The Delhi High Court on Monday said that insurance companies are liable to give effect to the Mental Healthcare Act 2017 in their policies from the time it came into force in 2018.
Justice Prathiba M. Singh said the Insurance Regulatory and Development Authority of India (IRDAI) was duty-bound to supervise the insurance companies and ensure that they comply with the Act and it “cannot turn a blind eye” to its non-implementation.
The High Court remarked that it was “clearly getting the feeling” that the insurance regulator was not taking action against the companies and was only taking steps when judicial orders were passed.
The High Court’s directions came on a woman’s plea whose claim for reimbursement of costs for treatment of schizophrenia were rejected by the National Insurance Company Ltd (NICL) on the ground that psychiatric disorders were excluded from medical cover.
When she approached the insurance ombudsman stating that her claim was reimbursable under the Mental Healthcare Act 2017, her plea was again rejected on the ground that her claim has to be settled under the terms of the policy.
In her plea, the woman has contended that “the said exclusion was arbitrary and is bound to be inoperative in view of Section 21(4) of the Mental Healthcare Act, 2017 which provides that every insurer shall make provision for medical insurance for treatment of mental illness on the same basis as is available for treatment of physical illness”.
The court agreed with the contentions of the woman and held that her claim for ₹6.67 lakh was reimbursable as she was entitled to it. The court also imposed a cost of ₹25,000 on the insurance company to be paid to the woman for forcing her to opt for litigation to claim reimbursement. It also held that the insurance ombudsman reasons for rejecting her claim were untenable in law.