SEBI vs IRDA SEBI moves Supreme Court

IRDA and SEBI are at loggerheads on the issue of regulation and administration of the Unit Linked Life Insurance Policies (ULIPs). News channel CNBC reports that SEBI moved the Supreme Court yesterday to settle the dispute..The Insurance Regulatory and Development Authority (IRDA), and the Securities and Exchange Board of India (SEBI) are at loggerheads on the issue of regulation and administration of the Unit Linked Life Insurance Policies (ULIPs). News channel CNBC reports that SEBI moved the Supreme Court yesterday to settle the dispute..This move by the market regulator was probably triggered by a spate of Public Interest Litigations (PIL) filed across India. The dispute began when SEBI, the securities regulator issued a directive on April 10, 2010 banning insurance companies from raising money from the public for ULIPs.. The IRDA had directed the insurance providers to ignore the SEBI directive, citing that ULIPs are essentially an insurance product and were outside the purview of SEBI’s mandate..This led to both regulators approaching the Finance Ministry to find a resolution to this issue. Finance Minister Pranab Mukherjee had told media persons, “To resolve any ambiguity and to ensure smooth functioning in the market, the regulators have agreed to jointly take a binding legal mandate from an appropriate court.”.Reports indicate that initial attempts by SEBI to file an application jointly before a Civil Court was met with silence on part of the IRDA, resulting in the former moving the Supreme Court. SEBI had earlier on April 16, 2010 filed caveats in the Supreme Court and the High Courts of Delhi, Bombay and Andhra Pradesh..There have been a number of petitions filed across India challenging the SEBI directive. Rajesh Thacker, a Mumbai-based businessman has filed a petition before the Bombay High Court and has requested the court to direct SEBI to reverse the directive banning insurance companies from raising money from public for ULIPs. While some petitions seek the exclusion of SEBI from exercising any authority over ULIPs, a petition filed in the Allahabad High Court by Dhruv Kumar, a lawyer and a former insurance professional, has sought SEBI’s intervention for more regulation in the ULIPs market..As the battle ground of the two regulators shifts from North Block to Tilak Marg, it will be interesting to see what the Apex Court has to say on the matter.