Galanty

—We granted review to consider the effect of a standard incontestability clause that the Insurance Code requires policies of disability insurance to include. (Ins. Code, §§ 10350, 10350.2; except as noted, all further statutory citations are to this code.) The lower courts construed the clause as permitting an insurer to deny coverage for its insured’s disability, caused by AIDS (acquired immune deficiency syndrome), because the insured tested positive for antibodies to HIV (human immunodeficiency virus) before the policy was issued. We reverse.

Facts and Procedural Background

This case comes to us from a decision of the Court of Appeal affirming a summary judgment for defendant Paul Revere Life Insurance Company (Paul Revere). Undisputed evidence adduced in connection with the motion reveals the following:

In June 1987, plaintiff Mark Galanty had his blood tested for antibodies to HIV. The result was positive. The lay counselor who reported the result to Galanty told him it could be erroneous, needed to be confirmed, and did not necessarily mean he was infected with HIV or would ever get AIDS. Galanty did not take another test at that time.

Galanty’s primary care…