Chennai, Jul 29 (IANS): The Indian insurance regulator has said that Rs 78 crore was siphoned off by Sahara India Life Insurance Ltd in the name of security deposits.

The Insurance Regulatory and Development Authority of India (IRDAI) late on Friday also said the promoters of Sahara India Life Insurance Company were no more "fit and proper" persons, and ordered transfer of all policies to ICICI Prudential Life.

The appointed date for the transfer of Sahara India Life to ICICI Prudential Life is July 31.

The IRDAI has also ordered Sahara India Life to transfer Rs 25 crore to a separate account under the control of the regulator to meet any contingency expenses to be refunded a year later.

In an order uploaded at the IRDAI website, its Chairman T.S. Vijayan said as per the report of the administrator appointed for Sahara India Life, a sum of Rs 78 crore had already been "siphoned off in the name of security deposits," and the promoters are no more "fit and proper", the shareholders and company board are not keen in recovery plan and the company is mainly surviving on release of reserves.

However, the situation may not continue for long as the new premiums of the company had come down significantly, it said.

In June 2017, R.K. Sharma, a General Manager at the IRDAI, was appointed as Administrator for Sahara India Life to manage the affairs of the private life insurer.

Based on the June 22 report of Sharma, the insurance regulator concluded that it is not in the best interests of policyholders to allow Sahara India Life to transact business further.

The IRDAI decided to transfer the life insurance portfolio to some other life insurer which is profitable, does not have any accumulated losses and compliant with the limits on management expenses and solvency margin.

According to IRDAI, ICICI Prudential Life expressed interest within the stipulated time though six life insurers complied to the above criteria.

As per IRDAI order, ICICI Prudential will assume the insurance liabilities of Sahara India Life as per the valuation by an independent actuary as on July 31.

The IRDAI has ordered Sahara India Life to transfer to ICICI Prudential Life the investment pertaining to the policyholders, loans against policies, current assets representing current liabilities, cash or cash equivalent to the extend of non-par fund and cash/cheques in Sahara India Life's branches towards premium for policies.

According to IRDAI, Sahara India Life should also transfer asset corresponding to the policyholder liabilities as per the statutory valuation report submitted by the company's appointed actuary as on March 31, 2017.

Sahara India Life should also transfer the assets corresponding to the changes in the policyholder liabilities as on July 31, 2018 as per the valuation of insurance liabilities report prepared by the independent actuary.

Incidentally, it took two years for IRDAI to conclude that the promoters of Sahara India Life are not "fit and proper" to run an insurance company.

In 2015, Securities and Exchange Board of India (SEBI) ordered cancellation of certificate of registration of Sahara Mutual Fund as it found the fund house, Sahara Asset Management Company (AMC) and Sahara Sponsor, not "fit and proper" to carry on the business.