Recently AIG, GE Capital and Prudential Financial disclosed that they are among the nonbank firms soon to be deemed systemically important financial institutions (SIFI), according to reports in the New York Times and The Economist.  This designation will come with higher capital requirements for these entities and may give consumers the false impression that SIFI’s are backed by some form of government guarantee. If New York’s bungling of the Executive Life Insurance Company of New York (ELNY) rehabilitation and subsquent liquidation is any indication of how insolvency proceedings for SIFI’s would work, it is probably time for the federal government to get involved.  ELNY was almost 100 times smaller than Prudential (the smallest of the big 3)  and its failure painfully highlighted the inadequacies of state regulation of the business of insurance and pushed the voluntary  guaranty associations to the brink.  It’s time to revisit McCarran -Ferguson before it is too late.