# The Insurance Companies Regulations 1994, Regulation 67: Valuation of future premiums


(1) Where further specified premiums are payable by the policy holder under a contract (not being a linked long term contract) under which benefits (other than benefits arising from a distribution of profits) are determined from the outset in relation to the total premiums payable thereunder, then, subject to paragraph (4) and regulation 68 below—
(a) where the premiums under the contract are at a uniform rate throughout the period for which they are payable, the premiums to be valued shall be not greater than such level premiums as, if payable for the same period as the actual premiums under the contract and calculated according to the rates of interest and rates of mortality or disability which are to be employed in calculating the liability under the contract, would have been sufficient at the outset to provide for the benefits under the contract according to the contingencies upon which they are payable, exclusive of any additions for profits, expenses or other charges;
(b) where the premiums under the contract are not at a uniform rate throughout the period for which they are payable, the premiums to be valued shall be not greater than such premiums as would be determined on the principles set out in sub-paragraph (a) above modified as appropriate to take account of the variations in the premiums payable by the policy holder in each year;
save that a premium to be valued shall in no year be greater than the amount of the premium payable by the policy holder.
(2) Where the terms of the contract have changed since the contract was first made (the terms of the contract being taken to change for the purposes of this paragraph if the change is indicated in an endorsement on the policy but not if a new policy is issued), then, for the purposes of paragraph (1) above it shall be assumed that those changes from the time they occurred were provided for in the contract at the time it was made.
(3) Where under a contract (not being a linked long term contract)—
(a) each premium paid increases the benefits (other than benefits arising from a distribution of profits) provided under the contract, or
(b) the amount of a premium payable in future is not determinable until it comes to be paid,
future premiums and the corresponding liability may be left out of account so long as adequate provision is made against any risk that the increase in the liabilities of the company resulting from the payment of future premiums might exceed the amount of the premiums.
(4) An alternative valuation method to that described in paragraphs (1) to (3) above may be used where it can be demonstrated that the alternative method results in reserves no less, in aggregate, than would result from the use of the method described in those paragraphs.

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Source: https://www.legislation.gov.uk/uksi/1994/1516/regulation/67 (the official version)
Page: https://openlegislation.uk/insurance-companies-regulations-1994/regulation-67
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.