New DelhiL: 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 until a court decision. The restriction is also applicable on the Life Corporation of India (LIC) and eight others companies which were not named in the earlier SEBI order that barred 14 insurers from issuing any new ULIP.
But all ULIPs issued before April 9 will continue. The Finance Minister had already asked the insurance and market regulators to maintain status quo on the SEBI order banning new unit linked schemes or products by insurance companies.
The market regulator had on April 12 lifted its ban order imposed 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 decision and asked the insurance companies to carry on with business as usual. 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 currently charge entry load.
The insurance companies against whom SEBI passed an order were 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.
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