it's factory fitted, but is not Cat 2 approved.
Even thought it's the same immobiliser that's fitted to the
Mk3 Ibiza, which is approved, Seat never got round to getting the Mk2 one approved.
I'm in the same position mate, just bought a Mk2 2.0 8v, which the insurance have said I need a Cat1/2 to cover it against theft.
Andy