are changing the ground ruleswho haven't established ground rules yet, so that's a concern forpeople." Additionally, heads of businesses are sitting oncash, uncertain as far as what happens next.

To get the economy moving again, Benmoschesaid regulators and the regulatedneed to "come to terms with the fact that, likeit or not, we have dramatically improved the financial system inthe last four years, and yet nobody—and you've heard me say thisbefore—nobody wants to talk about how much confidence we should allhave in companies like AIG.