A bureaucrat or a minister is respected by the size of the fiefdom he runs. So obviously when the corpus in ULIPs has got far higher than the full mutual fund industry….SEBI saw some ground slipping. If SEBI was so clear, it should have woken up long ago. Why was it sleeping.

Also ULIP is so much of a look alike product and it had to be IRDA’s ego that prevented it from doing a ‘cut copy paste’ of the SEBI regulation regarding portfolio norms, charges, disclosure, structure (why not seperate it from the funds of the loss making life insurance companies?) – why not have a trustee, custodian, r&t agent ? We have no clue whether life insurance companies are strictly following the next day nav, time stamping, etc.

In the meanwhile when a life insurance company buys a lemon, what is IRDA doing. After all if RBI is turning a blind eye to the banks taking SB a/c data to mis-sell a life insurance product which looks like a mutual fund Ministry of finance will have to step in, will it not? Do not even see a murmur from RBI about banks biggest future problems – expensive ‘micro -lending’ and life insurance mis-selling and life insurance bundling with loans. On the day it explodes, remember you saw it here first…like they say…’breaking news’

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  1. I personally feel that SEBI has done a lot more for investors in terms of lowering of costs, bringing transparency, etc than IRDA. And I totally agree with your view that its more of ego clash betwen SEBI & IRDA than anything else 🙂

  2. subra

    I recently did a post on how there is force selling happening with loans and other important things like NRE account and PPF account opening . IRDA shuld take a serious look at this . Its disgusting to see how big company are not strict enough to stop this all .


  3. Yesterday I saw an ULIP payment receipt with my colleague. when I inquired with him what it is, he told he had done it for ‘Tax saving’ 🙂

    With the little knowledge I had (from your blog), I told him that ULIP’s are costly and asked him whether he know how much commission (or PAC) they are charging? The answer I got is that he doesn’t aware of any of those charges and the agent doesn’t told him of ‘any charges’. Later I searched in the net for its brochure (it is SBI Unit Plus 3) I saw PAC at 20% for first year and that too it is mentioned in last pages. Then I sent that brochure link to my colleague., but nothing is there he can do bcoz already the cheque he had given was en cashed two weeks back.

    Then I came to know two persons in my team had also done the same ‘tax saving'(each for 50,000) and this guy for 30,000. At 20% PAC the agent got around 26,000 as commission 🙂

    The worst thing is that agent is not an friend/acquaintance of our colleagues, some body just called him for ‘tax savings’ and these guys done that with him.

    Its high time for controllers(like IRDA) had to start some consumer awareness programs.

  4. Praveen

    Why are we dependant on the government to start ‘consumer awareness program’ – why do your colleagues not feel responsible enough and ask your HR to do that? We expect too many things free – and do not understand how expensive free is :). If your colleagues have bought a ULIP and it is less than 15 days (from RECEIVING THE POLICY) he can give it back..BUT HE /SHE SHOULD SCREAM AND DO IT IMMEDIATELY…or else…!!

  5. Hi Subra, already I informed my colleague that he can cancel his policy in 15 days. But he is not in an hurry because many persons in our took the same policy. I had to wait and watch what will happen. I can only advise them (but can’t force 🙁 )

    Actually after seeing this last minute “Tax Saving” thing in my office, even I planned to write an article and circulate it among my colleagues, but I think at present my (financial) knowledge is that good and they also doesn’t listen to a Junior (to them) like me, but definitely I will do this in future.

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