New Delhi: Finance Minister Pranab Mukherjee will be briefed on the Securities and Exchange Board of India-Insurance Regulatory and Development Authority row over the ban on Unit Linked Insurance Polices (ULIPs) being sold by insurance companies.
Sources say the Finance Minister is worried about the investors and wants the issue to be resolved by the two regulators soon.
After market regulator SEBI banned 14 major life insurance companies from selling ULIPs, the IRDA rejected its decision and asked companies to carry on with business as usual.
IRDA invoked its powers under Section 34 (1) of the Insurance Act to take on SEBI.
Sources say IRDA's move was aimed at preventing redemption panic in the markets and Mukherjee was not aware of either SEBI or IRDA orders.
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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