The Securities Appellate Tribunal (SAT) has directed the Insurance Regulatory and Development Authority of India (IRDAI) to take a fresh look into the matter related to the merger of Sahara India Life Insurance Company with ICICI Prudential Life Insurance Company and decide within a period of three months.
In an order passed on Thursday, the tribunal, which hears appeals filed against orders issued by the insurance and capital markets regulators, upheld the earlier orders of IRDAI related to the appointment of an administrator at Sahara Life and restraining the insurance company from underwriting any new business.
The tribunal, however, granted relief in the matter of the merger of the two insurance companies by referring the case back to the insurance regulator.
Quashes order
“We hereby quash the impugned order and restore the whole matter to the file of the IRDAI with a direction to proceed from the stage of seeking a representation/response from the Appellant (Sahara Life)... IRDAI shall make an endeavor to complete the above said process as per law preferably within a period of three months from the date of receipt of the appellant’s reply/response to the Administrator’s report,” said the SAT order.
The matter dates back to 2015 when the then chairman of Sahara Life, Subrata Roy stepped down since he was in judicial custody since March 2014. IRDAI sent notices to the company based on certain observations in the annual report. Thereafter, IRDAI passed an order in June 2017 for appointing an administrator for Sahara Life as it was of the view that the company was acting in a manner that was likely to be prejudicial to interest of policy holders. The regulator passed another order of moratorium against Sahara Life on underwriting new business with immediate effect.
In July 2017, IRDAI passed an order directing transfer of the life insurance portfolio of Sahara Life to ICICI Prudential.
