Domestic Life insurance players have heaved a sigh of relief on Monday as the tug of war between two regulators-Irda & Sebi-has been brought to an end, though temporarily, with the intervention of ministry of finance.
Finance minister Pranab Mukherjee on Monday said the two regulators have agreed to maintain the status quo that existed before the ban. The status quo will be maintained till a court decides who can regulate Ulip schemes, he said.
Reliance Capital, the holding company of Anil Ambani Group?s insurance ventures, on Monday said Irda?s direction to ignore the Sebi order, which banned 14 companies from selling Ulips, has addressed ?immediate concerns? and protected interest of policyholders.
?With Irda passing a formal order directing insurance companies to go ahead and continue with their Ulip business, any immediate concerns have been addressed,? said Sam Ghosh, CEO, Reliance Capital.
?This is an issue that has been brewing for some time and we hope it will be sorted out between Irda and Sebi expeditiously,? he added.
ING Vysya Life Insurance MD & CEO Kshitij Jain said business on Monday was as usual as there was no other shocks for the policyholders.
?Having dual regulators for the same financial products is not a bad idea. The only thing that the role of both the regulators must be clearly defined so as to avoid any confusion in the future. I am of the view that the insurance products are different from the mutual funds in three aspects- investments, having a longer term and finally, it has got the element of life protection too,?? he said. Another chief of a life insurance company said though the industry is happy that the government has intervened into the matter at the right moment, it is yet to be clear what will be its implications in future.
?We are yet to know whether the issue would be tackled by normal court of law or a special tribunal would be formed to find out a way. At this moment, the business has become as usual after it was expected to be hit by the Sebi notice,?? he said. SB Mathur, secretary general, Life Insurance Council, said the life insurers would meet soon to examine the implications of the latest developments.
Market regulator Sebi?s order banning insurance companies from raising fresh money from public through Ulips may affect foreign investments in the sector, said R Kannan Member (Actuary).