New Delhi: Regulator Irdai on Friday directed SBI Life Insurance Company to take over the assets as well as policy liabilities of around two lakh policies from Sahara India Life Insurance Company Limited (SILIC) with immediate effect. The decision was taken at a meeting of the Insurance Regulatory and Development Authority of India (Irdai) in view of the deteriorating financial condition of SILIC.
“The Authority has identified SBI Life Insurance Company Limited (SBI Life), one of the largest life insurers in the country with satisfactory financial position, as the acquirer insurer of the life insurance business of SLIC.
“SBI Life, backed by the assets of the policyholders, will take over the policy liabilities of approximately two lakh policies of SILICK with immediate effect,” Irdai said in its order. Irdai said in a statement that it has also taken necessary steps to ensure smooth transition for all policyholders of SILIC.
A committee consisting of Member (Actuary), Member (Life), and Member (F&I) has been constituted for implementation of the order in a time bound manner. “SBI Life is directed to take adequate steps to reach out to the policyholders of SILIC, including setting up of a dedicated cell to address the queries of the policyholders of SILIC, and also to publish necessary details about them. website,” it said.
Sahara India Life Insurance was granted a Certificate of Registration in 2004 to carry on the business of life insurance. Irdai said that in view of some serious issues on aspects of financial ownership and administration of the insurer, the authority had appointed an administrator in 2017 to manage the business of the insurer.
The insurer was also not permitted to underwrite new business. Thereafter, further instructions were issued to the insurer to meet the regulatory requirements. “Despite being provided with adequate opportunities and sufficient time to ensure compliance, SILIC has failed to comply with the directions of the Authority and take any affirmative steps to protect the interests of its policyholders,” the regulator said. Moreover, the policy data from SILIC shows that the company’s portfolio is showing a run-off trend. The financial situation is deteriorating with higher percentage of claims increasing losses and total premium.
Irdai said, “If this trend is allowed to continue, the situation will worsen and there will be capital erosion and SILIC will not be able to discharge its liabilities towards the policyholders, thereby jeopardizing the interest of its policyholders.” Will fall in.”
It said that the action against Cilic has been taken after considering all the facts and circumstances. The authority, in its meeting held on June 2, 2023, said that this action is necessary to protect the interests of the policyholders of Siliq. Irdai further said that it will continue to monitor the situation and also issue necessary directions in the interest of the policyholders of SILIC.