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Insurance regulator IRDAI on Friday said that it has identified SBI Life Insurance as acquirer insurer of the life insurance business of Sahara India Life Insurance Co Ltd (SILIC).
SBI Life has been asked to take over the policy liabilities of around two lakh policies of SILIC, backed by the policyholders’ assets, with immediate effect. IRDAI issued an order to this effect on Friday.
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 Order in a time-bound 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 of SILIC,and also publish necessary details on their website.
IRDAI will continue to monitor the situation and also issue necessary directions as required in the interest of the policyholders of SILIC, according to a statement issued by the insurance regulator.
SILIC was granted a Certificate of Registration 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 life insurer, the IRDAI had appointed an Administrator to manage the business of the insurer in 2017.
The insurer was also not allowed to underwrite new business. Thereafter, further directions were issued to the insurer to meet the regulatory requirements.
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.
Further, the policy data of SILIC reveal 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.
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.
Accordingly, IRDAI has now decided to transfer the life insurance business of SILIC to SBI Life Insurance Company Limited (SBI Life), which is one of the largest life insurers in the country with satisfactory financials.
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