The Centre on Monday stepped in to end the turf war between insurance regulator IRDA and market regulator SEBI over their jurisdiction on ULIPs (Unit Linked Insurance Plans) by asking the two chiefs to approach the court and maintain status quo on the business and sale of such equity-linked products until the dispute is legally sorted out.
During the day, SEBI Chairman C.B. Bhave and IRDA Chairman J. Harinarayan held discussions with top Finance Ministry officials to explain their viewpoints. Finance Minister Pranab Mukherjee brokered peace by making the two warring regulators agree to a “binding legal mandate.”
Much to the relief of ULIP policy holders and the stock market which witnessed nervousness on account of the spat between the two regulators, Mr. Mukherjee, in a statement, said: “The Chairman, SEBI and Chairman, IRDA 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, the status quo ante is being restored.”
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On Friday, while the SEBI had banned 14 life insurance firms from selling ULIPs until they obtained registration from the market regulator, the IRDA asked the companies to ignore SEBI and continue with business as usual.