1.This Directive does not apply to mutual associations in so far as they 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 the latter constitute ancillary cover within the meaning of subparagraph (c) of the Annex - or credit and suretyship risks, - the annual contribution income for the activities covered by this Directive must not exceed one million units of account, 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.
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.