Draft Bill proposes mandatory surrogacy cover

A surrogate mother is one who bears a child for parents unable to reproduce on their own for various reasons, including infertility.

In vitro fertilization (IVF) specialist Nayna Patel, who runs the biggest surrogacy centre in the country called Akanksha in Anand, Gujarat, has entered into a deal with Max New York Life Insurance Co. Ltd for special life insurance cover.

“The biological parents have to pay a premium of ₹ 20,000 before five months of pregnancy to the company," said Patel. “In case of death of the surrogate mother, Max New York Life will pay ₹ 2 lakh to the family of the surrogate."

At Patel’s centre, about 70-80 couples every year have children by surrogate mothers who belong to the nearby villages.

The biological parents have to pay an additional ₹ 2 lakh and the Anand trust pays ₹ 1 lakh to the surviving family in case the surrogate mother dies, Patel said.

“In case of no casualty, the life insurance company will pay back ₹ 20,000 to the surrogate mother after five years," Patel told Mint over phone from Anand. So far there haven’t been any claims, she said.

Childless married couples often hire surrogate mothers on the basis of informal contracts to maintain confidentiality, partly because the practice is frowned upon. But this prevents the surrogate mother from getting insurance cover, exposes her and her family to greater financial risk if the pregnancy turns out to be life-threatening, or the intended parents refuse to take the child.

While most life insurers haven’t been forthcoming about issuing policies to surrogate mothers, Max New York Life has been providing such cover for the past eight months.

Nazir Damji, head of underwriting at Max New York Life, said his firm does not have any special products designed for such women, but its existing products cater to surrogate mothers.

“There are no additional risks we see in such cases, and hence, we do not make any exclusions for surrogate mothers," Damji said. It doesn’t askfor the name of the father of the child while giving insurance. Max New York Life collected a new business premium of ₹ 1,789.45crore till February of fiscal 2010-11.

A Law Commission report highlights that in India, costs are almost one-third that in Western countries and that this has resulted in surrogacy thriving. While the report has pegged the size of the surrogacy industry at ₹ 25,000 crore globally, lobby group Confederation of Indian Industry expects it to grow to $2.3 billion (around ₹ 10,280 crore) by 2012 in India alone.

The 228th report of the commission submitted in 2009 emphasized the need for legislation to regulate assisted reproductive technology clinics as well as rights and obligations of parties to a surrogacy.

It recommended that surrogacy agreements should be legally binding for all parties under the existing Indian Contract Act, and a surrogacy contract should necessarily take care of life insurance cover for the surrogate mother.

Shivani Sachdev Gour said in a blog on the website of Delhi-based Surrogacy Centre India in November that the centre had spent a few months negotiating “with premier insurance companies in India to provide life insurance for our surrogates".

The “premium will depend on age of the surrogate mother and other life factors, and will be between ₹ 5,000-9,000 for a year with the payout being ₹ 1,000,000", the blog said.

“It is a social issue. There may not be any special scheme designed specifically for surrogate mothers, but we can provide them a term assurance cover or endowment, depending on their physical conditions and other life parameters if it suits our underwriting policies," said an official at Life Insurance Corp. of India (LIC), the largest and the only state-owned life insurer in the country. “The intended parents (legal parents of the child) may have to bear the premium obligations for such policies," the official said.

A term policy refers to a life insurance cover where the policyholder or survivors receive the sum assured on death or permanent disability in return for an annual premium paid, typically in the form of single premium. If the policyholder does not claim during the tenure of the policy, the premium money is retained by the insurer.

There are 23 life insurers in India that collected total new business premiums of ₹ 1.04 trillion till February during fiscal 2011. LIC alone collected new business premiums of ₹ 73,121.61 crore during the year. It has assets worth at least ₹ 12 trillion.

“Once the legislations are intimated, we can provide short-term life insurance cover for surrogate mothers," said the chief actuary of a private life insurer in Mumbai.

According to another underwriting official at a private sector life insurer, surrogate mothers could avail themselves of one-year life insurance covers that will take care of the risks during and after the pregnancy.

“We will treat a surrogate mother like any other normal person, and if her profile suits our underwriting principles, a term assurance can be issued to her," said an official at Bajaj Allianz Life Insurance Co. Ltd that collected a new business premium of ₹ 2,890.89 crore till February in fiscal 2011.

None of the insurance officials wanted to be identified because of the sensitivity of the issue.

Though the Supreme Court legalized commercial surrogacy in India—often termed the surrogacy capital of the world—in 2002, there are still no clear laws governing such transactions.

Most contracts are legally non-binding, as they have not yet been cleared by Parliament. Also, extant laws are unclear about vital issues such as the rights of surrogates, their minimum age, details about contracts, informed consent and adoption requirements.

According to estimates, Indian clinics charge between $10,000 and $28,000 for the complete package, including fertilization, the surrogate’s fee and delivery of the baby at a hospital, air fare, medical procedures and hotels.

LH Hiranandani Hospital in Mumbai runs the biggest surrogacy centre in the city. With most of the intended parents being rich non-resident Indians and foreigners, the surrogate mothers are housed in three-star hotels in the upscale Hiranandani area of Powai in suburban Mumbai. The entire process from IVF to delivery takes around 12-18 months. According to hospital officials, most of the childless couples hail from the UK, Israel, the US and West Asia.

“There is no life cover that I have come across. But the biological parents give an undertaking to bear all the costs of medical treatment that the surrogate undergoes during the nine-month pregnancy," said Anita Soni, an obstetrician with the hospital. Soni attends to around 25-30 such surrogate mothers a month in Mumbai.

anirudh.l@livemint.com