Finally the Supreme Court (SC) will hear the case pertaining to the row over control of unit-linked insurance products (Ulips) between the market regulator – SEBI and the insurance regulator – IRDA in July (as the court is in vacation) but chances are that the controlling issue might not be resolved.
The petition filed in the court has no direct mention of the jurisdiction issue. Thus IRDA chief is unsure if SC will decide for the same.
Earlier, Sebi had filed a petition in the Supreme Court seeking transferring all the Ulip-related cases from various high courts to the apex court following which the SC had issued notices to the Centre, Irda and 14 life insurers.
Just in case you are new to the Ulip controversy, here is a quick re-cap:
SEBI and IRDA have been arguing about who has the power to regulate Ulips which happens to be equity and bond-linked insurance products.
Fight over regulation escalated on 9th April when SEBI banned 14 life insurers (excluding state-owned LIC) from raising any fresh money from Ulips unless they are registered with SEBI.
To this IRDA asked insurance companies to ignore the order and continue their business as usual.
When SEBI would have issued the directive to LIC and few other insurers, the finance ministry had to intervene and got the status quo restored. FinMin also asked them to jointly resolve the matter in court.
Thus Sebi allowed insurers to raise money from existing Ulips, but prevented them from issuing fresh Ulips after 9th April
Based on information collected from various sources, Irda wanted a joint application under Section 90 of the civil procedure code, but Sebi did not agree. Under Section 90 if any person agrees in writing to state a case for the opinion of the court, then the court shall try and determine the same in the manner prescribed.
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