The issue had been on the agenda of the inter-regulatory body on financial markets for a long time, says the central bank
Regulators SEBI and IRDA had agreed to settle the issue of jurisdiction over ULIPs mutually at the High Level Coordination Committee (HLCC)—an inter-regulatory body on financial markets—before the conflict snowballed into a full-blown turf war, the Reserve Bank of India (RBI) disclosed today, reports PTI.
“The HLCC did consider this issue. It has been on the agenda for the last several months,” said RBI governor D Subbarao, who is also the chairman of HLCC, when asked why HLCC has not been able to resolve the overlapping power of regulators.
Mr Subbarao further said that both the regulators—IRDA and SEBI—have agreed that they would settle the issue bilaterally.
HLCC, chaired by the RBI governor, consists of banking, capital markets, insurance & pension regulators, besides representatives from the ministry of finance.
It is a high-level forum for interface among financial sector regulators.
“What turned up is a legal issue. Perhaps there should be an agreement to settle at the legal forum,” he added.
Earlier this month, SEBI banned 14 life insurance companies from raising funds through unit-linked insurance plans (ULIPs). However, IRDA asked the insurance companies to do business as usual.
After SEBI and IRDA came out with conflicting orders, the finance ministry intervened and persuaded the two regulators to agree to seek a legally-binding mandate over their jurisdiction over ULIPs.
Following that, SEBI in a fresh order said that no insurance firm should issue any fresh ULIPs.