1. MEMBER STATES MAY NOT REQUIRE UNDERTAKINGS TO CEDE PART OF THEIR UNDERWRITING OF ACTIVITIES LISTED IN ARTICLE 1 TO AN ORGANIZATION OR ORGANIZATIONS DESIGNATED BY NATIONAL REGULATIONS.
2. (A) THE ITALIAN REPUBLIC MAY, AS AN EXCEPTION, CONTINUE TO REQUIRE UNDERTAKINGS ESTABLISHED IN ITS TERRITORY TO CEDE PART OF THEIR UNDERWRITING TO THE ISTITUTO NAZIONALE DI ASSICURAZIONI, ON CONDITION THAT:
- THE EXTENT OF THAT REQUIREMENT AS AT THE TIME OF NOTIFICATION OF THIS DIRECTIVE IS IN NO WAY ENLARGED,
- WHERE ACCOUNT IS TAKEN, IN DETERMINING THE COMPULSORY CESSION PERCENTAGE, OF THE PERIOD DURING WHICH THE AGENCY OR BRANCH HAS BEEN ESTABLISHED IN ITALY, ACCOUNT SHALL ALSO BE TAKEN OF THE TOTAL NUMBER OF FINANCIAL YEARS DURING WHICH THE UNDERTAKING HAS CARRIED ON THE KINDS OF INSURANCE REFERRED TO IN ARTICLE 1 IN THE TERRITORY OF THE MEMBER STATE IN WHICH ITS HEAD OFFICE IS SITUATED. IN SUCH CASES, THE COMPETENT AUTHORITY IN THAT STATE SHALL ISSUE A CERTIFICATE IN CONFORMITY WITH THAT REFERRED TO IN ARTICLE 10 (1) (B) IN RESPECT OF THE ENTIRE PERIOD DURING WHICH THE UNDERTAKING HAS CARRIED ON BUSINESS IN THOSE KINDS OF INSURANCE.
(B) THIS MATTER SHALL BE RE-EXAMINED IN CONNECTION WITH A SECOND DIRECTIVE RELATING TO THE COORDINATION OF LAWS ON LIFE ASSURANCE AND LAYING DOWN PROVISIONS INTENDED TO FACILITATE THE EFFECTIVE EXERCISE OF FREEDOM TO PROVIDE SERVICES.