For example, if a key sales manager had built up a relationship with key clients, they may no longer want to work with the business if that key person were no longer around. This can cause them to go elsewhere and cause a dip in sales figures. In addition to this, the cost of training, recruitment and temporary cover to find a replacement can be high. This also needs to be factored into the amount of cover that is taken out. The company would need to consider how they would be impacted as a result of a loss of a key person in different ways to determine how much that individual is worth. Key person insurance policies can be owned in a number of ways depending on the needs of the business. It is common for a business to own the policy with claim proceeds being paid directly to the business. There is no legislative or insurable requirement for a policy to be owned by a specific party or entity and there may be circumstances be it for taxation or policy continuation purposes where policies may be owned and paid for by the insured person directly or owned by another individual. The tax treatment for premiums paid for key person insurance and the treatment of monies received from a claim vary among countries. Premiums are generally not tax deductible in the U.S. Under the COLI Best Practices Act within the Pension Protection Act of 2006, key person insurance proceeds for policies owned by employers can be taxable if certain conditions are not met. In Australia, Key person insurance policies are generally not deductible unless used specifically for business revenue protection purposes. Claim proceeds in Australia if used for revenue purposes may be taxable and depending on the ownership of the policy, may trigger a Capital Gains Taxation Event. In the UK the main principles of key person insurance taxation were outlined by the Chancellor of the Exchequer in 1944, Sir John Anderson. The "Andersen Rules" state "Treatment for taxation purposes would depend upon the facts of the particular case and it rests with the assessing authorities and the Commissioners on appeal, if necessary, to determine the liability by reference to these facts. I am, however, advised that the general practice in dealing with insurances on the lives of employees is to treat the premiums as admissible deductions, and any sums received under a policy as trading receipts, if (i) the sole relationship is that of employer and employee; (ii) the insurance is intended to meet loss of profit resulting from the loss of services of the employee; and (iii) it is an annual or short-term insurance. Cases of premiums paid by companies to insure the lives of Directors are dealt with on similar lines."