Income Tax Regulations — 306
 amount payable in respect of a policy loan) in respect of the policy at that time exceeds 250% of (i) in the case where the particular time at which the policy is issued is determined under subsection 148(11) of the Act and the policy’s third preceding policy anniversary is before the particular time, the accumulating fund (computed without regard to any amount payable in respect of a policy loan and as though the policy were issued after 2016) in respect of the policy on that third preceding policy anniversary, and (ii) in any other case, the accumulating fund (computed without regard to any amount payable in respect of a policy loan) in respect of the policy on its third preceding policy anniversary; and (c) where that time is after 2016, (i) the accumulating fund (computed without regard to any amount payable in respect of a policy loan) in respect of the policy at that time exceeds the total of all amounts each of which is (A) if the policy is issued before 2017, 3/20 of the accumulating fund, at that time, in respect of an exemption test policy issued in respect of the policy, and (B) if the policy is issued after 2016, 3/8 of the accumulating fund, at that time, in respect of an exemption test policy issued in respect of a coverage under the policy, and (ii) subsection (7) did not apply on any of the policy’s six preceding policy anniversaries. (7) If this subsection applies at any time in respect of a life insurance policy, each exemption test policy issued before that time in respect of the life insurance policy is at and after that time deemed to be issued (except for purposes of this subsection, paragraph (4)(a) and subsection (5)) (a) on the later of (i) the date of the third preceding policy anniversary described in paragraph (6)(b) in respect of the policy, and (ii) the date on which it was deemed by subsection (3) or (10), as the case may be, to be issued (determined immediately before that time); and (b) not at any other time. (8) A life insurance policy that would, in the absence of this subsection, cease (other than by reason of its conversion into an annuity contract) on a policy anniversary of the policy to be an exempt policy is deemed to be an exempt policy on that policy anniversary if (a) had that policy anniversary occurred on the particular day that is 60 days after that policy anniversary, the policy would have been an exempt policy on the particular day; or (b) the person whose life is insured under the policy dies on that policy anniversary or within 60 days after that policy anniversary. (9) A life insurance policy (other than an annuity contract or deposit administration fund policy) issued before December 2, 1982 is deemed to be an exempt policy at all times from the date of its issue until the first time after December 1, 1982 at which (a) a prescribed premium is paid by a taxpayer in respect of an interest, last acquired before December 2, 1982, in the policy; or (b) an interest in the policy is acquired by a taxpayer from the person who held the interest continuously since December 1, 1982. (10) Notwithstanding subsections (3) and (4), if a life insurance policy is issued for any purpose at a particular time determined under subsection 148(11) of the Act, then for the purposes of applying this section (other than this subsection and subsection (9)) and section 307 in respect of the life insurance policy at and after the particular time, (a) in respect of each coverage issued before the particular time under the life insurance policy, a separate exemption test policy is deemed to be issued in respect of a coverage under the life insurance policy (i) on the date of issue of the life insurance policy, and (ii) on each policy anniversary that ends before the particular time of the life insurance policy on which (A) the amount of the benefit on death under the life insurance policy exceeds (B) 108% of the amount of the benefit on death under the life insurance policy on the later of the life insur