ULIP war may go to court

Going ahead with the Insurance Regulatory and Development Authority’s (IRDA) directive on Saturday to continue selling Unit Linked Insurance Policies (ULIPs), insurance companies say that it is business as usual for them. However, they will have a legal option in place, reports HT Correspondent.

Going ahead with the Insurance Regulatory and Development Authority’s (IRDA) directive on Saturday to continue selling Unit Linked Insurance Policies (ULIPs), insurance companies say that it is business as usual for them. However, they will have a legal option in place.

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“While we will continue to offer as directed by IRDA, insurance companies are looking at legal option where they can safeguard their business interest in case the tiff between the two regulators intensifies,” said a senior official at an insurance company on conditions of anonymity.

Experts say that the Sebi order is a quasi-judicial order and a violation of the same is a civil offence and thus may lead to civil penalty.

“If insurance companies violate it and continue selling Ulips, then Sebi might approach the court,” said an industry insider on conditions of anonymity.

On the other hand, Sebi is expected to announce its next step on Monday. Experts say that this is not the first product over which two regulators have clashed. There are products such as currency futures and interest rate futures where two regulators have fought.