Turkey: Objections to draft motor insurance payout formula raised
Source: Middle East Insurance Review | Oct 2021
A draft formula proposed by the Insurance and Private Pension Regulation and Supervision Agency (SEDDK) to be used for calculating motor compensation amounts payable to vehicle owners who are not at fault in traffic accidents could result in insurance payouts that are approximately one-third of current levels.
Evaluating the draft formula, Insurance Adjusters’ Employers’ Union (SEIS) president Mesut Cemil Boyner said the formula had been adjusted to consider the interests of insurers rather than for public benefit, according to a report by Finans Gundem.
He said, “The value of a vehicle before an accident, for example, is TRY100,000 ($11,838), but after the accident, the value falls to TRY90,000. Insurers pay TRY10,000 to compensate for the damage. Under the new formula, insurers will pay TRY3,000 instead.”
Officials of the Insurance Association of Turkey (TSB) said that public consultation on the draft compensation formula is still in progress. “There is no cause for concern. The regulation will be finalised after considering the opinions of all parties. We also do not want existing gains to be taken back,” a senior TSB official said. “Compensation payments will vary according to the brand and model of the vehicle.”
The SEDDK moved to have the Highway Traffic Law amended by lawmakers earlier this year to ensure that compensation for compulsory motor third-party liability insurance would become more predictable and fairer.
In June, after the amendments were passed, the SEDDK said that details of actuarial and technical methods to be used in the calculation of compensation would be released as soon as possible. M