SCHEDULE 2Life Policies, Life Annuities and Capital Redemption Policies
PART IIAmendment of Qualifying Conditions
3
(1)
The following provisions of this paragraph shall have effect for determining for the purposes of Schedule 1 and this Schedule whether a policy has been varied or whether a policy which confers on the person to whom it is issued an option to have another policy substituted for it or to have any of its terms changed is a qualifying policy.
(2)
If the policy is one issued in respect of an insurance made before the appointed day—
(a)
any such option shall, until it is exercised, be disregarded in determining whether the policy is a qualifying policy ; and
(b)
any change in the terms of the policy which is made in pursuance of such an option shall be deemed to be a variation of the policy.
(3)
If the policy is one issued in respect of an insurance made on or after the appointed day, the policy shall not be a qualifying policy unless it satisfies the conditions applicable to it under Schedule 1 before any such option is exercised and—
(a)
each policy that might be substituted for it in pursuance of such an option would satisfy those conditions under the rules of paragraph 9 of that Schedule ; and
(b)
the policy would continue to satisfy those conditions under the rules of that paragraph as applied by paragraph 10 of that Schedule if each or any of the changes capable of being made in pursuance of such an option had been made and were treated as a variation ;
and it shall not be treated as being varied by reason only of any change made in pursuance of such an option.