New Delhi: The insurance industry will remember 2010 as an eventful year in which insurance regulator Irda came out on top in a turf war with market watchdog Sebi over the regulation of Unit-Linked Insurance Products, with the end result of such schemes becoming investor-friendly. Sweeping regulatory changes with regard to ULIPs have already set the tone for the New Year. "2011 will be a year of transition and adaptation for the life insurance industry. After having witnessed the changes in the financial market, consumer sentiments and regulatory changes, going ahead life insurance will need to focus on and be sold as a long-term contractual savings and protection tool," Max New York Life Insurance Managing Director Rajesh Sud said. In April, 2010, a spat between the Securities and Exchange Board of India (SEBI) and Insurance Regulatory and Development Authority (IRDA) over regulation of ULIPs -- which are hybrid insurance products in which a portion of the investor's premium is invested in equity -- led to the metamorphosis of such products. To end the acrimony between the two regulators, the government issued an ULIP Ordinance on June 18 as capital markets regulator SEBI and insurance watchdog IRDA could not resolve their dispute over which of them was empowered to regulate such products. Thereafter, the Securities and Insurance Laws (Amendment) and Validation Bill, 2010, was passed by Parliament to address the issues of jurisdiction between the financial sector watchdogs. The Bill enabled the establishment of a joint body under the chairmanship of the Finance Minister and with representation from the four financial sector regulators and the Finance Ministry. As per the Bill, the Reserve Bank Governor would be vice-chairman of the joint committee. After the promulgation of the Ordinance, IRDA tightened the norms for these schemes by increasing the lock-in period and raising the risk cover to make a significant distinction between ULIPs and mutual fund products. At the same time, dealer commission rates were reduced and disclosure norms tightened to ensure greater transparency of ULIP schemes. As a result, the product became more investor-friendly. The lock-in period for all ULIPs was increased from three years to five years, including top-up premiums, thereby making them long-term financial instruments which primarily provide risk protection. In contrast, ULIPs were earlier more like an investment product. IRDA also directed insurers to evenly distribute charges on ULIPs during the lock-in period to ensure that high front-ending of expenses was eliminated.