IRDA asks insurers to turn their backs on new SEBI order

New SEBI order banning issue of fresh ULIPS to be ignored, IRDA tells insurers

PTI | April 14, 2010



In a sharp rebuff to market regulator SEBI for banning issue of any fresh unit-linked products, insurance regulator IRDA on Wednesday asked insurance companies to ignore it just like the previous order.

"There is no fresh clarification. The earlier one stands good," IRDA Chairman J Hari Narayan told PTI when asked to comment on SEBI's order yesterday, issued a day after Finance Minister Pranab Mukherjee asked the two watchdogs to restore status quo ante.

SEBI, which had banned last week 14 insurance companies from raising further money through ULIPs without registration with it, had yesterday in a fresh order said that no insurance firm should issue any fresh unit-linked insurance products (ULIP).

Hari Narayan, who had earlier asked insurance companies to ignore the SEBI directives, said whatever updates or notifications are to be given, have been updated in IRDA site and no fresh clarifications are being issued.

Sources in the IRDA said despite being a national holiday today on the occasion of Ambedkar Jayanti, Hari Narayan held discussions with members of the watchdog to draw a roadmap to counter SEBI's alleged intervention into their jurisdiction.

After SEBI and IRDA came out with conflicting orders with each other, Finance Ministry intervened and persuaded the two to agree to seek a legally binding mandate over their jurisdiction over the ULIPs.

To a query, the IRDA Chairman said as the Finance Minister suggested the issue will be settled in courts.

"IRDA and SEBI will jointly settle the issue in courts as suggested by the minister," he said, without specifying when and where the legal battle will be initiated.

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