The tug of war between two financial regulators – Security Exchange Board of India (SEBI), the stock market regulator and Insurance Regulatory and Development Authority (IRDA), the insurance sector regulator Monday went cool after the intervention of Finance Minister Pranab Mukherjee.
FM Mukherjee after meeting the head of both the regulators at a function organised in New Delhi to mark the SEBI Day, informed the media separately that the previous status has been restored, which means the private insurance player can be continue on their Unit Linked Policy until the matter get resolved in the court.
In a statement FM said that the Chairman of SEBI and the Chairman of IRDA had held discussions on the jurisdiction over the ULIP issue and both the regulators had agreed to jointly seek a binding legal mandate from an appropriate court.
After imposing the ban over the private players' ULIP products, there were speculations and ambiguity among the private players and investors, which is now clear and companies can go for the new policies and can also renew the old policies.
As it is known, SEBI had imposed a ban on ULIP products of 14 companies – SBI Life, ICICI Prudential, Tata AIG, egon Religare Life, Aviva Life, Bajaj Allianz, Bharti AXA, Birla Sunlife, HDFC Standard Life, ING Vysya Life, Kotak Mahindra Old Mutual Life, Max New York Life, Metlife India and Reliance Life – on April 09 by passing an order and arguing that ULIP plans were similar to the nature of Mutual Fund (MF) plans for which the issuing companies would need the prior consent of stock market regulator.
On the contrary, just a day after IRDA quashed the order of SEBI and directed to the players to carry on their products. IRDA argued that ULIP plans were different from MF plans and came under insurance regulatory body not SEBI.
This tussle was harshening and creating a vague in the market that led the Finance Minister to intervene in this matter.
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