The Federal Reserve Board announced its approval of the final living will rule today, clearing the way for implementation of the financial institutions' resolution plan mandated by the Dodd-Frank Act and approved by the Federal Deposit Insurance Corp. on Sept. 13. Under the plan, designated banks and non-banks with more than $50 billion in assets must submit their plans to the supervisory agencies annually, with details on how to dismantle the institutions if they become insolvent.

The Financial Stability Oversight Council will be responsible for assigning the title of Systemically Important Financial Institutions, or SIFIs, to financial institutions that will be subject to the rule. “The first group of companies, generally those with $250 billion or more

in non-bank assets, must submit their plans on or before July 1, 2012,”

the Fed said in a statement. The agency expects other SIFIs with assets less than $100 billion to submit their plans before Dec. 31, 2013.

Companies must include the following in their resolution plans: a description of the company's strategy for rapid and orderly resolution in bankruptcy during times of financial distress; an analysis of the plan's components; a description of the range of specific actions the company proposes to take for resolution; and a description of the company's organizational structure, material entities, interconnections and interdependencies, and management information systems.

Under the Dodd-Frank requirement, the FDIC and the Fed are tasked with the job of jointly issuing the rule before it can take effect. The rule forces financial institutions to contemplate their own mortality and prods them to inform the FDIC of the best way to dissolve their institutions in the event of bankruptcies that may negatively effect the country's financial system. The requirement was one of the top priorities in the Dodd-Frank Act, drafted after the 2008 financial crisis. The crisis saw the demise of several financial institutions, which had an adverse effect on the financial system.