Opinion ID: 2320872
Heading Depth: 2
Heading Rank: 3

Heading: Late Pay Statute

Text: [¶ 34] The late pay statute provides that a claim for payment of benefits under a policy or certificate of insurance delivered or issued for delivery in this State is payable within 30 days after proof of loss is received by the insurer. 24-A M.R.S.A. § 2436(1). The 30 day period is tolled, however, if the insurer notifies the insured, orally or in writing, that it disputes the claim. See id.; Depositors Trust Co. v. Farm Family Life Ins. Co., 445 A.2d 1014, 1018 (Me.1982). The plaintiffs argue that because the dispute was not based upon a reasonable investigation of the claim as required by 24-A M.R.S.A. § 2436(2), the $20,000 in payments were overdue and the plaintiffs are entitled to interest and attorney fees pursuant to sections 3 and 4 of the statute. [¶ 35] The existence of a legitimate controversy between the parties tolled the 30-day time period for payment. The record reveals that Allstate's position regarding the disputed amounts was based upon an interpretation of the insurance policy and Maine case law, an interpretation later accepted by the Superior Court when it granted Allstate's first motion for summary judgment. Allstate's conduct was, therefore, not a violation of the late pay statute.