In June 2017, IRDAI had appointed an administrator to look into the business of Sahara Life and later had instructed them to not write any new business.
The Securities and Appellate Tribunal (SAT) will now hear the Sahara Life Insurance versus Insurance Regulatory and Development Authority of India (IRDAI) case on August 29 which pertains to IRDAI directive to transfer Sahara Life Insurance’s policyholder liabilities.
The case that came up for hearing today will now be heard on August 29. It is anticipated that SAT may expedite the final order so that the transfer of the policies can happen smoothly.
A senior regulatory official said that since the matter is sub-judice, the transfer will happen only after a final decision by the body (SAT). On July 31, Sahara Life had approached SAT and got a one-week reprieve. SAT had ordered a status quo in which period IRDAI was to furnish its reply.
In July, IRDAI had directed ICICI Prudential Life Insurance to take over the life insurance business portfolio of Sahara Life Insurance with effect from July 31. Here, time of 21 days was given for the transfer.
Preceding this, in June 2017, IRDAI had appointed an administrator to look into the business of the insurer and later had instructed them to not write any new business. The regulator had said that the insurer has been acting in a manner likely to be prejudicial to the interests of holders of life insurance policies. It had also said that all the policies issued by Sahara Life will now be managed by an administrator.
RK Sharma, who was appointed Administrator in June for managing the affairs of the insurer, in his report to IRDAI said that the promoters of the company are no more "fit & proper".
“The company is mainly surviving on the release of reserves. However, the situation may not continue for long as the new premium of the company has come down significantly,” Sharma said in the report.
However, Sahara Life said that the order was passed with great impuginity, to benefit a third party and in violation of principles of natural justice.The insurer's counsel also pointed out in SAT that they were being targeted only due to proceedings against the promoter group in the Supreme Court. Sahara Group has been reeling under financial troubles ever since its chief Subrata Roy was arrested in 2014 in a case of duping investors. Sahara Mutual Fund's licence was cancelled by Securities and Exchange Board of India the following year.