20-1363. Relation of earnings to
insurance
A. There may be a provision as follows: "Relation of earnings to insurance: If the
total monthly amount of loss of time benefits promised for the same loss under all valid
loss of time coverage upon the insured, whether payable on a weekly or monthly basis,
shall exceed the monthly earnings of the insured at the time disability commenced or his
average monthly earnings for the period of two years immediately preceding a disability
for which claim is made, whichever is the greater, the insurer will be liable only for
such proportionate amount of such benefits under this policy as the amount of such
monthly earnings or such average monthly earnings of the insured bears to the total
amount of monthly benefits for the same loss under all such coverage upon the insured at
the time such disability commences and for the return of such part of the premiums paid
during such two years as shall exceed the pro rata amount of the premiums for the
benefits actually paid hereunder; but this shall not operate to reduce the total monthly
amount of benefits payable under all such coverage upon the insured below the sum of two
hundred dollars or the sum of the monthly benefits specified in such coverages, whichever
is the lesser, nor shall it operate to reduce benefits other than those payable for loss
of time."
B. The policy provision set forth in subsection A of this section may be inserted
only in a policy which the insured has the right to continue in force subject to its
terms by the timely payment of premiums until at least age fifty or, in the case of a
policy issued after age forty-four for at least five years from its date of issue. The
insurer may, at its option, include in this provision a definition of "valid loss of time
coverage," approved as to form by the director, which definition shall be limited in
subject matter to coverage provided by governmental agencies or by organizations subject
to regulation by insurance law or by insurance authorities of this or any other state of
the United States or any province of Canada, or to any other coverage the inclusion of
which may be approved by the director or any combination of such coverages. In the
absence of such definition the term shall not include any coverage provided for the
insured pursuant to any compulsory benefit statute, including any workers' compensation
or employer's liability statute, or benefits provided by union welfare plans or by
employer or employee benefit organizations.
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