Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: 4.8
Article rating: 5.0
Article rating: 3.0
Article rating: No rating
Article rating: 5.0
Article rating: No rating
Article rating: No rating
Article rating: 4.5
Article rating: No rating
Article rating: No rating
Article rating: 4.2
Article rating: 5.0
Article rating: 4.0
Article rating: No rating
Article rating: No rating


SAT stays IRDAI’s order on Sahara Life

Author: IANS/Tuesday, August 1, 2017/Categories: Corporate

SAT stays IRDAI’s order on Sahara Life

Chennai, July 31 (IANS) The Securities Appellate Tribunal (SAT) provided a week's relief to Sahara India Life Insurance Company Ltd against the order of insurance regulator IRDAI transferring its life insurance policy portfolio of ICICI Prudential Life Insurance Company Ltd. In a statement, Sahara India Life said SAT, condemning the order of Insurance Regulatory and Development Authority of India (IRDAI), also raised serious objection against the order. The SAT had ordered status quo till it completes hearing on August 7.

"The SAT is going to decide a landmark case in the liberalised Indian insurance industry. This is going to be an important case under the Insurance Act," D. Varadarajan, a Supreme Court advocate specialising in company/competition/insurance laws, said. He said the status quo order was waiting to happen.

"The harsh and extreme order of IRDAI against Sahara India Life can be likened to a staged shooting by trigger-happy and over-zealous cops," Varadarajan quipped. "How far the IRDAI is justified in acting on the basis of the report of the administrator who happen to be its own employee will be decided by SAT.

"Not only a bias, even the likelihood of bias in case of a harsh decision would raise many eyebrows. It remains to be seen whether the administrator acted as a free bird or a caged parrot," said Varadarajan.

On July 28, IRDAI had ordered transfer of Sahara India Life's business portfolio to ICICI Prudential Life Insurance effective from July 31.

Last month, IRDAI had appointed its own official as an administrator of Sahara India Life. The administrator had initially ordered Sahara India Life to stop accepting new business.

The IRDAI had ordered transfer of Sahara India Life's insurance business to ICICI Prudential Life based on the administrator's report.

According to the statement, Sahara India Life felt that the order was passed to benefit a third party and in violation of the principles of natural justice.

"Existence of power is one thing while the mode and manner of exercise of that power is another thing. With its status quo order, the SAT would be inclined to examine the manner and method of exercise of power by IRDAI," Varadarajan said.

Sahara India Life challenged the IRDAI action, stating that its business was continuously in profit and the company has been in absolute and strict compliance of all regulatory norms /directions issued by the regulator.

It argued that there has not been even a single case of any complaint of non-payment of any claim to any policy holder and though the regulatory requirement of solvency margin is only 1.5, Sahara India Life has been maintaining solvency margin of more than 8 which reflects the company's sound financial health.

IRDAI had not even framed any scheme, to safeguard the interest of policy holders, which is a statutory requirement before transferring the business to ICICI Prudential, it said.

The order was passed in great hurry and there was neither any transparency in the action of IRDAI nor the legal provisions were complied with, Sahara India Life said.

Print Rate this article:
No rating

Number of views (353)/Comments (0)

S Vijaykrishnan
S Vijaykrishnan


Other posts by IANS
Contact author

Leave a comment

Add comment



Ask the Finapolis.

I'm not a robot
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest



The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free