Market regulator Sebi has issued show cause notices to many life insurers including Aviva Life, Bharti AXA Life, Bajaj Allianz Life, Max New York Life And Reliance Life for their ULIP products.
Sebi's notice claims that ULIPs or Unit Linked Insurance Plans fall under the 'Collective Investment Scheme' category as per Section 12 1(b) of the Sebi Act.
Basically Sebi deems ULIPs as investment accumulation products thus requiring its approval.
Sebi had already issued a similar show cause notice to HDFC Standard Life.
When asked to comment Bharti Axa Life responded in a written reply stating that "since we learn that many other Life Insurance companies have also received such letter, we are referring this issue to Life Council and to Insurance Regulatory Development Authority (IRDA). As you would know, it is common knowledge that companies like us are registered under Insurance Act, 1938 and our products are approved under IRDA regulations."
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