1. Member States may allow undertakings which, on the date of notification of this Directive, provide only assistance in their territories, a period of five years from that date in order to comply with the requirements set out in Articles 16 and 17 of the First Directive.
2. Member States may allow any undertakings referred to in paragraph 1 which, upon 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 20 of the First Directive, submitted for the approval of the supervisory authority the measures which they propose to take for that purpose.
3. Any undertaking referred to in paragraph 1 which wishes to extend its business within the meaning of Article 8(2) or Article 10 of the First Directive may do so only on condition that it complies forthwith with that Directive.
4. Any undertaking referred to in paragraph 1 which has a form d