IRDAI orders SBI Life Insurance to take over Sahara India Life Insurance business
New Delhi: Insurance Regulatory and Development Authority of India (IRDAI) has named SBI Life Insurance Company Limited (SBI Life) as the acquirer insurer of the life insurance business of Sahara India Life Insurance Co. Ltd (SILIC), media reports said.
The insurance regulator has said shall take over the policy liabilities of around two lakh policies of SILIC, backed by the policyholders’ assets, with immediate effect.
SBI Life, which is one of the largest life insurers in the country, the insurance regulator said, will take over the business of Sahara India Life Insurance which obtained the registration certificate in 2004 to transact the business of life insurance.
"Despite being provided ample opportunities and sufficient time to ensure compliances, SILIC has failed to comply with directions of the Authority and take any affirmative steps to protect the interests of its policyholders. Further, the policy data of SILIC reveals that the company’s portfolio is showing run-off trend. The financial position has been deteriorating with rising losses and higher percentage of claims to total premium," the insurance regulator said in a statement.
"If the trend is allowed to continue, the situation will worsen and lead to erosion of capital and SILIC may not be able to discharge its liabilities towards policyholders, thereby endangering the interest of its policyholders," the regulator said.
In view of this, the regulator in its meeting held on Friday "decided that action is warranted to protect the interest of the policyholders of SILIC. Accordingly, the Authority decided to transfer the life insurance business of SILIC to another suitable life insurer with immediate effect."
IRDAI said it has "taken necessary steps to ensure the smooth transition for all policyholders of SILIC. A committee comprising of Member (Actuary), Member (Life), and Member (F&I) has been constituted for implementation of the Order in a timebound manner."
SBI Life has been instructed to proactively communicate with SILIC policyholders and ensure the smooth servicing of their policies.
This includes the establishment of a dedicated cell to address any inquiries from SILIC policyholders.
The insurance regulatory authority has stated that it will closely monitor the situation and provide further guidance as necessary to safeguard the interests of SILIC policyholders.