Don’t launch any new ULIPS : SEBI

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In terms of para 26 of the said order, 14 entities have been restrained from issuing any offer document, advertisement, brochure soliciting money from investors or raise money from investors by way of new and/or additional subscription for any product (including ULIPs) having an investment component in the nature of mutual funds, till they obtain the requisite certificate of registration from SEBI. As per para 28 of the said order, the order shall come into force with immediate effect, i.e. from 09.04.10.This is to bring to the notice of investors that SEBI has decided to keep in abeyance, till further notice, the enforcement of the above directions with respect to the ULIP schemes /products existing on the date of the order, i.e. 09.04.10. However, with respect to any new ULIP schemes / products launched after 09.04.10, the directions mentioned in the said order will be enforced as indicated therein.

SEBI does it again. Even after Finance Minister’s intervention, it ordered insurance companies to refrain from launching any new ULIP scheme. This means that even though insurance companies can continue selling and renewing their existing unit-linked products, they cannot launch new ULIPs.

Government should act fast and decisively. We should not just copy practices from abroad. Common investors interests are paramount. Imagine the situation before the introduction of ULIPS in India. Even during that period, LIC did good business and made profit. But ULIPs gave super normal profits to private insurance players and it’s agents. IRDA wanted to protect these suckers.   If these private insurers do any foreign exchange transaction, quite naturally they need to take necessary approvals and permissions from RBI. In that case IRDA can’t argue RBI has no jurisdiction over it’s most favorite private insurance companies. The same logic applies for ULIPS also. If private insurance companies want to do  the business of an asset management company, they have to seek additional approvals from SEBI and adhere rules and regulations of SEBI.

Dear Mr. Finance Minister, I don’t understand this situation. If I need to invest Rs.1lakh in an Mutual Fund Scheme, I need to submit my PAN card details andKYC documents. But, If I need to invest the same one lakh through ULIP (I am having option of buying no insurance or paying very low insurance premium allocation and maximum investment allocation), I don't need to submit my PAN details. Do you support this? IRDA supports. You please don’t support IRDA.    

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