Congress MP Sanjay Nirupam on Sunday sought Finance Minister P Chidambaram intervention in SEBI's decision banning issuance of Unit Linked Insurance Plans (ULIP) by life insurance companies. "I request you to intervene and clarify the situation to investors before the market opens for trading tomorrow," Nirupam said in a letter.
Market regulator SEBI on Friday banned 14 life insurance companies, including those belonging to Tatas, SBI, ICICI, HDFC and Reliance Anil Ambani group from raising funds through unit linked schemes. The decision was being taken during the weekend when investors had nobody to consult about the implications of these regulatory actions, he said.
However, Insurance Regulatory and Development Authority (IRDA) said on Saturday night that not withstanding the SEBI order, these companies can do business as usual including offering, marketing and servicing ULIPS, Nirupam said. "Investors are unsure about what it means and whether they should rush to redeem their investments on Monday morning," he said.
Nirupam said in 2008-09 there were over seven crore ULIP policies involving a total premium of Rs 90645 crore in force. In the period April 1, 2009 to February 28, 2010 another 16 lakh policies have been sold with a premium of Rs 44,611 crore.
Nirupam said to the Finance Minister to resolve the unwarranted turmoil between the regulators on top urgent basis since the insurance company supplies the long term money for investments. PTI
