The Insurance and Private Pension Regulation and Supervision Authority (SEDDK) has published in the Official Gazette some revisions to its ‘Regulation on Tariff Implementation Principles for Motor Vehicle Compulsory Financial Liability Insurance’.
The amended regulations took effect on 15 April 2023.
Vehicle owners are graded by category that ranges from 0 to 8 as is set out in the ‘No-claim Premium Discount and Increase Table’ in the Regulation, in which the premium increase rate at Grade 0 is set at 200%, and the no-claim premium discount rate at Grade 8 is 50%.
Grade 4 in the table applies to those who will be on the road for the first time, with a 10% premium increase stipulated for this category.
Every year that passes without any claim paid to the policyholder moves the latter up the table to Grade 7 to enjoy bigger discounts. The inverse applies to claims made.
The regulation stated that the Grade 8 discount rate will be applied at the next renewal of the motor insurance policy if no claims are paid while the policyholder is graded 7 for at least five years.
For policyholders who are in Grade 1, if three or more claims are paid during the insurance period, the policyholders will be pushed down to Grade 0 when they next renew their motor insurance policy.
In addition, under the new rules, SEDDK introduces a discount of up to 20% on insurance premiums, in addition to the rates stipulated in the regulation, if motor parts with certified equivalence to the original or reusable parts are preferred in repairs.
A maximum discount of 10% will be allowed on premium rates for electric vehicles.
With effect from 1 May, the maximum premiums to be applied in May will be calculated by adding 5% to premiums prevailing in April 2023 according to vehicle group and usage type. Premium rates are adjusted monthly because of hyperinflation in Turkey.
SEDDK chairman Mehmet Akif Eroglu outlined in November 2022 the regulator’s plan to make these changes to the tariff system for compulsory motor insurance. The goal is to address structural problems in compulsory motor insurance to ensure the sustainability of the branch. M