In a significant move aimed at safeguarding the interests of thousands of policyholders of Sahara India Life Insurance Co. Ltd., the Insurance Regulatory and Development Authority of India (Irdai) has directed the takeover of the company’s live insurance policies by SBI Life Insurance Co. Ltd., the country’s largest privately held life insurer.
Irdai’s decision comes after a thorough review of Sahara India Life’s policy data, which revealed a concerning trend of the company’s portfolio experiencing a run-off. Sahara India Life, founded in 2004 as the first wholly Indian-owned life insurance firm by the renowned entrepreneur Subroto Roy-promoted Sahara Group, faced significant challenges regarding financial propriety and governance.
Despite multiple opportunities and ample time to rectify the situation, Sahara India Life Insurance failed to address the issues adequately. Its financial position steadily deteriorated, with mounting losses and a higher percentage of claims in relation to total premiums. This worrying trend posed a risk of further capital erosion and raised concerns about the insurer’s ability to fulfill its liabilities towards policyholders.
To prevent any potential harm to policyholders, Irdai, utilizing its special powers under the Insurance Act, ordered the immediate transfer of Sahara India Life’s insurance business to the capable hands of SBI Life Insurance, the country’s leading private sector life insurer with a market share of 7.98%. SBI Life Insurance recorded impressive growth in the fiscal year 2023, collecting a new business premium of Rs. 29,587.60 crore, marking a 16.22% year-on-year increase.
In line with its commitment to ensuring a seamless transition, Irdai has formed a committee to oversee the transfer process, guaranteeing that all Sahara India Life policyholders receive the necessary support and protection during this transition period.
The takeover by SBI Life Insurance brings a ray of hope for Sahara India Life’s policyholders, assuring them that their interests will be safeguarded by a financially stable and well-established insurer. With this decisive action, Irdai reaffirms its commitment to maintaining the integrity and trustworthiness of the insurance sector, ensuring the well-being of policyholders across the country.