Expense Account, Mint
The spat between the insurance and the capital market regulators is now at a critical stage of a game theory experiment. While the regulators are debating the location of the court where the dispute will be heard (the insurance regulator does not want Mumbai where the judge may actually understand finance), insurers are debating whether to carry on with the launch of new investment-linked products.
From what I understand, the debate in the insurance industry is to figure out how far the Securities and Exchange Board of India (Sebi) will go in carrying out its threat of banning new unit-linked insurance plans (Ulips). And what form that ban will take. If the Insurance Regulatory and Development Authority (Irda) were to approve new Ulips, as it has said in repeated press statements that it will, it would be a violation of Sebi’s quasi-judicial order. An ex-regulator tells me that if there are two laws, one that says you can do something and another that says you can’t do that particular thing, the one that says you can’t will prevail.