SEBI Bars Mutual Funds From Bundling Insurance With Schemes
The regulator cited the instance of bundling insurance features with investments such as SIP Insure.
India’s market regulator has barred asset management companies from selling plans that bundle insurance with their mutual fund schemes.
The Securities and Exchange Board of India has observed that some mutual fund houses are “proposing to introduce bundled products and some existing schemes have such bundled products”, it said in a June 17 notice. The regulator cited the instance of bundling insurance features with investments such as SIP Insure.
Nippon India Mutual Fund offered ‘SIP Insure’ that provided free life insurance cover to SIP buyers. Other funds including Aditya Birla Sun Life AMC Ltd. and ICICI Prudential Mutual Fund, too, offered similar benefits.
SEBI, in the notice, said “no existing schemes or one which are proposed to be launched shall have bundled products”. It advised the Association of Mutual Funds in India to communicate it to all such AMCs.