(1)This section applies where—
(a)anything is received by way of premium under a taxable insurance contract, and
(b)the amount of the premium is less than it would be if it were received under the contract in open market conditions.
(2)The Commissioners may direct that the amount of the premium shall be taken for the purposes of this Part to be such amount as it would be if it were received under the contract in open market conditions.
(3)A direction under subsection (2) above shall be given by notice in writing to the insurer, and no direction may be given more than three years after the time of the receipt.
(4)Where the Commissioners make a direction under subsection (2) above in the case of a contract they may also direct that if—
(a)anything is received by way of premium under the contract after the giving of the notice or after such later date as may be specified in the notice, and
(b)the amount of the premium is less than it would be if it were received under the contract in open market conditions,
the amount of the premium shall be taken for the purposes of this Part to be such amount as it would be if it were received under the contract in open market conditions.
(5)For the purposes of this section a premium is received in open market conditions if it is received—
(a)by an insurer standing in no such relationship with the insured person as would affect the premium, and
(b)in circumstances where there is no other contract or arrangement affecting the parties.
(6)For the purposes of this section it is immaterial whether what is received by way of premium is money or something other than money or both.