Kinder

The instant appeal comes before us after summary judgment in favor of respondent and against appellant Insurance Commissioner.

*519 A review of the (undisputed) factual background shows that respondent had for several years sold long term disability insurance (LTD) in California. Such insurance is generally purchased by employers in order to guarantee employees a certain income level during periods of disability. Since, typically, disabled workers received income from other sources, respondent sold two types of LTD insurance. One, the so-called “nonfreeze” policy, provided that “other” income received during the disability period would be “integrated” with benefit payments, thus reducing the insurance company’s obligation by the amount of “overinsurance.” Thus, if a disabilitant earned $1,000 monthly, and was eligible to receive up to $800 in benefits, if other income from, for example, increased Social Security payments, brought his monthly income to a figure in excess of his monthly income, the insurance company under a “nonfreeze” policy could reduce disability payment by the amount of such excess.

A “freeze” policy, costing 21 percent more in premiums, provided that…