Market regulator SEBI's order banning insurance companies from raising fresh money from public through ULIPs may affect foreign investments in the sector, a member of the Insurance Regulatory and Development Authority (IRDA) said in Hyderabad on Monday.
"The SEBI act would raise doubts among foreign investors. Insurance sector is the sunrise industry in India. It is one of the flagship sectors of the country's reforms process," R Kannan Member (Actuary) told PTI, adding the issue will be settled in a day or two.
The SEBI, on Friday, banned 14 life insurance companies, including Reliance Life, SBI Life, ICICI Prudential, Tata AIG and HDFC Standard Life, from raising fresh money in ULIP schemes that invests a major chunk of funds in stock markets.
He said there is no issue of one-upmanship between the two regulators as both the bodies are working for the government and the system.
"One industry cannot survive at the cost of others. Financial sector will go together. Either we all fly together or sink together," Kannan said.
He said SEBI's order on Ulips was a surprise as it came even as the two regulators were in talks to sort out the issue.
He said if the companies are not allowed to collect premiums. There will be problem of liquidity.