SBI Life will have take over the policy liabilities of around two lakh policies of Sahara India Life Insurance (SILIC), backed by the policyholders’ assets, said the IRDAI,
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
Hyderabad:
Insurance regulator IRDAI on Friday has asked SBI Life Insurance, to acquirer the existing business of defunct Sahara Life, set up by businessman Subrata Roy.
SBI Life, which is one of the largest life insurers in the country with satisfactory financials, will have take over the policy liabilities of around two lakh policies of Sahara India Life Insurance (SILIC), backed by the policyholders’ assets, said the IRDAI.
SBI Life has been directed by the IRDAI 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 of SILIC, and also publish necessary details on their website, clarified the IRDAI.
The IRDAI has also 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 IRDAI’s order in a timebound manner.
The IRDAI will continue to monitor the situation and also issue necessary directions as required in the interest of the policyholders of SILIC.
“We have started and we are expeditiously working on the process of integrating all these policyholders in our 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. We will shortly reach out to these policyholders and intimate them of our various touch points and manner of servicing for a smooth transition. We however assure these policyholders of the highest standards of service and commitment as is accorded to our customers,” said SBI Life in a late evening statement.
According to the IRDAI, 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.
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, argued the regulator for taking such a decision.
In exercise of its powers under sub-section (2) of Section 52B of the Insurance Act, 1938, the IRDAI has decided to transfer the life insurance business of SILIC to another suitable life insurer with immediate effect, said the IRDAI.
In view of the certain serious issues on the financial propriety and governance aspects of the insurer, the IRDAI had appointed an administrator to manage the business of the insurer in 2017.
The insurer, set up in 2004, was also not allowed to underwrite new business. Thereafter, further directions were issued to the insurer to meet the regulatory requirements.
However, despite being provided ample opportunities and sufficient time to ensure compliances, SILIC has failed to comply with directions of the IRDAI and take any affirmative steps to protect the interests of its policyholders.
After due consideration of all the facts and circumstances, the IRDAI in its meeting held on Friday decided that action is warranted to protect the interest of the policyholders of SILIC.
In 2017, a similar initiative was taken by the IRDAI to merge Sahar Life’s business with ICICI Pru Life but couldn’t be implemented as SAT after an appeal by Sahara Life had set aside the regulator’s order.