Mukherjee says SEBI, IRDA to maintain ULIP current status

Finance Minister Pranab Mukherjee gestures during a news conference in New Delhi in this May 2009 file photo.

NEW DELHI (Reuters) - The capital markets and insurance regulators have agreed to maintain current status on unit-linked insurance products, Finance Minister Pranab Mukherjee said on Monday.

"The regulators have agreed to jointly seek a binding legal mandate from an appropriate board. Meanwhile, status quo ante is being restored," Mukherjee told reporters after meeting the heads of the regulatory bodies.

Late last Friday, the Securities and Exchange Board of India (SEBI) said it barred 14 life insurance companies from selling unit-linked insurance products without its approval, saying they needed to register with the capital markets regulator.

Unit-linked insurance products, or Ulips, are similar to mutual funds with an added life cover.

A day later, the Insurance regulatory Development Authority (IRDA), which oversees insurance companies, assured policyholders that their investments were safe and issues arising out of SEBI orders would be addressed in the "appropriate forum".

"SEBI does not have a jurisdiction on Ulip products. SEBI believes otherwise. The SEBI decision will have a negative impact on the financials of policy holders and insurance companies," IRDA Chairman J. Hari Narayan told reporters in New Delhi earlier on Monday.

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(Reporting by Manoj Kumar; editing by Malini Menon)

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