Market regulator the Securities & Exchange Board of India (Sebi) and the Insurance Regulatory & Development Authority (Irda) have started talks to iron out differences over the regulation of unit-linked insurance plans (Ulips).
Senior official said that Sebi had agreed to explore various ways to resolve the matter. Irda Chairman J Hari Narayanan had an hour-long meeting with Sebi Chairman CB Bhave on Friday to discuss the issues revolving around regulation of Ulips.
The meeting took place in the wake of the show cause notices issued by Sebi to life insurance companies over selling Ulips without any prior approval from them. Sebi had sent a copy of the notice to Irda later.
In its response, insurance regulator has written to Sebi saying the unit-linked plans were approved by Irda under the Insurance Act. Sebi, on the other hand, had questioned the sale of Ulips by insurance companies under collective investment schemes, which comes under its purview. The debate over regulating Ulips emerged after Sebi banned entry load on mutual funds in August last year. Subsequently, Irda had capped overall charges on Ulips.
The efforts to resolve the issue comes ahead of a meeting of the high-level co-ordination committee on financial markets, which is expected to meet over the next few weeks. Apart from discussing the report of the committee headed by D Swarup, which had suggested a revamp of the commission structure for life insurance, regulation of Ulips is also expected to be on the agenda.
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Senior official said that Sebi had agreed to explore various ways to resolve the matter. Irda Chairman J Hari Narayanan had an hour-long meeting with Sebi Chairman CB Bhave on Friday to discuss the issues revolving around regulation of Ulips.
The efforts to resolve the issue comes ahead of a meeting of the high-level co-ordination committee on financial markets, which is expected to meet over the next few weeks. Apart from discussing the report of the committee headed by D Swarup, which had suggested a revamp of the commission structure for life insurance, regulation of Ulips is also expected to be on the agenda.
