By IANS,
Chennai : The Insurance Regulatory and Development Authority (IRDA) has asked 14 life insurers to defy the Securities and Exchange Board of India (SEBI)-imposed ban on selling unit linked insurance policies (ULIP).
The IRDA, contending that the ban would bring the life insurance sector to a standstill, Saturday night directed the 14 insurance companies mentioned in Friday’s SEBI order to “continue to carry out insurance business as usual, including offering, marketing and servicing ULIPs in accordance with the Insurance Act, 1938, Rules, Regulations and Guidelines issued by it.”
Meanwhile, the life insurers — Aegon Religare, Aviva, Bajaj Allianz, Bharti AXA, Birla Sun, HDFC Standard, ICICI Prudential, ING Vyasa, Kotak Mahindra, Max New York, Metlife India, Reliance Life Insurance, SBI Life Insurance and TATA AIG — are expected to approach the court Monday to get a stay on the operation of SEBI’s ban order.
According to the IRDA, in 2008-09, 7.03 crore ULIPs involving a total premium of Rs.90,645 crore were in force.
A total of 16.7 lakh policies were sold with a total premium of Rs.44,611 crore April 1, 2009-Feb 28, 2010. The 14 insurance companies have an equity capital of Rs.16,281 crore as on March 31, 2009, it said.
The insurance regulator observed in a statement that the SEBI order would cause the stoppage of all renewals of insurance policies already invested in by the public.
It may result in the forced premature surrender of insurance policies, causing substantial loss to the policy holder and to the insurers, destabilising the market and upsetting financial stability, the IRDA added.