Explain the basis for approving insurance policies that exclude mental illness from full coverage: HC to IRDA

The Delhi Supreme Court has asked the IRDAI Insurance Sector Regulatory Authority to explain the basis on which insurance policies were approved that excluded mental illness from full coverage.

Justice Prathiba M Singh said that the 2017 Mental Health Act clarifies that there can be no discrimination between mental and physical illness and insurance related to it.

The judicial order of the court to the Indian Insurance Supervisory Authority (IRDAI) came at the request of a man whose claim for reimbursement of the cost of treating his mental illness was limited to 50,000 rupees by insurer Max Bupa Health Insurance Company Ltd.

The court informed IRDA and Max Bupa within two weeks that a large number of policyholders would be affected by such an insurance policy.

The petitioner has alleged that he regularly paid the premium for a sum insured of Rs 35 lakh, but when he applied for the sum insured for his treatment, he found that the sum insured is limited to Rs 50,000 in case of mental illness.

His attorney told the court that upon reviewing the fine print, almost all prevalent mental health conditions such as major depression, eating disorder, panic disorder, schizophrenia, post-traumatic stress disorder, and obsessive-compulsive disorder are limited to a total of Rs 50,000.

The petitioner has alleged that such a restriction violates the provisions of the Mental Healthcare Act 2017.

After hearing the petitioner’s side, the court said: “The clauses mentioned in the directive clearly show that a large number of mental illnesses are excluded from full coverage under the directive and that only Rs 50,000 can be reimbursed for these mental illnesses.

“This matter needs to be considered as the Indian Insurance Regulatory Authority should record the basis for obtaining approval for such insurance policies.”

The court brought the matter up for further hearing on June 2.