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3608 A California Supreme Court decision cleared up an area of unsettled law by holding that after a disability policy has been in effect for two years an insurer cannot refuse to pay for disability resulting from a pre-existing condition, so prior to the decision an insurer's refusal to pay benefits on that ground was reasonable; whatever an insurer's subjective intent might have been, it can not be liable for bad faith on the basis of objectively reasonable conduct.CitationMORRIS v PAUL REVERE LIFE (Pre-existing Disease) 109 CA4 966 [See: InsC 10350.2; McMackin v Great American 22 CA3 428; Callahan v Mutual Life (RevGrtd) 71 CA4 1089, T/AT 6/99; Galanty v Paul Revere Life 23 C4 368, T/AT 7/00]
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