MF houses to sell insurance

Soon the mutual fund (MF) industry is going to compete with ULIPs, the hottest selling product these days. The industry is expecting approval from fund houses to offer insurance cover to investors for a fee. As per reports, capital market regulator Securities and Exchange Board of India (SEBI), has considered a proposal submitted by the industry body, Association of Mutual Funds in India (Amfi), to permit MF houses to provide insurance cover and allowed them to collect the insurance premium from the investor.

Current regulation restricts fund houses to collect any premium from investors. At present, fund houses have tied up with the insurance companies to offer insurance cover. Currently only two fund houses, Reliance Mutual Fund and Birla Sunlife Mutual Fund, offer systematic investment plan (SIP) products with an insurance cover.