IRDAI Reiterates ‘Policyholders First' – The Sahara Precedent

In a landmark move, the Insurance Regulatory and Development Authority of India (IRDAI) appointed an administrator to manage the affairs of Sahara India Life Insurance Company Limited with immediate effect. Such a move is unprecedented and re-enforces the fact that the regulator would not hesitate in taking unprecedented action and exercise all powers available to it under the Insurance Act 1938 (Act) to foster its mission 'to protect the interests of policy holders'. 

On 12 June 2017, the IRDAI exercised its powers under Section 52A of the Act by appointing an administrator to manage the affairs of Sahara India Life Insurance Company Limited with immediate effect. In its order, it was mentioned that the IRDAI had reasons to believe that the concerned insurer had acted in a manner likely to be prejudicial to the interests of holders of life insurance policies issued by the concerned insurer. On the same date, the IRDAI also issued a public notice, addressing the