Contrary to their earlier stand to move court jointly for settling the issue of control over Ulips, difference have surfaced between insurance regulator Insurance regulatory development authority and market watchdog Securities and Exchange Board of India on the legal recourse.
IRDA said it wanted to seek a legal mandate jointly with Sebi, but the market regulator had reservations.
"Sebi has written a letter to us, that according to their legal counsel, the joint application is not valid in this (Ulip) case under section 90 of Civil Procedure Court," IRDA chairman J Harinarayan told PTI from Hyderabad.
According to sources, a renowned lawyer had suggested the regulators filed a case under section 90, as they were not adversaries fighting each other but only required a legal clarification over jurisdiction.
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.'
Asked whether IRDA would again approach the government, he said it could be one of the options.
However, Sebi chairman C B Bhave refused to comment on the issue, when contacted. The high voltage dispute between Sebi and IRDA arose when the market regulator banned 14 life insurers, including those belonging to State Bank of India and Reliance Anil Ambani Group, from raising any further money from Ulips unless they are registered with the market watchdog.
However, IRDA asked insurers to ignore the order and continue doing business as usual. After the two conflicting orders, the matter reached the finance ministry, where the two watchdogs agreed to jointly seek a legally binding mandate from an 'appropriate' court. Till then, status quo ante was restored.
Following government directive, Sebi allowed insurers to raise money from existing Ulips, but banned new launches under the scheme.
Sebi has been contending that Ulips, which have an investment content, should fall under its purview, while IRDA says as Ulips are an insurance product they are the subject matter of the insurance regulator.