SEBI Bans ULIP – Beginning of Financial Markets Cleanup in India ?
April 10, 2010
The Securities and Exchange Borad of India under Mr. Bhave and Whole Time Director Mr. Prashant Saran have banned ULIP – Unit Linked insurance Policies of 14 companies with immediate effect. It is an excellent move in our view. Seconding our views just minutes ago Union Finance Ministry has asked SEBI and IRDA to settle the dispute between themselves, in a way of speaking the arrogant IRDA must now go to the SEBI to talk.
We are very happy today as way back in July-2009, we were the first in indian financial media to raise a Debate on comparing ULIPs and Mutual Funds and justifying to all our Readers why Investment in ULIPs should be avoided.
In SEBI’s Order, 14 Indian Companies Made it to the Hall of Shame with Greedy ULIP Policies in force, which are as follows,
- Aegon Religare Life Insurance Company Limited
- Aviva Life Insurance Company India Limited
- Bajaj Allianz Life Insurance Company Limited
- Bharti AXA Life Insurance Company Limited
- Birla Sun Life Insurance Company Limited
- HDFC Standard Life Insurance Company Limited
- ICICI Prudential Life Insurance Company Limited
- ING Vyasa Life Insurance Company Limited
- Kotak Mahindra Old Mutual Life Insurance Limited
- Max New York Life Insurance Co. Limited
- Metlife India Insurance Company Limited
- Reliance Life Insurance Company Limited
- SBI Life Insurance Company Limited
- TATA AIG Life Insurance Company Limited
We have received the copy of SEBI Order and Mr. Saran’s order is as follows,
Accordingly, in exercise of the powers conferred upon me by virtue of section 19 of the SEBI Act read with sections 11, 11B and 12(1B) thereof, I hereby direct the entities mentioned in para 1 of this order not to issue any offer document, advertisement, brochure soliciting money from investors or raise money from investors by way of new and/or additional subscription for any product (including ULIPs) having an investment component in the nature of mutual funds, till they obtain the requisite certificate of registration from SEBI.
IRDA is one of the Worst Regulators in our View – Why ? Well as a Regulator, your duty is to Write REGULATIONS and enforce them, however, why do you advertise asking people to invest in ULIP, It is not the Duty nor Responsibility of a Regulator. Your failure in enforcement of Free Lookup and Mis-Selling of Insurance and ULIPs is evident online here and on ComplaintBox. Hence, we believe that SEBI has done a commendable job by exercising the powers it has to save the Wealth Millions of Hardworking Indians from falling in Bad Hands.
Is this Beginning of Cleaning the Financial Markets in India ? – Well, we really hope that SEBI and its officials stick to their judgment and don’t budge under pressure from North / South Block in New Delhi and continue their exercise of cleaning the Financial System, really especially the ULIP issuing companies. Globally, Honest Tax Payers and hard Working Citizens are asking why Banks / Insurance companies charge so much fees and take home so much salary when they are not solving problems of our society [read clean energy / alternate fuel, cure for cancer / medical research, water and infrastructure etc]