For a second time and after nearly six years, the Indian insurance regulator has ordered transfer of life insurance business of Sahara India Life Insurance Company Ltd.
The Insurance Regulatory and Development Authority of India (IRDAI) on Friday ordered the transfer of Sahara India Life's insurance business to listed SBI Life Insurance Company Ltd.
Interestingly, the IRDAI had issued a similar order on July 28, 2017.
However, by that order, it had ordered transfer of Sahara India Life's business to another private and listed player ICICI Prudential Life Insurance Company Ltd with effect from July 31, 2017.
Then the Sahara group appealed against the IRDAI's transfer order with the Securities Appellate Tribunal (SAT). In 2018, the SAT set aside the IRDAI's business transfer order while upholding the appointment of an administrator for Sahara India Life.
And about five years after SAT's order, the IRDAI on June 2, 2023 issued a fresh order transferring Sahara India Life's insurance business to SBI Life.
The IRDAI is silent as to why it did not reiterate its earlier order transferring Sahara India Life's business to ICICI Prudential Life, and what has changed between 2017 and now is not known.
"Probably IRDAI finds SBI Life's balance sheet stronger. Also, SBI Life was promoted by public sector bank State Bank of India (SBI)," a senior life insurance official told IANS preferring anonymity.
"The Authority (IRDAI) has identified SBI Life Insurance Company Ltd (SBI Life), which is one of the largest life insurers in the country with satisfactory financials, as the acquirer insurer of the life insurance business of SlLIC (Sahara India Life). SBI Life shall take over the policy liabilities of around two lakh policies of SILIC, backed by the policyholders' assets, with immediate effect," the IRDAI on Friday said.
Does that mean the financials of SBI Life is better than ICICI Prudential Life? Or a life insurer promoted by a public sector bank is easier to direct? Answers are not available.
Also Read | RBI issues draft directions on digital payment security controls