| Topic : banking and insurance |
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Activity:
Question posted: 02 13 2010 20:36:38 +0000,
4 answers, 885 views, last activity
07 06 2010 20:18:08 +0000
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Kindly share your valuable comments on the recent issue between the regulatory bodies, SEBI and IRDA over the issue of ULIPs.
Ulips are significant source of revenue for insurance companies and have indirectly contributed heavily to the growth of stock market also.
SEBI’s stand is that ulips and mutual funds being akin, insurance companies should get approval from them.
Recently there was news that this scuffle is affecting prospective ipo s of ulips.
Here's a nice view on the episode
http://blogxploitation.blogspot.com/
Now that everything is settled, we can sit back and see the humor in it.
Annuity products do not have a life cover but have a survivor benefit, which is why they are not like a regular insurance product with a life cover.Nowhere in the world are multiple regulators allowed to regulate the same financial products
At present, close to 90% of the premiums collected by private sector life insurers is channelled into Ulips, which have become extremely popular over the last 4-5 years. The primary reason why insurance firms have been more successful than their mutual fund peers in attracting investors is because their distributors were paid very large commissions. These commissions, as high as 40% in the first year of hence it is presumed Mutual Fund companies are also behind SEBI tio regulate Insurance product
This is another govt body fighting anotgher govt body for supremacy, actuallY Finance Minister shoudl stpe in and close this no value adding activity which is keeping insurance conmpanies on tenter hooks
Dear jyothi sir,
Thanks for your valuable suggestion. I opted for a q&a, as in addition to supporting either sebi or irda a third opinion for a super regulator was also possible and was confused.
I think They should function in such a way to offer maximum to the overall development of the nation, rather than fight for dominance. Definitely ulips will affect mutual fund industry, but they have contributed heavily to the development of Indian stock market. The regulatory scuffle affecting ipo s should be taken more seriously.
Dear Padmanabhan, Why don't you create a debate out of this? It will be so interesting as the users will be interested to comment on such kind of recent news. I will also refer this to my connections.
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