SBI Life, a subsidiary of country’s biggest lender State Bank of India (SBI), has said it is not a merger between the two companies but only a transfer of the policyholder related assets and liabilities of Sahara Life Insurance.
On Friday, regulator IRDAI directed SBI Life Insurance to takeover the policy liabilities of about two lakh policies along with assets of stressed Sahara India Life Insurance Co. Ltd. (SILIC).
The decision was taken at the meeting of the Insurance Regulatory and Development Authority of India (IRDAI) in view of the “deteriorating financial health of the SILIC.”
Following the IRDAI order, SBI Life assured two lakh policyholders of “high levels” of service and commitment as is accorded to our customers.
"We have started and we are expeditiously working on the process of integrating all these policyholders in our systems. While the full integration may take some time, we request these policyholders to reach out to us on our helpline number 1800 267 9090 or email us at saharalife@sbilife.co.in," it said.
SBI Life will shortly reach out to these policyholders and intimate them about various touch points and manner of servicing for a smooth transition, it said.
Sahara Life Insurance was also not allowed to underwrite new business. Thereafter, further directions were issued to the insurer to meet the regulatory requirements.
“Despite being provided ample opportunities and sufficient time to ensure compliances, SILIC has failed to comply with directions of the authority and take any affirmative steps to protect the interests of its policyholders,” the regulator had said.
Further, the policy data of SILIC reveals that the company's portfolio is showing 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,” IRDAI had said.
It said the action against SILIC has been taken after due consideration of all the facts and circumstances.
The authority added in its meeting held on June 2, 2023 that the action was warranted to protect the interest of the policyholders of SILIC.
Further, IRDAI said it will continue to monitor the situation and also issue necessary directions as required in the interest of the policyholders of SILIC.
Published - June 03, 2023 08:47 pm IST
