SAT stays order on SBI Life’s acquisition of Sahara India Life

1 136


The Securities Appellate Tribunal (SAT) on Tuesday stayed an order of insurance regulator Irdai which directed SBI Life Insurance to acquire the business of Sahara India Life Insurance (SILIC).

The Insurance Regulatory and Development Authority of India (Irdai) on June 2 asked SBI Life Insurance to acquire the business of SILIC to protect the interest of 200,000 policyholders.

Passing an order, the Securities Appellate Tribunal said, “…we stay the effect and operation of the impugned order dated June 2, 2023 till further orders of this tribunal.”

The matter is listed for admission and for final disposal along with connected appeal on August 3. Irdai, in its order on June 2, stated that despite being provided ample time and several opportunities to rectify its state of affairs, SILIC continues to be recalcitrant in compliance with the regulator’s directions.

“After due consideration of all surrounding facts and circumstances, the authority has decided that the life insurance business of SILIC is to be transferred to another suitable life insurer with immediate effect. The authority has identified SBI Life Insurance Company as the acquirer insurer for the transfer of the life insurance business of SILIC,” the regulator said. The order of Irdai was challenged by SILIC before the SAT Mumbai.

In its order passed on Tuesday the Securities Appellate Tribunal observed, “Pending consideration of this appeal, the impugned order dated June 2, 2023 has been passed ex parte mainly on the ground that the order dated December 30, 2020 has not been complied by the appellant (SILIC).”

SAT further observed considering the fact that the earlier direction of the respondent (Irdai) in transferring the business to ICICI Prudential Life Insurance was set aside in 2018 and since then no steps had been taken to transfer the policies, the appellate tribunal found it strange that such steps have been taken after a gap of five years and that too without granting an opportunity of hearing.

“We find that there was no tearing urgency in transferring the policies when the respondent had earlier directed by its order dated June 23, 2017 to service existing policy holders and collect renewal premium was still continuing,” it added.

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.

According to Sahara Life’s annual report, the insurer registered a loss of Rs 18.62 crore in FY22. Irdai, in its order, observed that the insurer has been incurring losses on a post-tax basis since 2019-20.

In a statement, pertaining to SAT’s order, Sahara India Life Insurance said, “SILIC is taking all possible actions as per applicable law to ensure that the best interest of its policyholders are secured.”

“It is relevant to mention that earlier orders passed by the Irdai were also duly challenged by SILIC vide appeals which are pending adjudication before the Hon’ble SAT, the issues in the same are sub judice and thus no comments are being offered qua the same,” the statement added.


Source link

What do you think?

Leave a Reply

GIPHY App Key not set. Please check settings

    1 130

    Sebi’s Zee order: Unravelling the money trail

    1 128

    FPI investors from UAE on the rise despite grey list tag