The new regulation details the rules on the insurances that can be provided linked to goods and services offered by businesses whose primary business activity is not insurance brokerage which is becoming to stand out in practice.
As per the new regulation, business processes carried out under the abolished regulation will be required to be compliant with the new Regulation by 1 September 2021.
Accordingly, with the new regulation, insurance intermediaries, banks and institutions incorporated under special laws and authorized to act as insurance agents, and individuals and entities providing a commercial environment for insurances linked to goods and services have been explicitly included to the scope of the regulation.
In addition, insurance companies and pension companies providing insurance coverage have been prohibited to transfer their obligations to bear risk and pay indemnification upon occurrence of risk which constitute the primary obligation of the insurance contract, except for reinsurance contracts.
Novelties With Respect to Distance Insurance Contracts
Products and activities of insurance companies and pension companies that provide insurance coverage cannot be sold through electronic commercial environments that are used for marketing and sale of goods and services, excluding the electronic commerce environments of insurance companies and pension companies providing insurance coverage, insurance intermediaries and banks and institutions established by special laws and authorized to act as insurance agent. The latter prohibition is not applicable to the insurance products that are linked to the sale of goods and services. However, such authorized institutions are allowed to place advertisements and publications in such environments.
The new regulation have abolished the requirement for those concluding a distance insurance contract to use the 3DSecure application in collections made with debit or credit card which was obliged by the former regulation . With the new regulation, it is stipulated that authorized institutions are under the obligation to ensure necessary and sufficient security measures by creating processes in accordance with the Bank Cards and Credit Cards Law dated 23/2/2006 and numbered 5464, Payment and Securities Settlement Systems, Payment Services and Electronic Money dated 20/6/2013 and numbered 6493, and secondary legislation during the collection of premium pertaining to the distance insurance contracts .
Insurances Offered Linked to the Sale of Goods and Services
The most fundamental changes are made under this section. Accordingly, electronic device, machinery breakdown and theft insurance linked to the sale of devices such as computers, tablets, mobile phones and home appliances, electronic device can only be offered under the following conditions:
a) The insurance shall be complementary to the goods or services sold and be purchased together with the above-mentioned devices or related to the same device after the sale.
b) The annual premium of the insurance shall not exceed the amount that will be calculated by increasing TL 3,000 by taking into consideration the annual change of the Consumer Price Index compared to the December of the preceding year
c) The coverage period shall be maximum two years, excluding insurances that provide extended warranty coverage.
Insurance for travel-related risks can be provided on the website or mobile application of the passenger transportation service providers, provided that such insurance is sold is along with the ticket sale or afterwards related to the same ticket after the sale.
The following explanations should be included with the visuals to be placed in places that can be seen by the customer if the insurance is offered in a store, or , through the link accessible to the customer if it is offered in an electronic commerce environment:
a)The insurance company or the pension company providing insurance coverage,
b)The subject and scope of the insurance, and the explanation that in case of occurrence of the risk, the insurance indemnity shall be paid by the insurance company undertaking the risk or the pension company providing insurance coverage as per the insurance legislation.
c)Where to access the additional information on the provided insurance.
The insurance premium can be collected together with the goods sold in order to be transferred to the insurance company. In this case, the amount of the insurance premium shall also be indicated on the payment receipt. In case the premium is paid in cash or with a bill of exchange, a premium collection receipt shall also be given to the insurant through a printed or permanent data storage. Such payment is deemed to have been made to the insurance company.
Within this scope, the authorized institutions are obliged to inform the Insurance and Private Pension Regulation and Supervision Agency (“Authority”) one month prior to the commencement of the above. The Authority may request changes in implementation in cases where it deems necessary, without prejudice to the administrative sanction decision.
Voluntary guarantees, which were not considered as insurance activities under the former regulation, are also excluded from insurance activities under the new regulation. Nevertheless, it is regulated that the voluntary guarantees cannot be promoted, marketed or sold with words and signs that might create the impression of insurance. Likewise, it is clarified that activities such as compensation of the damage arising from the risks within the scope of insurance risk, such as replacement, repair, and refund of the goods and/or any of its parts outside the scope of the warranty certificate, are among the activities that is considered as insurance activity.
It is also pointed out that, if an insurance product is given as a gift to the insured in a service package in insurance contracts concluded in favor of the consumer, the premium amount of the said insurance product cannot be collected directly or indirectly from the consumer under any name.