SBI Life to take over 200,000 policies of Sahara India Life Insurance

The Insurance Regulatory & Development Authority of India (Irdai) has identified SBI Life Insurance Co to take over policy liabilities of around 200,000 policies of Sahara India Life Insurance (SILIC) as the latter failed to comply with the regulatory directions, amid deteriorating financial health after being put under restrictions in 2017.

The insurance regulator has appointed a panel of Irdai members from life, actuary and finance & investments to take necessary steps to ensure the smooth transition for all policyholders of Sahara Life.

“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 said.

SBI Life’s new business premium collection in April was 1,336.87 crore, up eight per cent from the same period of previous year. For FY23, SBI Life, a leading private sector life Insurer in the country, collected new business premiums of Rs 29,587.60 crore, up 16.22 per cent from the previous financial year.

SBI Life has 990 branches across the country and serves 4,90,36,079 policyholders.

The insurance regulator said that Sahara India Life, which was granted an insurance licence in February 2004, failed to take any steps to protect the interests of policyholders despite being provided ample opportunities and sufficient time, and the portfolio of the company was showing a run-off trend. The financial position was deteriorating with rising losses.

“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,” Irdai said.

“After due consideration of all the facts and circumstances, the Authority in its meeting held on 2nd June 2023 decided that action is warranted to protect the interest of the policyholders of SILIC. Accordingly, in exercise of its powers under sub-section (2) of Section 52B of the Insurance Act, 1938, the Authority decided to transfer the life insurance business of SILIC to another suitable life insurer with immediate effect,” Irdai said.