(1) Subject to subarticle (2) of this Article, Articles 16 and 17 of these Regulations shall apply to an undertaking to which this Article applies.
(2) In calculating a solvency margin for the purposes of this Article, account shall be taken only of the premiums or contributions and claims pertaining to the business effected by the undertaking in the State.
(3) The assets representing the solvency margin shall be retained in the State up to the amount of the guarantee fund required by Article 29 of these Regulations and any excess shall be retained either in the State or in another member State.
(4) This Article, insofar as it applies to an undertaking which at the date of the making of these Regulations is carrying on business in the State in one or more of the classes of insurance specified in the Annex, shall come into operation on the 1st day of August, 1978, provided it does not extend its business within the meaning of Article 10 (2) of the Directive.