The stand-off between SEBI and IRDA is an affront to norms of regulation and poses a rhetorical question asto who would regulate the regulators. Is it time to opt for a super regulator ?
SEBI has obviously jumped the gun and issued show-cause notices to insurance companies without taking IRDA into confidence. If regulators take delight in outwitting each other, can we expect the regulated to adhere to fairness in competing with one another ? SEBI is perhaps technically correct in viewing ULIPs as mutual fund products and therefore subject to its regulation also. SEBI ought to have convinced IRDA instead of issuing directions to insurance companies. Regulators need not indulge in games of oneupmanship.
The finance ministry could have tried to settle the turf issues posed by this episode instead of advising the regulators to approach the court of law. The ministry has only ensured that IRDA and SEBI are in for protracted wrangling over jurisdiction consuming their precious time which should better be used for regulation.
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