The Finance Ministry on Tuesday said it would find out whether the SEBI order banning issuance of new ULIP schemes is in accordance with the agreement reached between the market regulator and the IRDA.
"We will certainly look into it (SEBI's order issued today). What has happened I don't know ... let us see what it is. Whether it is in pursuance of what was decided and announced by the Finance Minister yesterday," Finance Secretary Ashok Chawla told PTI.
SEBI in its order today said any new ULIP scheme launched after April 9, 2010, by insurance companies will remain covered by its earlier ban order.
"... with respect to any new ULIP schemes/products launched after April 9, 2010, the 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 and Exchange Board of India (SEBI).
The market regulator, however, clarified that it has decided to keep in abeyance, till further notice, its order concerning the ongoing ULIP schemes.
Finance Minister Pranab Mukherjee yesterday asked the two warring regulators -- IRDA and SEBI to "jointly seek a binding legal mandate from an appropriate court" on the oversight of unit linked insurance products (ULIP).
On Friday, SEBI banned 14 life insurance companies from selling ULIPs till they obtained registration from the market regulator. Within 24 hours, IRDA asked the companies to ignore the SEBI ban order and continue doing business as usual.
The companies that the Sebi order banned from raising fresh money through Ulips were SBI Life, ICICI Prudential, Tata AIG, Aegon Religare Life, Aviva Life, Bajaj Allianz, Bharti AXA, Birla Sunlife, HDFC Standard Life, ING Vysya Life, Kotak Mahindra Old Mutual Life, Max New York Life, Metlife India and Reliance Life.