(a) The purpose of this section is to achieve both of the following: (1) Prevent, in respect to disability insurance, fraud, unfair trade practices, and insurance economically unsound to the insured. (2) Assure that the language of all insurance policies can be readily understood and interpreted. (b) The commissioner shall not approve a disability policy for issuance or delivery in this state in any of the following circumstances: (1) If the commissioner finds that it contains a provision, or has a label, description of its contents, title, heading, backing, or other indication of its provisions that is unintelligible, uncertain, ambiguous, or abstruse, or likely to mislead a person to whom the policy is offered, delivered or issued. (2) If it contains a provision for payment at a rate, or in an amount (other than the product of rate times the periods for which payments are promised) for loss caused by particular event or events (as distinguished from character of physical injury or illness of the insured) more than triple the lowest rate, or amount, promised in the policy for the same loss caused by another event or events (loss caused by sickness, loss caused by accident, and different degrees of disability each being considered, for the purpose of this paragraph, a different loss); or if it contains a provision for payment for a confining loss of time at a rate more than six times the least rate payable for a partial loss of time or more than twice the least rate payable for a nonconfining total loss of time; or if it contains a provision for payment for any nonconfining total loss of time at a rate more than three times the least rate payable for any partial loss of time. (3) If it contains a provision for payment for disability caused by particular event or events (as distinguished from character of physical injury or illness of the insured) payable for a term more than twice the least term of payment provided by the policy for the same degree of disability caused by another event or events; or if it contains a benefit for total nonconfining disability payable for lifetime or for more than 12 months and a benefit for partial disability, unless the benefit for partial disability is payable for at least three months; or if it contains a benefit for total confining disability payable for lifetime or for more than 12 months, unless it also contains benefit for total nonconfining disability caused by the same event or events payable for at least three months, and, if it also contains a benefit for partial disability, unless the benefit for partial disability is payable for at least three months. This paragraph shall apply separately to accident benefits and to sickness benefits. (4) If it contains a provision or provisions that would have the effect, upon termination of the policy, of reducing or ending the liability as the insurer would have, but for the termination, for loss of time resulting from accident occurring while the policy is in force or for loss of time commencing while the policy is in force and resulting from sickness contracted while the policy is in force or for other losses resulting from accident occurring or sickness contracted while the policy is in force, and also contains provision or provisions reserving to the insurer the right to cancel or refuse to renew the policy, unless it also contains other provision or provisions the effect of which is that termination of the policy as the result of the exercise by the insurer of that right shall not reduce or end the liability in respect to the hereinafter specified losses as the insurer would have had under the policy, including its other limitations, conditions, reductions, and restrictions, had the policy not been terminated. The specified losses referred to in the preceding paragraph are: (i) Loss of time that begins while the policy is in force and results from sickness contracted while the policy is in force. (ii) Loss of time that begins within 20 days
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