1. Subject to paragraph 2, the free paid-up policy of a registered friendly society or an industrial assurance company shall assure payment, on the events on which the sums assured by the surrendered policy were payable, of sums bearing the same proportion to those sums (including any addition by way of bonus) as the amount of the premiums actually paid under the surrendered policy bears to the amount of the premiums which would have been payable under the surrendered policy had the full number of premiums become payable thereunder.N.I.