Securities Appellate Tribunal, “SAT” has condemned and raised serious objection against the order passed by Insurance Regulatory Development Authority of India, “IRDAI” directing transfer of business of Sahara Life to ICCI Prudential and granted status quo until it completes the hearing on Monday, the 7th August, 2017, that means the order passed by IRDAI has been stopped to be implemented until further orders.
Earlier the IRDAI had appointed administrator to take over the control of business of Sahara Life and thereafter stopped Sahara Life from doing further business. IRDAI had also directed ICICI Prudential to take over the business of Sahara life. Sahara felt that the order was passed with great impuginity, to benefit a third party and in violation of principles of natural justice. Sahara challenged the action of IRDAI 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 IRDAI and 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 Life has been maintaining solvency margin of more than 8 which reflects the sound financial health of the company.
However, it was unfortunate that IRDAI has stopped Sahara Life from selling new life insurance policies and to underwrite new business and directed ICICI Prudential to take over the existing life insurance business portfolio of Sahara Life. 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. 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. As such the SAT has criticized/condemned seriously and vehemently and passed the aforesaid order of status quo.