The insurance and private pension market is regulated by the Directorate General of Insurance and supervised by Insurance Supervisory Board of the Undersecretariat of Treasury.

Although the insurability capacity has not reached the expected level in Turkey, in recent years, there have been important developments in the insurance sector parallel to the economic growth.

In 2007, the assets of the insurance sector have become YTL 23.4 billion, increasing by 25%; meanwhile the production of premium has reached to YTL 10.9 billion, increasing by 13%. The number of the insurance policies has exceeded 38 million, increasing by 14% compared to last year. These progresses suggest that the potential of the insurance sector is hopeful.

Moreover, the new Turkish Insurance Law, prepared in accordance with EU norms, came into effect in June 2007.

Private pension system, which is a voluntary scheme, launched by Law No. 4632 in October 2001. After a two-year preparatory period, pension companies started operating as of 27th October 2003. The number of participants in the private pension funds reached 1.5 million and the amount of contributions surmounted USD 3.3 billion as of 31 December 2007.

• You can download the Basic Indicators of Private Pension System of Turkey. (click here for 2004, 2005, 2006, 2007 and 2008).

• A Brief Report on the Turkish Private Pension System can be reached here.

As a requirement of the law no. 4632, the Undersecretariat of Treasury authorised the "Pension Monitoring Centre" ("Emeklilik Gözetim Merkezi" or in short EGM in Turkish) in order to ensure that the Individual Pension System operates in a safe and efficient manner, and protects rights and interests of participants. As a self-regulated e-governance application, EGM is established to produce accurate information on behalf of Turkish Treasury for daily electronic supervision of the companies operating in the system. The establishment was completed by the shareholders with $ 1.7 million paid-in capitals on July 10, 2003. One of the shareholders of the centre is Prime Ministry Undersecretariat of Treasury with a small share in capital, other shareholders are 11 pension companies which have licenses to operate in the pension branch with equal share in capital.
EGM, which is a core control mechanism, mainly assigned to perform the following tasks;

• Daily electronic supervision and audit of pension company’s activities and e-reporting to the related government institution,
• Consolidation of data based on the daily transactions of the pensions companies,
• Providing information to public and participants,
• Generating statistical and actuarial information,
• Implementing the examination of Individual Pensions Brokers and following up the electronic registries,
• Meeting the demand for common presentation, training activities, software and allied subjects,
• Organizing data which is necessary for on time intervention to probable problems,
• Analytically querying the Individual Pension System.

As of February 22, 2005, EGM (Pension Monitoring Center) has been registered as a governing member of the International Organisation of Pension Supervisors (IOPS), which is an international organisation, aims to serve as the standard-setting body on pension supervisory issues and regulating issues related to pension supervision through the development and promotion of the implementation of international principles, standards, and good practices in pension supervision, having regard to the variety of different private pension systems.

28 insurance companies offer health insurance products as of December 31, 2004. Health insurance products are usually, yearly renewable. Private companies offer in patient and out patient health services in private hospitals. There are travel asistance products, contract lengths are less than one year. They offer health services during the tourists' journey in Turkey.

In Turkey, there are two types of insurance policies for properties. These are the compulsory earthquake insurance and other non-compulsory property insurance.

Compulsory: DASK (The Turkish Catastrophic Insurance Pool-TCIP) has been established by the virtue of Decree Law no:587 in order to write compulsory Earthquake Insurance and to do the other tasks given by the Decree. Compulsory Earthquake Insurance is underwritten by TCIP. The insurance companies are authorised to sign insurance agreement with the name and account of TCIP. In Turkey, Compulsory Earthquake Insurance is mandatory for all houses except for the buildings which belong to public establishments and the buildings constructed on village settlement areas.

Non-compulsory: Other property insurance types can be freely bought from the market and they cover some risks including theft and fire. Foreigners are permitted to conclude property insurance contract in Turkey. There are no legal restrictions for foreigners to buy all insurance types. Additionally, real persons and legal entities are obliged to buy insurance policies from the insurance companies operating in Turkey. The Insurance companies must have a licence to operate in Turkey. Those companies are not treated differently in terms of capital requirement whether they are domestic or foreign. It is possible to establish an insurance company in Turkey with %100 foreign capital.

Motor vehicle owners have to buy a compulsory traffic insurance policy. A person must not use a motor vehicle on a road unless there is in force in relation to the use of the vehicle by that person such a policy of insurance or such a security in respect of third party risks as complies with the requirements of Road Traffic Act.

Insurance Agents: According to the Insurance Supervision Law, agents, who are real persons or legal entities, are allowed to sell insurance policies or to represent insurance companies in some activities.

Insurance Brokers: Insurance brokers, who are real persons or legal entities, operate in line with the Insurance Brokers Regulation issued by the Undersecretariat of Treasury. They are authorised by the Undersecretariat of Treasury. As of 23 May 2008, the number of insurance brokers was 67.

Insurance Experts: Insurance experts are the authorised independent legal or real persons who assess the damages and losses subject to insurance policies. In order to become an insurance expert, people undertake special exams and internship programs.

Premium generation by the insurance market in Turkey