Ulip issue before SC

Replies sought from Irda and 14 insurers by July

A bench headed by Justice S H Kapadia directed the respondents to file their reply by June last week and fixed July first week as the next date of hearing. Attorney General Ghulam E Vahanvati appearing on behalf of Sebi, said the case should be heard by a single court so that there would not be a conflicting ruling.

The bench suggested that why not to transfer the matter to the Bombay High Court and club all the petitions together.

“(Government) appoint a super regulator to adjudicate the issues between these two regulators,’’ suggested Justice Kapadia during the hearing.

In its petition, Sebi said it has sought to transfer of the petition to the apex court on grounds of avoiding multiplicity of cases and judgement arising out of different high courts.

In an order April 10, the Securities & Exchange Board of India restrained 14 insurance companies from raising fresh money through Ulips.

The first PIL, filed in the Bombay High Court on April 15, 2010 by one Rajendra Thacker, a businessman based in the Mumbai suburb of Borivalli, is against the Sebi order preventing insurance companies from selling Ulips.

The second PIL, filed in the Allahabad High Court on April 22, 2010 by one Dhruv Kumar, a lawyer and former insurance professional, is against the Irda.

The PIL alleges that insurance agents are selling Ulips by misleading buyers promising high returns from them. It also alleges that a few insurance companies are using multi-level marketing structure to sell insurance policies. Ulips are investment plans offered by insurance companies with insurance cover of the buyers.