Review insurance clauses reg genetic disorders: HC to IRDA

In a significant judgement, the Delhi High Court today directed the Insurance Regulatory Development Authority of India (IRDA) to have a re-look at the exclusion clauses in the insurance contracts to ensure that claims were not rejected on the basis of exclusions relating to "genetic disorders" like cardiac conditions, high blood pressure and diabetes.
Observing that the availing of health insurance was an integral part of the 'Right to Health and healthcare' under the Constitution, Justice Pratibha Maninder Singh held that the clause in the insurance policy excluding a person with "genetic disorder" from availing its benefit was "discriminatory" and contrary to public policy.

The judge also left it to the lawmakers to take necessary steps in this regard, saying there was an urgent need for a proper framework against genetic discrimination.
"The IRDA is directed to re-look at the Exclusionary clauses in insurance contracts and ensure that insurance companies do not reject claims on the basis of exclusions relating to genetic disorders," the 47-page verdict said.
"The exclusion of genetic disorders in all forms would be contrary to public policy. Several of the prevalent medical conditions which affect a large mass of population, including cardiac conditions, high blood pressure, diabetes in all forms, could be classified as genetic disorders.

"The entire purpose of taking medical insurance would be defeated if all genetic disorders are excluded," the High Court said in the judgement, holding that the law and norms of 'genetic disorders' in the insurance policies in India were "too broad, ambiguous and discriminatory" and hence violated the constitutional provisions.

It said the insurance companies were free to structure their contracts based on reasonable and intelligible factors which should not be arbitrary and "in any case cannot be exclusionary".
The judge said discrimination in health insurance against individuals based on their genetic disposition or genetic heritage, in the absence of appropriate genetic testing and laying down of intelligible differentia, was unconstitutional.

"The broad exclusion of genetic disorders is thus not merely a contractual issue between the insurance company and the insured but spills into the broader canvas of Right to Health. There appears to be an urgent need to frame a proper framework to prevent against genetic discrimination as also to protect collection, preservation and confidentiality of genetic data.
"Insurance companies are free to structure their contracts based on reasonable and intelligible factors which should not be arbitrary and in any case cannot be exclusionary. Such contracts have to be based on empirical testing and data and cannot be simply on the basis of subjective or vague factors. It is for lawmakers to take the necessary steps in this regard," Justice Singh said in the order.

The high court considered at length the scope of genetic disorders, laws and norms in various foreign jurisdictions and the Indian position and concluded that "the exclusionary clause of 'genetic disorders' in the insurance policy, is too broad, ambiguous and discriminatory - hence violative of Article 14 of the Constitution".
The verdict was rendered in an insurance claim by one Jai Prakash Tayal against United India Insurance Company Limited.
Tayal, who was suffering from Hypertrophic Obstructive Cardiomyopathy, was denied his insurance claim on the ground that the said condition was genetic, and genetic diseases were not payable as per the policy.

The trial court had ruled in favour of Tayal, holding that there cannot be a discriminatory clause against persons who suffered from genetic disorders and they were entitled to medical insurance. The insurance company had appealed against the trial court's in August 2017 order.