The Insurance Regulatory and Development Authority of India (IRDAI) passed an order dated June 23, directing Sahara India Life Insurance Co. Ltd to stop collecting proposal deposits, procuring or underwriting new business with immediate effect.
The regulator also asked the insurer to direct all concerned insurance agents as well as intermediaries to comply with the order so that they also refrain from selling insurance plans of Sahara India Life Insurance to customers.
In addition to this, the insurer has been asked to continue to service existing customers who have already bought insurance policies from them in the past and to continue collecting renewal premium amount in order to keep their policies active and unhindered.
Earlier this month, IRDAI had raised concerns over the management of Sahara India Life Insurance Co, a wholly-owned subsidiary of Subrata Roy-led Sahara Group, saying it has reasons to believe that the insurer may act in a manner “prejudicial” to the interests of life insurance policyholders. It observed serious concerns with regards to the governance of the company, its declining business and financial position following a review of the insurer’s financial statements for the year to March 2015.
To manage the affairs of the insurer and to address these concerns, the regulator named its general manager R K Sharma as the administrator of Sahara India Life Insurance.