SEBI order on ULIP on hold; both regulators to go to court

New Delhi, Apr 12 (PTI) In a major relief to ULIP
holders and insurance companies, the Indian government Monday
stepped in to ensure that the business of selling
equity-linked insurance plans can go ahead as before while the
two clashing regulators have decided to approach the court for
sorting out the dispute.
The Indian Finance Ministry's intervention comes after
the two regulators SEBI and IRDA clashed with each other over
regulating the Unit Linked Insurance Products (ULIPs).
SEBI chairman C B Bhave and Insurance Regulatory and
Development Authority (IRDA) chairman J Harinarayan rushed to
Delhi and held discussions with senior officials and Indian
Finance Minister Pranab Mukherjee before the two sides agreed
to seek a "binding legal mandate".
"SEBI chairman and IRDA chairman today held
discussions on jurisdiction over ULIP (Unit Linked Insurance
Products).
"To resolve any ambiguity and to ensure a smooth
functioning in the market, the regulators have agreed to
jointly seek a binding legal mandate from an appropriate
court. Meanwhile, status quo ante is being restored,"
Finance Minister Pranab Mukherjee told reporters after the
discussions.
When asked what could be the appropriate court,
Finance Secretary Ashok Chawla said, "I believe the High
Court." While the SEBI is headquartered in Mumbai, IRDA is
based in the southern Indian city of Hyderabad.
On Friday, SEBI banned 14 life insurance companies
from selling ULIPs till they obtain registration from the
market regulator. Within 24 hours, IRDA asked the companies to
ignore the SEBI ban order and continue with business as usual.
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