The government is unlikely to intervene in the turf battle over the regulation of unit-linked insurance companies, other than asking the insurance and the capital markets regulators to resolve the issue amicably.
Senior government officials said that the issue was discussed at the last meeting of the high-level committee on capital markets (HLCC) on March 26, where it was felt regulators should discuss and resolve the differences.
“There is little we can do. It is between the two regulators and they should solve the problem. The bottom line is all of us will ensure no investor is inconvenienced,” said a senior finance ministry official.
Since the meeting, the Securities and Exchange Board of India (Sebi) issued an order asking 14 insurance companies to desist from selling or renewing Ulips. The Insurance Regulatory and Development Authority (Irda) responded by asking these insurers to ignore the Sebi order and carry on with business as usual.
The sources said senior officials will discuss the issue on Monday to ensure investors are not affected due to the ongoing fight.
In the past, too, the government has refused to step in to resolve differences between regulators. The issues have, however, been thrashed out at the level of the high-level committee on capital markets.