The IRDAI (Insurance Regulatory and Development Authority of India) moved to the Supreme Court on Monday, to challenge the decision of Securities Appellate Tribunal to stay its order directing Sahara India Life Insurance Company to transfer its life insurance business to SBI Life Insurance Company.
Seeking an urgent hearing in the matter, Tushar Mehta, the Solicitor General, appearing for the Insurance Regulatory Development Authority of India (IRDAI), told a vacation bench which is led by Justice Surya Kant that the SAT stay may have an impact on the servicing of Sahara policyholders. The judge, however, said there was no urgency and directed the matter to be heard on 3rd July which is its scheduled date.
The insurance regulator said that its order of 2nd June to immediately transfer the life insurance business of the Sahara firm to SBI Life was passed due to the former’s rapidly deteriorating financial position, and as the prudential regulator being seized of the company’s state of affairs, for protecting and promoting the interests of the erstwhile holders of life insurance policies issued by Sahara by transferring its life insurance business to another fit and proper insurer with sound financials.
The appeal, however has stated that,”In this regard, the assets and liabilities qua the policyholders have already been transferred to SBI Life on June 2, 2023, and various steps have been taken by IRDA and SBI Life in furtherance thereof. Any stay of the June 2, 2023, order may preclude SBI Life from effectively servicing the accounts of the policyholders.”
It has been argued by the insurance regulator that it had a strong prima facie case for setting aside SAT’s “erroneous” order and the stay is also needed to “ring-fence the assets/investments” of the Sahara firm from “possible diversion or syphoning off”.
