b'Insurance RegulatoryUK/BrexitBrexit On December 24, 2020, the UK and the EU agreed on the terms of the UK-EU Trade and Co-operation Agreement (TCA). At 11:00 p.m. on December 31, 2020, EU law ceased to apply to the UK, following the end of the Brexit transition period and the UK is now considered to be a third country by the EU (that is, a country outside of the European Economic Area).Insurance firms have been warned by regulators that they must be ready for the changes this will bring. For example, on October 21, 2020, the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) issued a joint Dear CEO letter to insurance firms, reminding them that it is imperative that they continue to build on their preparatory work to ensure that they, and to the extent possible their clients, are ready for a range of scenarios at the end of the Brexit transition period. The TCA contains surprisingly little dealing with insurance, and has been described as the equivalent, in many ways, to a no deal Brexit for financial services. The consequences of this are broadly that many insurance firms that used to operate in the EU on the basis of the EU passporting regime must now use EU entities to carry out their EU business. In the other direction, there is a temporary regime which allows some EU firms to continue to operate in the UK on the basis of their old passports, although this is due to expire after three years and some passported EU firms may choose to cease operating in the UK in the meantime.The future remains somewhat uncertain. Cross-border trade in financial services may become easier than at the moment, for example, if the UK and the EU can come to an agreement in the future about formally recognizing the equivalency of their respective regulatory regimes. Or it may become more difficult, for example, if regulatory authorities begin to take a more restrictive approach to cross-border activities or if the UK or EU governments adopt more protectionist policies. COVID-19OPERATIONAL RESILIENCE The FCA and the PRA have made it clear that regulated financial services firms, including insurers, must pay careful attention to the operational requirements and challenges created by COVID-19 and must be operationally resilient. Firms were invited by the regulators to review their current arrangements to address the evolving situation while managing the risks to their employees, customers and the impact on the market. In particular, the regulators made it clear that firms are expected to:MAYER BROWN 81'