Equitable Life with-profit policyholders who expect a windfall when the life assurer is sold could be disappointed.

Potential new industry regulations have led to further uncertainties about the size of the company's liabilities. And this could put prospective buyers off the company.

Meeting the cost of guaranteed annuities forced the mutual to put the operation on the market at the end of July, after it lost its appeal to the British House of Lords. Now, regulations - drawn up by the actuarial profession and at consultation stage - require all insurers to maintain reserves for the guaranteed element of terminal bonuses and the future growth in annual bonuses in unitised with-profits products.

At the moment, companies only have to hold a reserve for bonuses guaranteed to date. Equitable actuaries consider they have reserved adequately.

While the regulations are not expected to be implemented until January and the deadline for bids for Equitable is November 20th, prospective buyers will have to make a judgment on how any new regulations would affect Equitable's liabilities.

Equitable has already costed the funding of its guaranteed annuity problem at about £1.5 billion sterling (€2.56 billion), and any buyer would be expected to strengthen the life fund by about the same amount. But some British analysts are suggesting that new regulations could mean further liabilities of up to £1.8 billion.