Sec. 1. 24-A MRSA §2411, as enacted by PL 1969, c. 132, §1, is amended by adding a new paragraph at the end to read:

To prevent a recovery under this section for any application for life, credit life, disability, long-term care, accidental injury, specified disease, hospital indemnity or credit or accident insurance, an insurer need only prove one of the acts described in this section, not an act under subsections 1, 2 and 3.

SUMMARY

This bill clarifies that the Maine Revised Statutes, Title 24- A, section 2411 should be read in the disjunctive, which is the original intent of the law passed in 1969, but was not so interpreted by the Maine Supreme Judicial Court in American Home Assurance Co. v. Ingeneri, 479 A.2d 897 (Me. 1984). The Law Court read the statute in the conjunctive, in effect, overriding the Legislature's plain use of disjunctive construction in the section. The Ingeneri decision has had the unintended consequence of requiring the Federal Court in Maine to find that another portion of the Insurance Code, which requires an "incontestability clause" to be included in every health insurance contract delivered in this State, to be rendered null and void. Incontestability clauses are a consumer protection, preventing insurers from contesting representations made on insurance applications after 3 years, unless the insurer can prove fraud. Maine thus became the only state without an "incontestability" provision. This bill overrules Ingeneri and restores the original intent of the statute.