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”

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
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

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