He asked Geithner, "Why is it a good idea for the FSOC to designate other firms in other parts of the financial sector as Too-Big-To-Fail as you plan to do in the near future?"

He then asked Geithner, "Why do we want to harden the minds of the marketplace into believing asset-management firms, insurance companies and finance companies are Too-Big-To-Fail?"

He added, "I believe we should not be doing this. I believe the FSOC should not designate any nonbanks as Too-Big-To-Fail and I plan on introducing legislation next week to remove that authority."

At an earlier hearing, Garrett called the called the entire SIFI debate a "charade" and suggested that discussions should center on how to end too big to fail and the moral hazard it poses. 

The FSOC, created by the Dodd-Frank Act, is charged with identifying threats to the financial stability of the United States; promoting market discipline; and responding to emerging risks to the stability of the United States financial system.

Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies, voiced strong support for Garrett's bill.

"We have long argued that the property and casualty insurance companies do not pose a systemic risk and the Financial Stability Oversight Council should focus its limited resources on the sources of the recent financial crisis," Grande says.

"Designating P&C insurers as SIFIs and subjecting them to the type of heightened regulation and capital standards designed for banks would be inappropriate, unnecessary, and would create market distortions," Grande adds. 

But Garrett's legislation is likely to run into strong opposition.

The insurance industry vehemently opposes SIFI designation, but does want the Federal Insurance Office, also created by DFA, to help its members negotiate trade agreements with foreign countries on favorable terms.

It also opposes having to provide financial information to another agency within Treasury created by DFA, the Office of Financial Research.