State Bank of India’s subsidiary ensures seamless transfer of assets and liabilities, securing two lakh policyholders
SBI Life, a prominent subsidiary of State Bank of India (SBI), recently announced its involvement in the transfer of policyholder-related assets and liabilities from Sahara Life Insurance. The move comes after the Insurance Regulatory and Development Authority of India (Irdai) directed SBI Life Insurance to take over the policy liabilities of approximately two lakh policies, along with the assets of Sahara India Life Insurance Co Ltd (SILIC). This decision was made in response to SILIC’s deteriorating financial health.
The Irdai’s intervention was necessary to protect the interests of SILIC’s policyholders, given the company’s increasing losses and a higher percentage of claims in relation to total premium. SILIC’s portfolio has been experiencing a run-off trend, exacerbating its financial position and jeopardizing its ability to fulfill its obligations towards policyholders. Recognizing the urgent need for action, the regulatory authority mandated SBI Life’s involvement.
In response to the Irdai’s order, SBI Life reassured the two lakh policyholders of SILIC that they would receive exceptional levels of service and commitment, aligning with the standards set for their existing customers. The integration of SILIC’s policyholders into SBI Life’s systems has already commenced, with the full process expected to be completed in due time. To ensure a smooth transition, SBI Life will proactively reach out to policyholders, providing them with comprehensive information about touch points and the manner of servicing.
Sahara Life Insurance, on the other hand, has been prohibited from underwriting new business, with further directives issued to meet regulatory requirements. Despite being afforded ample opportunities and sufficient time to comply with the authority’s directions and safeguard policyholders’ interests, SILIC failed to take any affirmative steps, leading to this intervention.
The Irdai’s decision to intervene and protect SILIC’s policyholders was made after careful consideration of all relevant facts and circumstances. The authority remains committed to monitoring the situation closely and will issue any necessary directives to further safeguard the interests of SILIC’s policyholders. Continuous supervision and proactive measures are crucial to prevent any erosion of capital and ensure SILIC’s ability to fulfill its liabilities.
In conclusion, SBI Life’s takeover of Sahara Life Insurance’s policy liabilities and assets marks a significant step in safeguarding the interests of SILIC’s two lakh policyholders. With the commitment to provide high-quality service and a seamless transition, SBI Life aims to mitigate any potential disruption while ensuring policyholders receive the utmost care and attention. The Irdai’s proactive role in this process highlights its dedication to maintaining a robust insurance sector and protecting policyholders’ interests.
