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In the letter numbered E-36712415-155.09.01-2431032 and dated January 9, 2025, issued by Republic of Turkey Ministry of Transport and Infrastructure, Directorate General of Maritime Affairs, it was announced to the public that, pursuant to the "Directive on Respected P&I Clubs and Insurance Companies in Administrative Transactions under the Flag Member State Practices", measures should be taken to ensure that members and the sector are informed about insurance companies that are not among the Respected P&I Institutions announced under the directive, to prevent any grievances regarding registrations in the Port Single Window (LTP) and Port Management Information System (LYBS).
Under the relevant regulation, significant notifications concerning the Insurance Policy Requirement, the application process, and the submission deadline are highlighted.
Pursuant to the letter issued by the Directorate General of Maritime Affairs on January 9, 2025, it is emphasized that it is mandatory for vessels flying under the Turkish flag and all vessels of 300 GT and above entering or departuring ports within Turkey's maritime jurisdiction to have P&I (Protection and Indemnity) insurance. It is reiterated that this insurance provides coverage for damages to the environment, third parties, or cargo that may occur during vessel operations.
In accordance with this regulation, the relevant insurance policy must be issued by a respected insurance company and recorded through the Port Single Window (LTP) and Port Management Information System (LYBS). However, recent reports have surfaced regarding allegations that the insurance policies of certain vessels were either invalid or cancelled following incidents. This situation creates a risk that prevents vessels from obtaining compensation for damages incurred.
A) APPLICATION CONDITIONS TO THE ADMINISTRATION
According to the "Directive on Respected P&I Clubs and Insurance Companies in Administrative Transactions under Flag State Practices", the Directorate General of Maritime Affairs has stated that there is a need for additional regulation concerning insurance companies not included in the list of Respected P&I Institutions published on the Directorate's official website.
In this regard, for an insurer not listed among the Respected institutions to be registered as an insurance provider in Turkey's Port Management Information System (LYBS);
The Insurer must;
- Have a designated/contracted correspondent firm based in Turkey, which is authorized to carry out assessment, supervision, surveying, and claim settlement processes for an incident covered under P&I insurance in accordance with the rules of the relevant club or insurer. The correspondent firm must demonstrate its authority for the specific case through documentation obtained from the club or insurer it represents or by being listed on the club's or insurer's official website. Additionally, this correspondent for at least one member of the International Group of P&I Clubs,
- Submit to the Administration a letter of intent containing the applicant company's full name, address, contact details, and a sample P&I policy,
- Provide the details of an authorized company representative to act as the point of contact for information exchange with the Administration,
- Submit either the original or a notarized copy of a wet-signed document issued within the last year, demonstrating that the applicant holds a credit rating of BBB- or above (or an equivalent rating) from an international credit rating agency, or ensure that this rating can be verified on the credit agency's official website,
- Ensure that their website allows for the online verification of the validity of vessel P&I policies,
- Present confirmation, signed within the last year by a reinsurer or reinsurers with a credit rating above A- or above, that their reinsurance agreements cover the liability limits prescribed by international conventions to which Turkey is a party and that the total coverage amount is not less than USD 100,000,000,
- Submit financial reports related to P&I insurance and verified information on claim payments for the past three years.
The aforementioned document states that the required information and documents listed above may be submitted to the Administration by the correspondent firm specified in clause (a) or the authorized company representative, after which the Administration will conduct the necessary evaluation.
B) PROCESS AFTER THE APPLICATION
Following the application to be submitted by insurance companies, if the Administration determines that the above-mentioned conditions have been met, the insurance companies will be registered in the Maritime General Directorate's LYBS system, and these insurers will be announced on the Directorate's official website under the title "List of Insurance Providers Registered in Our Ministry's LTP and LYBS." Additionally, the Maritime General Directorate has decided that Respected P&I Institutions, as announced under the "Directive on Respected P&I Clubs and Insurance Companies in Administrative Transactions under Flag State Practices" will be included in this list without requiring an additional application.
The notification also states that the Administration may inspect whether the conditions for the inclusion of insurers registered in the LTP and LYBS systems are being maintained. For such inspections, the insurer's correspondent firm is obligated to provide the requested information and documents to the Administration. The notification strongly emphasizes that if the required information and documents are not submitted by the correspondent firm or if it is determined during inspections that the necessary conditions are no longer met, the insurer will be removed from the relevant list.
C) APPLICATION DEADLINE: FEBRUARY 20, 2025
Insurance companies not included in the Respected List but wishing to be listed as registered insurance providers in the LYBS system must submit their applications in accordance with the conditions outlined in Section a) by February 20, 2025, and be added to the LYBS system. The Administration has stated that insurance companies that fail to apply within this period or whose applications are rejected will have their existing registrations in the LYBS system deleted. Moreover, insurance policies issued by such companies will no longer be accepted after February 20, 2025, and vessels insured by the companies will not be permitted to enter Turkish ports.
In conclusion, vessels holding insurance policies issued by these companies will not be allowed entry to ports. To avoid any grievances, stakeholders are strongly advised to take necessary precautions regarding the validity of insurance policies and ensure timely submission of applications.
We kindly present this information to your attention and request that the necessary applications be made.
You can access the relevant regulation via the link below:
https://www.vda.org.tr/upload/duyuru/LTP%20ve%20LYBS'de%20Kay%C4%B1tl%C4%B1%20Sigorta.pdf
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.
