The Insurance and Private Pension Regulation and Supervision Authority (SDDK) has intervened in recent practices whereby banks and financial institutions have been directing citizens to take out insurance policies with their affiliated companies as part of credit transactions.
The SDDK stated in its regulation that citizens’ right to choose an insurance company cannot be restricted.
İhsan Yiğit, President of the Gaziantep Insurance Agents Association, has criticised banks and financial institutions for imposing ‘compulsory insurance policies’ on citizens.
Yiğit noted that citizens have the right to choose their preferred insurance agent, adding that in cases where pressure is exerted regarding insurance, they may contact CİMER or the Gaziantep Insurance Agents Association.
Yiğit highlighted that citizens face the imposition of insurance by banks or financial companies during the loan application process, stating that this situation leads to a loss of rights.
Yiğit referenced the amendment added to paragraph 5 of Article 32 of Law No. 5684 on Insurance and stated the following:
“The right of individuals to choose an insurance company cannot be restricted. Where, within the terms of a contract, one of the parties is obliged to take out insurance regarding any matter covered by the contract, any condition stipulated in the contract requiring such insurance to be taken out with a specific company is null and void.”
Yiğit also referred to the second paragraph of Article 29 of Law No. 6502 on the Protection of Consumers, sharing the following provision:
“The cover obtained by the consumer from the insurance company of their choice must be accepted by the lender. Credit-linked insurance, intended to provide security for the repayment of the loan, must be consistent with the outstanding loan amount and its maturity in terms of the sum insured.”
Yiğit emphasised that insurance transactions must be carried out by insurers, noting that policies issued by organisations without expertise in the insurance sector could lead to consumer detriment.
As an example, he mentioned that in vehicle insurance arranged by the institution providing the loan, it may be discovered after an accident that the policy is incomplete, and in such cases, difficulties may arise in identifying the responsible party.
