Even as SEBI and IRDA have decided to approach court to seek direction on regulating ULIPs, a Public Interest Litigation has been filed in the Bombay High Court, seeking reversal of SEBI's ban on sale of Unit Linked Insurance Products by the insurance companies. The petition, filed by an investor, is expected to come up for hearing on April 15.
Petitioner Rajesh Thacker, a Mumbai-based businessman, has claimed that lakhs of investors in the country are "suffering anxiety and uncertainty about their investments" due the order passed by Security and Exchange Board of India (SEBI). Insurance Regulatory and Development Authority (IRDA) too has been made a party to the PIL.
Pending the hearing of PIL, SEBI as well as IRDA be directed to issue a public notice "before passing orders which will affect the citizens of India" and to "formulate guidelines for overlapping areas of governance", the PIL says. On April 10, SEBI barred several insurance companies from selling Unit Linked Insurance Products as these are in the nature of mutual funds and not insurance. The order said that these companies must register themselves with SEBI first, before they sold ULIPs.
However, IRDA has argued that insurance companies could sell ULIPs. PTI
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