Money on the markets
A maturing market amid the mayhem
The finance ministry on Saturday said life insurers could sell unit-linked insurance plans without seeking a nod from the Securities and Exchange Board of India (SEBI).
This ends a spat between regulators over the much sought after product. Under the law, such orders issued when parliament is not in session must be confirmed by lawmakers in their next sitting.
The news would come as a relief to insurance firms and people who invest in such products.
SEBI had in April barred 14 life insurance companies from selling ULIPs without its approval. The Insurance Regulatory Development Authority (IRDA) argued SEBI had no authority to do so. After the finance ministry intervened, the two had decided to maintain the status quo.
It was not the perfect weekend for investors of unit-linked insurance products (ULIP) after market regulator SEBI barred 14 insurance firms from issuing or promoting such plans, which are a favourite among investors.
But Finance Minister Pranab Mukherjee said on Monday SEBI and insurance regulator IRDA have agreed to maintain status quo on ULIPs and also jointly seek a binding legal mandate from an appropriate board.
Years back, while on a trip to Jaipur, I had run into a rather energetic man who insisted on jumping the queue at the post office. When requests failed, I asked him why he was in a hurry.
“I have a savings account here,” he said proudly in Hindi, clutching a dog-eared booklet with currency notes tucked in. Ram Prasad, the 42-year-old cycle rickshaw driver had his way and left flashing his stained teeth.