Ch. 11

1996 LAWS OF MARYLAND

IN DETERMINING THE PREMIUM OR BENEFIT HAS BEEN MISSTATED, THE AMOUNT
PAYABLE OR BENEFIT ACCRUING UNDER THE POLICY SHALL BE THE AMOUNT OR
BENEFIT THAT THE PREMIUM WOULD HAVE PURCHASED HAD THE CORRECT AGE
BEEN STATED.

(B) OPTION OF INSURER TO VOID POLICY.

(1)      IF AN APPLICATION OR POLICY EXPRESSLY LIMITS THE INSURABLE
AGE AND THE CORRECT AGE AT THE DATE OF ISSUE IS OUTSIDE THE INSURABLE
AGE LIMIT, THE POLICY IS VOIDABLE AT THE OPTION OF THE INSURER DURING THE
LIFETIME OF THE INSURED, BUT NOT LATER THAN 3 YEARS AFTER THE DATE OF
ISSUE OF THE POLICY.

(2)      IF THE INSURER EXERCISES THE OPTION TO VOID THE POLICY, THE
INSURER SHALL RETURN TO THE INSURED THE AGGREGATE OF GROSS PREMIUMS
CHARGED ON THE POLICY, LESS:

(I)      DIVIDENDS PAID IN CASH OR USED TO PAY PREMIUMS ON THE
POLICY; AND

(II)    ANY INDEBTEDNESS TO THE INSURER ON THE POLICY,
INCLUDING INTEREST DUE AND ACCRUED.

(3)     THE INSURER MAY NOT EXERCISE THE OPTION TO VOID THE
POLICY MORE THAN 30 DAYS AFTER THE CORRECT AGE IS ESTABLISHED.

(4)      SUBJECT TO PARAGRAPH (5) OF THIS SUBSECTION, IF THE INSURER
DOES NOT EXERCISE THE OPTION TO VOID THE POLICY OR IF THE AGE
DISCREPANCY IS NOT DISCOVERED WITHIN 3 YEARS AFTER THE DATE OF ISSUE OF
THE POLICY, THE INSURER MAY NOT VOID THE POLICY AND THE AMOUNT PAYABLE
SHALL BE DETERMINED IN ACCORDANCE WITH SUBSECTION (A) OF THIS SECTION.

(5)      IF THE PREMIUM RATES OF THE INSURER AT THE DATE OF ISSUE OF
THE POLICY DO NOT INCLUDE A RATE FOR THE CORRECT AGE, THE AMOUNT
PAYABLE SHALL BE DETERMINED IN ACCORDANCE WITH ESTABLISHED ACTUARIAL
PRINCIPLES.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, §§ 392 and 392A.

In subsections (a) and (b)(1) and (5) of this section, the former references to
the correct "ages" are deleted in light of the references to the correct "age".
Article 1, § 8 of the Code provides that the singular includes the plural.

In subsection (a) of this section, the term "individual" is substituted for the
former reference to a "person" because only an individual can be an insured
under a life insurance policy.

Defined terms: "Insurer" § 1-101
"Life insurance" § 1-101
"Policy" § 1-101
"Premium" § 1-101

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