SBI Life to take over Sahara’s insurance business: Regulator

Sahara India Life Insurance was granted a certificate of registration in 2004. But due to concerns over financial propriety and governance, the insurance authority had to appoint an administrator to manage the insurer’s business  in 2017, and bar it from underwriting any new business.

Insurance regulator Irdai has identified SBI Life Insurance to acquire the business of Sahara India Life Insurance (SILIC) to protect the interest of 200,000 policyholders.

“…SBI Life shall take over the policy liabilities of around 2 lakh policies of SILIC, backed by policyholder’s assets, with immediate effect,” Irdai said in a statement on Friday.

Sahara India Life Insurance was granted a certificate of registration in 2004. But due to concerns over financial propriety and governance, the insurance authority had to appoint an administrator to manage the insurer’s business  in 2017, and bar it from underwriting any new business.

The administrator had flagged concerns such as a diversion of `78.15 crore in the name of security deposits and shareholders and board of directors not being keen on recovery. The report had said the company was surviving with release of reserves, which was not sustainable since new premium had decreased significantly, and the affairs of the company were being managed by the non-executive chairman rather than the board.

“Despite being provided ample opportunities and sufficient time to ensure compliances, 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 run-off trend,” Irdai said in its statement.  It said the company’s financial position has been deteriorating with rising losses and higher percentage of claims to total premium.    FE

Insurance regulator Irdai has identified SBI Life Insurance to acquire the business of Sahara India Life Insurance (SILIC) to protect the interest of 200,000 policyholders.

“…SBI Life shall take over the policy liabilities of around 2 lakh policies of SILIC, backed by policyholder’s assets, with immediate effect,” Irdai said in a statement on Friday.

Sahara India Life Insurance was granted a certificate of registration in 2004. But due to concerns over financial propriety and governance, the insurance authority had to appoint an administrator to manage the insurer’s business  in 2017, and bar it from underwriting any new business.

The administrator had flagged concerns such as a diversion of `78.15 crore in the name of security deposits and shareholders and board of directors not being keen on recovery. The report had said the company was surviving with release of reserves, which was not sustainable since new premium had decreased significantly, and the affairs of the company were being managed by the non-executive chairman rather than the board.

“Despite being provided ample opportunities and sufficient time to ensure compliances, 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 run-off trend,” Irdai said in its statement.  It said the company’s financial position has been deteriorating with rising losses and higher percentage of claims to total premium.    FE