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| Sebi-IRDA spat over Ulips can impact business: Aegon Religare |
| Press Trust of India / Kolkata May 28, 2010, 17:54 IST |
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Private insurance player Aegon Religare Life Insurance today said if the turf war between the capital markets regulator Sebi and insurance watchdog IRDA over Ulips is not resolved at the earliest it will impact the industry.
"If the issue is not resolved in the next couple of months then it will impact the business," Aegon Religare managing director and chief executive Rajiv Jamkhedkar said, adding however, so far there is no impact on the unit-linked insurance products (Ulips) business and the company does not have any need for new Ulips now.
On April 9, Sebi had banned 14 life insurance companies, including Aegon Religare, from raising funds through Ulips, which invest the premium money in equity and debt markets. But Irda asked insurance companies to ignore the ban and do business as usual as Ulips are an insurance subject and not that of securities market. Sebi reacted to this with a fresh order banning new Ulips.
This forced the finance ministry to intervene which asked the regulators to seek a legally binding opinion on the matter, following which the regulators moved the Supreme Court, which will hear the case in July.
Ulips constitute more than half of the total business of the life insurance industry. At the end of the last fiscal, Ulips comprised around 75 per cent of the total business of Aegon Religare which can be reduced to 65 per cent by the end of this fiscal as there will be increase in traditional products.
Jamkhedkar said the company will infuse up to Rs 470 crore to strengthen its branch network and hire over 15,000 in the current fiscal including 13,000 agents to support its expansion plans.
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