Insurance regulator IRDAI on June 2 identified SBI Life Insurance Company (SBI Life), which is one of the largest life insurers in the country, as the acquirer of the insurance business of Sahara India Life Insurance Company (SILIC) after the company failed to comply with directions.
SBI Life shall take over the policy liabilities of around two lakh policies of SILIC, backed by the policyholders’ assets, with immediate effect, IRDAI added.
Sahara India Life Insurance was granted a registration certificate in 2004 to transact the business of life insurance. "In view of the certain serious issues on the financial propriety and governance aspects of the insurer", the insurance regulator had appointed an Administrator to manage the business of the insurer in 2017. At that time, SILIC was also not allowed to underwrite new business.
"Despite being provided ample opportunities and sufficient time to ensure compliance, 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 a run-off trend. The financial position has been deteriorating with rising losses and a higher percentage of claims to total premium," IRDAI 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," it added.
In this regard, IRDAI added that the authority in its meeting held today "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."
The regulator also mentioned that 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 directed to take adequate steps to reach out to the policyholders of SILIC, with regard to servicing of policies, including setting up of a dedicated cell to address the queries of the policyholders.
The insurance regulator said it will continue to monitor the situation and also issue necessary directions as required in the interest of the policyholders of SILIC.
Commenting on the transfer, SBI Life said that it has started working on the process of integrating all these policyholders from Sahara India Life Insurance Company in its systems. "While the full integration may take some time, we request these policyholders to reach out to us on our helpline number 1800 267 9090 or email us at saharalife@sbilife.co.in," it added.
SBI Life also said that it will shortly reach out to these policyholders and help them in smooth transition.
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