“...with respect to any new ULIP schemes/products launched after April 9, 2010, directions mentioned in the said order (that banned 14 life insurance companies from launching ULIPs) will be enforced as indicated therein,” said an order by the Securities & Exchange Board of India (Sebi).

The market regulator, however, clarified that Sebi has decided to keep in abeyance, till further notice, its order concerning the ongoing ULIP schemes. “This is to bring to the notice of the investors that Sebi has decided to keep in abeyance, till further notice, the enforcement of the above direction with respect to any new ULIP schemes/products existing on the date of the order,” it said.

Finance Minister Pranab Mukherjee said in Gurgaon, “I do not know what circular they have issued. It is to be examined, but both of them agreed to resolve the issue by referring the matter to the competent court and the court’s interpretation will be binding to both of them.” The Irda had earlier asked the insurance companies to ignore Sebi’s ban order and continue the business as usual, forcing the government to intervene and broker a truce.

Reacting sharply to Sebi’s fresh order, Life Insurance Council (apex body of life insurance companies) said it would definitely affect companies that had started business last year or two years ago in a year or two.

“They were not able to sell many products. They have been unfairly affected by this order. There will not be level playing field for those companies who have just started business and the older ones,” Council Secretary General S B Mathur said.  Meanwhile, a PIL has been filed in the Bombay High Court seeking reversal of Sebi’s ban on sale of ULIPs by insurance companies on the ground that lakhs of investors were suffering from anxiety and uncertainty about their investments due to the order.