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The Security Appellate Tribunal (SAT) has stayed the insurance regulator's decision to transfer policy liabilities of Sahara India Life Insurance Co Ltd (SILIC) to SBI Life.
The appellate Authority said that five years since the Insurance Regulatory and Development Authority of India’s decision to transfer policies of Sahara Life to ICICI Prudential Life was set aside, no steps were taken by the insurance regulator to transfer the policies and a decision taken to select SBI Life was taken without granting a hearing to Sahara Life.
“We find that there was no tearing urgency in transferring the policies when the respondent had earlier directed by its order dated June 23, 2017 to service existing policyholders and collect renewal premium was still continuing,” the SAT order said.
“…we stay the effect and operation of the impugned order dated June 2, 2023 till further orders of this Tribunal,” SAT said.
On June 2, Irdai directed SBI Life Insurance to take over policy liabilities of around 2 lakh policies of Sahara Life as the latter failed to comply with the regulatory directions, amid deteriorating financial health after being put under restrictions in 2017.
Reacting to the SAT order, Sahara Life said, “The Hon’ble SAT questioned the high-handed actions of the market regulator as well as agreed with SILICLs contentions that prima facie principles of natural justice weren’t adhered to. In light of the same, the SAT granted protection to SILICL by granted a stay on the order dated 02.06.2023 as well as other actions initiated pursuant to the same.”
Sahara Life said it is taking all possible actions as per applicable law to ensure that the best interest of its policyholders is secured.
While asking SBI Life to takeover the policies of Sahara Life, the insurance regulator said that Sahara Life - which was granted an insurance licence in February 2004 – failed to take any steps to protect the interest of the policyholders despite being provided ample opportunities and sufficient time, and the portfolio of the company was showing a run-off trend. The financial position was deteriorating with rising losses, IRDAI had said. (End)
