Hyderabad:
The insurance regulator IRDA has said that Cardiff, the Fremch partner of the State Bank of India in SBI Life Insurance Company, sold 5.069 per cent of its stakes in SBI Life Insurance Company, through the stock exchange, on 29th March, 2019,without seeking its approval and violated various existing regulations.
Cardif is a part of the Frencj banking major BNP Paribas Group.
Cardif had done the transaction with multiple parties without seeking prior approval of the IRDAI as required under section 6A(4)(b)(iii) of the Act read with Reg.3(b) of Transfer Regulations and Listed Insurance Companies Guidelines, said the IRDAI on Tuesday..
However,the IRDAI said that In view of the submissions made by the Cardif during the personal hearing and their request for taking a lenient view, the IRDAI has granted post-facto approval to the said transaction of transfer.
“Since, compliance with the law was solely their responsibility, Cardif is hereby advised to exercise due caution to ensure adherence to all legal and regulatory stipulations as applicable, in future,’’ said SC Khuntia, chairman, IRDAI, in his final decision on the matter.
During the personal hearing with the IRDAI,Cardif had confirmed that prior approval was not sought as their legal counsel advised them that prior approval was required by the acquirer and not the transferor.The representatives of Cardif further submitted that on the advice of their counsel, they genuinely believed that prior approval of IRDAI was not required and hence, prior approval was not sought.
When the provisions of the Act and Regulations were pointed out to them, they requested IRDAI to condone the unintentional mistake and submitted that in future the same would not be repeated and that the provisions of law would be brought to the notice of the management of Cardif for compliance.
Cardif had requested for grant of post-facto approval of IRDAI for the above said sale of shares.
During the personal hearing,,it was brought to the notice of the representatives of Cardif that SBI Life in its e-mail dated 28th March, 2019, had advised Cardif to obtain approval of IRDAI prior to the transaction date i.e. 29th March, 2019 for the proposed transaction. SBI Life further requested Cardif to provide a copy of the approval received from IRDAI in this regard. Inspite of the advice from SBI Life, Cardif carried out the transaction without seeking prior approval of IRDAI in violation of the various relevant legal provisions