SBI Life to acquire business of Sahara’s insurance arm

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New Delhi, June 2

The Insurance Regulatory and Development Authority of India (IRDAI) has identified SBI Life Insurance Company Limited (SBI Life) to acquire the business of Sahara India Life Insurance Corporation (SILIC).

“After due consideration of all the facts and circumstances, 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 a IRDAI statement issued on Friday.

IRDAI said it identified SBI Life, one of the largest life insurers, which has satisfactory financials. 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.

To ensure the smooth transition for all policyholders, a committee has been constituted for implementation of the order in a time-bound manner. SBI Life too will reach out to SILIC policyholders and set up a dedicated cell to address their queries.