Full Text
HIGH COURT OF DELHI
Date of Decision: 13th December, 2022
SAURABH SHUKLA ..... Petitioner
Through: Mr. Siddharth Nath and Ms. Khushboo Hora, Advs.
(M:9811004884)
Through: Mr. Rajiv Jaiswal, Advocate for R-2.
(M:9871901997)
Mr. Dipak Nag, Advocate for R-3.
JUDGMENT
1. This hearing has been done through hybrid mode. Brief Facts
2. The inherent challenges for persons with disabilities are further exacerbated by institutions which fail to recognise rights of such persons as provided for in law. The present petition raises issues concerning denial of health insurance for persons with disabilities.
3. The present petition has been preferred by Mr. Saurabh Shukla who is suffering from Tetraplegia and paralysis below his chest due to a spinal cord injury which he suffered in 2011. He is confined to a wheelchair and has limited use of his arms. Despite the injury, he is currently working as an investment professional with a hedge fund and is working from home.
4. It is the case of the Petitioner that he approached two insurance companies i.e, Max Bupa Health Insurance Co. Ltd. & Oriental Insurance Co. Ltd., for seeking a Mediclaim/Health Insurance. However, both the companies refused to issue any health insurance policy to the Petitioner. Thereafter, the Petitioner submitted a representation vide an email dated 7th January, 2018 to the Court of the Chief Commissioner for Disabilities. The Dy. Chief Commissioner of the Court of the Chief Commissioner for Disabilities vide letter dated 14th March, 2018 took up the matter with The Chairperson, Insurance Regulatory and Development Authority of India (IRDAI). The relevant extract of the communication addressed to the Chairperson, IRDAI is as follows:
5. In their reply dated 4th May, 2018, the General Manager (Health), IRDAI simply stated that the regulatory mechanism to enable insurance companies to provide health insurance covering existing disability already exists. However, no positive reply or consideration in regard to the case of the Petitioner for issuance of a health insurance policy was given. The reply concluded with the following extract: “Therefore, taking into consideration the needs of the targeted market segment, Insurers design the products, which is in their domain. It is essential that the products that the insurance companies design shall be financially viable and seif-sustainable for them to meet the liabilities as and when the claim arises” Thus, the IRDAI turned a blind eye to the problem and defended the insurance companies.
6. In this factual background, the Petitioner has approached this court with the present petition seeking quashing of the rejection of his Health Insurance application by the insurance companies. Further, he also seeks a writ of mandamus directing the Respondent Insurance companies i.e, Max Bupa Health Insurance Co. Ltd. & Oriental Insurance Co. Ltd. to issue a Health Insurance policy to him. Application for Health Insurance
7. Today, none appears for Max Bupa Health Insurance Co. Ltd. Mr. Rajiv Jaiswal, ld. Counsel appears for the Oriental Insurance Co. Ltd. He submits that as per the application form submitted by the Petitioner, he suffers from various medical conditions which are serious in nature. The Petitioner has also truly and diligently filled in his application for issuance of health insurance and self-declared his existing disabilities. As per the self-declaration form filled by the Petitioner, these conditions include:
(i) Quadriplegia i.e., paralysis of arms and legs
(ii) Respiratory Distress due to undergoing Tracheostomy following the spinal cord injury
(iii) Stones in Bladder
(iv) Threat of urinary diseases/infection due to the requirement to use a Foley Catheter urine drainage The relevant portion of the Mediclaim Insurance Proposal Form filled by the Petitioner while applying for issuance of Health Insurance Policy from The Oriental Insurance Company Limited, is relied upon.
8. As per the said form, the Petitioner is confined to a wheelchair and suffers from respiratory diseases.
9. Upon the application for issuance of a Health Insurance policy being received from the Petitioner, the question of issuing a policy to him was considered at the level of the regional office. However, the request for issuance of a health insurance policy was denied due to adverse medical history as also on the ground that Max Bupa has also refused to issue Health Insurance to the Petitioner. The same was communicated to the Petitioner vide email dated 8th February, 2019. Ld. Counsel for Oriental Insurance submits that as per the policies of the insurance company whenever a Mediclaim policy is sought, the same is only issued after evaluating the risks involved. He further submits that in the present case, the Petitioner was considered to be not entitled to a Health insurance policy, considering his medical history.
10. As per the record, the Petitioner had also approached Max Bupa Health Insurance Company (hereinafter ‘Max Bupa’) with a request for issuance of Health Insurance Policy. However, in the correspondence with Max Bupa, it has been claimed by the Petitioner that his request was rejected without even looking at his medical records. In response to the contentions raised by the Petitioner, the following response was given by the General Manager, Customer Services, Max Bupa vide emails dated 30th January, 2018 and 5th February, 2018 to the following effect: “We hope you will appreciate that an underwriter while underwriting is bound by certain conditions as mentioned in Underwriting Policy (filed with the regulator), Underwriting Manuals and SOPs. During the Underwriting process, the underwriter, evaluates each individual's medical history and takes appropriate action based on the severity and prognosis of the condition(s), upon full assessment of facts. The underwriter has to decide whether the proposed insured's declared condition presents a future medical risk and thereby takes a decision on whether to accept the risk, apply exclusions or decline the risk. In case of an unacceptable risk, the insurer cannot issue the policy as requested by the customer.” Discussion
11. At this stage, the court queried the ld. Counsel for Oriental Insurance Company if any disabled person has been issued a health insurance policy by the said company. Upon this query being raised by the Court Mr. Jaiswal, ld. Counsel submits that he does not have instructions in this regard.
12. On behalf of the IRDAI, Mr. Nag, ld. Counsel relies upon Regulation 8(b) and 8(c) of the Insurance Regulatory and Development Authority of India (Health Insurance) Regulations, 2016 which mandates that health insurance coverage shall be provided to disabled persons. Regulation 8 of the said regulations are extracted below:
13. Ld. Counsel further submits that a recent circular issued by the IRDAI dated 2nd June, 2020 also requires companies to evolve health insurance policies for persons with disabilities, HIV/AIDS and persons affected with mental illness diseases. The said circular reads as: “Ref: IRDAI / HLT/ MISC / CIR / 129 / 06 / 2020 2nd June, 2020 To, All Insurers (Except ECGC and AIC) Sub: Disclosure of underwriting philosophy of offering Insurance coverage to Persons with Disability (PWD) and people affected with HIV/AIDS and Mental Illness diseases.
1. Reference is drawn to the provisions of IRDAI (Health Insurance) Regulations, 2016 in accordance to which every insurer shall evolve a health insurance underwriting policy covering approach and aspects relating to offering health insurance coverage not only to standard lives but also to substandard lives. Further insurance companies shall also comply with various provisions of HIV and AIDS Prevention and Control Act, 2017 and Mental healthcare Act, 2017.
2. Notwithstanding the above provisions, it is considered essential that the targeted population of every insurer shall have complete information on the philosophy that insurers adopt while complying with the above referred provisions.
3. In furtherance to above, all Insurers are instructed to publish on their respective websites the underwriting philosophy and approach with regard to offering insurance coverage to the following category of population: a. Persons with Disabilities ( PWD) b. Persons affected with HIV /AIDS c. Persons affected with Mental Illness diseases.
4. All Insurers (Life, General and Health Insurers) are here by directed to comply with the aforesaid instruction by 01st October, 2020.
5. This has the approval of the competent authority.”
14. Upon being questioned by the court as to whether IRDAI has received or approved any products for offering health insurance for persons with disabilities, Mr. Nag, ld. Counsel submits that he would require to seek instructions in this regard. Observations
15. It is observed that in the counter affidavit, IRDAI has taken a stand that the regulations do not specify that policies could be modified on a caseby-case basis, based on the individual requirements of the person seeking insurance. Upon the denial of an insurance policy the reasons have to be communicated to the person. Paragraph 6 of the Counter Affidavit which refers to Regulation 8(c) of the IRDAI Health Regulations, 2016 clearly states that the denial of health insurance coverage shall be the last resort of the insurer. The relevant extracts of the counter affidavit of IRDAI are set out below: “2. At the outset, it is important to highlight the standard insurance companies have to meet in order to deny health insurance. Decisions such as the impugned decisions are underpinned on the underwriting policy of each insurance company. It is the practice of all companies to have such a policy, and it is this policy that dictates the instances in which insurance is either issued or denied to an applicant. This policy being a private document, is naturally subject to law. In order to appreciate the legal framework within which these policies operate, it is important to take note of Regulation 8 of the IRDAI (Health Insurance) Regulations, 2016 (hereinafter referred to as the "2016 Regulations") which deals with underwriting policies, and specifically Regulation 8 (c) which is reproduced below for convenience; "Any proposal for health insurance may be accepted prospect in writing by recording the reasons for denial. Provided, the denial of the coverage shall be the last resort that the insurer may consider." (emphasis supplied)
3. Evidently therefore, it has been left to the commercial wisdom of insurance companies to determine which risks they are able to undertake in the underwriting policy, and accordingly issue or deny health insurance policies/Crucially however, this freedom has been circumscribed by the proviso which states that denial of a policy can only be the last resort i.e. insurance companies must insure an applicant, if they can. Regulation 8 (c) also mandates the insurance companies to modify their terms if required to meet the needs of a particular applicant. Undoubtedly therefore, the company must evaluate each and every applicant and if it is theoretically possible to issue an insurance policy, the law requires them to do so. The rationale behind such law is evident in that insurance companies are serving an important public function, and they cannot be permitted to take decisions based solely on their own whims or on the principles of profit maximisation. This reasoning becomes even more relevant when their grossly illegal actions are seen in the context of the Petitioner, a disabled person and one who may not meet their expectation of a highly profitable policy holder but one who in fact needs their services the most. Various international conventions, domestic statutes and directive principles of state policy clearly state that India must move towards a society where disabled people are not discriminated against and the summary refusal by the Respondent companies flagrantly violate these principles.
XXXX XXXX XXXX
5. In any case, it is submitted that as described above, the only question to be answered while issuing or denying a health insurance policy is to determine whether it is possible to insure the particular applicant. If it is possible, there is a positive obligation on the companies to extend insurance to the applicant. In order to answer this question, it is important to understand the broad contours of the insurance business.
XXXX XXXX XXXX
6. Therefore, if at all the Respondent companies' actions can be justified, they can only be done so on the ground that the Petitioner's probability of filing a claim each year is too close to 1. In such a scenario, the Petitioner would be placed in a pool of people all of whom have a probability close to 1, resulting in a situation where each person in the pool is filing a claim each year. This would lead to a situation where there is no cross subsidization possible, since each person in the pool is filing a claim and there is nobody to cross subsidize. Therefore, each person's premium would have to be roughly similar to their payout. Insurance as a concept” Legal Position
16. It is the settled position in law that the Right to Life includes the right to health and healthcare is an integral part of the same. The Supreme Court in C.E.S.C. Limited and Ors. v. Subhash Chandra Bose and Ors. (1992) 1 SCC 44 has also held that the term health includes medical care and health care facilities. The Court held:
17. In W.P.(C) No.10323/2009 titled ‘Vikas Gupta vs. Union of India’ a Division Bench of this Court in a judgment authored by Justice R. S. Endlaw has held that in fact there should be no difference between the insurance premium paid by disabled and non-disabled persons inasmuch as discrimination is itself is prohibited. The relevant portion of the said judgment reads as under:
22. It would thus be seen that disability per se cannot be the basis of discrimination in the matter of insurance. This Court is therefore unable to uphold the action of the respondents and/or the provisions of the Rules (supra) which create persons with disabilities class unto themselves. The same undoubtedly is a violation of the Disabilities Act even though not expressly dealing with the matter of insurance. The persons with disability cannot be grouped together for the purpose of insurance. They are to be treated similarly as others/non-disabled persons and just like in the case of non-disabled persons, the insurance risk is assessed on an individual basis, are liable to be similarly assessed; while so assessing, depending upon the risk assured and the risk assessed, premium is to be computed.”
18. Further, in Shikha Nischal v. National Insurance Company Ltd & Anr., 2021 SCC OnLine Del 2577, this Court had the occasion to consider a case involving a person suffering from mental illness and the insurance policies in this respect. The Court in the said case has observed as under:
19. The Rights of Persons with Disabilities Act, 2016 (hereinafter ‘RPwD Act’) leaves no ambiguity insofar as the entitlement of persons with disabilities for insurance. A perusal of Sections 3, 25 and 26 makes it clear that person with disabilities cannot be discriminated against insofar as healthcare and other connected aspects are concerned.
20. Further, the United Nations Convention of the Rights of Persons with Disabilities, 2006 under Article 25 also prohibits discrimination against persons with disabilities in the provision of health insurance and also requires countries to provide the same in a fair and reasonable manner. Article 25 of the said convention which was ratified by India in 2007 reads as: “States Parties recognize that persons with disabilities have the right to the enjoyment of the highest attainable standard of health without discrimination on the basis of disability. States Parties shall take all appropriate measures to ensure access for persons with disabilities to health services that are gendersensitive, including health-related rehabilitation. In particular, States Parties shall: a. Provide persons with disabilities with the same range, quality and standard of free or affordable health care and programmes as provided to other persons, including in the area of sexual and reproductive health and population-based public health programmes; b. Provide those health services needed by persons with disabilities specifically because of their disabilities, including early identification and intervention as appropriate, and services designed to minimize and prevent further disabilities, including among children and older persons; c. Provide these health services as close as possible to people's own communities, including in rural areas; d. Require health professionals to provide care of the same quality to persons with disabilities as to others, including on the basis of free and informed consent by, inter alia, raising awareness of the human rights, dignity, autonomy and needs of persons with disabilities through training and the promulgation of ethical standards for public and private health care; e. Prohibit discrimination against persons with disabilities in the provision of health insurance, and life insurance where such insurance is permitted by national law, which shall be provided in a fair and reasonable manner; f. Prevent discriminatory denial of health care or health services or food and fluids on the basis of disability.” Analysis
21. The IRDAI is the sector regulator in the insurance industry in India. Regulation 8 which deals with underwriting reads as under:
22. A perusal of the IRDAI regulations above regulation would show that, unfortunately, the terminology sub-standard lives is used in respect of persons with disabilities which is not an acceptable terminology. Even otherwise, Regulation 8(b) and Regulation 8(c) read with the circular dated 2nd June, 2022 clearly provides that insurance companies have to give insurance coverage to the following three categories three categories of persons: i. Persons with disabilities ii. Persons with HIV iii. Persons affected with mental illness.
23. The IRDAI being the regulator of the sector has important functions to perform under the IRDAI Act of 1999. The IRDAI ought to ensure that its circulars and other policies are duly given effect to by the insurance companies. In the present case, it has been observed the Court of the Chief Commissioner of Disabilities brought the facts of this case to the knowledge of the IRDAI. However, this action also did not yield any positive response from the IRDAI with respect to the case of the Petitioner. The stand of IRDAI before this Court both in the Counter affidavit, Circular and in the oral submissions does not match with the inaction when the issue was brought to its notice. The IRDAI ought to have stepped up and ensured that the insurance companies offer adequate products for persons with disabilities. Refusal to issue a health insurance policy to the Petitioner ought to have been a warning bell to the IRDAI. Unfortunately, despite the above settled legal position and the IRDAI’s position on record, there is a disconnect in implementation. Conclusion and Directions
24. In the background of this case, the manner in which both the insurance companies have simply rejected the proposal of the Petitioner that too with cryptic rejection letters is disconcerting. The Petitioner is a person who is working as an investment professional who can afford an insurance policy by paying a reasonable premium. Irrespective of the economic standing of a person with disability, insurance coverage cannot be rejected or refused.
25. Under these circumstances, this Court is of the opinion that there is no doubt that persons with disabilities would be entitled to health insurance coverage and products would have to be designed to enable them to obtain health insurance coverage.
26. In view of the above discussion the following directions are issued: i. The IRDAI, shall call a meeting of all insurance companies to ensure that the products are designed for persons with disabilities and other persons in terms of the circular dated 2nd June, 2020. The process of designing such products shall be supervised by the IRDAI and it shall be ensured that the said products are introduced on an early date, preferably within two months. ii. The Petitioner is permitted to approach Max Bupa Health Insurance Co. Ltd. & Oriental Insurance Co. Ltd., once again. The two insurance providers shall consider the case of the Petitioner for issuance of a health insurance policy and the question of extending insurance to the Petitioner shall be reviewed. A proposal shall be placed on record by the next date of hearing. iii. Immediate steps shall be taken by the IRDAI to modify the terminology `sub-standard lives’ in their Regulations so as to ensure that such unacceptable terminology is not used in its Regulations or other documents while referring to persons with disabilities.
27. Let a status report be filed on behalf of the IRDAI and the insurance companies at least two weeks before the next date of hearing.
28. List on 17th March, 2023.
PRATHIBA M. SINGH JUDGE DECEMBER 13, 2022/dj/am