The Securities and Exchange Board of India (SEBI) has made the next move in the battle of the regulators. Medialearns from sources that SEBI has moved the Supreme Court in the ULIP matter. The petition, which was prompted by a spate of public interest litigations (PILs) was filed on April 28th and SEBI has sought the clubbing of all PILs.
Earlier this month, SEBI triggered off the battle by asking all insurers to stop the sale of ULIPs, which according to SEBI, should come under its regulations. Insurance regulator IRDA immediately struck down on this call and asked insurance companies to ignore SEBI's order.
What followed was a bitter public spat between the two regulators with the Finance Minister intervening and calling for a joint application before the judisciary.
Medialearns from sources that since SEBI did not get a reply from IRDA for this joint application, SEBI has gone ahead and made this move. SEBI, sources say, also believes that this joint initiative, if at all, should be heard by the Supreme Court and not in multiple jursdictions across the country.
A PIL was filed in the Bombay High Court seeking reversal of the SEBI ban on the sale of ULIPs. It sought guidelines on overlapping governance. The petition was filed by a Mumbai-based investor. The Insurance Regulatory and Development Authority (IRDA) had been made party to the PIL.
Another PIL was filed in the Allahabad High Court against the IRDA. The PIL alleged that insurers were guilty of promising high return on unit-linked insurance plans (ULIPs). The PIL highlighted cases of mis-selling of ULIPs and alleged that some insurance companies were indulging in multi-level marketing activities.