1.This Directive shall not apply to mutual associations which fulfil all the following conditions:
the articles of association must contain provisions for calling up additional contributions or reducing their benefits;
their business does not cover liability risks unless these constitute ancillary cover within the meaning of point C of the Annex or credit and suretyship risks;
the annual contribution income for the activities covered by this Directive must not exceed EUR 5 million; and
at least half of the contribution income from the activities covered by this Directive must come from persons who are members of the mutual association.
This Directive shall not apply to undertakings which fulfil all the following conditions:
the undertaking does not pursue any activity falling within the scope of this Directive other than the one described in class 18 in point A of the Annex,
this activity is carried out exclusively on a local basis and consists only of benefits in kind, and
the total annual income collected in respect of the activity of assistance to persons who get into difficulties does not exceed EUR 200 000.
Nevertheless, the provisions of this Article shall not prevent a mutual insurance undertaking from applying, or continuing, to be licensed under this Directive.
2.This Directive shall not, moreover, apply to mutual associations which have concluded with other associations of this nature an agreement which provides for the full reinsurance of the insurance policies issued by them or under which the concessionary undertaking is to meet the liabilities arising under such policies in the place of the ceding undertaking.
In such a case the concessionary undertaking shall be subject to the rules of this Directive.