Once, Life insurance in India used to be a quiet sector with not many crucial developments and few safeguarded returns. It was investment recommended by the elders and the wise, not of any major concern to any media house. It was certainly not a part of a common man’s conversation. The great Indian insurance Tamasha, as we call it, has witnessed a rather hasty decision by the Insurance Regulatory and Development Authority (IRDA) where it has directed the ICICI Prudential to take over Sahara India Life Insurance’s customers and business.
The insurance regulator, in its July 28th order, has said: “The promoters of the company (Sahara India Life) are no longer fit and proper; a sum of Rs.78 crore has already been siphoned off in the name of the security deposits; the shareholders and Board of Directors are not keen in recovery plan; the company is mainly surviving on the release of reserves. However the situation may not continue for long as the new premium of the company has come down significantly.”
This seems to be a keen observation by the regulator as Sahara India is in good terms with its policyholders. Moreover there hasn’t been any complaint over a claim settlement by any of its customers. The siphoning which has been decreed as fraudulent was marked for the purposes of opening more branches in the country.
Curiously enough, IRDAI has been silent on how and by whom the money was siphoned off. Apart from that, the regulator has also not made the administrator’s report public. One industry expert not wanting to be named stated that the IRDAI had not explained in detail the reasons for appointing an administrator to run the affairs of Sahara India Life and then ordering the transfer of all its polices to ICICI Prudential Life Insurance.
This predicament without any major pre-cursor to it brings several questions from industry experts, finance enthusiasts and the general populace. Sahara India has chosen to knock on the doors of the Supreme Court to understand and challenge the decision made by IRDAI. Hopefully, this reckless tamasha would have a cessation before the public loses any money or sleep over it.