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This time, the insurance regulator has raised objection over the market regulator's proposal to allow insurance companies to become 'proprietary trading members' for the newly approved debt trading on stock exchanges.
The market regulator had last month allowed bourses to set up debt segments to develop the country's languishing corporate bond market.
To boost liquidity in such instruments, Sebi had proposed to have financial institutions like banks, pension funds, insurance firms and mutual funds as proprietary trading members and allow them to trade in their own account
While the Reserve Bank of India has allowed banks to become proprietary members in the corporate bond market, Irda is wary of this. The thinking is, it won't be prudent for insurers to undertake proprietary transactions with policyholders' money.
Irda officials said the move was being opposed because, though the proposal was for the debt segment, there could still be trading losses.
A senior Sebi official said the talks with Irda were still on and there was hope insurance companies would be allowed. Stock exchange officials said the new debt segment was being created to provide framework for trading, as well as clearing, settlement and risk management.
"The debt segment will, in fact, help mitigate risk. If Irda is apprehensive about allowing insurers, it can prescribe internal curbs, such as a cap on exposure or net worth," said a senior official with a stock exchange who didn't wish to be named. He further said Irda could be wary as it believed insurers might also come under Sebi if they became members.
Earlier, the finance ministry had to intervene in 2010 when Sebi and Irda had been at loggerheads over the regulatory jurisdiction of unit-linked insurance products.
