The Insurance Regulatory Authority of India (IRDA) will regulate the issue of unit-linked insurance policies (ULIPs) and the insurance regulator will now come up with revised guidelines on ULIPs.
The President on Friday promulgated an ordinance to this effect. The ordinance will be made into bill to be passed at the next session of Parliament.
"Life insurance business shall include any ULIP or any such instruments. This would set at rest all the issues regarding ULIPs between the two financial regulators," the government said after promulgating an ordinance to make necessary changes in the law.
The finance ministry is expected to issue notification on the ordinance and the bill to replace the ordinance is expected in six weeks of during the next session of Parliament.
The ordinance ended a two-month-long turf war between IRDA and capital market regulator Securities and Exchange Board of India (SEBI) over the issue and sale of the hybrid product ULIP, which has the character of both an insurance policy as well as a mutual fund product.
A high-level committee chaired by finance minister Pranab Mukherjee is also looking into the issue of jurisdiction of all such hybrid products.