Where an insurer is liable by virtue of section 65(9) of the Act to pay to an insured person an amount equal to the amount which has been recovered from him, then, if and to the extent that the insurer would not be liable to do so apart from this regulation, he shall pay interest to him.

The interest payable under paragraph (1) above shall be paid at the rate of 8 per cent. per annum for the period beginning with the date on which the amount was recovered from the insured person and ending with the date the insurer paid to him an amount equal to that amount.