On 19 March, the UK and EU agreed in principle to a 21 month transition period following the UK's exit from the EU in March 2019, giving UK businesses additional time to plan for Brexit. The transition period will last from 29 March 2019 until 31 December 2020, during which time EU laws will generally still apply to the UK. Importantly, this means that freedom of movement for people, goods, capital, and services, including the passporting regime for (re)insurance businesses, will continue during the transition period. Under the terms of the agreement, the UK government will also be able to negotiate and ratify trade deals with third countries in readiness for 1 January 2021 when the transition period is due to end. As yet there is no agreement on Northern Ireland, and disagreement still looms over the trade framework, judicial cooperation, and data protection issues.
(Re)insurance business should not treat the agreement of a transition period as more than a breathing space to complete the preparatory work needed for Brexit. Regulators have emphasised that businesses need to continue to prepare to make authorisation applications and begin portfolio transfer processes as soon as possible.
The European Commission has published the draft agreement on withdrawal from the EU showing the agreed and disputed terms in detail. The transition agreement is set out in Articles 121 to 126. The text of the draft agreement is in different colours to indicate its current status: green text is agreed at negotiators’ level and will only be subject to technical legal revisions in the coming weeks; yellow text is agreed on the policy objective but drafting changes or clarifications are still required, and white text corresponds to text proposed by the Union on which discussions are ongoing as no agreement has yet been found.