Amendments To The Insurance Agencies Regulation (2025)

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The Regulation Amending the Insurance Agencies Regulation (the"Amendment Regulation") was published inthe Official Gazette on January 22, 2025, and has entered intoforce on the same date.

The Regulation, which introduces significant provisions forinsurance agencies, includes noteworthy updates particularlyregarding minimum capital requirements, technical personnelqualifications, and operational obligations. The key highlights ofthe Amendment Regulation are as follows:

• Significant changes have been introduced to the minimum capitalrequirements for legal entity insurance agencies. The minimum paidin capital for legal entity insurance agencies has been set at TRY3,250,000. Agencies that wish to establish branch offices must haveat least TRY 4,000,000 capital for their headquarters and anadditional TRY 325,000 for each branch. For agencies that aim tooperate solely through distance selling without establishingbranches, the minimum capital requirement has been set at TRY4,000,000.

It is important to note that these minimum paid in capitalrequirements will not apply to existing agencies as of the date theAmendment Regulation was published.

However, agencies operating with branch offices or conductingdistance sales will be required to have equity equal to at least 4%of the total premiums intermediated by the end of each year. Thisequity amount cannot be less than TRY 4,000,000 in any case, andcalculations related to this requirement will be made at the end ofeach year. If additional capital is needed, the shortfall must becompleted by the end of June of the following year. Furthermore, atleast 50% of the minimum paid in capital must consist of cash,deposits, or easily convertible investment instruments such asgovernment debt securities.

It has been stipulated that the minimum capital and equityamounts mentioned above will be updated annually based on theannual domestic producer price index increase rate announced by theTurkish Statistical Institute in January, unless otherwisedetermined by the Insurance and Private Pension Regulation andSupervision Agency (the "Agency").

• It has been regulated that agencies are obliged to accuratelycommunicate to the insurance company the information contained inthe insurance contract regarding the parties to the contract andthe individuals benefiting from the contract.
• Regarding advertisements and promotions, it has been stipulatedthat agencies must include their agency title in printed materials,on their websites, and in any other electronic media. Agencies andtheir branches are prohibited from using trade names, logos,emblems, or other distinctive corporate identity elements thatcreate the impression that they are insurance companies, engage inactivities other than insurance agency services, or perform thetasks and transactions of non-agency institutions, as well as fromusing misleading, deceptive, or unfairly competitive elements.Agencies must inform individuals wishing to enter into contractsabout the insurance companies they mediate for and the authoritiesgranted to them by these companies, in accordance with theprinciples set forth by the Agency. This information must also bepublished on their websites.
• It has been regulated that technical personnel must participatein renewal training every five years to maintain their professionalqualifications, knowledge, and skills. The calculation of thefive-year period will be based on the date the qualificationcertificate was obtained or the last renewal date. Technicalpersonnel who fail to complete the training within the specifiedperiod will have their activities suspended until the training iscompleted.
• Individuals holding the title of private pension intermediarywill be required to pass a qualification exam and complete therequired professional experience period in order to becometechnical personnel. Time spent as a private pension intermediarywill be considered in calculating the minimum professionalexperience period. However, those with an associate degree ininsurance-related departments and those with bachelor's degreewill not be required to meet the experience requirement.
• Regarding the cancellation of the certificate of conformity,the Agency has been granted the authority to immediately andtemporarily suspend the insurance agency's intermediaryactivities in cases of urgency and importance, in order to preventthe rights and interests of individuals covered by the insurancecontract from being jeopardized.

The Amendment Regulation entered into force on January 22, 2025,and it is crucial for insurance agencies to take the necessaryactions in line with the amendments.

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

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