Market regulator Securities and Exchange Board of India, or SEBI had issued showcause notices to several life insurance companies over their unit linked insurance plans or ULIP’s.
Sources close to the development at the Finance Ministry said the government is not going to interfere in the matter, and that the insurance regulator Insurance Regulatory and Development Authority (IRDA) and the SEBI will have to resolve amongst themselves. But sources added that if either regulator does need government intervention then that is when the finance ministry will come into the picture.
SEBI’s showcause notices also said that ULIPs also require SEBI approval along with IRDAs. Companies are examining the legal implications of the showcause notice and are yet to respond to SEBI
On the other hand, IRDA is also individually seeking a legal opinion on the issue. The regulator however says that ULIPs do not require SEBI approval.
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