(1) This Chapter applies to legal expenses insurance in class 17 in Part 1 of Schedule 1 whereby an insurance undertaking (in this Chapter referred to as a "legal expenses insurance undertaking") promises, against the payment of a premium, to bear the costs of legal proceedings and to provide other services directly linked to insurance cover, in particular with a view to the following:

(a) securing compensation for the loss, damage or injury suffered by the insured person, by settlement out of court or through civil or criminal proceedings;

(b) defending or representing the insured person in civil, criminal, administrative or other proceedings or in respect of any claim made against that person.

(2) However, this Chapter does not apply to any of the following:

(a) legal expenses insurance concerning disputes or risks arising out of, or in connection with, the use of sea-going vessels;

(b) the activity pursued by an insurance undertaking providing civil liability cover for the purpose of defending or representing the insured person in any inquiry or proceedings where that activity is at the same time pursued in the own interest of that insurance undertaking under such cover;