Friday, 1 June 2018

Whether any person can be discriminated in health Insurance based on his genetic disorders ?


(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

F.2. The Trial Court has rightly held that a person, suffering from a genetic disorder, needs medical insurance as much as others. The suit is decreed for a sum of Rs. 5 lakhs along with interest @12% from the date of filing of the claim with the Appellant Insurance Company till the date of payment;

IN THE HIGH COURT OF DELHI

RFA 610/2016 and CM No. 45832/2017

Decided On: 26.02.2018

 United India Insurance Company Limited  Vs.  Jai Parkash Tayal

Hon'ble Judges/Coram:
Prathiba M. Singh, J.
Citation: 2018 SCCONLINE DEL 7415



1. The human gene in all its myriad combinations decides the traits of an individual human being. While most genetic traits of human beings have a positive expression, there are certain traits which could cause abnormalities. Such abnormalities are termed as 'genetic disorders'. Genetic disorders are subject matter of research and development in the search of newer drugs to cure them but are also subject matter of debate, world over, in the context of health insurance. The question raised in the present case is whether persons having genetic disorders can be discriminated against in the context of health insurance.

A. Background Facts

A.1. The Respondent/Plaintiff (hereinafter 'Plaintiff') took an insurance policy for himself along with his wife and daughter, from the Appellant/Defendant (hereinafter 'Defendant') being Policy No: 041703/48/11/97/00000934 which is valid and subsisting. The said policy is a medi-claim Policy where the sum insured is Rs. 5 lakhs per individual. The Plaintiff submits he had first taken a medi-claim on 11th September, 2000 with the National Insurance Co. Ltd. vide policy No. 2000/8100540. The said policy was shifted to Defendant on 10th September, 2004, after which the policy was renewed continuously year to year without break till 10th September, 2012. The Plaintiff suffers from HOCM i.e. Hypertrophic Obstructive Cardiomyopathy {hereinafter 'HOCM'). He was hospitalised on 23rd January, 2004 and 27th February, 2006 and his claims for the said periods have been honoured and payments were made by the Insurance Company.

A.2 The Plaintiff was again hospitalised for treatment on 27th November, 2011 and was discharged on 30th November, 2011. He made a claim for an amount of Rs. 7,78,864/- with the Defendant. The said claim was rejected vide letter dated 6th February, 2012 where the reasons for rejection were mentioned as -

"...We are closing your claim file, on account of the following reasons:-

TPA Vipun Medcorp P Ltd. had repudiated your claim. Since genetic diseases are not payable as per the policy, genetic exclusion clauses".

(extracted verbatim)

A.3. It is the Plaintiffs case that the exclusion of genetic disorders was not a part of the initial policy which was availed by him but was added as part of the 'Exclusions' in a later policy document, without specific notice to him and hence the said exclusions do not bind him. However, the stand of the Defendant was that HOCM is a genetic disorder which is clearly excluded and hence the claim is not liable to be entertained.

A.4. The Plaintiff issued a legal notice on 30th March 2012, calling upon the Defendant to pay a sum of Rs. 7,78,864/-, the breakup of which is as under: -

"9. That the defendants have committed breach of trust with the plaintiff for which the defendants are liable to face civil and criminal consequences before the competent court of law. It is submitted that the Defendants are liable to pay the amount i.e:

(i) Medi-claim Amount Rs. 5,00,000/-

(ii) Damages Rs. 2,78,864/-

Total: Rs. 7,78,864/-

(Rs. Seven Lakh Seventy Eight Thousand Eight Hundred Sixty Four) alongwith interest @ 12% per annum."

He received a reply on 24th April, 2012 that the claim cannot be paid as 'genetic disorders' are excluded in the policy document. The Plaintiff then filed a suit for recovery against the Defendant praying for a decree for the sum of Rs. 7,78,864/-. The Prayer clause in the plaint reads:

"It is, therefore most respectfully prayed that the Hon'ble court may please to pass a decree of Rs. 7,78,864.00 (Rs. Seven Lakh Seventy Eight Thousand Eight Hundred Sixty Four Only) along with interest @ 12% p.a. since the filling of the suit till the realization of decretal amount.

Cost of the suit may also be awarded in favour of the plaintiff and against the defendants."

A.5. The Defendant in its written statement relied upon clause 4, specifically 4.17 which excludes genetic disorders from being claimed. The Defendant further sought to justify rejection of the claim on the ground that HOCM is a genetic disorder and hence the amount is not liable to be paid. The Defendant sought to blame the Plaintiff for not having gone through the terms and conditions of the policy.

A.6. The Plaintiff led the evidence of five witnesses including himself. He summoned three officers from the defendant insurance company and a doctor from Fortis Escorts Heart Institute, New Delhi.

PW-1 - Plaintiff Himself

PW-2, PW-4 & PW-5 - M/S United India Insurance Company Limited

PW-3 - Doctor of Fortis Escorts Heart Institute

All relevant documents were exhibited including the insurance policy, rejection letter, renewals thereof, etc. The Trial Court has, summarised the evidence of all the witnesses in paragraph 12 of the impugned judgment.

A.7. The Trial Court held that an insurance policy has to be renewed on the existing terms and conditions, and at the time of renewal fresh clauses and exclusions cannot be added. The Trial Court held that no advance notice was given to the Plaintiff and that some new clauses have been added to the policy.

A.8. The Trial Court thereafter went into the question of whether the ailment of the Plaintiff was validly excluded from the medi-claim policy, and if so, had the Defendant acted contrary to law. The Trial Court observes that twice in the past, for the same disease, the claims of the Plaintiff had been approved. The Trial Court thereafter held that there cannot be a discriminatory clause against those persons who suffered from genetic disorders and they are entitled to medical insurance. The Trial Court decreed the suit for a sum of Rs. 5 Lakhs alongwith interest of 8% per annum and rejected the claim for damages of Rs. 2,78,864/-.

A.9. When the appeal was listed before this Court on 22nd August, 2017, the Defendant was directed to deposit the decretal amount. Thereafter, the same has been released to the Plaintiff on 28th April, 2017, subject to furnishing of a bank guarantee to the satisfaction of the Registrar General. The bank guarantee has been filed by the Plaintiff and is alive till 24th August, 2018.

A.10. None had appeared for the Defendant, arguments were heard on behalf of the Plaintiff and judgement was reserved. Thereafter, the Counsel for the Plaintiff mentioned the matter and made his submissions before the Court.

A.11. The admitted facts in this case are:

• The Plaintiff had obtained an insurance policy from the Defendant.

• The same was duly renewed from time to time and is valid and subsisting.

• The Plaintiff had on two earlier occasions i.e., on 23rd January, 2004 and 27th February, 2006 obtained claims to the tune of Rs. 1,04,640/- and Rs. 3,30,000/- respectively from the Defendant.

• The hospitalisation of Plaintiff on 27th November, 2011 at Fortis Escort Heart Institute, New Delhi is not disputed.

• The doctor from the said institute had appeared as a witness and had produced the entire hospital record.

• All the policy documents were produced by representatives of the Defendant who were summoned by the Plaintiff.

A.12. The two clauses from the insurance policy which are relevant to the case at hand are -

"1.1 NOW THIS POLICY WITNESSES that subject to the terms, conditions, exclusions and definitions contained herein or endorsed, or otherwise expressed here on the Company undertakes that during the period stated in the Schedule, if any insured person(s)contracts any disease or suffers from any illness (hereinafter called INJURY) and is such disease or injury requires such insured Person upon the advice of a duly qualified Physician/Medical Specialist/Medical practitioner (hereinafter called MEDICAL PRACTITIONER) or of a duly qualified Surgeon (hereinafter called SURGEON) to incur hospitalisation/domiciliary hospitalisation expenses or medical/surgical treatment at any Nursing Home/Hospital in India as herein defined (hereinafter called HOSPITAL) as an inpatient, the Company will pay through TPA to the Hospital/Nursing Home or the Insured Person the amount of such expenses as are reasonably and necessarily incurred in respect thereof by or on behalf of such Insured Person but not exceeding the Sum Insured in aggregate in any one period of insurance stated in the schedule hereto

....

4. EXCLUSIONS:-

.... 4.1-4.16

4.17 Genetic disorders and stem cell implantation/Surgery"

Thus, the Insurance Company would pay the sum insured in the policy 'subject to' the exclusion clause. If the medical condition is covered by any of the exclusions, the claim is liable to be disallowed. 'Genetic disorders' is one such exclusion.

A.13. The two questions that arise are -

(i) Whether the exclusion in relation to 'genetic disorders' is valid and legal?

(ii) Whether the exclusionary clause 4.17 relied upon by the Defendant for rejecting the claim of the Plaintiff applies on facts?

B. Genetic Disorders - Meaning

B.1. In order to determine question No. 1, the meaning of the term 'genetic disorders', needs to be understood. Genes are responsible for the various traits that human beings possess. It is the difference in these traits that makes one human being different from the other. While genes pass on several positive characteristics, they could at times be responsible for some abnormal medical conditions which are passed on from one generation to another. Such abnormal medical conditions which are passed on are termed as 'genetic disorders'. The inherited traits leading to disorders could either be dominant or recessive. If the trait is dominant, the disease will surface and if the gene is recessive the trait would not show up, but the individual would be a carrier of the gene and could pass it on to the next generation.

B.2. As per the National Human Genome Research Institute1, there are several types of genetic disorders. They are -

• Monogenetic disorders - They are caused by the mutation in a single gene. Eg: Sickle cell disease

• Multifactorial inheritance disorders - Caused by a combination of genetic and environmental factors. Eg: Diabetes, Cardiac diseases and some forms of Cancer;

• Chromosome disorders - Caused due to either deficiencies or excesses of the genes or due to structural changes in the chromosomes. Eg: Down syndrome, Chronic Myeloid leukamia.

B.3. Thus there are several medical conditions which could be partially attributable to genetics, but could also be attributable to several other factors, such as lifestyle, environmental conditions, dietary habits, etc. Detailed genetic testing is required in order to determine the nature of the genetic disorder, in the absence of which, it would be medically impossible to determine whether a broad medical condition is a pure genetic disorder i.e., solely attributable to a gene or to the several other factors which could contribute.

B.4. The fact that there are different types of genetic disorders and even common diseases like diabetes and cardiac diseases could be included in the broad definition, and makes the exclusion vulnerable. In effect, it would mean that large swathes of population would be excluded from availing health insurance which could have a negative impact on the health of a country.

B.5. Thus, it is necessary to determine the legality of such an exclusion in insurance policies. Moreover, in order to exclude genetic disorders from insurance claims, there has to be genetic testing, which is itself a complex and expensive process. The data, so collected from testing also needs to be preserved and confidentiality has to be maintained. Without doing genetic testing and prescribing what is the kind of genetic disorder which is excluded, applying a general exclusion would lead to arbitrariness.

C. Genetic Disorders and Insurance - Global position

C.1. Genetic discrimination in the context of insurance has been subject matter of several International Covenants, Directives, laws and regulations in various countries. Though there is lack of uniformity in the nature of regulation, the unanimous opinion appears to be that discrimination based on genetic heritage and disposition is contrary to human rights and in the context of insurance, exclusions relating to genetic disorders is heavily regulated. Even the collection of genetic data, preservation and maintenance of confidentiality of the data is a subject matter of grave concern.

C.2. The Universal Declaration of Human Rights, 1948 recognises that :

"Everyone has a right to a standard of living adequate for the health and well-being of himself and his family, including food, clothing, housing and medical care, and necessary social services, and the right to security in the vent of unemployment, sickness, disability, widowhood, old age, or other lack of livelihood in circumstances beyond his control"2
Thus, medical care is a basic human right, universally recognised as far back as in 1948. In the modern world, when health care costs are very high, availing health insurance is an integral part of medical care.

European Union (E.U)

C.3. At a regional level, the 1997 Council of European's Convention for the Protection of Human Rights and Dignity of the Human Being with regard to the application of Biology and Medicine stipulates that 'Any form of discrimination against a person on grounds of his or her genetic heritage is prohibited.'3 The European Convention on Human Rights & Biomedicine expressly bars discrimination of any kind on the basis of genetic heritage. In fact, Article 12 of the said convention only permits genetic testing for the purposes of health or for scientific research.4 This has led a large number of European countries including Austria, Belgium, Switzerland, Luxembourg, Denmark, Portugal to enact legislations in respect of genetic data and regulation of such data.

C.4. Following the above Convention, certain recommendations have been made and accepted by the Community Minister in Europe which seeks to strike a balance between the legitimate interest of the insurer and the level of risk presented by the insured. These recommendations have a specific prohibition in principle No. 4 which is set out below:

"Principle 4- Insurers should not require genetic tests for insurance purposes. "

"15. In accordance with the principle laid down in Article 12 of the Convention on Human Rights and Biomedicine, predictive genetic tests must not be carried out for insurance purposes.

16. Existing predictive data resulting from genetic tests should not be processed for insurance purposes unless specifically authorizes by law. If so, their processing should only be allowed after independent assessment of conformity with the criteria laid down in paragraph 5 by type of test used and with regard to a particular risk to be insured.

17. Existing data from genetic tests from family members of the insured person should not be processed for insurance purposes."5

C.5. The Charter of Fundamental Rights of the European Union, which enlists the various freedoms for the people of Europe and is based on the Constitutions of its member states protects the Right to life6 under Article 2, Right to Liberty and Security, Freedom of Expression etc. Relevant to the issue, however, are Articles 20 and 21. The principle of non-discrimination as per this Charter extends to protection against any discrimination based on genetic features. Articles 20 and 21 are set out below:

"Article 20 Equality before the law:

Everyone is equal before the law.

Article 21 Non-discrimination:

1. Any discrimination based on any ground such as sex, race, colour, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation shall be prohibited.

2. Within the scope of application of the Treaty establishing the European Community and of the Treaty on European Union, and without prejudice to the special provisions of those Treaties, any discrimination on grounds of nationality shall be prohibited."

C.6. Several researchers are of the view that Article 21 applies to insurance policies and thus, this provision bars insurers from seeking genetic testing as a pre-condition for insurance contracts. When read in conjunction with Article 11 of the Convention on Human Rights and Biomedicine, it appears that in Europe, genetic testing, modification of insurance contracts based on such testing, or discrimination based on genetic heritage or genetic features are barred.7

C.7. Several countries across the world have enacted laws in respect of genetic discrimination by insurance corporations. The said laws regulate and govern exclusion of genetic medical conditions from insurance policies as also the collection, preservation of genetic data.

C.8. The Austrian Gene Technology Act, 2005 prohibits the collection and use of data for genetic tests8 and use stringent provisions in respect of prior consent9 to be obtained before doing a genetic test. The only exception is that genetic tests are allowed for only scientific and educational purposes.10 The Austrian Gene Technology Act, 2005 permits genetic testing on humans only for scientific purposes and for education and strict data protection measures have been enacted.11 In Belgium, any contract that discriminates on the basis of genetics is void.12 In Switzerland, any discrimination based on genetic information is prohibited unless the same is required for preservation of health.13

C.9. In Estonia, the Human Genes Research Act of 2001 contemplates the establishment and maintenance of a gene bank for organization of genetic research and maintaining the confidentiality of the same.14 The gene bank can be used only for scientific research, public health research and data analysis.15 A specific bar is contained in Section 27 which reads as under:

"§27. Discrimination in insurance relationships

(1) Insurers are prohibited from collecting genetic data on insured persons or persons applying for insurance cover and from requiring insured persons or persons applying for insurance cover to provide tissue samples or descriptions of DNA.

(2) Insurers are prohibited from establishing different insurance conditions for people with different genetic risks and from establishing preferential tariff rates and determining insured events restrictively."16

C.10. In Finland, the Insurance Companies Federation has adopted a policy of not asking questions about genetic tests in connection with risk assessment and they also maintain the confidentiality of data generated from genetic tests undergone by consumers. In risk assessment, Finnish insurance companies do not pose questions or use information on the status of health of relatives of applicants.17

C.11. France has gone a step ahead and has recognised in Article 16-10 of its civil code that genetic studies are permissible only for medical purposes or scientific research18 and use of genetic data is, in fact, an offence.19

C.12. In Ireland, genetic testing is permissible only if the testing is not prohibited by law, however, genetic data cannot be processed in relation to a policy of life insurance or health insurance.20 Violation of this provision has been deemed to be an offence under this Act.21 Family history related information can however be collected but the said data is also protected.22

C.13. In Spain, the Constitution itself prohibits discrimination on the grounds of personal or social circumstances which applies to both employers and insurers.23

C.14. In Sweden, on the other hand, the Genetic Integrity Act, 2006 permits the use of genetic information in insurance. Section 2 of the said Act reads as under:

"With regard to risk-related personal insurance, notwithstanding the provisions of Section 1, second paragraph, first sentence, an insurance company may inquire into or use genetic information in connection with entering into, amendment or renewal of an agreement, provided that

1. the person insured is over the age of 18 years and the amount insured that becomes payable in the event of an insurance loss is a lump sum in excess of 30 price base amounts as defined by the National Insurance Act (1962:381), or

2. the person insured is over the age of 18 years and the amount insured that becomes payable in the event of an insurance loss is a periodic indemnity in excess of four price base amounts per year."24

It is, however, unclear as to whether genetic disorders can be excluded.

United Kingdom

C.15. In the U.K, the position appears to be different. As per publicly available records, an agreement has been entered into by which the Government and the Association of British insurers have agreed to a broad policy framework (Concordat Act).25 Under this framework, there is a voluntary moratorium on insurer's use of predictive genetic test results until 1st November, 2019. Under this agreement -

"15. The parties to this Concordat agree the following principles.

• Insurers should not treat customers who have an adverse predictive genetic test result less favourably than others without justification.

• Customers should receive clear explanations of their rights. They should have access to a free, independent service for resolving complaints.

• Insurers and customers should have equal accesses to information such as health status that is material and relevant for underwriting the type of cover applied for, except as provided for by the Concordat and the Moratorium."26

However, predictive genetic test results are permissible only for medical conditions that are:

"a. monogenic (single gene disorders that are inherited in a simple fashion);

b. late-onset (symptoms are delayed until adult ages); and of

c. high penetrance (a high probability that those with the gene will develop the disorder)."27

This shows that a broad exclusion of genetic disorders is impermissible even in the U.K. The only disorder that people are required to disclose voluntarily is Huntington's disease or where the insured sum is more than 500,000 Pounds the insurance company can ask for genetic testing.28

United States of America (USA)

C.16. The USA enacted the Genetic Non-discrimination Act, 2008 which bars the use of genetic information in health, education and employment.29 It also prohibits the charging of higher premium based on the genetic predisposition of an individual for developing a disease in future.30 While, Genetic Information Nondiscrimination Act of 2008 covers medical insurance it does not cover life, disability or long term insurance and has therefore been a subject of criticism.

Australia

C.17. The position in Australia is quite different and insurance companies are allowed to regulate their own policy through the Financial Services Council (FSC). In fact, prior to undergoing any genetic testing, customers are advised to review the life insurance policy as they have an obligation to disclose the results of genetic testing to insurers. One opinion is that this has had a deterrent effect from consumers undergoing genetic testing31. There have been cases in Australia wherein insurance premiums have been made more expensive because of results of genetic testing.

Canada

C.18. In Canada, the Canadian Life and Health Insurance Association has a voluntary code under which insurers cannot demand genetic testing but if the testing is already done results have to be disclosed if the sum insured is more than 250,000 dollars. A Bill S-201 is currently pending in Parliament which prohibits genetic discrimination. It is yet to become law.

C.19. The above summary of the position in various jurisdictions is the position as it appears from the publicly available information and material and is not decisive thereof. They are only illustrative of the international position which shows that almost many countries are conscious of the issues related to genetic discrimination and insurance. Some mechanism has been provided in these jurisdictions to regulate and protect genetic data and also prevent discrimination based on genetic testing by insurance companies.

D Indian Position

Question 1: Whether the exclusion in relation to genetic disorders' is valid and legal?

D.1. Article 14 of the Constitution of India prohibits discrimination of any kind. This would include discrimination based on genetic heritage of an individual. It is well settled that Right to Health is a Fundamental Right, as an integral part of Article 21 and Right to Healthcare is also a Fundamental Right. The Supreme Court, in C.E.S.C. Limited and Ors. v. Subhash Chandra Bose and Ors. MANU/SC/0466/1992 : (1992) 1 SCC 441, has also held that the term health includes medical care and health facilities. The Court held:

"32. The term health implies more than an absence of sickness. Medical care and health facilities not only protect against sickness but also ensure stable manpower for economic development. Facilities of health and medical care generate devotion and dedication to give the workers' best, physically as well as mentally, in productivity. It enables the worker to enjoy the fruit of his labour, to keep him physically fit and mentally alert for leading a successful, economic, social and cultural life. The medical facilities are, therefore, part of social security and like gilt-edged security, it would yield immediate return in the increased production or at any rate reduce absenteeism on grounds of sickness, etc. health is thus a state of complete physical, mental and social well being and not merely the absence of disease or infirmity. In the light of Articles 22 to 25 of the Universal Declaration of Human Rights, International Convention on Economic, Social and Cultural Rights, and in the light of socio-economic justice assured in our Constitution, right to health is a fundamental human right to workmen the maintenance of health is a most imperative constitutional goal whose realisation requires interaction of many social and economic factors. Just and favourable condition of work implies to ensure safe and healthy working conditions to the workmen. The periodical medical treatment invigorates the health of the workmen and harnesses their human resources..."
D2. In Consumer Education and Research Centre and others v. Union of India and others MANU/SC/0175/1995 : (1995) 3 SCC 42 the Supreme Court has held that the Right to Health has no meaning without the Right to Healthcare. The relevant extract reads:

"25. Therefore, we hold that right to health, medical aid to protect the health and vigour of a worker while in service or post-retirement is a fundamental right under Article 21, read with Articles 39(e), 41, 43, 48-A and all related articles and fundamental human rights to make the life of the workman meaningful and purposeful with dignity of person."
D.3. The Supreme Court has further held in LIC of India & Anr. v. Consumer Education & Research Centre & Ors. MANU/SC/0772/1995 : (1995) 5 SCC 482 (hereinafter, 'LIC of India') that insurance contracts have to stand the test of reasonableness. Relevant extract reads:

"20. It is true that the life insurance business as defined under Section 2(11) of the Insurance Act, 1938, is business of effecting contracts of insurance upon human life, including any contract whereby the payment of money is assured on death (except death by accident only) or the happening of any contingency dependant on human life, and any contract which is subject to payment of premiums for a term dependant on human life including those enumerated in clause (a) to (c) thereof. There, the contract of insurance is hedged by bilateral agreement on human life upon payment of premia subject to the covenants contained thereunder. ......... We make it clear at this juncture that the insurer is free to evolve a policy based on business principles and conditions before floating the policy to the general public offering on insurance of the life of the insured but as seen earlier, the insurance being a social security measure, it should be consistent with the constitutional animation and conscience of socio-economic justice adumbrated in the Constitution as elucidated hereinbefore.

..................

47. It is, therefore, the settled law that if a contract or a clause in a contract is found unreasonable or unfair or irrational, one must look to the relative bargaining power of the contracting parties. In dotted line contracts there would be no occasion for a weaker party to bargain or to assume to have equal bargaining power. He has either to accept or leave the services or goods in terms of the dotted line contract. His option would be either to accept the unreasonable or unfair terms or forego the service for ever. With a view to have the services of the goods, the party enters into a contract with unreasonable or unfair terms contained therein and he would be left with no option but to sign the contract.

.......................

53. We have, therefore, no hesitation to hold that in issuing a general life insurance policy of any type, public element is inherent in prescription of terms and conditions therein. The appellants or any person or authority in the field of insurance owe a public duty to evolve their policies subject to such reasonable, just and fair terms and conditions accessible to all the segments of the society for insuring the lives of eligible persons. The eligibility conditions must be conformable to the Preamble, Fundamental Rights and the Directive Principles of the Constitution. "

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 spiralling 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.7. It however appears, as submitted by the Counsel for the Defendant Insurance company that all general insurance companies in India, have an exclusion, qua genetic disorders. The 2016 guidelines are not readily accessible on the IRDA website which still contain the 2013 guidelines. Thus, even the IRDA does not appear to have taken a clear stand in this regard.

D.8. The IRDA claims to have issued these guidelines in public interest under Section 34(1) of the Insurance Act. The powers and functions of the authority are broad. Section 14 of the IRDA Act, 1999 provides the powers and functions of the authority that include-

"Section 14(2)- Duties, powers and functions of Authority

...

(b) protection of the interests of the policy-holders in matters concerning assigning of policy, nomination by policy-holders, insurable interest, settlement of insurance claim, surrender value of policy, and other terms and conditions of contracts of insurance

...."

D.9. It appears that the ambiguity in the IRDA guidelines is working against the interest of consumers. There appear to be three regulations/guidelines issued by the IRDA in respect of health insurance in 2001, 2013 & 2016. While the 2013 guidelines have a vague mention of 'genetic conditions', along with congenital conditions, there is no mention of the same in the 2001 and 2016 guidelines. One of the prime duties of the IRDA is 'settlement of insurance claims'. Such settlement includes governing and regulating the Exclusions in insurance contracts. Thus, the IRDA ought to have supervised the manner in which the term 'genetic disorders' is being misused by insurance companies to reject genuine claims. Obviously, the IRDA has turned a blind eye to the functioning of the insurance companies.

D.10. It is also a settled proposition that once an insurance policy has been issued, the conditions of the same cannot be altered. In Biman Krishna Bose v. United India Insurance Co. Ltd. &Anr. MANU/SC/0948/2001 : 2001 (6) SCC 477 the Supreme Court held:

"A renewal of an insurance policy means repetition of the original policy. When renewed, the policy is extended and the renewed policy in the identical terms from a different date of its expiration comes into force. In common parlance, by renewal, the old policy is revived and it is sort of a substitution of obligations under the old policy unless such policy provides otherwise. It may be that on renewal, a new contract comes into being, but the said contract is on the same terms and conditions as that of the original policy. Where an insurance company which has exclusive privilege to carry on insurance business has refused to renew the mediclaim policy of an insured on extraneous and irrelevant consideration, any disease which an insured had contacted during the period when the policy was not renewed, such decease cannot be covered under a fresh insurance policy in view of the exclusion clause. The exclusion clause provides that the pre-existing diseases would not be covered under the fresh insurance policy. If we take the view that the mediclaim policy cannot be renewed with retrospective effect, it would give handle to the insurance company to refuse the renewal of the policy on extraneous consideration thereby deprive the claim of insured for treatment of diseases which have appeared during the relevant time and further deprive the insured for all time to come to cover those diseases under an insurance policy by virtue of the exclusion clause. This being the disastrous effect of wrongful refusal of renewal of the insurance policy, the mischief and harm done to the insured must be remedied. We are, therefore, of the view that once it is found that the act of an insurance company was arbitrary in refusing to renew the policy, the policy is required to be renewed with effect from the date when it fell due for its renewal."
This position is reiterated in United India Insurance Co. Ltd. & Ors. v. Manubhai Dharmasinhbai Gajera & Ors MANU/SC/7754/2008 : (2008) 10 SCC 404 (hereinafter Manubhai Dharmasinhbai).

D.11. In Manubhai Dharmasinhbai (supra) the Supreme Court further clarifies that every case involving an insurance policy would not be considered to be a case involving a contract qua contract question alone. The Supreme Court held:

"30. The functions of the insurance companies are governed by statute. A contract of insurance, therefore, must subserve the statutory provisions. It must indisputably be construed having regard to the larger public policy and public interest guiding nationalization of the insurance companies.

26. If it is a "State" its action must be fair and reasonable. It has been so held in a catena of decisions of the Court as for example in Peacock Plywood (P) Ltd. v. Oriental Insurance Co. Ltd SCC para 57 at p. 691 and LIC v. Consumer Education and Research Centre.

59. .... It is essential that while on the one hand, the insurance companies are not put to undue burden keeping in view the changes in the statute as also the policy decisions of the Central Government, they also cannot be permitted to create a social condition which would negate all human rights. Although, would not place Medicare and old age being the facets of human rights with abject poverty, but then the gap between the object on the statutes and the action on the part of the players on the field must be taken care of.

61. While determining a lis having public law domain, the courts would be entitled to take a broader view. It would not consider to be a case involving contract-qua-contract question only.

72. Having regard to the fact situation obtaining in each case, we are not inclined to exercise our discretionary jurisdiction under Article 136 of the Constitution of India.....

74. We would request the IRDA to consider the matter in depth and undertake a scrutiny of such claims so that in the event it is found that the insurance companies are taking recourse to arbitrary methodologies in the matter of entering into contracts of insurance or renewal thereof, appropriate steps in that behalf may be taken."

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. Question (ii) - Whether the exclusionary clause 4.17 relied upon by the Defendant for rejecting the claim of the Plaintiff applies on facts?

E.1. There are three different policy documents on record which have different exclusionary clauses. Exhibit PW-2/2 applicable for 2006-2007 has the following exclusionary clauses -

"4 EXCLUSIONS:

The company shall not be liable to make any payment under this policy in respect of any expenses whatsoever incurred by any Insured Person in connection with or in respect of:

4.1 All diseases/injuries which are pre-existing when the cover incepts for the first time. For the purpose of applying this condition, the date of inception of the initial mediclaim policy taken from any of the Indian Insurance Companies shall be taken, provided the renewals have been continuous and without any break.

4.2 Any disease other than those stated in clause 4.3, contracted by the Insured person during the first 30 days from the commencement date of the policy. This condition 4.2 shall not however, apply in case of the Insured person having been covered under this scheme or Group Insurance Scheme with any of the Indian Insurance Companies for a continuous period of preceding 12 months without any break.

Note: These exclusions 4.1 and 4.2 shall not however apply if,

a. In the opinion of a Panel of Medical Practitioners constituted by the Company for the purpose, the Insured Person could not have known of the existence of the disease or any symptoms or complaints thereof at the time of making the proposal for insurance to the Company.

AND

b. The insured had not taken any consultation, treatment or medication, in respect of the hospitalisation for which claim has been lodged under the policy prior to taking the insurance.

4.3 During the first year of the operation of the policy, the expenses on treatment of diseases such as Cataract, Benign, Prostatic, Hyperthrophy, Hysterectomy for Menorrhagia, or Fibromyoma, Hernia, Hydrocele, Congenital internal disease, Fistula in anus, piles. Sinusitis and related disorders are not payable. If these diseases (other than congenital internal disease) are pre-existing at the time of proposal they will not be covered even during subsequent period of renewal. If the insured is aware of the existence of congenital internal disease before inception of policy, the same will be treated as pre-existing.

4.4 Injury/disease directly or indirectly caused by or arising from or attributable to invasion, Act of Foreign enemy. War like operations (whether war be declared or not)

4.5 Circumcision unless necessary for treatment of a disease not excluded hereunder or as may be necessitated due to an accident, vaccination or inoculation or change of life or cosmetic or aesthetic treatment of any description, plastic surgery other than as may be necessitated due to an accident or as apart of any illness.

4.6 Cost of spectacles and contact lenses, hearing aids.

4.7 Dental treatment or surgery of any kind unless requiring hospitalisation.

4.8 Convalescence, general debility; run-down condition or rest cure, Congenital external disease or defects or anomalies, Sterility, Venereal disease, intentional self injury and use of intoxication drugs/alcohol

4.9 All expenses arising out of any condition directly or indirectly caused to or associated with Human T-Cell Lymphotropic Virus Type III (HTLB -III) or lymphadinopathy Associated Virus (LAV) or the Mutants Derivative or Variation Deficiency Syndrome or any syndrome or condition of a similar kind commonly referred to as AIDS.

4.10 Charges incurred at Hospital or Nursing Home primarily for diagnosis x-ray or Laboratory examinations or other diagnostic studies not consistent with or incidental to the diagnosis and treatment of positive existence of presence of any ailment, sickness or injury, for which confinement is required at a Hospital/Nursing Home

4.11 Expenses on vitamins and tonics unless forming part of treatment for injury or disease as certified by the attending physician

4.11.1 Injury or Disease directly or indirectly caused by or contributed to by nuclear weapon/materials

4.12 Treatment arising from or traceable to pregnancy (including voluntary termination of pregnancy) and childbirth, (including caesarean section)

4.13 Naturopathy Treatment"

Thus the policy for the year 2006-2007 did not exclude claims relating to genetic disorders or any genetic disposition. However, in the policy document Exhibit PW-2/1 for the year 2011-2012 (Gold Category), the clause relating to Exclusions has been expanded as under:

"4. EXCLUSIONS:

The company shall not be liable to make any payment under this policy in respect of any expenses whatsoever incurred by any Insured Person in connection with or in respect of:

4.1 Any pre-existing condition(s) as defined in the policy, until 48 months of continuous coverage of such insured person have elapsed, since inception of his/her first Policy with the Company.

4.2 Any disease other than those stated in clause 4.3 and 4.4 below, contracted by the insured person during the first 30 days from the commencement date of the policy. This exclusion shall not however, apply in case of the Insured person having been covered under an Insurance Scheme with our company for a continuous period of preceding 12 months without any break.

4.3 During the first two years of the operation of the policy, the expenses on treatment of diseases such as Cataract, Benign Prostatic Hypertrophy, Hysterectomy for Menorrhagia or Fibromyoma, Hernia, Hydrocele, Congenital Internal disease, Fistula in anus, piles, Sinusitis and related disorders, Gall Bladder Stone removal, Gout & Rheumatism, Calculus Diseases are not payable.

4.4 During the first four years of the operation of the policy, the expenses related to treatment of Joint Replacement due to Degenerative Condition and age-related Osteo arthritis & Osteoporosis are not payable.

If these diseases mentioned in Exclusion No. 4.3 and 4.4 (other than congenital internal disease) are pre-existing at the time of proposal they will not be covered even during subsequent period of renewal subject to the pre-existing disease exclusion clause. If the insured is aware of the existence of congenital internal disease before inception of policy, the same will be treated as pre-existing.

4.5 Injury/disease directly or indirectly caused by or arising from or attributable to War, invasion, Act of Foreign enemy, War like operations (whether war be declared or not),

4.6 a. Circumcision unless necessary for treatment of a disease not excluded hereunder or as may be necessitated due to an accident

b. Vaccination and inoculation

c. change of life or cosmetic or aesthetic treatment of any description such as correction of eyesight, etc.

d. Plastic surgery other than as may be necessitated due to an accident or as a part of any illness.

4.7 Cost of spectacles and contact lenses, hearing aids.

4.8 Dental treatment or surgery of any kind unless necessitated by accident and requiring hospitalisation.

4.9 Convalescence, general debility; run-down condition or rest cure, obesity treatment and its complications including morbid obesity, Congenital external disease/defects or anomalies, treatment relating to all psychiatric and psychosomatic disorders, infertility, sterility, Venereal disease, intentional self injury and use of intoxication drugs/alcohol.

4.10 All expenses arising out of any condition directly or indirectly caused to or associated with Human T-Cell -Lymphotropic Virus Type III (HTLB - III) or lymphadinopathy Associated Virus (LAV) or the Mutants Derivative or Variation Deficiency Syndrome or any syndrome or condition of a similar kind commonly referred to as AIDS.

4.11 Charges incurred at Hospital or Nursing Home primarily for diagnosis x-ray or Laboratory examinations or other diagnostic studies not consistent with or incidental to the diagnosis and treatment of positive existence or presence of any ailment, sickness or injury, for which confinement is required at a Hospital/Nursing Home

4.12 Expenses on vitamins and tonics unless forming part of treatment for injury or diseases as certified by the attending physician

4.13 Injury or Disease directly or indirectly caused by or contributed to by nuclear weapon/materials.

4.14 Treatment arising from or traceable to pregnancy, childbirth, miscarriage, abortion or complications of any of these including caesarean section, except abdominal operation for extra uterine pregnancy (Ectopic Pregnancy) which is proved by submission of Ultra Sonographic Report and Certification by Gynaecologist that it is life threatening one of left untreated.

4.15 Naturopathy Treatment, acupressure, acupuncture, magnetic therapies, experimental and unproven treatments/therapies.

4.16 External and or durable Medical/Non-medical equipment of any kind used for diagnosis and or treatment including CPAP, CAPD, Infusion pump etc. Ambulatory devices i.e. walker, crutches, Belts, Collars, Caps, Splints, Slings, Braces, Stockings, elastocrepe bandages, external orthopaedic pads, sub cutaneous insulin pump, Diabetic foot wear, Glucometer/Thermometer, alpha/water bed and similar related items etc., and also any medical equipment, which is subsequently used at home etc.

4.17 Genetic disorders and stem cell implantation/surgery.

4.18 Change of treatment from one system of medicine to another unless recommended by the consultant/hospital under whom the treatment is taken

4.19 Treatment for Age Related Macular Degeneration (ARMD), treatments such as Rotational Field Quantum Magnetic Resonance (RFQMR), Enhanced External Counter Pulsation (EECP), etc.

4.20 All non medical expenses including convenience items for personal comfort such as charges for telephone, television, ayah, private nursing/barber or beauty services, diet charges, baby food, cosmetics, tissue paper, diapers, sanitary pads, toiletry items and similar incidental expenses.

4.21 Any kind of Service charges, Surcharges, Admission Fees/Registration Charges, Luxury Tax and similar charges levied by the hospital."

E.2. The policy documents for the other years are not being quoted for the sake of brevity. A perusal of the said documents, which are on record, shows that for the periods 2006-07, 2007-08, 2008-09, 2009-10, the exclusionary clause relating to genetic disorders does not exist. For the first time in the policy document for the year 2011-12, i.e. 11th September, 2011 to 10th September, 2012, the exclusion of genetic disorders appears. Thus, when the claim form was filled by the doctor, at Fortis Escort Heart Institute, New Delhi, on 30th November, 2011, the following question was answered as under-


E.3. The doctor at the hospital went by the exclusionary clause in the latest insurance policy and simply applied it. The question is, does the exclusion apply.

E.4. The Plaintiff obtained the first insurance policy from the Defendant in 2004. He was therefore an old customer of the Defendant. He merely renewed the same from time to time. The medical condition for which he made a claim in 2006 for Rs. 3,30,000/- was similar to the one he suffered in 2011. The claim at that time in 2006 had been honoured and there was no reason for the Plaintiff to believe that there was any change in the policy conditions. No evidence has been led by Defendant to show that the Plaintiff was made aware of the new exclusions, including the one for genetic disorders.

E.5. The witness from the Defendant insurance company produced exhibits PW-2/1 and PW-2/2. He categorically submits that it is only exhibit PW-2/1 which contains the exclusionary clause. His cross-examination is relevant and is set out below: -

"I have brought the certified copy of summoned record which is pertaining to a policy bearing No. 041703/48/11/97/00000935 for the period 11.09.2011 to 10.09.2011, which stands issued in the name of Sh. Jai Prakash Tayal, which is Ex. PW 2/1. I have also brought the other record related with the policy of Sh. Jai Prakash Tayal, from 11.09.2006 to 10.06.2010. The same is exhibited as PW 2/2 (colly). I am also producing before this court the certified copy of renewal of individual medi-claim policy bearing No. 221983/48/05/20/00000288 in the name of Sh. Jai Prakash Tayal, the same is exhibited as Ex. PW 2/3. I have no personal knowledge about these policies.

XXX by Sh. G.S. Ahuja, counsel for the defendant. It is correct that the various policies which stand issued in the name of insurer for different intervals, which have been filed today by me, were issued and handed over to the insured on each and every occasion. The policy Ex. PW 2/1 exclusively contains the term 4.17 which reads as "Genetic disorders and stem cell implantation/surgery." The documents submitted by the insured alongwith the claim, which are already Mark B (colly) contains the problem suffered by the injured in item No. 9 of the medical certificate filled by the Treating Doctor which is encircled at point X. I have not got executed a proposal form at the time of issuing a renewal in the year 2006. Whatever has been deposed by me, I have deposed as per record."

E.6. PW-3, Dr. S.C. Gupta, exhibited the records of the hospital including the discharge summary, namely; exhibits PW-3/A, PW-3/B and PW-3/C. He identified the signatures of all the doctors. The witness from Paramount Health Services (TPA) Pvt. Ltd., PW-4, placed on record the details of the settlement claim. The rejection of the claim is exhibited as PW-5/1, by PW-5, the Administrative Officer of the Defendant insurance company. The rejection reads as under:

"THE PATIENT HAS BEEN DIAGNOSED TO BE A CASE OF HYPERTROPHIC OBSTRUCTIVE CARDIOMYOPATHY (HOCM), POST SEPTAL & ICD ABLATION. THIS IS RELATED TO GENETIC DISEASE WHICH IS NOT PAYABLE UNDER GENETIC EXCLUSION CLAUSE 4.17 OF GOLD POLICY (POSITIVE FAMILY HISTORY OF SUDDEN CARDIAC DEATH). THE CLAIM MERITS REPUDIATION UNDER THE SAID CONDITION. THE ORIGINAL CLAIM FILE OF RELEVANT DOCUMENTS ENCLOSED HEREWITH FOR YOUR APPROPRIATE ACTION."
E.7. The legal notice, Exhibit P-4, and the receipt thereof is duly admitted. An analysis of all the above documents leads to the conclusion that exclusion of genetic disorders did not exist in the earlier policies obtained by the Plaintiff and was included, without notice to the insured, in the last policy document for 2011-12. The mere fact that a new policy document is issued upon each renewal, does not change the basic nature of the contract. Any unilateral insertion or change in the clause of the contract has to be with the consent of the insured, and there is no evidence on record to show that this clause was brought to the notice of the insured. Thus, there was no 'consensus ad idem' on the exclusionary clause contained in PW-2/1. It is merely a unilateral insertion which would not bind the Plaintiff.

E.8 The discharge summary dated 12th January, 2006 Exhibit PW-3/B records the history of the Plaintiff as under:

"HISTORY:

History of Presenting Illness: The patient is normotensive, nondiabetic, nonsmoker and has positive family history of sudden cardiac death. He is a known case of HOCM, underwent septal ablation on 01/12/2003. He had c/o chest pain on exertion and giddiness. Echo done revealed LVOT gradient 100mmHg Holter done revealed isolation VPC's particular bigemini. He was admitted to this hospital for further evaluation and management."

E.9 Dr. T.S. Kler of Fortis Escort Heart Institute, New Delhi issued a certificate dated 3rd May, 2012 to the following effect:

"This is to certify that Mr. Jai Prakash Tayal vide EHIRC NO: 214290 is under my treatment since 2003. He has hypertrophic obstructive cardiomyopathy (HOCM), post septal ablation (2003), post ICD (2006). This disease though may have higher incidence of family occurrence but in his case there is no history of any such disease before."
This certificate by Dr. Kler clearly states that in the plaintiff's case, HOCM is not due to a genetic disorder. The certificate issued by Dr. Kler has not been challenged and there is no evidence to the contrary that the medical condition of the Plaintiff was in fact genetic.

E.10. Dr. Balraj Gupta Medical Director of the Insurance agency has said HOCM has a 'definite heterogenecity'. This term is capable of different interpretations in this context. It could mean that HOCM has several causes but could also mean that it relates to different species of genes. Thus there is no clarity. The extract of this report reads as under:

Dr Balraj Gupta

"Hypertrophic obstructive cardiomyopathy (HOCM) has a definite heterogenecity in its cause, although the occurrence in general population is only 0.25% but it is transmitted as an autosomal dominant trait affecting males and females equally. This occurs worldwide. The treatment is in the form of abalation and ICD (implantable cardioverter defibrillator) implantation which was done in this particular case. This claim is not tenable because of a specific exclusion clause in the policy.

The claim was rightly rejected after taking an opinion from a cardiologist as well."

E.11. However, the discharge summary already referred to above, of Fortis Escorts describes the Plaintiff's condition as under:

Fortis Escorts- Dr Govind Goel

"History of Presenting Illness:

The patient is normotensive, non-diabetic, non-smoker with positive family history of Ischemic heart disease. He is a known case HYPERTROPHIC OBSTRUCTIVE CARDIOMYOPATHY, underwent septal ablation on 02/11/2003, ICD implantation on 09/01/2006. He was admitted to FEHI for ICD replacement and further management."

Physical Examination:

On Admission his Pulse 66/min, BP 110/70mmHg and physical examination revealed JVP was normal. No jaundice, pallor, clubbing, cyanosis or edema. CVS: S1, S2 normal. No murmur. Respiratory: Normal breath sound. No added sound. Abdomen: No hepatosplenomegaly. CNS: The patient is conscious and oriented to time, place and person. No neurological deficits."

Course in the Hospital:

The patient underwent ICD pulse generator replacement on 28/11/2011. The procedure was uncomplicated and well tolerated. His general condition at the time of discharge is satisfactory."

Dr Vinod Sharma

"By definition and design, the Hypertrophic Obstructive Cardiomyopathy (HOCM) is undoubtably a genetic disease that leads to hypertrophy i.e. thickening of heart muscles and in my opinion, if Insurance does not cover genetic disorder then rejection from your end is very much justified."

E.12. There are conflicting reports by doctors as to whether the condition of the Plaintiff is a genetic disorder at all. The opinions of doctors are not consistent.

Opinion 1: Dr. Balraj Gupta

HOCM has a definite heterogenecity in its cause but it is covered by the exclusions in the policy.

Opinion 2: Discharge summary of Fortis Escorts by Dr. Govind Goyal Plaintiff has a family history of ischemic heart disease which is a known case of HOCM.

Opinion 3: Dr. Kler.

HOCM may have a higher incidence of family occurrence but in the Plaintiff's case there is no history of HOCM.

Opinion 4: Dr. Vinod Sharma in Ex. PW 5/1

HOCM is undoubtedly a genetic disorder.

E.13. There was no genetic testing that was done to prove that the condition of the Plaintiff was a genetic disorder. In common knowledge, HOCM is not necessarily genetic in nature and the treatment for the same is primarily to prevent "sudden death". In some cases it could be genetic. Unless there is testing, it cannot be conclusively held to be genetic in all cases. Thus while Dr. Gupta mentions that HOCM has a 'definite heterogenecity in its cause' it means that there could be many causes, Dr. Sharma gives a categorical opinion that it is a genetic disorder and the Fortis clinical summary gives a different opinion. These varying opinions show that it is unclear if HOCM is a genetic disorder or not in the case of the Plaintiff.

E.14. HOCM is treated usually by inserting an ICD which takes care of rhythm disturbances in the heart to prevent sudden death. The insurance company cleared the procedure undergone by the Plaintiff on the two earlier occasions and the present procedure was merely a replacement of the pulse generators of a device, which was already inserted in the Plaintiff. Thus the procedure that the Plaintiff underwent was nothing new. The device was already inserted on 2nd November, 2003 and only the pulse generator was being replaced in 2011. So in 2011, the condition was the same as in 2003 but the claim was rejected.

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.

E.18. There has been enormous thought, which has gone into such exclusions in most jurisdictions. Pure genetic disorders such as Huntington's disease, Down's syndrome, etc., can be treated differently in insurance policies. However, exclusion of the entire gamut of disorders which are speculatively genetic would be totally illegal.

E.19. The Exclusion clause quoted above is one of the longest clauses in the policy having a wide umbrella of exclusions. A perusal of the exclusions in clause 4 of the policy and an analysis of the same reveals that the policy excludes more than it includes. Usually persons, who have paid premium for a long time, hope to be able to avail of medical insurance at a later stage in life. However, the manner in which the exclusions are worded, are so broad that it would be easy to reject any medical claim under one of the clauses in these exclusions. It is a known fact that citizens are usually not able to get insurance claims passed and it requires a lot of effort and time before their claims get passed.

E.20. These exclusions deserve to be regulated in some manner in order to ensure that customers, who avail of medical insurance policy, are not made to run from pillar to post for passing of their claims. The exclusionary list is so long and so broad that almost every ailment could be said to fall under one of the clauses and then comes the final all encompassing exclusion of genetic disorders which would give too much freedom and arbitrary power to the insurance companies to reject genuine claims. On a specific query from the court, the Learned Counsel appearing for the insurance company stated that the exclusion of genetic disorder exists in almost all health insurance contracts and policies issued by general insurance companies. This is a major cause for concern.

E.21. The exclusion of insurance claims in respect of genetic disorders creates a broad classification which is writ with ambiguity and vagueness. Since the term genetic disorder is capable of myriad interpretations, the differentiation is not intelligible and hence falls foul of Article 14 of the Constitution. Unless and until there is a proper genetic test in accordance with a strict regulatory mechanism, and the cause of the disorder is attributable solely to a genetic condition, the classification is too broad. Therefore, there is a need to bring in a policy for collection of genetic data, analysis and preservation of confidentiality, and for a precise definition of genetic disorders.

E.22. A cause based exclusion in insurance contracts of reasons such as war, damage due to natural disasters, disorders caused due to nuclear material, etc. cannot be equated with genetic disorders. It is the settled position in our country that Right to Healthcare is a part of Right to Life, which is protected under Article 21 of the Constitution. With the spiralling costs of healthcare, health insurance is an integral part of healthcare. Thus, every citizen ought to be entitled to obtain health insurance and avail of claims arising therefrom. Though, insurance policies are contractual in nature, and parties to them are bound by it, the clauses of such a contract have to stand the test of Constitutionality. Insurance companies, especially those which are 'instrumentalities of state' under Art. 12, have the freedom to structure their contracts, however, clauses that are unreasonable, arbitrary or contrary to public policy are not immune. If a clause in an insurance contract is unconstitutional, it is not enforceable. Primacy is given to a contract, but not above Fundamental Rights.

E.23. The insurance policy in the present case, which has been issued to the Plaintiff, contains an exclusion qua genetic disorders, which was not based on any tests conducted on him or results thereof. It was a clause suddenly inserted in the year 2011, prior to which the Plaintiff had undergone treatment for the same medical condition, and for which his claim was sanctioned. Thus, it is clear that no advance intimation was given to the Plaintiff about the inclusion of this clause, nor was he put to notice of the same. The fine print of an insurance contract is not easily understandable by a layman, who operates primarily on the basis of trust and faith. Standard form contracts, especially insurance policies, do not provide a choice to the consumer whether to sign up or not. Under such circumstances, the principle of uberima fides applies, on the insurance companies and the insured, as held by the Supreme Court in Hanil Era Textiles Ltd. v Oriental Insurance Co. Ltd. & Ors MANU/SC/0736/2000 : (2001) 1 SCC 269.

"13. Learned Author E.R. Hardy Evamy, in his book relating to Fire & Motor Insurance, 2nd Edn., on p.7, has observed:

"The contract of fire insurance, like other contracts of insurance, differs from any ordinary contract in that it requires, throughout its existence, the utmost good faith (uberrima fides) to be observed on the part of both the insured and the insurers...."
The insured person and the insurance company have to act in good faith. This principle has now been expanded in the US to the doctrine of insurance in bad faith wherein it has been held that the insurance companies owe a duty of good faith and fair dealing to the persons who are insured.

E.24. The manner in which the genetic disorder exclusion has been inserted in the policy document for the year 2011-2012 is a violation of good faith between the Plaintiff and the insurance company. 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.

E.25. The rejection of the claim of the Plaintiff on a premise that HOCM is a genetic disorder appears to be completely erroneous due to the divergent opinions which emerge from the record. Since, the clause itself is illegal and unconstitutional; the consequential rejection of the claim of the Plaintiff is contrary to law.

Conclusions & Relief:

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

F.2. The Trial Court has rightly held that a person, suffering from a genetic disorder, needs medical insurance as much as others. The suit is decreed for a sum of Rs. 5 lakhs along with interest @12% from the date of filing of the claim with the Appellant Insurance Company till the date of payment;

F.3. The Plaintiff has been contesting the appeal for more than one and a half years and though the money has been released to him, he has submitted a bank guarantee to secure the said amount. The suit was filed in the year 2012. The Plaintiff is entitled to costs. Costs of Rs. 50,000/- are awarded. The bank guarantee submitted by the Plaintiff is released. All pending CMs are disposed of.



1National Human Genome Research Institute, 24/02/2018, www.genome.gov/19016930/faq

2Universal Declaration of Human Rights, UN § 25 (December 10, 1948)

3European Convention on Human Rights & Biomedicine § 11, Oviedo (1997)

4European Convention on Human Rights & Biomedicine § 12, Oviedo (1997)

5Recommendation CM/Rec(2016)8 of the Committee of Ministers to the member States on the processing of personal health related data for insurance purposes, including data resulting from genetic tests, Chapter 3, Principle 4.

6Charter of Fundamental Rights of the European Union, EU § 21 (December 18, 2000)

7European Convention on Human Rights & Biomedicine § 11, Oviedo (1997).

8Austrian Gene Technology Act, § 67 (2005)

9Austrian Gene Technology Act, § 71 (2005)

10Austrian Gene Technology Act, § 66 (2005)

11Austrian Gene Technology Act, § 66 & 67 (2005)

12The Introductory Bill of Belgium § 3 (2002)

13The Swiss Academy of Medical Sciences, Medical-ethical Guidelines for Genetic Investigation in Humans, Paragraph 3.9, Pg 6

14Human Genes Research Act of Estonia § 1 (2001)

15Human Genes Research Act of Estonia § 16 (2001)

16Human Genes Research Act of Estonia § 27 (2001)

17Federation of Finnish Insurance Companies, 1999 (Now Federation of Finnish Financial Services) Moratorium 1999

18Civil Code of France, Article 16-10, Law n. 94-653 (July 29, 1994).

19Code Penal of France, Article 226-26, Law n.94-654 (July 29, 1994).

20Disability Act of Ireland § 42(2) (2005)

21Disability Act of Ireland § 42(4) (2005)

22Disability Act of Ireland § 43 (2005)

23Spain. Constitution. § 10 Chapter 2

24The Genetic Integrity Act § 2 (2006:351)

25Concordat and Moratorium on Genetics and Insurance, Association of British Insurers (2004)

26Concordat and Moratorium on Genetics and Insurance, Association of British Insurers, Paragraph 15, Pg 3 (2004)

27Concordat and Moratorium on Genetics and Insurance, Association of British Insurers, Paragraph 17, Pg 4 (2004)

28Concordat and Moratorium on Genetics and Insurance, Association of British Insurers, Paragraph 21(d), Pg 5 & 6 (2004)

29Genetic Non-discrimination Act of USA § 206 (2008)

30Genetic Non-discrimination Act of USA § 101 (2008)

31IFSA Genetic Testing Policy (1999)


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