Talk to our Experts
1800-12000-0055
Get a call back!! 
The Securities and Appellate Tribunal (SAT) has ordered status quo for one week on the insurance regulator's directive to transfer Sahara Life Insurance’s policyholder liabilities.
Sahara Life approached SAT on Monday and got a one-week reprieve, in which period the Insurance Regulatory and Development Authority of India (IRDAI) will be required to furnish its reply.
A senior IRDAI official said that Sahara Life has had serious "governance issues" and that they will give their response within a week. The official added that the business will get transferred after a week. Sahara Life did not immediately respond to a mail sent by Moneycontrol.
On Friday, IRDAI had directed ICICI Prudential Life Insurance to take over the life insurance business portfolio of Sahara Life Insurance with effect from July 31. A sum of Rs 78 crore has already been siphoned off in name of the security deposits in Sahara Life Insurance, according to an IRDAI- appointed Administrator’s report. RK Sharma, who was appointed Administrator in June for managing the affairs of the insurer, in the report said that the promoters of the company are no more "fit & proper".Sahara put out a statement on Monday. "Sahara felt that the order was passed with great impuginity, to benefit a third party and in violation of principles of natural justice. Sahara challenged the action of IRDAI stating that its business was continuously in profit and the company has been in absolute and strict compliance of all regulatory norms/directions issued by IRDAI and that there has not been even a single case of any complaint of non-payment of any claim to any policy holder and though the regulatory requirement of solvency margin is only 1.5, Sahara Life has been maintaining solvency margin of more than 8 which reflects the sound financial health of the company."
In a statement on Sunday, Sahara Life said that on one hand IRDAI didn't give permission for branch expansion and now IRDAI is alleging that business is not increasing. Further, the insurer said that the IRDAI appointed an administrator for reasons best known to them and the said administrator secretly submitted a report to the IRDAI for transferring the business of Sahara Life to any other entity.
“Even any copy of the administrator’s report was neither provided to Sahara Life, nor was it granted any opportunity of hearing on such report or before passing the order of transfer of business to any third entity. The company has never acted in any manner prejudicial to the interest of the policy holders. Sahara will pursue its remedy, against such approach of IRDAI, in the Court of Law,” the insurer had said.
In June, IRDAI had appointed an administrator to look into the business of the insurer and later had instructed them to not write any new business. Based on certain criteria, about six insurers were approached to assess their interest in buying policyholder
liabilities. Of them, ICICI Prudential Life Insurance gave a favourable consent.
Sahara Group has been reeling under financial troubles ever since its chief Subrata Roy was arrested in 2014 in a case of duping investors. Sahara Mutual Fund's licence was cancelled by Securities and Exchange Board of India the following year.
On the issue of Rs 78 crore being siphoned off, Sahara Life said that this is wrongly concluded. “In fact this amount was kept as security deposit to one entity, Sahara India who has provided furnished, computerised office accommodation in around 150 places. Even since Sahara India is not charging any rent, electricity charges, so the security deposit. This arrangement is very beneficial for Sahara Life. Whereas IRDAI has concluded in such unwise manner. This security deposit amount is absolutely repayable to Sahara Life,” it said.
On Friday, SAT rejected Sahara's plea against an order by the Securities and Exchange Board of India (SEBI) cancelling its mutual fund licence. However, the company was given six weeks' time to approach the Supreme Court. SEBI had said that Sahara Mutual Fund no longer met the "fit and proper" criteria, a point also mentioned by IRDAI in its order.
