Parliamentary panel asks Centre to resolve ULIP row

Parliamentary panel asks Centre to resolve ULIP row

Expressing annoyance over the ongoing dispute between the two regulators on ULIP, the PSC asked the finance ministry to put in place comprehensive regulations for the popular insurance product incorporating the concerns of the both Sebi and Irda.

The committee noted with concern that despite ULIP being an old product, the regulatory jurisdiction over these products is still hazy and not clearly defined with both Sebi and Irda claiming to be mandated to regulate the marketing and sale of these products.

“It is also apparent that while mutual funds, which are akin to ULIP are well regulated in terms of entry loads and disclosure norms this does not appear to be the case with the ULIP,” the panel noted.

Mute spectator

Referring to the ongoing tussle between the Sebi and Irda it said “key financial regulators appointed by government being at loggerheads on an issue concerning large number of investors and subscribers is very unusual and extremely disquieting.”

The committee noted that the ministry of finance cannot remain a mute spectator to such posturings of one upmanship by its regulatory bodies. Against this backdrop it recommended that the Finance Ministry must not only intervene immediately to resolve the deadlock in this matter but also as a general policy should spell out in clear terms their supervisory role vis-à-vis regulatory bodies under their jurisdiction.

Giving one month time to the Ministry to report back to the Committee on steps being taken to resolve the dispute between the Irda and Sebi it suggested that the proposed Financial Stability and Development Council should be constituted early to address such inter-regulatory issues.