Ulips row: Life insurers reply to Sebi notice

Some of the major life insurance companies have replied to the market regulator Sebi's show-cause notice issued to them on the Ulips issue while others are in the process of submitting their replies, officials from different companies have said.

Sebi had issued show-cause notices to a host of life insurers asking them to explain as to why they had not taken its permission before launching Ulips-- unit-linked insurance products, the return of which are linked to stock market conditions as part of the premium is invested in stock markets.

Officials from companies such as Max New York Life, Bharti AXA and HDFC Standard Life amongst others, said they have responded to the Sebi notice.

Bajaj Allianz Life is also understood to have submitted its reply, a source said, adding other insurance companies are expected to submit their replies very soon.

While none would divulge details, the life insurers are understood to have taken a stand that Ulips come under the purview of Irda, the industry regulator, and hence, they do not need Sebi permission for their launch.

Sebi, in its notice, had argued that the structure of Ulips is similar to that of mutual funds and in the nature of collective investment schemes and hence, falls under its purview.

Ulips are those insurance products where a part of the premium goes towards providing life-cover and the funds are mainly invested in stocks.