“Any stay of the June 2, 2023, order may preclude SBI Life from effectively servicing the accounts of the policyholders. There is a strong prima face case for setting aside SAT’s “erroneous” order and the stay is also needed to “ring-fence the assets/investments” of the Sahara firm from “possible diversion or siphoning off” the IRDA argued
New Delhi:
The Supreme Court on Monday has fixed July 10 to hear IRDAI’s appeal against the Securities Appellate Tribunal’s (SAT) decision staying the insurance regulator’s order directing Sahara India Life Insurance Company to transfer its life insurance business to SBI Life Insurance Company.
Admitting the IRDAI’s plea, the apex court said, “some solution has to be found to protect the interest of 3300 people who have filed their claims.”
“Any stay of the June 2, 2023, order may preclude SBI Life from effectively servicing the accounts of the policyholders. There is a strong prima face case for setting aside SAT’s “erroneous” order and the stay is also needed to “ring-fence the assets/investments” of the Sahara firm from “possible diversion or siphoning off”. In this regard, the assets and liabilities qua the policyholders have already been transferred to SBI Life on June 2, 2023, and various steps have been taken by IRDA and SBI Life in furtherance thereof,” the IRDAI argued.
Earlier, in a big relief to Sahara India Life Insurance , the SAT had stayed the IRDAI’s June 02 order directing the transfer of policy liabilities of around two lakh policies along with assets of Sahara Group firm to SBI Life Insurance Company.
The order came after Sahara India Life filed an appeal against an order passed by the IRDAI.
IRDAI, in its order on June 2, ordered for transferring the entire business of Sahara India Life to SBI Life. Further, the books of accounts, bank accounts, etc were also been directed to be transferred.
The decision was taken at the meeting of the Irdai given the deteriorating financial health of Sahara India Life.
In March 2017, a show cause notice was issued after that Irdai appointed an administrator under the Insurance Act on June 12, 2017. Besides, another order was passed on June 23, 2017, directing the appellant (Sahara India Life) to only serve the existing policyholders and collect renewal premiums but was restrained from collecting new deposits.
A third order was passed on July 28, 2017, directing the transfer of the business of the appellant to ICICI Prudential Life Insurance Company.
All these three orders were challenged before the SAT wherein a composite order was passed in January 2018 and the order dated that directed the transfer of the business of the appellant to ICICI Prudential Life Insurance Company was quashed.
Also, the matter was sent back to Irdai to pass a fresh order within three months.
Subsequently, on December 30, 2020, a fresh order was passed holding that Sahara India Life was no longer a “fit and proper” promoter and that the shareholding of the promoters should be transferred to any other “fit and proper” promoter within six months and further directed the appellant to recover a sum of Rs 78 crore. from Sahara India Life.