The Mutual Fund industry is concerned about insurance firms’ unilateral decision to prevent asset management companies from bundling insurance products with their own fund offers.
The Life Insurance Council, the apex body of the insurance industry, fired a fresh salvo on Thursday after its members decided not to offer any of its products to be bundled with mutual fund products from October 1.
Mutual fund houses said the move provided an unfair advantage to insurance firms.
“This move is anti-investor and is a move that creates monopoly of the insurance players to offer insurance,” said the head of a fund house on condition of anonymity Companies such as Reliance Capital AMC and Birla Sunlife AMC have been bundling insurance cover with their equity schemes.
Such schemes worked on the same princip1es on which an organisation buys a term plan for its employees.
The latest salvo by the insurance companies, mutual fund houses said, will deprive the investors to get a term plan on their mutual fund scheme.
AMFI had earlier made a proposal with the Sebi that mutual funds should be allowed to offer insurance Coler to the investors along with their mutual ftmd schemes. Industry sources, however, said that till the time mutual funds receive a formal communication, they could continue to offer the term insurance product along with their saving and imvstment schemes.
