Amendments to the Insurance Agencies Regulation

The Regulation Amending the Insurance Agencies Regulation (the “Amendment Regulation”) was published in the Official Gazette on January 22, 2025, and has entered into force on the same date.

The Regulation, which introduces significant provisions for insurance agencies, includes noteworthy updates particularly regarding minimum capital requirements, technical personnel qualifications, and operational obligations. The key highlights of the Amendment Regulation are as follows:

- Significant changes have been introduced to the minimum capital requirements for legal entity insurance agencies. The minimum paid in capital for legal entity insurance agencies has been set at TRY 3,250,000. Agencies that wish to establish branch offices must have at least TRY 4,000,000 capital for their headquarters and an additional TRY 325,000 for each branch. For agencies that aim to operate solely through distance selling without establishing branches, the minimum capital requirement has been set at TRY 4,000,000.

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

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

It has been stipulated that the minimum capital and equity amounts mentioned above will be updated annually based on the annual domestic producer price index increase rate announced by the Turkish Statistical Institute in January, unless otherwise determined by the Insurance and Private Pension Regulation and Supervision Agency (the "Agency").

- It has been regulated that agencies are obliged to accurately communicate to the insurance company the information contained in the insurance contract regarding the parties to the contract and the individuals benefiting from the contract.

- Regarding advertisements and promotions, it has been stipulated that agencies must include their agency title in printed materials, on their websites, and in any other electronic media. Agencies and their branches are prohibited from using trade names, logos, emblems, or other distinctive corporate identity elements that create the impression that they are insurance companies, engage in activities other than insurance agency services, or perform the tasks and transactions of non-agency institutions, as well as from using misleading, deceptive, or unfairly competitive elements. Agencies must inform individuals wishing to enter into contracts about the insurance companies they mediate for and the authorities granted to them by these companies, in accordance with the principles set forth by the Agency. This information must also be published on their websites.

- It has been regulated that technical personnel must participate in renewal training every five years to maintain their professional qualifications, knowledge, and skills. The calculation of the five-year period will be based on the date the qualification certificate was obtained or the last renewal date. Technical personnel who fail to complete the training within the specified period will have their activities suspended until the training is completed.

- Individuals holding the title of private pension intermediary will be required to pass a qualification exam and complete the required professional experience period in order to become technical personnel. Time spent as a private pension intermediary will be considered in calculating the minimum professional experience period. However, those with an associate degree in insurance-related departments and those with bachelor’s degree will 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 and temporarily suspend the insurance agency's intermediary activities in cases of urgency and importance, in order to prevent the rights and interests of individuals covered by the insurance contract from being jeopardized.

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