Turkiye: Regulator seeks structural solution for motor third-party insurance branch
Source: Middle East Insurance Review | Sep 2022
The insurance regulator has met the top management of 26 insurance companies in a bid to resolve recent problems that have surfaced in compulsory motor third-party liability insurance (dubbed ‘traffic insurance’) in Turkiye.
In a statement, the Insurance and Private Pension Regulation and Supervision Agency (SEDDK) chairman Mehmet Akif Eroglu said the SEDDK has been closely following the developments in the traffic branch. “Every move in traffic insurance, which concerns approximately 25% of the insurance sector’s balance sheet, affects the profitability of the consolidated balance sheet. As the regulatory and supervisory agency, we are in contact with industry players and all stakeholders involved with such an important insurance branch, which is obligatory and closely related to 25m vehicle owners,” he said.
Mr Eroglu added, “We will bring a structural solution with long-term measures. Our goal is to ensure that the traffic insurance branch is sustainable with more predictable and more stable pricing, especially for the insured, insurance companies, and distribution channels.”
On 25 July, SEDDK said in a circular that it had observed that in recent weeks, motor insurers had adopted some practices forcing customers to a certain payment method to settle premium payments during the issuance of a compulsory traffic insurance policy. The regulator said that the move is a violation of good faith, adding that obstructive practices will be considered as “avoiding compulsory insurance”.
The SEDDK warned that it would take all measures in accordance with the Insurance Law if insurers continued with these practices.
The regulator said that mandatory motor third-party liability insurance is a double-sided obligation. Vehicle owners are required to have the coverage, while insurance companies holding motor insurance licences are obliged to issue the insurance policy. M