Where subsidiaries are set up in accordance with Article 13(5), half the minimum of the guarantee fund may take the form of an irrevocable financial guarantee from the parent company, subject to the following requirements:
(a) at least 95 % of the subsidiary's share capital must be held by the parent company;
(b) unpaid-up share capital may not be used to constitute that half of the minimum of the guarantee fund which is not covered by the irrevocable financial guarantee; and
(c) the financial requirements of both the first coordination Directive (non-life insurance) and this Directive must be met by the parent company, the funds corresponding to the amount of the guarantee not being considered as part of its free assets.
Subsidiaries may benefit from this arrangement for a period of seven years as from the date when it is granted. During this period, and from the third year onwards at the latest, subsidiaries must progressively replace the parent company's guarantee by free asset