# The Insurance Companies Regulations 1994, Regulation 68: Acquisition expenses


(1) In order to take account of acquisition expenses, the maximum annual premium to be valued under regulation 67 above may (subject to paragraph (2) below) be increased by an amount not greater than the equivalent, taken over the whole period of premium payments and calculated according to the rates of interest and rates of mortality or disability employed in valuing the contract, of 3.5 per cent. (or the defined percentage, if it is lower than 3.5 per cent.) of the relevant capital sum under the contract.
(2) For the purposes of paragraph (1) above “the defined percentage” is the percentage arrived at by taking (for all contracts of the same type as the contract in question for which an adjustment is made) the average of the percentages of the relevant capital sum under each such contract that represent the acquisition costs incurred which, after allowing for the effects of taxation, might reasonably be expected to be recovered from the premiums payable under the contract.
(3) The increase permitted by paragraph (1) above shall be subject to the limitation that the amount of a future premium valued shall not in any event be greater than the amount of the premium actually payable by the policy holder.
(4) For the purposes of this regulation—
(a) for contracts other than temporary assurances, the relevant capital sum under a contract shall be arrived at in accordance with regulation 25(4) above, and
(b) for temporary assurances, the relevant capital sum shall be the sum assured on the valuation date.

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Source: https://www.legislation.gov.uk/uksi/1994/1516/regulation/68 (the official version)
Page: https://openlegislation.uk/insurance-companies-regulations-1994/regulation-68
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.