The Securities Appellate Tribunal (SAT) has decided to stay the order issued by the Insurance Regulatory and Development Authority of India (IRDAI) to transfer the life insurance business of Sahara India Life Insurance Company Ltd to SBI Life Insurance Company Ltd. In its ruling, SAT stated that there was no pressing need to transfer the policies, and that the IRDAI had taken these steps hastily, without providing Sahara India Life with an opportunity to speak on the matter.
Moreover, the SAT noted that the transfer order came ex parte, despite an ongoing appeal filed by Sahara India Life. The IRDAI passed the order mainly because Sahara India Life did not comply with its orders from December 2020, which required the insurer to recover Rs 78.15 crore from the major shareholder Sahara India Financial Corporation Ltd, within a period of three months. Sahara India Life was also directed to seek out promoters who meet the fit and proper, criteria, as the existing four promoter companies no longer meet these standards.
In its counter-statement, Sahara India Life pointed out that it had already recovered Rs 8 crore from Sahara India Financial, but the IRDAI claims that the insurer and its promoters have not taken any definitive steps in this regard. However, the SAT has granted the IRDAI three weeks to file its reply, and another three weeks for Sahara India Life to submit its rejoinder. The case will be listed for admission and final disposal on August 3, 2023, along with the connected appeal.
As this saga unfolds, many policyholders of Sahara India Life are left in limbo, waiting to see what happens next. The SAT’s decision is a welcome respite for them, as it provides them with some breathing room. However, these policyholders will have to wait for the legal battle to reach its conclusion before they can be certain about the future of their policies. In the meantime, they will have to keep paying premiums to keep their policies active.
