1. Member States shall allow undertakings referred to in Title II which at the entry into force of the implementing measures to this Directive provide insurance in their territories in one or more of the classes referred to in the Annex, a period of five years from the date of notification of this Directive in order to comply with Articles 18, 19 and 20.
2. Furthermore, Member States may:
(a) allow any undertakings referred to in paragraph 1, which upon the expiry of the five-year period have not fully established the solvency margin, a further period not exceeding two years in which to do so provided that such undertakings have, in accordance with Article 24, submitted for the approval of the supervisory, authority the measures which they propose to take for such purpose;
(b) except for the mutual associations referred to in the second sentence of the second indent of Article 3(2), exempt undertakings referred to in paragraph 1 of this Article, for which upon the expiry of the fi