Regulator Directs SBI Life to Take Over Sahara Life Policies

In a significant move, the Insurance Regulatory and Development Authority of India (IRDAI) has directed SBI Life Insurance Co to take over the life insurance business of Sahara India Life Insurance Co (SILIC) with immediate effect. The decision comes as Sahara Life failed to comply with IRDAI’s directives and neglected to protect the interests of policyholders. The deteriorating financial position of Sahara Life, characterized by mounting losses and a higher percentage of claims to total premium, necessitated this intervention to safeguard policyholders’ interests.

Background

Sahara Life had already been under scrutiny since 2017, when the regulator appointed an administrator to manage the company’s affairs due to concerns regarding financial propriety and governance. Subsequently, Sahara Life was prohibited from underwriting new business, and the insurer received further directives to meet regulatory requirements. In July 2017, IRDAI had ordered ICICI Prudential Life Insurance Co Ltd to take over Sahara India Life Insurance Co’s business. However, this order was set aside by the Securities Appellate Tribunal in January 2018.

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SBI Life’s Responsibility

SBI Life Insurance Co has been entrusted with the responsibility of taking over the policy liabilities of approximately 2 lakh policies held by Sahara Life. These policies are backed by the assets of the policyholders themselves. The regulator expects SBI Life to assume control of these policies promptly, ensuring a seamless transition for the affected policyholders.

Committee Formation

To ensure the implementation of the order within a designated timeframe, IRDAI has formed a committee comprising an actuary, Member (Life), and Member (Finance and Insurance). This committee will oversee the transfer of policies and manage the associated administrative tasks, providing policyholders with continued support and service.

Shareholder Investments

While SBI Life assumes responsibility for the policy liabilities, the investments made by shareholders will remain under the control and supervision of the administrator appointed by IRDAI. The regulator will continue to monitor this aspect until any further orders are issued.

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