On August 28, 2015, the Undersecretariat of the Treasury issued
its Regulation on Insurance Support Services,
comprehensively setting out the rules for insurance companies to
outsource ancillary functions. While the Treasury had previously
issued several sector announcements with guidelines for
insurers' outsourcing activities, this is the first time that
the Treasury has compiled the guidelines in a single regulation.
The regulation will come into force on November 28, 2015. Under the
Insurance and private pension companies may outsource ancillary
services that are not central to their insurance business. These
services include: (i) technical examinations and controls for
underwriting and compensation management, (ii) mitigation of risks
and losses, (iii) ancillary services for damage management, (iv)
repair, maintenance and spare parts services, (v) assistance
services, (vi) health consultancy for compensation management,
(vii) medical treatment services, (viii) call center services, (ix)
salvage and recourse services, (x) data retention and management
services, (xi) product and tariff development services, and (xii)
information technology services, provided that an insurance company
maintains ultimate control over its design and management.
Services provided by seconded employees from other firms, legal
and tax consultancy services, and advertisement services do not
fall within the scope of the regulation and can be freely
Insurance and private pension companies are required to file an
annual report with their board and the Insurance Information and
Monitoring Center (Sigorta Bilgi ve Gözetim Merkezi)
containing information on risk management and a cost-benefit
analysis of their outsourced functions.
Insurance and private pension companies are liable for all
damage and losses incurred by policyholders and policy
beneficiaries arising from outsourced services. This liability
cannot be limited or assigned to service providers. Insurance and
private pension companies can request indemnification from service
The Treasury acts as the regulator for service providers and
requires service providers to have sufficient organizational
sophistication, technical and human resources, and experience.
Service providers must also have a clean track record in all
jurisdictions within the last five years.
Service providers must register with the service provider list
maintained by the Insurance Information and Monitoring Center.
Service providers that offer their services in Turkey must be
incorporated as a Turkish company.
The rules apply equally to service providers' outsourcing
Insurance and private pension companies must bring their
outsourcing arrangements into compliance with the regulation by
August 28, 2016.
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guide to the subject matter. Specialist advice should be sought
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