Sri Shyamal Gupta, Member

Aggrieved over allowing of the complaint case by the Ld. District Forum, this Appeal is moved by M/s Bajaj Allianz General Insurance Co. Ltd.

A complaint was filed before the Ld. District Forum by one Sri Dipankar Neogi over repudiation of his claim by the OP Insurance Company.  Incidentally, the claim was lodged for reimbursement of the treatment cost incurred by the Complainant in respect of his son, since deceased. 

The  OPs justified the decision contending inter alia that the beneficiary died of genetic disorder which was beyond the purview of the subject policy.

Decision with reasons

We have heard both sides and gone through the documents on record.

Ld. Advocate for the Appellants submitted that from the documents, i.e., medical report of insured, it was found that the insured died due to ‘Intracerebral Hemorrhage and Intraventricular  Hemorrhage’.  According to the Ld. Advocate, brain Herniation is a genetic disease (congenital defect) which was not covered under the policy and therefore, there was no infirmity with the decision of the Insurance Company to repudiate the subject claim.  In support of his contention, the Ld. Advocate drew our attention to the opinion of Dr. Viswanathan Iyer.

Ld. Advocate for the Respondent, on the other hand, contended that the Respondent had no inclination whatsoever about such ailment of his son, since deceased.  If he was indeed aware of such fact, he would certainly arrange for necessary treatment of his son.  In this regard, he referred to the decision of Hon’ble National Commission in Dr. Ashish Sharma v. United India Insurance Co. Ltd. & Anr., 2016 (2) CPR 308 (NC).

Notwithstanding such contention, we find it quite baffling that Appellants have not placed before this Bench the detail terms and conditions of the subject policy to show that genetic disease was not covered under the policy.

That apart, it appears that genetic disorder is not the sole contributory factor that causes Intracerebral Hemorrhage.  The main cause of Brain Herniation is anything which increases pressure within the brain causing the brain to move from its position. Head injury, brain tumor, brain abscess, or strokes are the main causes that result in swelling and increased pressure in the brain causing Brain Herniation. It can occur due to Brain Hemorrhage, Hydrocephalus, Swelling after radiation therapy for a .

There can be no two opinions as to the fact that a detailed genetic testing is required in order to determine the nature of the genetic disorder.   It would be medically impossible to determine whether a broad medical condition is a pure genetic disorder—solely attributable to a gene or to the several other factors which could contribute. The opinion of Dr. Iyer being not proven following due process of law, we are not inclined to put any importance on this report.

A question was came up before the Hon’ble Delhi High Court in M/s.United India Insurance Company Limited vs. Jai Parkash Tayal l (RFA 610/2016 & CM Nos. 45832/2017) as to whether persons having genetic disorders could be discriminated against in the context of health insurance. The Hon’ble Delhi High Court extensively considered the said issue by doing a wonderful research work with comparative study of the said issue in various countries and thereafter, found that the objection raised by the Insurance Company was not tenable. In paragraph Nos. D4, D5, D6, D12, E15, E16, E17 and F1 of the said solemn authority, the Hon’ble Court observed as under:

"D.4. Thus, Right to Healthcare is a part of Right to Life. Medical care and health facilities are part of Right to Healthcare. With spiraling medical costs, health insurance has to be an integral part of medical care and health facilities. Thus, healthcare without health insurance is a challenge. The individual's Right to avail health insurance is an inalienable part of the Right to Healthcare. Health insurance with the exclusion of "genetic disorders" hits at the basic right of an individual to avail of insurance for prevention, diagnosis, management and cure of diseases. Excluding any particular category of individuals i.e., those with genetic disorders, from obtaining health insurance or having their claims honoured, based on genetic disposition would be per se discriminatory and violative of the citizen’s Right to Health.

D.5. As held in LIC of India (supra) the clause in an insurance policy has to stand the test of `reasonableness'. It is a means of social security. The principles laid down above in respect of life insurance equally apply with greater vigor to health insurance. Thus, the fact that a particular consumer's genetic heritage could lead to higher risk ought not to be used against the said person for exclusion of the person from availing medical insurance. What makes it worse is the fact that insurance companies, like in the present case, have not asked for higher premium based on a genetic disposition but have completely refused to honour a claim based on a broad understanding (or misunderstanding) of the term 'genetic disorders'.

D.6. The Insurance sector in India is regulated by The Insurance Act, 1938 which envisages the establishment of the Insurance Regulatory Development Authority (hereafter `IRDA"). The IRDA had issued guidelines on standardization in health insurance dated 20th February, 2013, which had a specific exclusion in respect of 'pregnancy, infertility, congenital and genetic conditions". Unfortunately, however, the term 'genetic conditions' is not defined in the guidelines. Thus, at the relevant point the IRDA itself permitted Insurance companies to provide for exclusions based on genetic conditions. These guidelines have now been superseded by guidelines dated 29th July, 2016, wherein only 'congenital anomalies' have been defined and genetic conditions do not find a mention. Thus, 'genetic conditions' can no longer be excluded.

......D.12. Thus exclusions such as the ones relating to genetic disorders do not remain merely in the realm of contracts but overflow into the realm of public law. The reasonableness of such clauses is subject to judicial review. 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. However, the broad exclusion of genetic disorders from insurance contracts/claims is illegal and unconstitutional. Question (i) is answered accordingly.

...E.15. Insurance documents are standard form contracts and usually the insured person signs on the dotted line. It would be extremely tenuous to expect a layman to read each and every clause of an insurance document before signing it. On most occasions, a person who intends to obtain insurance has no choice to say NO to a clause in an insurance policy. Medical insurance is primarily obtained for the purpose of unforeseen medical conditions which may affect a person and so long as there has been no fraud, concealment or suppression, at the time of obtaining insurance, policies ought to be honoured. It is usual to see claimants running from pillar to post in order to get medical reimbursement from insurance companies. This case is no different. In the insurance policy issued to the Plaintiff, no genetic testing was undertaken before hand. This obviously means that the exclusion of genetic disorder is being applied on the basis of family history and not on the basis of a specific test. Such application of exclusion lacks the foundation itself and is untenable.

E.16. In every disease, there are four stages- i) prevention, ii) diagnosis & management, iii) cure iv) palliative care in non-curable diseases. Insurance would be required at every stage; diagnostic tests can begin with a simple lab report to complex diagnostic costing thousands of rupees. Management of a disease would include continuous administration of medicines for example in the case of diabetes and blood pressure or use of devices like a pacemaker and ICD in the case of a cardiac condition. Cure of a disease would include medicinal cures & surgical cures. In the case of diseases like cancer, the fourth stage of chemotherapy, medicinal administration and palliative care go hand in hand. To exclude any particular medical condition from availing insurance for any of the above steps in the journey of well- being could lead to loss of life. There could be different terms specified by the insurance company in the case of serious ailments, provided they stand the test of reasonableness and the differentiation is intelligible.

E.17. A broad categorization and exclusion of genetic disorders of every and all kind would lead to enormous discretion in the hands of the insurance company to reject genuine claims. The ambiguity and the uncertainty of the precise definition of genetic disorders makes the exclusion too broad. Firstly, exclusion of genetic disorders by itself would be unconstitutional and the broad unqualified exclusion would not stand the test of non- arbitrariness and unreasonableness.

...F.1 To conclude:

(i) Right to avail health insurance is an integral part of the Right to Healthcare and the Right to Health, as recognised in Art. 21 of the Constitution;

(ii) 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, is Unconstitutional;

(iii) 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.

(iv) The Exclusionary clause of `genetic disorders', in the insurance policy, is too broad, ambiguous and discriminatory - hence violative of Art. 14 of the Constitution of India;

(v) Insurance Regulatory Development Authority of India (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."

Fortified by the above decision, we have no qualms holding that the repudiation of Respondent’s claim by the Insurance Company was nothing but a nullity in law.

The Appeal, accordingly, fails.

Hence,

O R D E R E D

The Appeal stands dismissed on contest with a cost of Rs. 20,000/- being payable by the Appellants to the Respondent.  The impugned order is hereby affirmed.