The Securities Appellate Tribunal (SAT) has issued a stay on the Insurance Regulatory and Development Authority of India’s (IRDAI) order to transfer the life insurance business of Sahara India Life Insurance Company Ltd to SBI Life Insurance Company Ltd. SAT emphasized that there is “no tearing hurry” for such a transfer and expressed surprise that the order was made without granting an opportunity for a hearing, especially after a significant time gap of five years.
SAT further stated that there was no urgency to transfer the policies since the IRDAI’s previous directive on June 23, 2017, to service existing policyholders and collect renewal premiums was still in effect. The tribunal noted that the IRDAI had passed the transfer order ex parte, even though an appeal filed by Sahara India Life in 2022 is still pending.
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The IRDAI’s transfer order was primarily based on its finding that Sahara India Life had not complied with the IRDAI’s order dated December 30, 2020. Under that order, Sahara India Life was instructed to recover Rs 78.15 crore from Sahara India Financial Corporation Ltd, along with interest, within specified timeframes. This amount had been diverted from Sahara India Life to Sahara India Financial Corporation as security deposits.
Additionally, the IRDAI directed Sahara India Life to find promoters who meet the “fit and proper” criteria, as the existing four promoter companies no longer fulfilled this requirement. Sahara India Life had previously filed a case against the IRDAI’s December 30, 2020 order, which is still pending.
In response to the IRDAI’s recent claim that Sahara India Life and its promoters failed to take definitive steps, SAT has granted the IRDAI three weeks to file a reply. The matter will be listed for admission and final disposal, along with the connected appeal, on August 3, 2023.
