MAINS 2013
GS2
10 marks
The product diversification of financial institutions and insurance companies, resulting in overlapping products and services, strengthens the case for merger of the two regulatory agencies, namely SEBI and IRDA. Justify.
WRITE IN
7 min
200 words
What the examiner wants
Justify the case for merging SEBI and IRDA given overlapping financial products.
JustifyGive reasons and evidence that support the statement.
Demand-wise check
- 1Overlap: ULIPs, pension and investment-linked products straddle both regulators≈35 words
- 2Turf war: SEBI banned 14 insurers from selling ULIPs (2010); ordinance gave ULIPs to IRDA≈35 words
- 3Merits: single rulebook, no regulatory arbitrage, investor protection≈35 words
- 4Caveats: insurance needs specialist prudential oversight; coordination via FSDC as alternative≈35 words
Open in about 30 words and close in about 30.
Answer plan
Product convergenceULIP disputeArguments for mergerCaveatsConclusion
Where marks usually go
- No mention of the 2010 ULIP clash
- Ignoring FSLRC recommendations
Draw this
- Venn diagram of SEBI and IRDA product domains with ULIPs in overlap
Value addition
- CommissionFSLRC (Justice B.N. Srikrishna, 2013) proposed a Unified Financial Agency merging SEBI, IRDA, FMC, PFRDA.FSLRC Report, 2013
- FactForward Markets Commission was merged with SEBI in 2015.Ministry of Finance, 2015
Next: plan for one minute, write it in 7 minutes, then get it checked.