SEBI sounded the battle cry on Friday. IRDA replied with equal force on Saturday. And on Monday — Day 3 of the war over the Rs 135,000 crore unit linked insurance plan (ULIP) market — finance minister Pranab Mukherjee told them both to back off.
“To resolve ambiguity and ensure smooth functioning in the markets, the regulators have agreed to jointly seek a binding legal mandate from an appropriate court,” Mukherjee told reporters. “Meanwhile, status-quo ante is being restored.”
Both Securities and Exchange Board of India (SEBI) chairman CB Bhave and Insurance Regulatory and Development Authority (IRDA) chairman J. Hari Narayan refused to comment. Earlier in the day, Narayan had told reporters the SEBI decision would have a negative impact on policyholders and insurance companies.
“When there are differences between the regulators they should be quickly sorted out so there is no uncertainty,” Planning Commission Deputy Chairman Montek Singh Ahluwalia said.
“Court intervention in such cases is not uncommon,” said Manoj Kumar, managing partner of Hammurabi and Solomon, a law firm. “We’ve seen telecom authorities seek legal recourse in the past and as the economy and markets develop, we’ll see many such overlaps.”