Turkey: Insurance Law In Turkey

Last Updated: 2 March 2009
Article by Guner Law Office

1. Background And Current Legislation

In parallel with the rapid growth in the Turkish insurance sector, there have been major changes to the Turkish insurance legislation in the last few years. The Insurance Supervision Law which regulated insurance activities for 47 years has been replaced with Insurance Law No. 5684 (the Insurance Law) in 3 June 2007. In addition to the Insurance Law, there are specific pieces of legislation regulating the activities of individual professions in insurance industry (e.g. brokers, loss adjusters, etc.) and different types of insurance (e.g. life insurance, reinsurance, etc.).

The principal piece of legislation regulating insurance contracts in Turkey is the Turkish Commercial Code (the TCC). Article 1263 of the TCC defines an insurance contract as follows:

"an insurance contract is a contract, by which one party, the insurer, in exchange for the payment of a premium, assumes:

  1. a risk(s) associated with the interests of another party, the insured, and in the event that damage is caused to the insured's interest by an assumed risk, the insurer will compensate such damage; or
  2. the responsibility for making a payment or taking some other action in the event of one or more persons' death or as a result of some incident taking place in their lives."

Under Turkish law, insurance and reinsurance activities in Turkey can be conducted by (i) Turkish joint stock companies or cooperative companies (mutual insurance companies); and (ii) licensed Turkish branches of foreign insurance and reinsurance companies. In order to operate, these companies must obtain a permit from the General Directorate of Insurance (the Directorate).

Notwithstanding the above, share transfers of insurance/reinsurance companies exceeding certain percentages or effecting the management or audit of such companies are subject to a permit from the Directorate. Also, any merger, asset and liability transfer, and portfolio transfer of insurance/reinsurance companies are subject to a permit from the Minister to which the Directorate is related.

2. Compulsory Insurance

According to Article 13 of the Insurance Law, the Council of Ministers is authorised to introduce new compulsory insurance types; in other words, can make it compulsory for a person to insure certain risks. New compulsory insurance types may also be introduced by new legislation.

Below is a list of several compulsory insurance types:

  • highway motor vehicle third party financial liability insurance (see the Highway Traffic Law dated 13 October 1983, numbered 2918) (Green Card Vehicle Insurance is also valid in Turkey);
  • bus seat personal accident insurance (see the Regulation on Overland Transportation published in the Official Gazette dated 25 February 2004, numbered 25384), which is an industry specific insurance covering passengers and personnel;
  • passenger transportation liability insurance (Overland Transportation Law dated 10 July 2003, numbered 4925);
  • dangerous materials liability insurance (see the Council of Ministers decision dated 14 September 1991, numbered 91/2253 and), which includes all aspects of handling dangerous materials including their sale, storage, transport, etc;
  • bottled gas liability insurance (see the Council of Ministers decision dated 14 September 1991, numbered 91/2253), which covers all aspects of the bottled gas industry including manufacturers and retailers but not individual purchasers;
  • earthquake insurance (see the Decree in the Force of Law regarding Earthquake Insurance dated 25 November 1999, numbered 587);
  • insurance for goods that are subject to Finance Leasing (see the Finance Leasing Law dated 10 June 1985, numbered 3226);
  • insurance for possible losses arising from transportation agreements and third party liabilities (see the Civil Aviation Law dated 14 October 1983, numbered 2920);
  • professional liability insurance for insurance and reinsurance brokers (see the Regulation on Insurance and Reinsurance Brokers published in the official Gazette dated 21 June 2008, numbered 26913);
  • P&I Policy for ships carrying dangerous cargo passing through the Turkish Straits (see Article 12 of the Turkish Straits Directive);
  • workers' compensation insurance is compulsory for all employees but can only be provided by the State. Notwithstanding, an employer may additionally seek private insurance coverage from insurance companies.

3. Foreign Participation In Insurance

Article 15 of the Insurance Law provides that a real person or legal entity located in Turkey must insure its local risks in Turkey by a Turkish insurance company/cooperative or a Turkish branch of a foreign insurance company.

Article 15 lists several exceptions to the above principle stating that the types of insurance specified below can be provided by foreign insurers:

  1. transportation insurance for goods that are being exported or imported;
  2. hull insurance for aircraft (planes/helicopters) and vessels (that are bought using foreign credit, until all accrued credit payments are paid; or in the event that they are acquired from abroad by way of financial leasing, until the lease financing is terminated. Such insurance shall be limited to the amount of financing acquired from abroad);
  3. liability insurance for operation of vessels;
  4. life insurance; and
  5. personal accident, disease, health and motor vehicle insurance taken out by Turkish residents when they are abroad.

Moreover, according to Article 15 of the Insurance Law, the Council of Ministers may introduce new types of insurance that foreign insurers can provide. The Council of Ministers resolved in its decision dated 24.12.2007, numbered 2007/13028 that the liability insurances determined by the Directorate may also be effected by foreign insurers. Accordingly, the Directorate stated in the Sector Announcement dated 11.01.2008, numbered 2008/4 that the liability insurance relating to clinical pharmaceuticals researches introduced by the Ministry of Health as compulsory insurance may also be provided by foreign insurers.

According to the Council of Ministers decision on international activities in the insurance sector (dated 6 July 2007, numbered 2007/12467), foreign loss adjusters may operate in Turkey on the basis of reciprocity between the relevant country and Turkey, excluding persons foreign reinsurance companies will assign to operate in Turkey in relation to reinsurance agreements. In addition, provisions related to Turkish loss adjusters will also be applicable to the foreign loss adjusters operating in Turkey.

The same decision states that (i) a foreign real person insurance agency may operate in Turkey provided that he/she is a resident in Turkey; and (ii) a foreign insurance agency which is a legal entity may operate in Turkey provided that it has established a branch in Turkey. These foreign insurance agencies operating in Turkey may only act on behalf and on account of the insurance companies operating in Turkey and cannot act as intermediaries for insurance companies established abroad. Foreign insurance agencies operating in Turkey are subject to the same provisions as the insurance agencies established in Turkey.

4. The Parties Involved In An Insurance Transaction

In Turkey, insurance intermediaries (e.g. insurance brokers, insurance agencies, loss adjusters, etc.) can operate in compliance with the relevant legislation.

An insurance broker is a person (i) conducting preparatory work before an insurance or reinsurance agreement is effected; (ii) assisting in the execution of such agreements; and (iii) assisting in the collection of a claim. An insurance broker acts on behalf of the ones who wish to enter into an insurance or reinsurance agreement and takes into consideration the rights and interests of the insured. Therefore, an insurance broker should act impartially and independently while choosing the insurance company with which an agreement will be entered. Accordingly, an insurance broker should not enter into an agreement with insurance or reinsurance companies. The Insurance Law and the Regulation on Insurance and Reinsurance Brokers dated 26 January 2008, numbered 26913 prescribe a number of conditions to be fulfilled by a real person/legal entity to act as an insurance broker in Turkey.

Insurance agencies have a very similar role to that of brokers, but act on behalf of and in favour of specific insurance companies according to the terms of an agreement between the agency and the insurance company. The agency will act either as an agent for the insurance company on the insurance companies account or on behalf of an insurance company entering into agreements binding the insurance company.

Loss adjusters determine the reasons and amount of a loss/damage arising from an insured risk. A loss adjuster impartially and independently conducts agreed value assessments and preliminary expert analysis and verifies the amount of any damage. According to the Insurance Law, a loss adjuster should always act impartially and not be related/connected to an insurer or reinsurer (or any relevant party) in any way.

Foreign insurers must work with loss adjusters registered with the Loss Adjusters Registry in Turkey.

Guner Law Office was established in 1996 and has since grown into one of the major corporate, M&A, banking, litigation, energy and TMT practices in Turkey. Guner Law Office is headed by Ece Guner and works with international law firm Denton Wilde Sapte.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions