SEBI-IRDA spat: FM to step in

The Head of the Insurance Regulatory and Development Authority (IRDA) has said that the business continuity plans for insurance companies were in place and it advised continued ULIP sales to protect consumers. He also said that no meeting of insurance companies had yet been called by IRDA and there was no advisory yet from the Finance Ministry on the SEBI-ULIP directive, reports CNBC-TV18 quothing NewsWire18.

It may be recalled that on Friday, the SEBI stunned the insurance sector by ordering 14 insurance companies against selling any more ULIPs.Multiple reasons invoked this action. Firstly, SEBI contended that ULIPs as products were very similar to mutual funds and would need to come under the purview of SEBI's regulations. Secondly, ever since the launch of ULIPs, there has been much debate about the high charges and the rampant mis-selling in ULIPs. ULIPs, experts argued, were being sold as short term policies whereas the true benefits would accrue only after a long period of holding.