New regulation on information in insurance contracts

The New Regulation on Information in Insurance Contracts (the « New Regulation« ) was published by the Turkish Ministry of Treasury and Finance (the « Ministry« ) in the Turkish Official Gazette no. 31039 dated 14 February 2020. The New Regulation entered into force on its publication date, repealing its previous version dated 28 October 2007.

Similarly to the previous text, the New Regulation sets forth information obligations applicable to insurers before, during and after the execution of insurance contracts. The burden of proof for fulfilment of this obligation remains on the insurer.

Generally speaking, the New Regulation aims at simplifying the structure of the previous regulation but does not significantly revise the existing requirements applicable to customer information. Main principles under the New Regulation can be summarised as follows:

GENERAL RULES ON INFORMATION OBLIGATION

In principle, the information obligation of insurers must be performed in writing.

In case the parties cannot be physically present or where the nature of transaction so requires, the information obligation can be met via « permanent data storage » means such as text message, electronic mail, Internet, disk, CD, DVD, any structure to be established through the Insurance Information and Monitoring Centre or E-Devlet (Turkey’s e-Government Gateway) or any similar device or medium that enables the recording, the review for a reasonable period of time, the duplication and the unmodified access to information.

This definition of « permanent data storage means » was recently introduced with the New Regulation for the purpose of clarifying the main media that can be used for remote transactions.

The information obligation can also be fulfilled by the insurer through call centre or telephone, provided that the relevant phone call is recorded on a magnetic or digital medium.

Insurance agencies are obliged to comply with such information obligation unless previously performed by the insurer via registered data storage means.

INFORMATION OBLIGATION BEFORE AND DURING THE EXECUTION OF THE CONTRACT

An information document must be provided to customers prior to the conclusion of any policy. It must contain the following minimum items:

• Tradename and contact information of insurer and insurance agency;
• General warnings as to the contract to be concluded;
• Insurance coverage provided by the contract;
• Exemptions for insurance coverage and risks which may be covered under the contract;
• General information for indemnity and rules on indemnity payment;
• Information on complaint, information request and arbitration membership;
• Other information and documents as may be requested by the Ministry.

Where the information obligation is fulfilled in writing, the information document should be issued in at least two copies: one duly signed and stamped copy must be delivered to the policyholder against his/her signature, and one copy must be kept by the insurer. If the information obligation is fulfilled via permanent data storage means, the insurer must properly save such information document.

INFORMATION OBLIGATION AFTER THE EXECUTION OF THE CONTRACT

The following events must be notified by the insurer to the insured and to beneficiaries at the latest within ten working days of their occurrence:

• Legislation amendments relating to the subject matter of the contract;
• Bankruptcy or liquidation of the insurer, licence cancellations for relevant insurance branches and termination of authorisation for contract execution in all branches;
• Any kind of modification and event which may directly affect rights, liabilities and obligations of the insured and beneficiaries during the validity period of the insurance contract.

The above-mentioned information obligation can also be fulfilled through public media where deemed appropriate by the Ministry.

The New Regulation further provides that insurers are obliged to respond to all kinds of information requests, including complaints and payments, submitted by the insured and beneficiaries in writing or via electronic means within fifteen working days following receipt.

A complaint unit to be composed of at least two people must be established by the insurer in order to review and settle the above complaints and information requests. This unit must also report all records and statistics on complaints to the Ministry on a quarterly basis.

* * *

In compliance with Turkish bar regulations, opinions relating to Turkish law matters that are included in this client alert have been issued by Özdirekcan Dündar Şenocak Avukatlık Ortaklığı, a Turkish law firm acting as correspondent firm of Gide Loyrette Nouel in Turkey.