Insurance

It said genuine claims were rejected by companies that took advantage of the ambiguity in the IRDA guidelines with respect to genetic conditions.

While the 2013 IRDA guidelines on standardisation in health insurance had a specific exclusion in respect of congenital and genetic conditions without defining the term itself, the 2016 guidelines which superseded the earlier guidelines had no reference to “genetic disorders” and only defined “congenital anomalies”. The court, thus, concluded that genetic conditions could no longer be excluded from the scope of health insurance contracts.

The court directed IRDA to ensure that no claims were rejected by companies on the basis of exclusionary clauses pertaining to genetic disorders, and to “re-look” into the exclusionary clauses in insurance contracts.

“Typically, any health insurance policy excludes latent, unknown diseases and pre-exist- ing disorders. As a result of the judgment, pre-existing medical conditions are excluded except genetic disorders. Only thing, probably, (for the insurance companies to do) is to align with the judgement and continue to make pre-existing conditions as an exclusion..within that exclusion you make an exclusion for genetic disorders. That means you are opening yourself to any kind of genetic disorder... and the kind of hospitalisation costs that follow genetic disorder are extraordinary,” said K Ramchandran, an industry expert.

Justice Pratibha M Singh delivered the 47-page judgment in a plea brought by Jai Prakash Tayal, who suffered from Hypertrophic Obstructive Cardiomyopathy, seeking damages from United India Insurance Co. Ltd.

“The judgment is being studied but prima facie it’s significant if it prevents insurers from using the genetic disorder clause to refute claims in future after the policyholder was insured and the policyholder had no prior knowledge of the genetic disorder,” said Sanjay Datta, chief underwriting and claims, ICICI Lombard General Insurance Co. Ltd.