Chennai, July 30 (IANS) - The Sahara group said it would approach the court against insurance regulator's order of transferring life insurance policies of Sahara India Life Insurance Company Ltd to ICICI Prudential Life Insurance Company Ltd. In a statement, the group said: "Sahara will pursue its remedy, against such approach of IRDAI, in the court of law."
"IRDAI (Insurance Regulatory and Development Authority of India) appointed administrator for the reason best known to them and the said administrator secretly submitted a report to the IRDAI for transferring the business of Sahara Life to any other entity.
"Even any copy of the administrator's report was neither provided to Sahara Life, nor was it granted any opportunity of hearing on such report or before passing the order of transfer of business to any third entity. The company has never acted in any manner prejudicial to the interest of thepolicyholders," the statement said. Referring to IRDAI's charge of Rs 78 crore being siphoned out of Sahara India Life, the statement said: "In fact this amount was kept as security deposit to one entity - Sahara India - who has provided furnished, computerised office accommodation in around 150 places."
According to the Sahara group, this arrangement is very beneficial for Sahara India Life while IRDAI concluded in such unwise manner. "This security deposit amount is absolutely repayable to Sahara Life," the statement said. The group said Sahara India Life has been doing business since 2004 and since last seven years running continuously in profit and has been in absolute and strict compliance of all regulatory norms/directions issued by IRDAI. The statement said the life insurer's asset is more than its liability and there was not a single complaint of non-payment by any policyholder.
Sahara's response follows the IRDAI's statement on July 29 that Rs 78 crore was siphoned off by Sahara India Life Insurance Ltd in the name of security deposits. The regulator alsso added that the promoters of Sahara India Life Insurance Company were no more "fit and proper" persons, and ordered transfer of all policies to ICICI Prudential Life by July 31 (today).
The IRDAI has also ordered Sahara India Life to transfer Rs 25 crore to a separate account under the control of the regulator to meet any contingency expenses to be refunded a year later.
In an order uploaded at the IRDAI website, its Chairman T.S. Vijayan said as per the report of the administrator appointed for Sahara India Life, a sum of Rs 78 crore had already been "siphoned off in the name of security deposits," and the promoters are no more "fit and proper", the shareholders and company board are not keen in recovery plan and the company is mainly surviving on release of reserves.
However, the situation may not continue for long as the new premiums of the company had come down significantly, it said. In June 2017, R.K. Sharma, a General Manager at the IRDAI, was appointed as Administrator for Sahara India Life to manage the affairs of the private life insurer.
Based on the June 22 report of Sharma, the insurance regulator concluded that it is not in the best interests of policyholders to allow Sahara India Life to transact business further. The IRDAI decided to transfer the life insurance portfolio to some other life insurer which is profitable, does not have any accumulated losses and compliant with the limits on management expenses and solvency margin.
The IRDAI has ordered Sahara India Life to transfer to ICICI Prudential Life the investment pertaining to the policyholders, loans against policies, current assets representing current liabilities, cash or cash equivalent to the extend of non-par fund and cash/cheques in Sahara India Life's branches towards premium for policies.