(1) Paragraph (3) of Regulation 10 shall not apply to a parent undertaking (in this Regulation referred to as "the exempted parent undertaking") which is itself a wholly-owned subsidiary of another undertaking established in an EEA State (in this Regulation referred to as "the parent undertaking") if the requirements set out in paragraph (3) of this Regulation are complied with; provided that the fact that the advantage of this Regulation is being availed of shall be disclosed in a note to the accounts of the insurance parent undertaking annexed to its annual return under the Principal Act.
(2) In this Regulation, an undertaking shall be deemed to be a wholly-owned subsidiary of another if -
(a) that other parent undertaking holds all the shares in the exempted parent undertaking, or
(b) that other holds 90 per cent. or more of the shares in the undertaking and the remaining shareholders in or members of the undertaking have approved the exemption.
(3) The requirements referred to