ALL ULIPS 2 LAST

Bhave and Hari Narayan held a series of meetings with the
Finance Secretary and other finance ministry officials, before
agreeing on jointly approaching the court
Earlier in the day, Hari Narayan told reporters that
while IRDA does not have power to quash SEBI order, it
certainly has powers to give directions to insurance firms.
He questioned the authority of SEBI to ban 14 insurers
from raising further money in ULIPs, but added that the market
regulator has different views.
SEBI chairman C B Bhave refused to comment on the issue.
Industry body Life Insurance Council Secretary General
S B Mathur said, "Policy holders have got reassurance that a
way out has been found out to meet uncertainties and
differences of opinions and their interest will be protected
so they should be reassured."
Law firm Link Legal Managing Partner Atul Sharma said it
will take a little bit of time to bring clarity on the issue
of jurisdiction of IRDA and SEBI over ULIPs.
"The matter (SEBI order) can be challenged in SAT. The
two parties can also sit together to resolve the issue," he
added.
The centre of the controversy is whether ULIPs are like
mutual funds and hence should come under SEBI or are insurance
products under IRDA's regulation. ULIPs invest a major chunk
funds in stock markets.
Insurance companies say that ULIPs are not mutual fund
products. They said the predominant feature of a ULIP is
insurance cover, and mere existence of an additional
investment feature cannot convert an ULIP into a mutual fund.
They added that ULIPs have a mandatory insurance cover,
which forms a vital and inseparable part of the product.
Unlike mutual fund schemes, the products are interlinked
with the life of the policy holder, these companies added.
About 7.03 crore Ulip policies involving a total
premium of Rs 90,645 crore were in force in 2008-09. As many
as 16.7 lakh policies were sold with a premium of Rs 44,611
crores during April-February 2009-10. PTI