Not A Merger But Rather A Transfer Of Sahara Life’s Policyholder-Related Assets And Liabilities To SBI Life

It is not a merger between the two businesses, according to SBI Life, a division of the nation’s largest lender State Bank of India (SBI), but rather a transfer of Sahara Life Insurance’s assets and liabilities relating to policyholders.

The regulatory body Irdai ordered SBI Life Insurance to assume the assets and policy obligations of the financially troubled Sahara India Life Insurance Co Ltd (SILIC) on Friday. There are around two lakh policies in question.

In light of the SILIC’s declining financial situation, the decision was made during a meeting of the Insurance Regulatory and Development Authority of India (Irdai).

SBI Life promised two lakh policyholders “high levels” of service and devotion in response to the Irdai ruling, just as we do for our clients.

“We have begun the process of incorporating all of these policyholders into our systems, and we are moving quickly to complete it. We ask that these policyholders contact us from our helpline number, 1800 267 9090, or by email at [email protected] even though the complete integration may take some time, it stated.

According to SBI Life, it would soon get in contact with these policyholders and inform them about several touch points and service methods to ensure a seamless transition.

Additionally, Sahara Life Insurance was prohibited from approving new business. After then, the insurer received more instructions on how to comply with the rules.

The regulator had said, “SILIC has failed to comply with directions of the authority and take any affirmative steps to protect the interests of its policyholders, despite being given ample opportunities and sufficient time to ensure compliances.”

Furthermore, the portfolio of the corporation exhibits a run-off pattern, according to SILIC policy data. A larger proportion of claims compared to total premiums and escalating losses have worsened the financial situation.

“If the trend is allowed to continue, the situation will worsen and lead to capital erosion, and SILIC may not be able to discharge its liabilities towards policyholders, thereby endangering the interest of its policyholders,” Irdai had said.

It said that after carefully considering all the relevant facts and circumstances, action had been taken against SILIC.

In its meeting on June 2, 2023, the authority further said that the measure was necessary to safeguard the interests of SILIC policyholders.

Irdai said that it will keep an eye on the situation and provide any relevant guidance as needed to protect the interests of SILIC policyholders.