Irdai challenges stay on Sahara Life policies’ transfer to SBI Life

NEW DELHI: The Supreme Court on Monday declined immediate hearing on a petition filed by Insurance Regulatory and Development Authority of India (IRDAI) challenging an order of Securities Appellate Tribunal (SAT) staying the insurance regulator’s decision to transfer nearly two lakh policies under Sahara Life to SBI Life.
Appearing for the regulator, solicitor general Tushar Mehta told a vacation bench of Justices Surya Kant and M M Sundresh that IRDAI had on June 2 directed transfer of the policies to SBI as Sahara India Life Insurance Company (SILIC) has been facing financial and governance issues and failed to comply with the regulator’s directions given its deteriorating financial conditions.

Mehta said that the stay on the June 2 order of IRDAI for transition of Sahara policies to SBI Life has created a hiatus as there is confusion as to which one of them during the interregnum would receive the premiums paid by policyholders and which one would settle the claims as also payments towards maturing policies.
However, the bench said that issues relating to monetary claims could wait till the SC resumed its normal work schedule after summer break and posted IRDAI’s statutory appeal for hearing on July 3.
Last week, the SAT had stayed the transfer of policies from Sahara to SBI and said, “We find that there was no tearing urgency in transferring the policies when the IRDAI had earlier directed by its order dated June 23, 2017 to service existing policyholders and collect renewal premium was still continuing.”
On June 2, IRDAI had said that Sahara Life, which was granted an insurance licence in February 2004, failed to take any steps to protect the interest of the policyholders despite being given ample opportunities and sufficient time, and that the financial position of the insurer was deteriorating because of rising losses.