Insurer cannot discriminate against persons with genetic disorder says the Delhi High Court

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One thing that makes a person truly unique is his or her genetic setup; a “gene,” is fundamental unit of heredity, and the basic unit of all biological information. It’s a blueprint, an institutional design of a person. Something over which an individual has little control (though environment factors do trigger genes in some cases, but more on that later). Anyway, the study of genes has helped man understand the process of our evolution and minimize the pernicious effects of many genetic disorders. But it is not always that geneticists have covered themselves in glory and used their understanding of genetics for the welfare of humanity; the German experience of ‘eugenics’ (Eugenics is a movement that is aimed at improving the genetic composition of the human race) is a terrifying example as to how, in Germany, eugenics was used as a scientific base to justify the mass killings of the weak, maimed, disabled and the Jews, amongst others. Some of this was also judicially upheld. None other than Oliver Wendel Holmes, J. of SCOTUS had said that in the times of war, the state needs strength and can do without the weak. This reminds us as to how mankind’s understanding of genetics can be used to justify something as horrific as a holocaust. Similarly, the unsavoury debate worldwide on the genetic differences (and intellectual capabilities!) between the black and white, is another example of the curse of knowledge (or perceived knowledge!).

How an individual can be made to pay for his genetic infirmities is a question that High Court of Delhi was recently faced-with; this was a case where a person was denied benefits of insurance owning to the fact that he was suffering from a genetic disorder[1]. The question before the court was “whether persons having genetic disorders can be discriminated against in the context of health insurance”.

The High Court of Delhi has answered this in the negative.

For better understanding of the stance taken by the Delhi High Court, it becomes important to understand the nature of insurance contracts; insurance contracts are, what we call, the contracts of utmost trust i.e. uberrima fides. On one hand the insured is duty bound to declare all the material facts that are within his knowledge to the insurer (so as to enable the latter to assess the risks adequately); on the other hand, the insurer has to take care of the special needs of the person so insured.

It is also to be kept in mind that insurance, especially health insurance, has a social ring to it and the same has to be seen in context of the larger social goal it tries to achieve. Health after all is fundamental right of all citizens. Therefore, health insurance contracts cannot be seen in the same light as a general contract of insurance.

In that backdrop, let us examine the facts of the case under discussion: the Plaintiff in the instant case took an insurance policy with the National Insurance Company and first availed the benefits of the same in the year 2000. The policy was subsequently shifted to United India Insurance Company (“Insurance Company”), the appellant/defendant in the case. The policy was renewed on year to year basis for almost eight years. In the interim the Plaintiff availed the benefits to the health insurance policy twice for the same disorder, the claim on both occasions was honored.

Bone of contention arose when the insured was hospitalized in the year 2011 for a period of four days, and he made a claim for Rs. 7,78,864. This claim of the Plaintiff was denied by the insurance company giving the following reason:

Since genetic diseases are not payable as per the policy, genetic exclusion clauses

Plaintiff asserted that exclusion of genetic disorders was not the part of initial policy and the same was added without notice to him, and therefore, such exclusion in no way binds him. The trial court decided in favor of the Plaintiff stating that insurance policy had to be renewed in terms of the existing policy. This makes sense as a contract is based on consensus ad idem and cannot be amended unilaterally, later. The Trial court took note of the fact that the Plaintiff had availed the benefit of the insurance, for the same ailment, twice in past and therefore, there cannot be any discrimination based on the genetic disposition of the Plaintiff, in this particular instance.

The Insurance Company thus finally came before the Hon’ble High Court of Delhi in appeal. The two questions which the Hon’ble Court was faced with were:

  • Whether the exclusion in relation to genetic disorders is valid or legal?
  • Whether exclusionary clause relied upon by the Insurance Company applied on the facts of the case in hand.

The answer to the first question is of considerable importance for us. “Genes” are the carriers of traits in any human being, they are responsible for individuality of a human being. They are in certain unfortunate circumstances also carriers of certain diseases, such conditions or diseases are known as genetic disorders. These are further subdivided into various categories namely monogenetic disorders, multifactorial inheritance disorder and chromosomal anomalies. There is no clear dichotomy as to condition/disease being fully attributable to genes, there might be a situation where a disease is caused partially due to a genetic condition and partially due to lifestyle, environmental condition etc. (See-epigenetics). It is due this this reason the High Court considered the exclusion of genetic disorders, constitutionally vulnerable and suspect.

The Hon’ble High Court then went on to examine the position of law in various foreign jurisdictions, concerning the exclusion of genetic disorders vis-à-vis health insurance claim. The High Court found out in almost all jurisdictions which included, UK, EU, Estonia, Canada and the US, the use of genetic information in health education and employment is barred. In fact, in the US there is bar on charging higher premium based on the genetic predisposition of an individual.

The High Court then examined the issue in light of judicial decisions in India. Right to health has been held to be fundamental right by plethora of decisions of the Supreme Court. The Hon’ble Supreme Court in C.E.S.C. Limited and Ors. v. Subhash Chandra Bose and Ors[2] has held that “term health implies more than an absence of sickness. Medical and health care facilities not only protect against sickness but also ensure stable manpower for economic development”. Further, the Apex court has, in LIC of India & Anr. v. Consumer Education & Research Centre & Ors.[3] enunciated a sound legal principle that even though the insurance business is essentially dealing with contracts, and insurance companies are free to evolve their policies, the same have to be in line with the constitutional frame work of the country. The court held that “insurance being a social, security measure, it should be consistent with the constitutional animation and conscience of socio-economic justice…

In the light of these judgments, the Hon’ble High Court of Delhi reached a conclusion that exclusion of genetic disorders is not merely a contractual issue, rather it has far reaching implications on the Right to health and is literally a matter of life and death. Thus, any exclusion without having any credible basis would not stand the test of reasonableness and is liable to be set aside. Broad exclusion of genetic disorders was thus prohibited as the same would not pass constitutional muster.

The High Court further held the clause excluding the health insurance benefits to persons suffering from genetic disorder to be unconstitutional. The High Court concluded that availing health care benefits under the health insurance scheme forms part of right to life under Article 21 of the Constitution. Further, discrimination of the individuals based on their genetic pre-disposition without any empirical data is unconstitutional. The Court further directed the Insurance regulator to look into exclusionary clauses and ensure that a claim is not rejected on the specious premise of exclusion of genetic disorders.

This is an extremely progressive rights oriented judgment and upholds the right to dignity and healthcare to persons suffering from genetic disorders. The judgment is also laudable for extending rights based jurisprudence to what was erroneously argued to be a purely private contract. The judgment’s biggest take-away is the recognition of the public interest element to insurance contracts. Having said that, to say that we have seen the last of this issue would be jumping the gun, as in all probability the insurance company is likely to challenge the verdict in the Supreme Court. But all in all, a huge shout out to the Hon’ble Judges who delivered this judgment.

[1] M/s United India Insurance Company v. Jai Parkash Tayal  RFA 610 of 2016

[2] (1992) 1 SCC 441

[3] (1995) 5 SCC 482

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