(1) This article applies in relation to an arrangement falling within article 72(1) if -

(a) the performance by E of the function to which the arrangement relates was approved by a recognised self-regulating organisation subject to conditions and that approval was effective immediately before commencement; or

(b) the Authority had served a notice under paragraph 3(2) or (3) of Schedule 2D to the Insurance Companies Act or under paragraph 5(2) of Schedule 13A to the Friendly Societies Act specifying conditions with which E or A must comply and those conditions were effective immediately before commencement.

(2) An arrangement falling within paragraph (1)(a) is not to be taken to be excluded from article 72 by paragraph (2)(b) of that article, even if there has been a breach of the conditions mentioned in paragraph (1) of this article.

(3) But where this article applies, any approval which has effect by virtue of article 72(1) is not to be taken to extend to approval of anything that, had it been done before commencement, would have breached any of the conditions mentioned in paragraph (1) of this article.