SC Partially Stays Delhi HC Judgement Striking Down Exclusion Of Genetic Disorders From Insurance Policies As Unconstitutional [Read Order]

The Supreme Court on Monday partially stayed the Delhi High Court judgment which had held as unconstitutional 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.

The Bench comprising Justice Ranjan Gogoi, Justice Navin Sinha and Justice KM Joseph also directed the Insurance Regulatory and Development Authority (IRDA) to be impleaded as a respondent in the Appeal filed by the United India Insurance Company.

In the impugned judgment, Justice Pratibha M. Singh had categorically held that the right to avail health insurance is an integral part of the right to healthcare, as guaranteed under Article 21 of the Constitution of India.

The High Court had further held that the exclusionary clause of ‘genetic disorders’ in insurance policies is too broad, ambiguous and discriminatory – hence, violative of Article 14 of the Constitution of India.

It had ruled, “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.”

The Supreme Court has now stayed the operation of the judgment on the following conclusions and reliefs:

1. Right to avail health insurance is an integral part of the Right to Healthcare and the Right to Health, as recognized in Art. 21 of the Constitution;


2. 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;


3. 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;


4. 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;


5. 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.