Mr. D Subbarao today revealed that market regulator SEBI and insurance regulator IRDA had mutually agreed to settle the jurisdiction issue over ULIPs at the High Level Coordination Committee (HLCC).
Mr. Subbarao, who is also the chairman of HLCC disclosed that both the regulators-IRDA and SEBI-have mutually agreed to settle the issue bilaterally among themselves.
HLCC on the other hand is a high level forum chaired by RBI Governor and works as an interface among the various financial sector regulators. The forum constitutes representatives of the finance ministry along with banking, insurance, pension and capital markets regulators. Adding further on the settlement of the issue Mr. Subbarao said, What turned up is a legal issue. Perhaps there should be an agreement... to settle at the legal forum.
SEBI had been arguing that since the money raised through ULIPs is used by these companies for making investments into equity and debt markets, hence the same should fall under the regulation framework of SEBI and not IRDA. However, in its response to SEBI, IRDA had later asked the insurance companies to continue doing business on the usual lines.
Following the issue contradictory orders from the two regulators the Finance Ministry had intervened in an effort to persuade both SEBI and IRDA.The finance ministry's intervention was then followed by an issue of a fresh order by SEBI stopping the insurance companies from issuing any new unit-linked insurance products (ULIP). The 14 insurance companies that were affected under the ban by SEBI includes the likes of SBI Life, ICICI Prudential, Tata AIG, Aegon 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.
Mr. Subbarao, who is also the chairman of HLCC disclosed that both the regulators-IRDA and SEBI-have mutually agreed to settle the issue bilaterally among themselves.
HLCC on the other hand is a high level forum chaired by RBI Governor and works as an interface among the various financial sector regulators. The forum constitutes representatives of the finance ministry along with banking, insurance, pension and capital markets regulators. Adding further on the settlement of the issue Mr. Subbarao said, What turned up is a legal issue. Perhaps there should be an agreement... to settle at the legal forum.
SEBI had been arguing that since the money raised through ULIPs is used by these companies for making investments into equity and debt markets, hence the same should fall under the regulation framework of SEBI and not IRDA. However, in its response to SEBI, IRDA had later asked the insurance companies to continue doing business on the usual lines.
Following the issue contradictory orders from the two regulators the Finance Ministry had intervened in an effort to persuade both SEBI and IRDA.The finance ministry's intervention was then followed by an issue of a fresh order by SEBI stopping the insurance companies from issuing any new unit-linked insurance products (ULIP). The 14 insurance companies that were affected under the ban by SEBI includes the likes of SBI Life, ICICI Prudential, Tata AIG, Aegon 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.
