Market regulator SEBI on Friday night banned 14 major private insurance companies, including SBI Life, ICICI Prudential and Tata AIG, from raising money from public for any Unit Linked Insurance Products (ULIP).
While passing the order late Friday, SEBI said the entities have not obtained any registration from the regulator though the ULIPs launched by them had an investment component in the nature of mutual funds.
“I hereby direct the entities...not to issue any offer document, advertisement, brochure soliciting money from investors or raise money from investors by way of new or additional subscription for any product (including ULIPs) having an investment component in the nature of mutual funds, till they obtain the requisite certificate of registration from SEBI,” said Prashant Saran, wholetime SEBI member in an order.
The other insurance companies against whom SEBI passed an order are 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.
The order said ULIPs launched by the insurance companies were prima facie found to be akin to the mutual fund schemes.
While the SEBI regulates mutual funds and their schemes, Insurance Regulatory and Development Authority (IRDA) oversees functioning of insurance companies.