Regulation 4 Calculation of average market level indicator

The average market level indicator shall be calculated in accordance with the following provisions of this regulation.

Subject to paragraphs (3) to (5) of this regulation the average market level indicator shall be the average of the market level indicators derived from the 15-year index numbers or (as the case may be) the 25-year index numbers and the gross dividend yields, appropriate to the first 5 days on which the London Stock Exchange was open in the month in which the event giving rise to the liability for the premium occurred.

Where the average market level indicator is 70 or less it shall be adjusted by multiplying it by 1.25.

Where the average market level indicator is more than 70 but not more than 104.5 it shall be adjusted by halving it and adding 52.5.

Where the average market level indicator (calculated in accordance with the preceding provisions of this regulation) is not a whole number, it shall be rounded to the nearest whole number, or the nearest lower whole number where the decimal part of that indicator is 0.5.