New Delhi: The Supreme Court (SC) will hear the case pertaining to the row over control of Ulips between market watchdog Sebi and insurance regulator Irda next month but may not decide on the controversy over who would regulate these market-linked insurance products.
“The Supreme Court is in vacation. The transfer petition is likely to be taken up in July,” Irda chairman J Hari Narayan told PTI on Wednesday when asked about the progress on resolving its dispute with Sebi over controlling unit-linked insurance products (Ulips).
Significantly, the Irda chief is not sure whether the apex court will decide on the issue of jurisdiction of Ulips as it is not directly raised in the transfer petition filed by Sebi before the apex court.
“The issue of jurisdiction is not squarely mentioned in the petitions. It is only obliquely mentioned,” said Narayan, who was in the Capital and met finance secretary Ashok Chawla.
Earlier, Sebi had filed a petition in the Supreme Court seeking transferring all the Ulip-related cases from various high courts to the apex court. In this regard, the apex court had issued notices to the Centre, Irda and 14 life insurers.
Sebi and Irda have been locking horns over who has the power to regulate Ulips, which are equity and bond-linked insurance products. The dispute snowballed into a major controversy after Sebi on 9 April banned 14 life insurers, including those belonging to SBI and Reliance Life of the Anil Ambani Group, from raising any fresh money from Ulips unless they are registered with the market watchdog.
Responding to the Sebi directive, Irda asked insurance companies to ignore the order of the market regulator and continue with business as usual.
Amid conflicting orders, the finance ministry brokered peace between the two regulators and asked them to jointly seek a legally binding order from an appropriate court. It also asked the regulators to maintain status quo till a binging judicial order is secured.
Following the government directive of status quo, Sebi allowed insurers to raise money from existing Ulips, but prevented them from issuing fresh Ulips after 9 April.
On jointly seeking a legally binding mandate with Sebi, Narayan said, “we are all for it, but the Sebi counsel told them that it is not a civil matter, civil procedure does not apply.”
According to sources, Irda wanted a joint application under Section 90 of the civil procedure code, but Sebi did not agree. Under Section 90 if any person agrees in writing to state a case for the opinion of the court, then the court shall try and determine the same in the manner prescribed.