Malone v. North Atlantic Life Insurance Co. of America

—Order affirmed without costs. Memorandum: Plaintiff appeals from an order of Supreme Court that granted defendant’s motion for partial summary judgment on the issue of the commencement date of the two-year contestability period of a life insurance policy and denied plaintiff’s cross motion for summary judgment. Plaintiff’s husband (decedent) applied for a $50,000 life insurance policy with defendant on May 7, 1990 and, on that day, tendered the first month’s premium and received a “Conditional Premium Receipt” (Receipt). The policy was issued on June 1, 1990. Decedent died from leukemia on May 18, 1992. Plaintiff commenced this action seeking the proceeds of the insurance policy. Defendant answered and asserted an affirmative defense that decedent had concealed the fact that, shortly before applying for the insurance policy, he was diagnosed with leukemia. Defendant further asserted that, had it known of the condition, it would not have issued the policy. The policy contains a standard two-year incontestability provision. The issue is whether the two years began to run from May 7, 1990, when decedent received the Receipt upon tender of the first month’s premium, or whether it began to run on June 1, 1990, the effective date of the policy. We conclude that 1078 the court properly granted defendant’s motion for partial summary judgment on the issue of the commencement date and denied plaintiff’s cross motion for summary judgment on that same issue. Plaintiff’s reliance on the Receipt is misplaced. A conditional receipt is simply a binder that provides for temporary or preliminary insurance, covering the applicant until the insurance company’s investigation of insurability is completed (see, 1 Couch, Insurance 3d § 13:1, at 13-2—13-4; see also, Kitchen & Bath Creations v Guardian Life Ins. Co., 234 AD2d 157). Plaintiff attempts to bootstrap the Receipt onto the policy itself. The policy, however, does not incorporate by reference the Receipt, and thus defendant is entitled to rely on the effective date of the policy (June 1, 1990) as the commencement of the two-year contestability period (cf., LaTorre v Connecticut Mut. Life Ins. Co., 38 F3d 538; see also, American Natl. Ins. Co. v Motta, 404 F2d 167). All concur except Hayes, J., who dissents and votes to reverse in the following Memorandum.