The Insurance Regulatory and Development Authority of India (IRDAI) has identified SBI Life Insurance Company Ltd (SBI Life) to acquire the business of Sahara India Life Insurance Corporation (SILIC).
“After due consideration of all facts and circumstances, the IRDAI 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,” said an IRDAI statement.
IRDAI said SBI Life shall take over the policy liabilities of around two lakh policies of SILIC, backed by the policyholders’ assets, with immediate effect.
The regulator said SILIC was provided with ample opportunities and sufficient time to ensure compliance but failed to do so. “Further, the policy data of SILIC reveals that its portfolio is showing a run-off trend. 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,” said IRDAI.