(1) Where the Bank concludes that an insurance undertaking which is conducting business in the State through a branch or on the basis of the freedom to provide services is not complying with the legal provisions applicable to it in the State, it shall require the undertaking to remedy the failure.

(2) Where the undertaking fails to take the necessary action, the Bank shall inform the supervisory authority of the home Member State accordingly.

(3) If the undertaking persists in its failure to comply with the legal provisions applicable to it in the State, despite any measures taken by the home Member State or because those measures prove to be inadequate or are lacking in that State, the Bank may, after informing the supervisory authority of the home Member State, in the exercise of its powers under financial services legislation, take appropriate measures to prevent or penalise further failure, including, in so far as is strictly necessary, preventing the undertaking from concluding new insurance contracts in the State.

(4) Paragraphs (1) to (3) shall not affect the power of the Bank to take appropriate emergency measures to prevent or penalise failures in the State, including preventing the undertaking from concluding new insurance contracts in the State.