The Securities Appellate Tribunal (SAT) on Wednesday said there was “no tearing hurry” for the Insurance Regulatory and Development Authority of India (IRDAI) to order the transfer of life insurance business of Sahara India Life Insurance Company Ltd to SBI Life Insurance Company Ltd.
Staying the IRDAI’s June 2 order transferring the life insurance business of Sahara India Life to SBI Life, the SAT said: “… we find it strange that such steps have been taken after a gap of 5 years and that too without granting an opportunity of hearing.”
“We find that there was no tearing urgency in transferring the policies when the respondent (IRDAI) had earlier directed by its order dated June 23, 2017 to service existing policy holders and collect renewal premium was still continuing,” it said.
The SAT, in its stay order, said the IRDAI has passed the life insurance business transfer order ex parte, when an appeal filed by Sahara India Life in 2022 is still pending.
According to SAT, the IRDAI had ordered transfer of business from Sahara India Life to SBI Life mainly on the ground that its (IRDAI) order dated December 30, 2020 has not been complied with by the insurer.
On December 30, 2020, the IRDAI had directed Sahara India Life to recover Rs 78.15 crore from major shareholder Sahara India Financial Corporation Ltd within three months and interest on that within a further period of one month.
The sum was diverted from Sahara India Life to Sahara India Financial Corporation in the name of security deposits.
The IRDAI, under the same order had directed the life insurer to find promoters who are ‘fit and proper’ as the existing four promoter companies – Sahara India Financial Corporation, Sahara Care Ltd, Sahara India Commercial Corporation Ltd, and Sahara Infrastructure & Housing Ltd – were no longer come under the ‘fit and proper’ definition.
Sahara India Life had filed a case with SAT against IRDAI’s order dated December 30, 2020 and the case is still pending.
The IRDAI, on June 2, said that Sahara India Life or the promoters did not take any definitive steps in that regard and only a sum of Rs 8 crore was recovered by Sahara India Life from Sahara India Financial.
In the case, the SAT gave the IRDAI three weeks time to file its reply.
“Rejoinder may be filed within three weeks thereafter. The matter would be listed for admission and for final disposal along with connected Appeal on August 3, 2023,” the SAT said.
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