Even as life insurers are relieved that they can continue to sell unit-linked insurance products (Ulip) following the Irda order that virtually asked them to ignore the restraint order by Sebi, the regulatory turf war on who would supervise Ulips is far from over. Market sources expect the finance ministry to intervene in the matter on Monday itself, although Irda sources say no such intervention has yet been sought.

?We had to issue an instant order on Saturday night to protect the interests of the life insurers and their customers which was very much at stake after Sebi surprisingly issued the restraint orders to 14 life insurers to stop transacting Ulips immediately, However, a clear picture will emerge on Monday. ?? said a top Irda official.

Recounting some of the developments before Sebi had resorted to such a drastic action, the Irda official said the two regulators had last met on March 15 and had decided to continue their discussions in future.

?When we were waiting to meet Sebi officials again, they have gone ahead and issued the order. We would like to find a legal solution to the whole situation,?? said the official.

To a question on whether Irda has taken the help of the ministry of finance to sort out the matter between the two regulators, the official said ?Not yet??.

However, industry observers point out that the intervention of MoF at this stage is inevitable. It is expected that the MoF will come out with some statement on Monday.

Also, the Irda official had expressed concern over the fact that the Sebi?s action can impact the stock market adversely as life insurers do invest their large premium proceeds from Ulips in the markets.

?Sebi action unless countered at the right time would have exposed the stock market to great risks. Ironically it is Sebi which supervises the capital markets,?? he said.

Meanwhile, the 14 life insurers who were ordered to stop selling Ulips immediately by the Sebi on Friday night have decided not to challenge the order in court.

?Though a lot of issues are yet to be clear, we will do business as usual from Monday,?? said a Delhi-based life insurer.

The Life Insurance Council, the official body of the life insurers is also planning to meet soon to deliberate the range of issues.

Sebi?s order to the 14 life insurers had said Ulips offered by insurance companies were different from traditional insurance products, being a combination of insurance and investment. ?The attributes of the investment component of Ulips launched by these entities are akin to the characteristics of mutual funds, which issue units to the investors and provide exit at net asset value of the underlying portfolio,? said the Sebi order.

However, coming to the rescue of the 14 life insurers who have been restrained by the Sebi from transacting Ulip products, Irda in a late evening order on Saturday had asked the insurers to ignore Sebi?s restraint order and asked them to continue selling these products as usual. ?In exercise of the powers vested in the Authority under Section 34(1) (a) and (b) of the Insurance Act, 1938, and after due consultation with the members of the consultative committee , all the 14 insurance companies which are mentioned in the order of Sebi are directed to note that notwithstanding the said Sebi order, they shall continue to carry out insurance business as usual including offering , marketing and servicing Ulips in accordance with the Insurance Act, 1938, Rules, Regulations and Guidelines issued thereunder by the Irda,?? said an order signed by Irda chairman J Hari Narayan.The Irda has said Sebi order will bring the insurance industry to a standstill which would not be in public interest and would be detrimental to the interests of the policyholders and prejudicial to the interests of the insurers.