Apr 10, 2010

Sebi bans sale of Ulips

UPDATE (12 April, 2010): Ban lifted; dispute to be resolved by a court. Let’s pray Sebi wins because that way the cost of Ulip will come down and the yield / IRR will improve.

In an order issued yesterday (April 9, 2010) night, Sebi has barred 14 life insurance companies from selling Unit linked insurance plans (ULIPs) without its approval. This is a first sincere step by Sebi to break this unholy nexus between IRDA and life insurance companies which has been going on for so long. IRDA was established to protect the interest of policyholders / investors but instead it is promoting the interest of life insurance industry.

But the task is not an easy one...the turf war
between Sebi and IRDA will be a long drawn. So let’s wait and watch. Anyway, my heart felt congratulations to Sebi for taking such a bold step for protecting the interests of investors.

The Money Quest wishes Sebi good luck!

Click here for detailed Sebi order.

Thought for the day
How do the life insurance companies succeed in making a fool of almost the entire nation?

Also see:
1. Revised Cap on ULIP Charges – What a Sham!
2. New Tax Code – Impact on life Insurance policies
3. Understanding life insurance – Ask yourself a few questions
4. Most Amazing Fact about life insurance
5. Little Known Facts about life insurance
6. Review of SBI life SMART ULIP


  1. Katya MehraApril 11, 2010

    Thanks Fisher. I hope SEBI wins the case. I hope we can just get our money back on surrender of our policy :-)
    Lets wait and watch.

  2. Just read the morning papers today...though I hadn't read about the SEBI ban, I read the article on IRDA asking the 14 companies to get back with its ULIP biz as usual. Apparently except LIC, most companies were banned from selling ulip products without placing it for approval with SEBI...which, if they go abt it diligently, actually makes a lot of sense for the investors. However IRDA has ruled it out saying that it is detrimental to the investors (i suppose the existing ones) and prejudicial to the insurance companies (which is the moot point). Hopefully SEBI will persist and come out winners!

    Rgds, Nisha

  3. I sincerely hope SEBI wins the case, looting and cheating by ULIP industry has to stop.
    Now, IRDA has woken up suddenly. What was it doing when companies were cheating people in the name of ULIPs? I think they were also taking their cut from the commission earned by ULIPs by cheating gullible customers.


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