The policy is applicable for SQL Server Logins. Microsoft recommends not to turn of the password policy. As documented in BOL, "Turning off this option may result in a security risk."
If you want to turn it off for the existing logins you can write a cursor or generate ALTER statment for with CHECK_POLICY = OFF.
If you want to disable it on the server level, you can add trace flag 4602 while starting up the SQL Server to disable this option, which is not recomended. You can find some more details in the below KB article.
http://support.microsoft.com/default.aspx?scid=kb;EN-US;936892
r, manish