Insurance Law in Turkey has been a complex legal area over the years. Fundamental principles and benchmarks should be observed, understood and absorbed.
Overview: What is insurance under insurance law in Turkey
Insurance refers to a type of agreement between an insurance company as insurer and an individual as insured. Insurance law in Turkey operates within a well-established legal framework aimed at regulating the industry, protecting rights of individuals, and fostering a stable insurance market. Under an insurance agreement, legal protection is offered to cover a wide variety of costs. The coverage completely depends on the type of insurance. Insurance is a contractual arrangement between an insurer and an insured, where the insurer undertakes to provide financial or legal protection against specified risks in exchange for a premium paid by the insured. Coverage varies depending on the type of insurance policy.
For example:
Legal Protection Insurance: Covers legal expenses, including attorney fees and court costs, for first-instance or appeal proceedings.
Health Insurance: Provides partial or full coverage for medical expenses, based on the terms of the policy. Insurance serves as a risk management tool, compensating individuals or entities for losses or damages caused by unforeseen events.
What law is in Turkey for insurance?
The Law on Insurance Numbered 5684 is the core legislation applicable to Turkey. Governed primarily by Law on Insurance No. 5684, this legislation outlines the principles, operations, and supervision of insurance and reinsurance activities in the country. The objective of this Law is to regulate principles and procedures relating to the commencement of operations, management, organization, operation principles and procedures, termination and supervision of activities of the parties which are subject to his Law, to regulate procedures and principles related to the insurance arbitration system for the settlement of disputes arising from insurance contracts in order to provide the development of the national insurance sector, to protect the rights and interests of people involved in an insurance contract, and ensure that the national insurance sector operates effectively in a secure and stable atmosphere.
What is the insurance requirement for Turkey?
Compulsory Insurance in Turkey
While most insurance policies are voluntary, certain types are mandatory under Article 13 of the Law on Insurance Numbered 5684. Insurance can be made based on a free will but for some areas of concern, the Turkish President is authorized to impose compulsory insurance under Article 13 of the The term insurance may be regarded as a compensation when it is used for anybody because he|she is hurt or damaged. Compulsory insurance policies aim to mitigate risks in critical areas and ensure broader social and financial protection.The President of Turkey is authorized to designate specific risks as requiring compulsory insurance. Examples include:
- Traffic Insurance: Covers liabilities and damages resulting from road accidents.
- Earthquake Insurance (DASK): Mandatory for residential properties to cover earthquake-related damages.
- Healthcare Insurance: Required for foreign nationals seeking residence permits or Turkish citizenship.
Is healthcare insurance compulsory in Turkey?
It is mandatory to live in Turkey based on a healthcare insurance contract. That is a part of all applications to the Migration Managements in Turkey to provide a residence permit and|or citizenship. For more information take a look at our practice area:
Insurance norms are also applicable when it comes to the Medical Liability System in Turkey , Medial Malpractice Cases in Turkey, the Strict Liability Regime for Traffic Accidents
What is an insurance company: Structure and Regulation of Insurance Companies
Under Article 3 of Law No. 5684, insurance and reinsurance companies operating in Turkey must adopt one of the following organizational structures:
-Joint Stock Companies, or
-Cooperatives.
Pursuant to Article 3 of the Law concerned, insurance companies and reinsurance companies which are going to operate in Turkey have to be established as a joint stock or a cooperative. Insurance companies, reinsurance companies, Association of the Insurance, Reinsurance and Pension Companies of Turkey, intermediaries, actuaries and loss adjusters operating in Turkey are subject to the provisions of this Law.
Conclusion
Turkey’s insurance law framework, anchored in Law No. 5684, establishes a balanced system that promotes sector growth, protects consumers, and regulates market participants. By addressing key risks through both voluntary and compulsory insurance mechanisms, the law supports a secure and resilient insurance industry, benefitting individuals, businesses, and the economy as a whole.
