The Insurance Regulatory and Development Authority has asked all insurance companies not to include ‘Genetic Disorders’ as one of the exclusions in new health insurance policies issued in respect of all their existing health insurance products after a ruling by Delhi High court.
The Delhi High Court had directed the Insurance Regulatory Development Authority of India (Irdai) to have a re-look at the exclusion clauses in the insurance contracts to ensure that claims are not rejected on the basis of exclusions relating to genetic disorders like cardiac conditions, high blood pressure and diabetes.
The court has directed all insurance companies offering health insurance that no claim in respect of any existing health insurance policy shall be rejected based on exclusions related to ‘Genetic Disorder’.
In the matter of public Insurer, Delhi high court held that the exclusionary clause of ‘Genetic Disorders’, in the insurance policy, is too broad, ambiguous and discriminatory – hence violative of Article 14 of the Constitution of India.
The court further said, “the definition of genetic disorder is too broad and gives insurance companies the power to reject even genuine claims”
What does this scenario mean to us?
- Claims cannot be denied due to a genetic disorder
- Insurance companies shall re-look before including genetic disorder in the exclusion list in the new policies from the policy wordings
- It might impact on pricing of the policies hereafter
- Implementation of the rule is under review by the insurance companies
Irdai’s notification is a step in the right direction as it makes exclusions sharper.
What is a genetic disorder?
A genetic disorder is a genetic problem caused by one or more abnormalities in the genome, especially a condition that is present from birth (congenital).
Until now most of the insurance companies had this condition in exclusion part of the policy. This helped the companies to mitigate the risk to an extent. Now coverage to Genetic disorders by the insurance policies can change the operational aspects of the insurers.