General Terms and Conditions

Official Gazette Date: May 13, 2011 Friday
Official Gazette Issue Number: 27933

A. SCOPE OF INSURANCE

A.1- Scope of Insurance

Pursuant to Catastrophe Insurance Law numbered 6305, the independent sections covered by the Law numbered 634 on Flat Ownership, buildings constructed on the immovable assets which are registered with real estate registration office and which are subject to private ownership; the independent sections constructed in such buildings which are used as a place of business, office or for similar purposes and the dwellings ordered to be built by the State or constructed by the credits extended by the State due to natural disasters are subject to Compulsory Earthquake Insurance.

The Turkish Catastrophe Insurance Pool (TCIP) covers property (material) damages caused directly by earthquakes and other perils of fire, explosion, tsunami or landslide caused by earthquake for up to the sum insured under the Compulsory Earthquake Insurance Policy with regards to losses caused directly by such perils on insured buildings (including those occurring on foundations, main walls, party walls separating independent divisions, garden walls, retaining walls, ceilings and floors (bases), stairs, lifts, landings, corridors, roofs, chimneys and other supplementary structures of a similar nature).

A.2- Buildings excluded from Coverage

This insurance excludes the following buildings:

2.1- Buildings and independent sections that are subject to Public Housing Law dated 9/11/1983 and numbered 2946 or used as public establishments,
2.2- Buildings constructed on village settlement areas by those who are registered in the village population register and permanent residents of village,
2.3- Buildings used for commercial or industrial purposes,
2.4- Buildings that have not been subjected to engineering services and with no project.
2.5- Buildings that are detected to have been modified or weakened in a way to affect the carrier system adversely,
2.6- Buildings that have been constructed in a way to affect the carrier system adversely by falling against the relevant regulations and the project,

A.3- Exclusions

This insurance excludes the following circumstances:

3.1- Losses in respect of removal of wreck, loss of profit, business interruption, loss of rent, alternative residence and office expenses, legal liabilities and similar consequential losses,
3.2- Any and all movable properties, goods and similar items,
3.3- All bodily injuries including death,
3.4- Claims for moral damages,
3.5- Losses other than earthquake and fire, explosion, tsunami or landslide caused by earthquake,

A.4- Determination of the Sum Insured

The sum insured is determined according to the amount found by multiplying the gross surface area (square meter) or (approximate surface area) of the insured residence by the price per square meter, as specified under "Compulsory Earthquake Insurance Tariff and Instruction" published by the Undersecretariat of the Turkish Treasury in respect of construction types of such residences. The sum insured of a residence insured under Compulsory Earthquake Insurance cannot, under any circumstances, be higher than the maximum amount covered, as specified under "Compulsory Earthquake Insurance Tariff and Instruction".

A.5- Over-insurance

If the sum insured exceeds the reconstruction costs of the insured residence, then the portion exceeding this insurance amount shall be invalid. The Pool shall reduce the sum insured and return the surplus premium of the current year to the assured on a pro-rata basis if the Pool comes to the knowledge of such a situation during the currency of the insurance.

A.6- Deductibles

Each and every loss shall be subject to application of a deductible for 2% of the sum insured. TCIP shall be liable for the portion exceeding deductibles calculated this way. For the application of the deductible, each period of 72 consecutive hours shall be deemed a loss.

A.7- Start and End of the Insurance Period

The period of this insurance contract is one year. Save as otherwise provided, the insurance period starts at 12.00 pm and ends at 12.00 pm (Turkish Local Time) on days specified as dates of start and end in the policy.

B- LOSSES AND DAMAGES

B.1- Assured or Insured's Obligations in Case of Occurrence of Risks

The assured or insured is obliged to fulfill the following requirements upon occurrence of a risk.

1.1- To inform TCIP or the insurance company that concludes the contract in the name and on behalf of the Pool at the latest within fifteen days as soon as it comes to the knowledge of such occurrence of a risk,
1.2- To allow responsible employees of or persons authorized by TCIP to have access to damaged buildings for acceptable purposes and in the appropriate manner and to make interventions to minimize losses and damages,
1.3- To forthwith provide TCIP with information and documents needed to identify amounts of losses and evidences which can be procured by the assured, upon the request of TCIP, and also to exercise rights of subrogation,
1.4- To give written notifications about estimations of losses to TCIP or persons authorized by it within an acceptable and appropriate period of time,
1.5- To inform TCIP about any other insurance contracts with earthquake coverage if any, other than Compulsory Earthquake Insurance related to the insurance building/location.

B.2- Adjustment of Losses

The reason, extent and amount of losses of or damages to buildings insured hereunder are adjusted by TCIP or persons authorized by it under an agreement to be entered into by parties.

In the cases of high-scale losses, TCIP can develop loss assessment applications which are simplified by benefiting from technological facilities so that the loss assessments can be done as soon as possible.

B.3- Calculation of Indemnity

3.1-For the calculation of the insurance indemnity, the similar constructional specifications at the location and time of the loss are considered, irrespective of whether it is a total or partial loss, and the reconstruction costs calculated according to the current market value of the building shall be the basis. However, the insurance indemnity, cannot, in any case, be higher than the sum insured.
3.2- For the calculation of the indemnity, the provision of Article C.2 shall be reserved.
3.3- TCIP is obliged to complete all necessary inspections within the shortest possible time following its receipt of documents related to the loss amount, and adjust and notify amounts of losses and indemnities to the insured.

B.4- Indemnity Payments

After the adjustment of the indemnity amount as per the law and also the provisions of this policy, TCIP has to pay the defined indemnity amount to the beneficiary at the latest within one month following the adjustment thereof, provided that it does not exceed the sum insured.

B.5- Consequences of Losses and Damages

5.1- TCIP shall be legally subrogated to the rights of the insured to the extent of indemnity payments it has made, and any rights of action of the insured against third parties due to such losses shall be transferred to TCIP to the extent of the indemnity it has paid.
5.2- If a total loss arises out of an earthquake event, then the insurance coverage shall cease upon payment of indemnities. In case of a partial loss, the sum insured shall be reduced in proportion to the indemnity paid as from the date of occurrence of such risks.

As for losses affecting the carrier system of the building, the residence must be repaired within the reasonable period of time set forth in the survey report so that the coverage can be valid again. Otherwise, subsequent losses occurring during the validity of the policy cannot be paid.

When the sum insured is exhausted, the sum insured of the damaged building is increased by accruing premiums on a pro-rata basis, starting from the date the sum insured is restored to the value prevailing during the previous day.

C- MISCELLANEAOUS PROVISIONS

C.1- Payment of Insurance Fees, Commencement and End of the Liability of the Turkish Catastrophe Insurance Pool

Insurance premiums are exempt from any and all taxes, duties and fees.

C.2- Assured's Obligations to Declare and Cancellations

TCIP concludes this insurance contract according to the statement of the assured about the actual condition of the risk. The following clauses shall apply if the insured or assured makes misrepresentations about details such as the gross surface area, construction type, address of the residence as well as EQ loss conditions during the arrangement of the contract.

If the insured or assured's statement is incorrect or missing, then TCIP or the insurance company authorized to act as an intermediary may ask the assured to pay the premium difference within 15 days as soon as TCIP or the insurance company authorized to act as an intermediary learns circumstances that TCIP needs to make contracts under heavier conditions.

If it is found out after the earthquake event that such misrepresentations have been made, then the indemnity shall be payable according to the ratio between premiums accrued and premiums accruable.

If it is discovered that the insured or assured intentionally fails to represent moderate losses or more severe losses sustained during previous earthquake events, then TCIP can recede from the contract and be entitled to get premiums even if losses have occurred.

TCIP can terminate the contract if the assured makes changes on the insured residence within the insurance period by falling against the regulations.

If the assured evidences as per Article A.2 that multiple compulsory earthquake insurance policies have been arranged for the same location or Compulsory Earthquake Insurance policy has been erroneously arranged for a location which falls outside of the scope of the insurance policy, then the compulsory earthquake insurance contract shall be cancelled from the beginning and the whole premium shall be returned to the assured.

C.3- Multiple Insurance

No multiple Compulsory Earthquake Insurance can be maintained for the same building/independent section. However, insurance companies can procure facultative earthquake insurance, provided that, if the value of independent sections or buildings covered under a Compulsory Earthquake Insurance policy is above the sum insured specified under such an Compulsory Earthquake Insurance policy, then the portion exceeding such amount is insured under the Compulsory Earthquake Insurance.

C.4- Change in Possession of Right

If the beneficiary changes during the validity of the contract, then the insurance provision continues to survive for the new beneficiary. In this case, the new beneficiary is obliged to maintain an addendum in respect of the transfer of the insurance policy and submit the said addendum to the relevant directorate of land registry for the completion of sales transactions. Otherwise, the assured, and the new beneficiary who learns the existence of such insurance is obliged to inform the insurance company that acts as an intermediary for the contract within 15 days.

C.5- Notices and Notifications

The assured shall make written notices/notifications to the insurance company that acts as an intermediary for the contract on behalf of TCIP. Notices/notifications of TCIP or the insurance company authorized by it shall be made to parties in writing by recorded deliveries or sent (in writing) to the address of the assured as specified in the policy, or to the latest notified address if that address has been changed.

Notifications made by TCIP shall be valid as from the date of service when such notifications are mailed or delivered to the notary public.

C.6- Competent Jurisdiction

Regarding the disputes arising out of the insurance contract, in the event that the event- which gives rise to the dispute- had occurred prior to the date of membership, Insurance Arbitration Commission can be consulted. The verdicts- to the amount determined pursuant to 12th clause of the 30th article of the Insurance Law, numbered 5684- shall be binding on both parties. Detailed information concerning the application to Insurance Arbitration Commission can be obtained from www.sigortatahkim.org Courts authorized to hear lawsuits initiated against TCIP due to disputes arising out of this insurance contract shall be ones commissioned to hear commercial litigations at the place where TCIP resides or where losses occur; and courts authorized to hear legal cases to be initiated by TCIP shall be ones commissioned to hear commercial litigations at the place of the respondent's residence.

C.7- Time Limitation

All claims arising out of the insurance contract shall be barred by the statute of limitations within two years following the expiry of the contract.

C.8- Enforcement

Compulsory Earthquake Insurance General Terms and Conditions- published in the Official Gazette dated 8/9/2000 and numbered 24164- have been abolished.

C.9- Enforcement

These general terms and conditions shall take effect on 16 May 2011.

Official Gazette Date and Issue Enforcement Date Amended Articles
29.12.2012 - 28512 01.01.2013 A1,A2,B2,B5,C1,C2,C6