Ministry in a fix on legal opinion in Sebi-Irda spat

The row between regulators over Ulip monitoring has the officials baffled

Ministry in a fix on legal opinion in Sebi-Irda spat

 The finance ministry had referred the row between the two over who should regulate the Unit linked Insurance Products (Ulips) for legal opinion from the law ministry. However, the law ministry itself is unable to use the expertise and services of its two top law officers as they have already been approach by market regulator Sebi or insurance watchdog Irda with their respective cases.

Opinion sought

Neither Attorney General G E Vahanvati, who is representing Sebi in a Ulip-related petition filed by the regulator in Supreme Court, nor Solicitor General Gopal Subramanian, who is believed to have been approached by Irda for its case, could be contacted for comments. The officials concerned in the ministry are baffled as to who they should approach to put together the opinion sought by the finance ministry. As the fight between the two became public after Irda challenged a Sebi order banning 14 insurance companies from raising funds through Ulips, Finance Minister Pranab Mukherjee had told reporters earlier this month that a legal remedy to this issue would be found.

Although the two regulators decided to move court jointly, differences appeared once again this week when Sebi questioned Irda Chairman J Hari Narain’s move to approach court under a particular clause.

Following this, the finance ministry once again intervened and approached the law ministry for its opinion. The dispute between the two watchdogs arose as ULIPs are both an insurance product as well an investment scheme. As such, both regulators claim it to be their jurisdiction to regulate such schemes.

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