New Delhi: The Securities and Exchange Board of India on Monday lifted the ban imposed on selling of Unit Linked Insurance Polices (ULIPs) by 14 insurance companies.
The ban was lifted after market regulator SEBI officials met Insurance Regulatory and Development Authority (IRDA) and Union Finance Ministry officials in New Delhi.
Union Finance Minister Pranab Mukherjee, who chaired the meeting, said that status quo on the ULIP matter has been restored. Mukherjee said the Finance Ministry has sought legally binding verdict from courts on ULIPs.
With the lifting of the ban status quo on the ULIP issue has been restored. There is now no ban on insurance companies providing ULIPs as part of an insurance policy.
Earlier SEBI Chairman CB Bhave and IRDA Chairman J Harinarayan met Union Finance Secretary Ashok Chawla separately on Monday to resolve the tussle over the ban on selling of ULIPs between the two regulators.
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 had on Friday banned 14 insurance companied companies from selling ULIPs saying they are not authorised to sell investment products since ULIP is a kind of a mutual fund.
While passing the order late on Friday night, SEBI said the insurers had not obtained any registration from the regulator though the ULIPs launched by them had an investment component in the nature of mutual funds.
The insurance companies against whom SEBI passed an order are 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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