The life insurance business of Sahara India Life Insurance Co (SILIC) will be transferred to SBI Life Insurance Company Ltd (SBI Life), according to the insurance regulator Insurance Regulatory and Development Authority of India (IRDAI), which announced the decision on Friday, June 2.
A Smooth Transition
According to the insurance regulator, SBI Life would immediately assume the policy liabilities of about two lacks SILIC policies that are supported by the policyholders’ assets.
IRDAI said it had taken the necessary actions to guarantee a seamless transition for all SILIC policyholders. The regulator stated that a committee made up of a member(actuary), a member (life), and a member(F&I) had been established for the order’s timely execution.
SBI Life has been instructed to take the necessary actions to get in touch with SILIC policyholders regarding insurance servicing, including creating a particular cell to handle their inquiries. To protect the interests of SILIC policyholders, the insurance regulator stated that it would continue to monitor the situation and give any appropriate directives as needed.
The SILIC Failure
IRDAI claims that SILIC received a Certificate of Registration in 2004 to conduct the life insurance business. But in 2017, the regulator appointed an administrator to run the insurer’s operations owing to several significant financial integrity and governance difficulties. Additionally, new business underwriting was not permitted for the insurer.
Despite having adequate opportunity and time to guarantee compliance, SILIC had not followed IRDAI’s instructions or taken any concrete action to safeguard the interests of its policyholders.
As per CNBC reports, the authority “decided that action is warranted to protect the interest of the policyholders of SILIC” at its meeting conducted today.