Genetic disorders to hike health premiums?

On Monday, the Insurance Regulatory and Development Authority of India (IRDAI) directed insurers not to reject any health insurance claim based on exclusions related to ‘genetic disorder’.

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Mumbai: Insurance companies say that they might need to go to the regulator and seek higher premiums if inclusion of genetic disorders increases their claims outgo.

On Monday, the Insurance Regulatory and Development Authority of India (IRDAI) directed insurers not to reject any health insurance claim based on exclusions related to ‘genetic disorder’. The regulator also asked insurers not to list ‘genetic disorders’ as one of the exclusions in new health insurance policies.

The circular is in line with a Delhi high court order that held exclusionary clause of ‘genetic disorders’ in insurance policies as too broad, ambiguous and discriminatory, and in violation of Article 14 of the Constitution dealing with right to equality.

“If eventually the experience requires price correction, we will go to the regulator to seek a price revision,” said G Srinivasan, chairman, New India Assurance. He said that insurance companies, who do medical underwriting while accepting a policy, would need to look at all aspects to prevent losses to the industry.

Sanjay Datta, head of underwriting and claims, ICICI Lombard General Insurance, said, “Long term, there is always the possibility that you may reprice. In the short term, it will prevent rejections of claims where the policyholder was not aware of an ailment that was not detected. Because insurers are not rejecting the claims, it will come back to their portfolio and require repricing.”

According to Datta, the ruling also ensures that India does not go down the path of genetic testing. “Another aspect that needs to be borne in mind is what the long-term impact of genetics is? Today we do not do what Angelina Jolie did nor do we underwrite policies based on genetics,” said Datta. The Hollywood actress underwent bilateral mastectomy as a preventive measure against cancer after genetic tests showed her to be at risks to cancer, kicking off a debate on the need for preventive surgeries following genetic tests. “The order brings some stability as it ensures that claims are neither rejected nor excluded from policies on account of genetics,” said Datta.

The Delhi high court last month had directed IRDAI to knock out exclusion clauses in 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.

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