Only first statement of two in update-rule is executing?

I'm trying to create a table that maintains change-history and a modifable
view over it showing only current data. The delete and insert rules work
well, but I'm having trouble getting my update rule to work (it contains
two statements, the others contain only one each).

Here's a simple demonstration of my problem:

CREATE TABLE simple1(a varchar, b varchar, c timestamp DEFAULT now(),
d timestamp, PRIMARY KEY(a, c));
CREATE VIEW simple2 AS SELECT a, b FROM simple1 WHERE d IS NULL;
INSERT INTO simple1(a, b) VALUES('a', '1');
CREATE RULE simple2_upd AS ON UPDATE TO simple2 DO INSTEAD
(UPDATE simple1 SET d = now() WHERE a = NEW.a AND d IS NULL;
INSERT INTO simple1(a, b) VALUES(NEW.a, NEW.b));

Now, if I do

UPDATE simple2 SET b='2';

... I expect the the original row in simple1 to now have d=(some time),
and a new row with (a, b, c, d) = ('a', '2', some time, NULL).

However, the new row isn't inserted; only the previous row is changed.

What am I missing? Any pointers? I've read through the docs (I'm on
8.2.6) for rules several times, and nothing seems to explain this.

Thanks,
David Owen