IRDAI has taken over the management of Sahara India Life Insurance, as the insurance regulator believe that the company is not acting in the interests of its policyholders.
The insurance regulator has appointed RK Sharma as a run-off administrator to manage day-to-day affairs of the life insurer and improve its performance.
Typically, a run-off administrator looks into the books and policyholder related services until the company gets financially sound or has a potential buyer.
Last year, the insurance regulator reviewed the performance of Sahara Life and found issues with its governance aspects, business performance, adjustments against revaluation reserves and unclaimed insurance amounts. IRDAI sent many reminders and warnings to the company but it chose not to respond, said the insurance regulator.
In a circular, IRDAI said, “Considering the serious nature of the concerns related to the financial position of the insurer and based on other details, the insurance regulator has reasons to believe that the life insurer is acting in a manner likely to be prejudicial to the interests of holders of life insurance policies and the orderly growth of the insurance sector as a whole.”
It further stated that the appointed official would have to file a report suggesting measures to help policyholders. In addition, IRDAI has assured policyholders that the change in management will not affect their rights and the company will continue to offer all the policy-servicing activities.
The insurance regulator has further directed the management of the insurer to extend all possible assistance and cooperation to the administrator.