After the Securities and Exchange Board of India (SEBI) and the Insurance Regulatory and Development Authority (IRDA) locked horns over the jurisdiction of unit-linked insurance products (ULIPs), the government issued an ordinance giving the insurance regulator the powers to regulate such schemes, leading to concerns about finance ministry becoming a “super-regulator”. In an interview to NDTV Profit, IRDA Chairman J. Hari Narayan said that’s not the case. Excerpts:
Is there a concern that the committee set up to settle the (ULIP) dispute could end up being a super regulator?
I don’t see that happening at all. The HLCC (high level coordination committee) has been set up to resolve matters between regulators. The new committee proposed in the Bill is a wider body, which will look into issues even relating to products.
Are we likely to see more changes in norms for ULIPs?
At the moment, we have tightened up the various aspects of ULIPs. However, regulation of products is a dynamic affair. We will have to see, for instance, how the markets move and address concerns of policy holders. So I can’t say this is the final thing on ULIPs.
HLCC represents all the regulators, has a govt official on board and is headed by the RBI. What is the need to set up a separate committee?
The committee will be an alternative or a second consultative body. The government has the power to issue directions to any regulator, and regulatory bodies are bound to follow directions.
RBI has gone on record saying that it is uncomfortable with the ordinance to be converted into a Bill and it is a threat to regulatory independence. Is there a split among the regulatory community?
It’s a matter that you should perhaps address to the appropriate quarter.
Now that this committee that has been proposed, what will be the role of the Financial Stability and Development Council (FSDC)?
The issues of financial stability are much larger and wider are completely different from minor legislative issues. The FSDC deals with the entire financial stability of the country and its major institutions.
The interview will be aired on NDTV Profit on July 24 at 10:30 am & July 25 at 2.30 pm.