Indian Govt to Discuss Insurance Clash

By admin • April 12th, 2010

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MUMBAI (Reuters) – According to the Economic Times, today the Indian Finance ministry is likely to discuss a clash between two regulatory bodies over an insurance product linked to the stock market,

Finance Secretary Ashok Chawla told the newspaper, “We will see if the government has a role or we should let the legal process carry forward”.

The Securities and Exchange Board of India, on Friday, barred 14 insurance companies from selling unit-linked insurance products without its approval, saying they needed to register with the capital markets regulator.

The clash came a day later when the head of Insurance Regulatory and Development Authority (IRDA), which oversees insurance companies, said the insurers including Aviva Life Insurance Company, Bajaj Allianz Life Insurance, HDFC Standard Life Insurance and ICICI Prudential Life Insurance can continue selling the product.

Unit-linked insurance products, or Ulips, are similar to mutual funds with an added life cover.

The head of IRDA , J. Hari Narayan told the paper,”The recent developments have been unfortunate” .

“We are clear that the remit over regulation of Ulips rests with IRDA as the law stands now. Investors can go ahead and buy new Ulips or renew Ulips sold by these 14 companies and all other insurers,” he said.

Officials at the insurance and market regulatory authorities could not immediately be reached for comment.

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