Insurance Plans Reviews and Articles

SEBI has banned 14 life insurance companies from issuing ULIP

Posted in life insurance by kishosingh on April 11, 2010

Recently, market regulator SEBI banned 14 life insurance companies from issuing ULIP. ET writes about those companies who have been banned by SEBI, “The 14 companies mentioned in this order include; Aegon Religare, Aviva, Bajaj Allianz Life Insurance, Bharti AXA, Birla Sun Life, HDFC Standard Life, ICICI Prudential, ING Vyasa Life, Kotak Mahindra Old Mutual Life, Max New York Life, Metlife India, Reliance Life, SBI Life, TATA AIG Life.”

J Harinarayan who is the chairman of IRDA said, “After due consultation with the members of the consultative committee all the 14 insurance companies which are mentioned in the order of Sebi are directed to note that notwithstanding the said order of the Sebi, they shall continue to carry out insurance business as usual including offering, marketing and servicing ULIPs in accordance with the Insurance Act 1938.”

The statement was published in economictimes.indiatimes.com, an online news portal about economy and business.

Further the news portal quotes another statement of IRDA, “The IRDA Act `99 is specifically enacted to provide for an authority to protect the interests of holders of insurance policies, to regulate, promote and ensure the orderly growth of the insurance industry.”

In an analysis the news portal quotes some data of IRDA, “Sebi’s order has more far reaching implications than a press release or a circular. Since the order has been issued under Section 34(i) (a) and (b) of the insurance Act. IRDA has said that in the year `08-09 ULIP policies involving a total premium of Rs 90,645 cr were in force. In fiscal `09-10 upto February 16.7 lakh policies have been sold with a premium of Rs 44,611crores.”

Now, the whole things are very clear from the above mentioned data. It is nothing but regulatory battle in insurance segment of India. It is the biggest news in life insurance segments for insurance companies just like M&A guidelines for insurance companies.

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