Union Finance Ministry has stepped in the war between Securities and Exchange Board of India (SEBI) and Insurance Regulatory Development Authority (IRDA) over new unit linked insurance plans.
Insurance companies cannot issue any fresh ULIP products awaiting a court decision. The restriction is also relevant on the Life Corporation of India (LIC) and 8 others companies which be not named in the previous SEBI order that barred 14 insurers from issuing any new ULIP.
But all ULIPs issued before April 9 will carry on. The Finance Minister had already asked the insurance and market regulators to keep status quo on the SEBI order banning new unit linked plan or products by insurance companies.
The market regulator had on April 12 lifted its ban order forced on April 10 on selling of ULIPs by the 14 insurance companies after a meeting with IRDA and Finance Ministry officials in New Delhi.
The IRDA had rejected SEBI's resolution and asked the insurance companies to carry on with business as normal. The insurance regulator had invoked its powers under Section 34 (1) of the Insurance Act to take on SEBI.
SEBI wants all financial products to move to no entry load. ULIPs at present charge entry load.
The insurance companies against whom SEBI passed an order were SBI Life, ICICI Prudential, Tata AIG Life Insurance, Aegon Religare Life, Aviva Life, Bajaj Allianz Life Insurance, Bharti AXA, Birla Sunlife, HDFC Standard Life, ING Vysya Life Insurance, Kotak Life Insurance, Max New York Life, Metlife India and Reliance Life Insurance.
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