Country’s largest private life insurer, ICICI Prudential Life Insurer is all set to take over Sahara Life, said a corporate announcement issued by the company.
The insurer has received IRDAI’s go ahead to acquire Sahara Life who has been in troubled waters for quite some time.
Last month, the insurance regulator took over the management of Sahara India Life Insurance, as it believed that the company was not acting in the interests of its policyholders. It also directed the company to stop procuring fresh business from policyholders and appointed R.K. Sharma, general manager, IRDAI, as a run-off administrator to manage the day-to-day affairs of the life insurer.
Further, the administrator submitted a report to IRDAI stating the total failure in the governance of Sahara Life. The report stated that the promoters are no longer ‘fit and proper’ for the company. In fact, the administrator found that the company had mis-used Rs.78 crore which they took as security deposits. In addition, the board of directors of the company were not keen on any recovery plan, said the administrator.
Therefore, IRDAI decided to transfer the business of Sahara Life to another life insurer who fulfilled certain parameters based on profits, accumulated losses, management expenses and solvency margin. Six life insurers, including state-owned LIC met the criteria. However, only ICICI Prudential expressed interest in taking over Sahara Life, said IRDAI.
ICICI Prudential Life Insurance said that it will take over the Sahara Life’s assets and liabilities with effect from July 31, 2017. In a latest regulatory filing, the company clarified, “This is not a merger between the two companies and is only a transfer of the life insurance portfolio.” It also stated the portfolio being transferred is less than 1% of its balance sheet.