Sebi bans Ulip! Breaking News!

If you think you heard the last in the SEBI vs. IRDA fight…well the answer is no. The latest salvo is from SEBI – they have BANNED unit linked plans!

They have banned all the life insurance companies. It is an order by Mr. Prashant Saran whole time member…here is a pdf of the order..ULIPOrder

Mr. Saran says that the notices were sent in December to all the companies and they all have made written submissions….however he does not think it is necessary to give them a personal hearing. Hence after considering all the brochures and definitions…from IRDA and SEBI and the contract regulations…SEBI HAS BANNED ULIPS!

It is quite amazing that this order covers 14 companies – and excludes LIC, Shriram, BoB, have been excluded….

The industry is still in a state of denial. In fact I have been asked not to sensationalize a WRONG order…I have no clue ….draw your own conclusions…

THIS is going to be fun…watch this space!

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12 Responses to “Sebi bans Ulip! Breaking News!”

  1. In other news, the government of India has ordered Bollywood to stop making stupid movies. Also, Sreesanth has ordered batsman to not hit his deliveries for boundaries.

    Also, I have ordered my wife to only make delicious meals 🙂

  2. Step in a right direction, but with a delay of almost a decade, that’s how I see this ULIP Ban. I’m unable to understand the stand taken by IRDA. I have read the order of SEBI & from the order I feel SEBI is merely asking for registration of ULIPs with it. Once ULIPs r registered with SEBI & adhere to rules & regulations of SEBI, no problem in any manner ‘ll be there for these ULIPs.

    Regarding the role of IRDA, I’m recalling one of ur old post where u told something like
    Quote –

    IRDA is meant to protect somebody – so sometimes it protects jobs in the industry, sometimes it protects agents, sometimes it protects the shareholder / promoter of the life insurance companies…and some times even the bloody policy holder…



  3. Did Obama not issue an arrest warrant for Osama? things do happen 🙂
    Dhirendra Kumar says if SEBI were to regulate ULIP clients will get better returns. What you say depends on where you sit. With 1% gross margins, how will mf make money? and if they do not how will they advertise on valueresearchonline? If H bank can give IPL tickets to transfer aum (I did it so I know)and consolidate..will we have 4 manufacturers and 12 distributors? then we do not need so many websites to use PAST DATA to analyse and rank funds which people use for FUTURE performance. LOL. ROFFLL.

  4. well mixed reactions. One potential ceo said ‘Do not sensationalize, the order is wrong.

    another hi ranking official said ‘Ek to Sat afternoon ka neend bigad diya, ESOP ka vaat laga diya…with your sms asking me to read your blog..Now you are asking me for my reaction? Saale phut….

    will keep posting more…

  5. Ravinder Makhaik on April 10th, 2010 at 9:02 pm

    Reactions are coming in thick and fast

    ULIPs are becoming a victim to over-regulation.

  6. Amazing! Really? Why is LIC missing from the list? LIC garners ULIP premiums more than all the others put together! Guess, who is the joker in the pack? The 14 insurers, IRDA, MoF, SEBI or Chandu (Halwai) Bhave, who has taken regulation to a new level…er, actually, into a boxing ring!

  7. Whatever be the validity of the SEBI order, the outcome of this spat will definetly benefit the customers, who until now were being fleeced by the insurance companies.

  8. Very interesting indeed. Sandeep Parekh has some thoughts on what might happen next …

    Mr Subra, please keep us (your readers) updated on this matter. Thanks, as usual.

  9. I have come to a fantastic conclusion. LIC is missing because LIC is missing !! :). No other reason. Irda says it is beyond sebi jurisdiction. Funny what started as a small turf battle is now a big fight. Amused at Suku’s post quoting Dhiren from a TV channel :). Another friend told me about ZEE business / news channel saying ‘Irda chief should be arrested…or he should guarantee that there will be no losses…”

    will post more…have fun. In the post on risk I forgot to add ‘Squabbling regulators risk’ LOL

  10. SEBI Bans ULIPs: Regulators in a Boxing Ring - Ranjan Varma on April 11th, 2010 at 11:12 am

    […] Subramoney on the Ban Order […]

  11. Why is no one asking this question..why were LIC and some similar insurance companies spared by SEBI?

    Do you know the answer?

  12. 3 phone calls, 1 sms…surprisingly no emails asking same question:

    “should I surrender my ULIP”. My answer: ‘You should not have bought it perhaps”.

    then no answer LOL

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