2138                                      Vetoes

Dear Mr. President:

In accordance with Article II, Section 17, of the Maryland Con-
stitution, I have today vetoed Senate Bill 168.

This bill makes certain corrections in Article 89B of the Anno-
tated Code of Maryland. The same corrections were made by House
Bill 1000, which was enacted by the General Assembly and was
signed by me on May 5, 1970. Consequently, it is unnecessary for
me to sign Senate Bill 168.

Sincerely,
/s/ Marvin Mandel,

Governor.

Senate Bill No. 267—Defenses Against Insurance Policies

AN ACT to repeal and re-enact, with amendments, Section 441
of Article 48A of the Annotated Code of Maryland (1968 Replace-
ment Volume and 1969 Supplement), title "Insurance Code," subtitle
"Health Insurance," to limit or reduce the extent of the period during
which an insurer may void a policy or raise certain defenses to
claims.

May 26, 1970.
Honorable William S. James
President of the Senate
State House
Annapolis, Maryland

Dear Mr. President:

In accordance with Article II, Section 17, of the Maryland Con-
stitution, I have today vetoed Senate Bill 267.

This bill would reduce the time limit under which insurance com-
panies issuing health and accident insurance policies could void poli-
cies for misstatements in applications by claimants, from the present
maximum limit of two years to a limitation of one year. These mis-
statements which allow the health insurance companies to deny claims,
generally relate to the applicant's age, occupation, pre-existing dis-
ease or physical condition. The statutory limitation found through-
out the country ranges from two to three years, and no State pres-
ently limits the incontestable period for misstatements to one year.
The rates set by the insurance companies throughout the entire coun-
try are based upon the two year period of limitations, and the stand-
ard insurance policies prepared by the insurance companies are based
on the two year limitation. If this bill were to become law, the many
insurance companies doing business in this State would be forced to
prepare special policies for Maryland, which would have the effect
of increasing the cost of these policies.

Even more important, is the fact that by decreasing the limita-
tion period, those innocent persons who do not make misstatements
will be adversely affected because of increased premium rates. In-
surance companies base their premiums on the present two year limi-