Ulip row won’t affect investor confidence: Salman Khurshid

NEW DELHI: Minister for corporate affairs Salman Khurshid on Wednesday set aside fears that the regulatory row between Sebi and Irda over market-linked insurance policies could lead to investors losing confidence.

“Investors will have confidence that at the end of the day, even if there is disagreement between regulators, one regulator will prevail (over Ulip issue). It is only a matter of time. So investors need not worry,” Mr Khurshid told reporters on the sidelines of an Assocham event on transparency and accountability. He said regulators are new institutions and there were bound to be overlaps in their functioning.

Referring to engagement rules which apply in cases where there are chances of a regulatory conflict , Mr Khurshid said that in this particular case, the finance ministry seems to have suggested that the courts will clarify the position . Engagement rules refer to practices followed in situations of opposing interests. Ulips are products which combine insurance features with market investment .

Mr Khurshid said similar conflicts on inter-regulatory overlap could also arise between the Competition Commission of India and Sebi or the Central Electricity Regulatory Commission, but added that engagement rules are supposed to resolve these issues . “They (engagement rules) are supposed to resolve any such issue, any potential or actual conflict. It is not an impossible task,” he said.

Conflict between market regulator Sebi and insurance regulator Irda arose when the former banned 14 life insurers from raising money from market-linked insurance schemes (Ulips), following which the latter asked the companies to ignore the order. Subsequently, the finance ministry intervened and the two regulators agreed to jointly seek a legally binding mandate from the court as to who has jurisdiction over Ulips.