UPDATE 1-AIG may come under much more U.S. regulatory oversight
* Company has said it expected to be tagged 'too big to fail'
* Federal Reserve would become primary regulator * Shares up 0.6 percent
(Adds details on designation, share movement)
Oct 2 (Reuters) - A U.S. federal panel may tag American International Group Inc as "too big to fail," a move the company has been expecting and one that would sharply increase regulatory oversight of the government-rescued insurer.
AIG said on Tuesday that the Financial Stability Oversight Council had said it may designate the company as a "systemically important financial institution," or SIFI, under the Dodd-Frank reform laws.
The FSOC is charged with identifying banks and nonbank institutions that are so large or otherwise so important that their collapse could have repercussions across the economy.
AIG, which received a $182 billion bailout after nearly failing four years ago, has said repeatedly that it fully expected to be tagged by the FSOC and that it has been preparing itself accordingly.
For much of the period since the rescue, the company did not have a primary regulator. If the company is ultimately designated by the council, the Federal Reserve would become its primary regulator.
Shares of AIG were up 0.6 percent at $33.46 in early trading.
(Reporting by Ben Berkowitz in Boston; Editing by Gerald E. McCormick and Lisa Von Ahn)
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