Introduction

Insurance disputes may involve much more than a disagreement over the amount of compensation. The parties may dispute whether the insured event occurred, whether the loss falls within the policy period, whether an exclusion applies, whether the insured complied with disclosure and notification obligations, or whether the insurer may pursue a third party after paying the claim.

Reinsurance disputes can be even more complex. They may involve questions concerning aggregation of losses, claims cooperation, allocation between underwriting years, policy limits, retention, settlement authority, retrocession and the relationship between the underlying insurance policy and the reinsurance contract.

Türkiye provides several dispute resolution mechanisms for insurance-related claims. Depending on the parties and the nature of the dispute, proceedings may take place before:

• The Turkish Insurance Arbitration Commission;
• Turkish commercial or consumer courts;
• An arbitral tribunal constituted under the Turkish Code of Civil Procedure;
• An international tribunal governed by the Turkish International Arbitration Law;
• An institutional tribunal under rules such as the Istanbul Arbitration Centre Rules.

These mechanisms should not be confused with one another. The statutory insurance arbitration system is primarily designed for claims between policyholders, insured persons, beneficiaries or other persons deriving rights from an insurance contract and the insurer that assumed the relevant risk. By contrast, disputes between insurers and reinsurers are generally commercial disputes governed by their reinsurance contracts and any arbitration clauses contained in those contracts.

This guide explains insurance and reinsurance arbitration in Turkey, including coverage disputes, indemnity calculations, liability insurance claims, subrogation, expert evidence, statutory insurance arbitration, commercial arbitration and enforcement of arbitral awards.

Insurance Arbitration and Reinsurance Arbitration Are Different

The expression “insurance arbitration” may refer to several legally different procedures.

Statutory insurance arbitration

The Turkish Insurance Arbitration Commission was established under Article 30 of Insurance Law No. 5684. Its purpose is to resolve disputes arising from insurance contracts between insured parties or persons benefiting from insurance and the party assuming the risk, as well as qualifying claims against the Assurance Account.

This mechanism is particularly important in disputes involving:

• Motor vehicle insurance;
• Compulsory traffic insurance;
• Property damage;
• Bodily injury compensation;
• Health insurance;
• Life insurance;
• Workplace insurance;
• Liability insurance;
• Other individual or commercial policies issued by participating insurers.

Contractual commercial arbitration

Sophisticated businesses may include an arbitration clause in a commercial insurance policy, insurance programme, broker agreement or claims-handling agreement.

Such disputes are resolved through ordinary commercial arbitration rather than the special Insurance Arbitration Commission procedure.

The arbitration may be:

• Domestic arbitration seated in Türkiye;
• International arbitration seated in Türkiye;
• Foreign-seated arbitration;
• Institutional arbitration;
• Ad hoc arbitration.

Reinsurance arbitration

Reinsurance disputes arise between insurers, reinsurers, retrocessionaires and sometimes insurance intermediaries. Reinsurance contracts commonly involve professional parties and cross-border risk allocation.

Article 1403 of the Turkish Commercial Code recognises that an insurer may reinsure the interest it has insured on terms of its choosing. Reinsurance does not remove the original insurer’s obligations to the policyholder and does not give the policyholder an automatic direct claim against the reinsurer.

Because the Insurance Arbitration Commission’s statutory jurisdiction concerns insurance-contract claims between protected persons and the party assuming the insured risk, ordinary insurer-versus-reinsurer disputes are generally addressed through the reinsurance contract’s dispute resolution clause rather than the Commission.

Legal Framework for Insurance Arbitration in Türkiye

Insurance and reinsurance disputes may involve several bodies of law.

The principal legal sources include:

• Turkish Commercial Code No. 6102;
• Insurance Law No. 5684;
• The Regulation on Arbitration in Insurance;
• Turkish Code of Obligations No. 6098;
• Turkish Code of Civil Procedure No. 6100;
• Turkish International Arbitration Law No. 4686;
• Consumer Protection Law No. 6502;
• Sector-specific compulsory insurance legislation;
• General and special policy conditions;
• Institutional arbitration rules.

The Sixth Book of the Turkish Commercial Code regulates insurance contracts. It addresses matters including coverage, disclosure, policy documentation, premium payment, notification of the insured event, indemnity, liability insurance, direct actions and subrogation.

Domestic arbitration seated in Türkiye is generally governed by Articles 407 to 444 of the Turkish Code of Civil Procedure where the dispute does not contain the foreign element defined by the International Arbitration Law. International arbitration seated in Türkiye is principally governed by Law No. 4686 where the statutory foreign element exists.

The Turkish Insurance Arbitration Commission

The Insurance Arbitration Commission provides a specialised dispute resolution procedure for qualifying insurance disputes.

Applications are initially reviewed by Commission rapporteurs. Matters that cannot be resolved at the preliminary stage are referred to independent insurance arbitrators selected through the Commission’s system.

This system should be distinguished from voluntary arbitration under the Code of Civil Procedure. The Commission procedure is a special statutory mechanism established specifically for insurance-contract disputes.

Who Can Apply to the Insurance Arbitration Commission?

Applications may generally be made by:

• The policyholder;
• The insured;
• A beneficiary;
• A natural or legal person deriving a protected interest from the insurance contract;
• A person asserting a qualifying claim against the Assurance Account.

The dispute must arise from the relevant insurance contract or statutory insurance relationship. The Commission does not function as a regulator and does not impose administrative penalties on insurers. Its role is to determine the private claim between the applicant and the insurance undertaking or Assurance Account.

In compulsory insurance claims, the availability of the Commission procedure may not always depend on the insurer’s voluntary membership in the same way as ordinary insurance branches. The Commission states that disputes arising after 18 April 2013 under compulsory insurance may be brought before it irrespective of the insurer’s membership status.

Prior Application to the Insurance Company

A claimant cannot ordinarily apply directly to the Commission without first presenting the claim to the relevant insurance organisation.

The applicant must demonstrate that:

• A written claim was submitted to the insurer;
• The claim was rejected wholly or partly; or
• The insurer failed to provide the required final response within the applicable period.

The Commission currently states that the insurer’s failure to respond within 15 business days is generally sufficient for an application. For compulsory traffic insurance, the relevant waiting period is expressed as 15 days.

The initial insurance claim should therefore be prepared carefully. It should identify:

• The policy;
• The insured event;
• The date and place of loss;
• The legal basis of liability;
• The amount requested;
• Supporting invoices and records;
• Medical or technical reports;
• Bank details;
• The requested interest commencement date.

An incomplete initial claim may create later disputes about whether the insurer received the information necessary to investigate and determine the claim.

Disputes That Cannot Be Re-Submitted to the Commission

The same dispute cannot ordinarily be pursued simultaneously through several competing dispute resolution mechanisms.

The Commission states that an application cannot be considered if the dispute has already been brought before:

• A court;
• Arbitration under the Turkish Code of Civil Procedure;
• A consumer arbitration committee.

This rule is intended to prevent duplicate proceedings and conflicting decisions.

Before selecting the Commission procedure, the claimant should therefore determine whether any prior lawsuit, arbitration application or consumer proceeding has already been initiated concerning the same claim.

Procedure and Decision Period

Commission rapporteurs must complete their preliminary examination within 15 days. Where the matter is referred to an insurance arbitrator, the arbitrator must ordinarily complete the examination within four months from appointment. The period may be extended by the parties’ express written consent.

Insurance arbitration is generally document-based. The arbitrator may decide the matter using:

• The insurance policy;
• General and special conditions;
• Claim forms;
• Accident reports;
• Medical records;
• Expert reports;
• Photographs;
• Repair invoices;
• Correspondence;
• Payment documents.

A hearing may be held where necessary, but the Commission explains that arbitrators decide principally through the documents filed in the application record.

This makes the quality of the written application particularly important.

Current 2026 Monetary Thresholds

As of 22 January 2026, the Insurance Arbitration Commission announced the following monetary limits:

• Decisions concerning disputes of TRY 35,000 or more may be challenged through the Commission’s objection procedure;
• Objection-panel decisions concerning disputes exceeding TRY 383,000 may be appealed before the Court of Cassation;
• Disputes of TRY 122,000 or more must be decided by a panel of at least three arbitrators.

The Commission also announced in March 2026 that whether a decision is subject to objection or appeal is determined according to the monetary thresholds applicable on the date the original application was filed.

An objection to an insurance arbitrator’s decision must be filed within ten days after notification.

Because statutory thresholds may be adjusted, parties should verify the limits applicable on the filing date rather than relying on older decisions or publications.

2026 Insurance Arbitration Application Fees

The application-fee tariff effective from 1 January 2026 provides:

• TRY 520 for disputes up to TRY 8,500;
• TRY 1,040 for disputes between TRY 8,501 and TRY 17,000;
• TRY 1,560 for disputes between TRY 17,001 and TRY 85,000;
• 1.8% of the claim amount for disputes of TRY 85,001 or more, subject to a minimum fee of TRY 1,560.

The same application fee applies to an objection. Separate notification expenses are also payable, with different amounts depending on whether the applicant provides a valid registered electronic mail address.

Commercial Insurance Arbitration outside the Commission

Large commercial policies may contain negotiated arbitration clauses.

Examples include:

• Construction all-risks insurance;
• Energy insurance;
• Marine and cargo insurance;
• Aviation insurance;
• Cyber insurance;
• Directors’ and officers’ liability insurance;
• Professional indemnity insurance;
• Credit insurance;
• Political risk insurance;
• Large property and business interruption programmes.

These policies may be concluded between sophisticated companies, insurers, brokers and international insurance markets.

Where the parties choose contractual arbitration, the clause should identify:

• The institution;
• The legal seat;
• The language;
• The number of arbitrators;
• The governing law;
• The scope of disputes;
• The method of appointment;
• Interim relief;
• Confidentiality;
• Consolidation with related disputes.

ISTAC’s official model clause refers disputes arising out of or connected with the contract to final arbitration under the ISTAC Arbitration Rules and allows parties to add provisions concerning the seat, language, number of arbitrators, governing law and emergency arbitration.

Consumer insurance policies and standard-form clauses require separate analysis. A pre-dispute arbitration clause should not be assumed to override mandatory consumer protections, unfair-term rules or the statutory remedies available to insured consumers.

Coverage Disputes under Turkish Law

Coverage is usually the central question in an insurance dispute.

The tribunal or insurance arbitrator may need to determine:

• Whether the insured event occurred;
• Whether the event falls within the insured risks;
• Whether the loss occurred during the policy period;
• Whether the claimant has an insurable interest;
• Whether a territorial restriction applies;
• Whether the loss falls within a policy exclusion;
• Whether a deductible applies;
• Whether the policy limit was exhausted;
• Whether several events constitute one loss or multiple losses.

Article 1409 of the Turkish Commercial Code provides that the insurer is responsible for loss or the agreed benefit resulting from the risk described in the contract. The insurer bears the burden of proving that one or more of the risks stated in the contract were excluded from insurance coverage.

This allocation of the burden of proof is important. The claimant must establish the occurrence of a loss falling prima facie within the policy, while the insurer relying on an exclusion must establish the factual and contractual basis for that exclusion.

Interpretation of Policy Terms and Exclusions

Insurance policies frequently combine:

• General insurance conditions;
• Special conditions;
• Endorsements;
• Schedules;
• Proposal forms;
• Broker correspondence;
• Risk surveys.

The documents should be read together.

Common coverage exclusions may concern:

• Intentional conduct;
• Wear and tear;
• Gradual deterioration;
• Defective design;
• War and terrorism;
• Cyber incidents;
• Pollution;
• Known circumstances;
• Contractual liability;
• Fraud;
• Late notification.

An exclusion should be applied according to its precise wording. A tribunal should not extend an exclusion beyond its contractual scope merely because the loss is unusual or substantial.

Where an endorsement conflicts with a general condition, the contract’s hierarchy provisions may become decisive. The parties should determine whether:

• Special conditions prevail over general conditions;
• The schedule prevails over the policy wording;
• Manuscript clauses prevail over printed provisions;
• Later endorsements prevail over earlier language.

Pre-Contractual Disclosure and Misrepresentation

Insurance pricing depends on the insurer’s ability to evaluate the risk.

Article 1435 of the Turkish Commercial Code requires the policyholder to disclose material circumstances known or reasonably required to be known when the insurance contract is concluded. A circumstance is material where nondisclosure or incorrect disclosure would have caused the insurer not to conclude the contract or to conclude it on different terms. Matters expressly asked by the insurer are presumed material unless the contrary is proved.

Disputes may concern:

• Whether a fact was material;
• Whether the insured knew it;
• Whether the insurer asked clear questions;
• Whether the insurer already knew the true facts;
• Whether nondisclosure affected the occurrence of the loss;
• Whether the insurer would have charged a higher premium;
• Whether rescission or proportionate reduction is available.

The arbitrator should examine the underwriting evidence rather than relying only on an insurer’s general statement that the policy would not have been issued.

Relevant evidence may include:

• Underwriting manuals;
• Proposal forms;
• Internal risk assessments;
• Pricing models;
• Emails between insurer and broker;
• Evidence concerning similar risks;
• Expert underwriting opinions.

Notification of the Insured Event

The policyholder must notify the insurer without delay after becoming aware of the insured event.

Under Article 1446, delayed or omitted notification may justify a reduction only where it increased the indemnity or benefit payable, with the amount of reduction depending on the degree of fault. The insurer cannot rely on the late-notification consequence where it had already learned of the event.

A late notification should therefore not automatically eliminate coverage.

The tribunal should examine:

• When the insured learned of the event;
• When the insurer was notified;
• The reason for the delay;
• Whether evidence was lost;
• Whether the insurer’s investigation was prejudiced;
• Whether the loss increased;
• The causal relationship between delay and prejudice.

Claims-made liability policies may contain special notification requirements. Their legal effect should be analysed according to the policy wording, mandatory Turkish insurance provisions and the characteristics of the relevant coverage.

Duty to Provide Information and Permit Investigation

After the insured event, the policyholder must provide the information and documents reasonably required to determine the risk and the amount of compensation. The insured must also permit appropriate investigation at the location of the loss or other relevant places.

Where breach of this obligation increases the amount payable, compensation may be reduced according to the degree of fault.

The insurer’s information requests should remain relevant and proportionate.

An insurer should not delay a decision indefinitely by repeatedly requesting:

• Documents that do not exist;
• Information already supplied;
• Records unrelated to the loss;
• Excessive commercial documentation;
• Personal data with no connection to the claim.

The claimant should maintain a clear record of all documents delivered and should request written confirmation where the insurer alleges that the claim file remains incomplete.

Mitigation of Loss and Preservation of Subrogation Rights

Article 1448 requires the policyholder to take reasonable measures to prevent, reduce or limit the loss and to protect the insurer’s rights of recovery against third parties. The insured must also comply, as far as reasonably possible, with the insurer’s instructions.

This duty may involve:

• Emergency repairs;
• Protecting damaged property;
• Preventing further water or fire damage;
• Preserving defective equipment;
• Obtaining photographs and records;
• Notifying responsible contractors;
• Avoiding waiver of claims against third parties;
• Preserving limitation periods.

The insurer must reimburse reasonable mitigation expenses even where those measures ultimately prove unsuccessful. The Code also requires an advance for such costs upon the policyholder’s request.

A dispute may arise where the insurer argues that the insured failed to mitigate, while the insured argues that immediate action was necessary to protect business continuity or public safety.

Indemnity and Payment Deadline

Unless the contract provides for reinstatement or another form of performance, insurance indemnity is paid in money.

Article 1427 provides that the insurance indemnity or benefit becomes due after the insured event, delivery of the relevant documents and completion of the insurer’s investigation, but in any event generally 45 days after notification of the event. For life insurance, the period is 15 days. A delay not attributable to the insurer may suspend the relevant period.

If the investigation cannot be completed within three months after notification, the insurer must pay at least 50% of the amount rapidly determined by agreement or preliminary expert assessment, to be deducted from the final indemnity. Once the debt becomes due, the insurer is in default without a separate notice, and contractual provisions excluding default interest are invalid.

Disputes may concern:

• Whether all required documents were delivered;
• Whether the investigation was genuinely incomplete;
• Whether the delay was attributable to the insurer;
• The amount of the advance;
• The applicable interest;
• The date of default.

Calculation of Property Insurance Indemnity

Property insurance arbitration may require determination of:

• Actual cash value;
• Replacement cost;
• Repair cost;
• Depreciation;
• Salvage;
• Betterment;
• Underinsurance;
• Deductibles;
• Policy limits;
• Multiple insurance.

The claimant should prove the actual economic loss rather than relying solely on the insured value stated in the policy.

Evidence may include:

• Purchase invoices;
• Repair quotations;
• Expert valuations;
• Market comparisons;
• Accounting records;
• Inventory lists;
• Photographs;
• Technical reports.

The insurer may challenge whether replacement work improved the property beyond its pre-loss condition. The insured may respond that replacement with modern equipment was unavoidable because the old model was unavailable.

The award should explain clearly how each component of compensation was calculated.

Business Interruption Claims

Business interruption disputes are among the most technically demanding insurance cases.

A claim may include:

• Lost gross profit;
• Reduced turnover;
• Continuing fixed expenses;
• Increased cost of working;
• Additional mitigation expenditure;
• Extended interruption periods;
• Loss caused by supplier or customer interruption.

The parties may disagree over:

• The applicable indemnity period;
• The projected counterfactual revenue;
• Market trends unrelated to the insured event;
• Seasonal fluctuations;
• Government restrictions;
• Underinsurance;
• Causation;
• Savings resulting from the interruption.

Forensic accountants commonly compare the actual financial results with the business performance that would probably have occurred without the insured loss.

The calculation should avoid both undercompensation and placing the insured in a better financial position than if the event had not occurred.

Liability Insurance and Direct Claims

Liability insurance protects the insured against responsibility for damage caused to third parties.

Article 1473 provides that, unless otherwise agreed, the insurer pays compensation up to the policy limit for liability arising from an event occurring within the insurance period, even where the damage appears later.

Article 1478 grants the injured third party a direct right to request compensation from the liability insurer up to the policy limit within the limitation period applicable to the insurance contract.

This direct-action right may be relevant in:

• Motor liability;
• Employer liability;
• Professional indemnity;
• Medical malpractice;
• Product liability;
• Directors’ and officers’ liability;
• Construction liability.

A dispute may involve three separate legal relationships:

1. Liability of the insured wrongdoer to the injured person;
2. Coverage owed by the insurer to the insured;
3. The injured person’s statutory direct claim against the insurer.

An arbitration clause between the insurer and policyholder does not necessarily bind the injured third party automatically. Consent and the statutory direct-action framework must be analysed separately.

Defence Costs and Settlement Control

Liability policies frequently require the insurer to defend or fund the defence of claims brought against the insured.

Article 1474 requires the insurer to pay reasonable costs associated with a claim against the insured. Payment of costs exceeding the policy amount requires a contractual provision, and the insurer must provide an advance for costs upon request.

Coverage disputes may concern:

• Appointment of defence counsel;
• Control of litigation;
• Settlement authority;
• Reservation of rights;
• Conflicts between insurer and insured;
• Allocation of defence costs;
• Claims partly covered and partly excluded.

Where the insured settles without approval, the tribunal may need to determine whether the policy required consent and whether the insurer unreasonably refused to approve the proposed settlement.

Insurance Subrogation under Turkish Law

Subrogation allows the insurer that paid the insured loss to pursue the person legally responsible for that loss.

For property insurance, Article 1472 provides that the insurer legally succeeds to the insured’s rights against responsible persons to the extent of the payment. Where proceedings have already begun, the insurer may continue them by proving the payment without requiring the court’s or opposing party’s approval.

Article 1481 establishes a similar subrogation framework for liability insurance after the insurer has paid the indemnity.

Subrogation disputes may involve:

• Defective construction;
• Product defects;
• Transport losses;
• Fire damage;
• Professional negligence;
• Workplace accidents;
• Motor accidents;
• Damage caused by tenants or contractors.

Can the Insurer Rely on the Insured’s Arbitration Clause?

An important question is whether a subrogated insurer is bound by an arbitration clause in the underlying contract between the insured and the responsible third party.

Because subrogation transfers the insured’s existing claim rather than creating an entirely independent claim, the insurer generally acquires no better substantive position than the insured possessed. Contractual defences and dispute resolution obligations connected with the transferred claim may therefore become relevant.

For example, if a construction contract between the insured employer and contractor contains an ISTAC arbitration clause, the property insurer pursuing the contractor after paying the loss may need to bring the subrogated claim through that arbitration mechanism rather than ordinary litigation.

This issue remains fact-specific. Counsel should examine:

• The wording and scope of the underlying arbitration clause;
• The law governing the underlying contract;
• The law governing subrogation;
• Whether the claim is contractual or tortious;
• Whether the insurer’s claim exceeds the transferred right;
• Whether other parties must be joined.

Partial Payment and Competing Claims

Where the insurer pays only part of the loss, both the insurer and insured may retain claims against the responsible person.

Article 1472 expressly preserves the insured’s right to recover the unpaid portion where the insurer has compensated only part of the loss.

This can create procedural difficulties.

The insurer and insured should coordinate:

• The total claim;
• Priority of recovery;
• Allocation of legal costs;
• Settlement authority;
• Evidence;
• Limitation periods;
• Double recovery prevention.

If the insurer commences arbitration without the insured, the respondent may argue that the dispute should include all parties necessary to determine the entire loss.

Reinsurance Arbitration in Türkiye

Reinsurance is a commercial risk-transfer relationship between professional insurance-market participants.

The original insurer is generally referred to as the cedant, while the party assuming part of the risk is the reinsurer. A reinsurer may itself transfer risk through retrocession.

Reinsurance arrangements may be:

• Facultative;
• Treaty-based;
• Proportional;
• Non-proportional;
• Excess-of-loss;
• Stop-loss;
• Quota-share;
• Surplus.

Article 1403 confirms that the original insurer remains responsible to the policyholder even where the risk was reinsured. The policyholder does not automatically obtain direct rights against the reinsurer.

Common Reinsurance Disputes

Reinsurance arbitration may concern:

• Whether the underlying loss falls within the reinsurance cover;
• Attachment of the risk;
• Policy period;
• Allocation to underwriting years;
• Aggregation of multiple claims;
• Event or occurrence definitions;
• Retention and deductible;
• Exhaustion of underlying layers;
• Claims notification;
• Claims cooperation;
• Settlement authority;
• Follow-the-settlements provisions;
• Premium adjustment;
• Reinstatement premium;
• Commutation;
• Misrepresentation and nondisclosure;
• Sanctions;
• Broker accounting;
• Retrocession recovery.

These disputes often depend heavily on industry practice, but contractual wording remains central.

Terms such as “follow the fortunes” or “follow the settlements” should not be treated as having an identical meaning in every contract. Their effect depends on the governing law, the precise clause and whether the cedant’s settlement was made honestly, reasonably and within the scope of the original policy and reinsurance cover.

Aggregation of Reinsurance Losses

Aggregation determines whether several underlying losses are treated as:

• One event;
• One occurrence;
• One originating cause;
• Several separate claims.

The outcome affects:

• Attachment of the reinsurance layer;
• The number of retentions;
• The applicable limit;
• Reinstatement premiums;
• Allocation between treaties.

For example, numerous claims may arise from:

• A natural disaster;
• A defective product series;
• A cyberattack;
• A common design defect;
• A group of professional errors;
• Government restrictions.

The tribunal must apply the aggregation language selected by the parties. Commercial similarity alone is not always sufficient to combine separate claims.

Notice and Claims Cooperation in Reinsurance

Reinsurance contracts commonly require the cedant to notify the reinsurer of claims or circumstances likely to affect the reinsurance.

Disputes may concern:

• Whether notification was timely;
• Whether the reinsurer suffered prejudice;
• Whether notice was a condition precedent;
• Whether the cedant supplied adequate information;
• Whether the reinsurer was entitled to participate in the defence;
• Whether the cedant could settle without approval.

The tribunal should distinguish among:

• A contractual condition precedent;
• A procedural cooperation obligation;
• A duty whose breach gives rise only to damages;
• An obligation whose breach suspends or removes coverage.

The wording and governing law are decisive.

Evidence and Experts in Insurance Arbitration

Insurance disputes commonly require specialist evidence.

Relevant experts may include:

• Insurance adjusters;
• Actuaries;
• Medical experts;
• Engineers;
• Fire investigators;
• Forensic accountants;
• Valuation professionals;
• Cybersecurity experts;
• Marine surveyors;
• Reinsurance-market experts.

An insurance expert may explain industry practice, but the arbitrator remains responsible for interpreting the contract and determining the legal consequences.

Expert evidence should identify:

• The instructions received;
• The documents reviewed;
• The methodology;
• Assumptions;
• Areas of uncertainty;
• Alternative calculations.

A party-appointed report should not merely repeat the instructing party’s legal submissions.

Document Preservation

Once an insured event or reinsurance dispute becomes foreseeable, relevant evidence should be preserved immediately.

Important materials may include:

• Policy wording and endorsements;
• Proposal forms;
• Underwriting files;
• Broker slips;
• Claims correspondence;
• Loss-adjuster reports;
• Photographs and videos;
• Repair records;
• Medical documents;
• Reinsurance bordereaux;
• Treaty statements;
• Settlement agreements;
• Payment records;
• Expert calculations.

The insured must also avoid altering the damaged property before the cause and amount of loss can be determined, except where the insurer approves the change or alteration is necessary to reduce the damage.

Confidentiality

Insurance and reinsurance disputes may contain commercially sensitive information, including:

• Claims reserves;
• Pricing models;
• Underwriting manuals;
• Customer data;
• Medical records;
• Reinsurance programmes;
• Settlement strategies;
• Corporate risk information.

Contractual arbitration may allow the parties and tribunal to adopt confidentiality and cybersecurity protocols. ISTAC’s online-hearing rules permit remote hearings and require the tribunal to determine confidentiality and security measures, restrict attendance and prohibit unauthorised recording.

The statutory Insurance Arbitration Commission also processes extensive personal and financial data, and applicants should avoid filing irrelevant sensitive documents.

Interim Measures and Evidence Preservation

Urgent protection may be required before the tribunal is fully constituted.

Possible measures include:

• Preservation of damaged property;
• Independent inspection;
• Protection of electronic records;
• Prevention of disposal of salvage;
• Preservation of policy documents;
• Security for claims;
• Protection of confidential information.

In contractual arbitration seated in Türkiye, interim measures may be requested from the arbitral tribunal or competent courts under the applicable domestic or international arbitration regime.

A court application for urgent protection does not necessarily waive the arbitration agreement. Court assistance may be particularly important where the requested measure must bind a third party, requires official enforcement or must be granted before the arbitrator is appointed.

Limitation Periods

Article 1420 provides that claims arising from insurance contracts generally become time-barred two years after the claim becomes due. Claims concerning insurance indemnity or the insured amount are in any event subject to a six-year long-stop period beginning on the date of the insured event, subject to the special rule for liability insurance and provisions contained in other legislation.

Article 1482 provides that compensation claims against liability insurers become time-barred ten years after the insured event.

Special statutes may provide different periods, particularly in compulsory motor insurance, transport and other regulated insurance branches.

Submitting an incomplete claim or conducting lengthy negotiations should not be assumed to suspend or interrupt limitation automatically. Parties should calculate the applicable period at the beginning of the dispute.

Annulment and Enforcement of Contractual Arbitration Awards

An arbitral award rendered in contractual insurance or reinsurance arbitration seated in Türkiye is not subject to an ordinary appeal on the merits.

The award may be challenged only on the limited grounds established by the applicable domestic or international arbitration legislation, such as:

• Invalid arbitration agreement;
• Improper tribunal constitution;
• Excess of jurisdiction;
• Serious procedural irregularity;
• Violation of the right to be heard;
• Non-arbitrability;
• Public policy.

The reviewing court should not conduct a complete reassessment of policy interpretation, expert evidence or indemnity calculations merely because one party disagrees with the tribunal’s conclusions.

Foreign insurance and reinsurance awards may be recognised and enforced under the New York Convention in contracting jurisdictions. The Convention establishes common standards for recognition of arbitration agreements and enforcement of foreign and non-domestic awards, subject to limited refusal grounds.

Drafting an Insurance or Reinsurance Arbitration Clause

A carefully drafted clause should state:

• Which disputes are covered;
• The arbitration institution;
• The legal seat;
• The language;
• The number of arbitrators;
• The governing law;
• The law governing the arbitration agreement;
• Required insurance or reinsurance expertise;
• Confidentiality;
• Interim measures;
• Consolidation and joinder;
• Notice requirements.

An illustrative commercial clause may provide:

Any dispute, controversy or claim arising out of or in connection with this Policy, including any dispute concerning its formation, validity, interpretation, coverage, exclusions, claims handling, indemnity, termination or subrogation, shall be finally resolved under the Istanbul Arbitration Centre Arbitration Rules.

The seat of arbitration shall be Istanbul, Türkiye. The tribunal shall consist of three arbitrators. The language of arbitration shall be English. Turkish law shall govern the merits of the dispute.

A reinsurance clause may also specify that arbitrators must have substantial insurance or reinsurance-market experience.

The arbitration clause should be coordinated across:

• The insurance policy;
• Broker agreement;
• Reinsurance treaty;
• Facultative certificate;
• Retrocession agreement;
• Claims cooperation agreement;
• Settlement agreement.

Practical Checklist for Insurance Claims

Before commencing proceedings, the claimant should determine:

1. Who is legally entitled to claim;
2. Which policy and endorsement apply;
3. Whether the Insurance Arbitration Commission is available;
4. Whether the insurer has been properly notified;
5. Whether the prior application requirement was satisfied;
6. Whether the dispute has already been submitted elsewhere;
7. Which risks are covered;
8. Which exclusions are alleged;
9. Whether notification was timely;
10. Whether the insurer requested additional documents;
11. How the indemnity is calculated;
12. Whether advance payment is due;
13. Which limitation period applies;
14. Whether expert evidence is required;
15. Whether subrogation rights must be preserved.

Practical Checklist for Reinsurance Disputes

The parties should examine:

1. The complete contract wording;
2. The governing law;
3. The seat and arbitration rules;
4. Attachment of the risk;
5. Underwriting period;
6. Aggregation language;
7. Retention and limits;
8. Notice obligations;
9. Claims cooperation and control;
10. Settlement authority;
11. Follow-the-settlements language;
12. Allocation between years and layers;
13. Reinstatement premiums;
14. Accounting and bordereaux;
15. Retrocession and contribution rights.

Frequently Asked Questions

What is the Insurance Arbitration Commission?

It is a specialised statutory body established under Article 30 of Insurance Law No. 5684 to resolve qualifying disputes arising from insurance contracts between insured or benefiting persons and the party assuming the risk.

Must I apply to the insurer first?

Yes. The claimant must ordinarily submit the claim to the insurer and obtain a rejection or wait for the applicable response period to expire before applying to the Commission.

How long does insurance arbitration take?

The preliminary review must generally be completed within 15 days, and the arbitrator must ordinarily decide the referred dispute within four months unless the parties agree in writing to extend the period.

Can a company use the Insurance Arbitration Commission?

A legal person may apply where it is the policyholder, insured or another person deriving rights from the insurance contract and the other statutory conditions are satisfied.

Can reinsurance disputes be brought before the Commission?

Ordinary disputes between insurers and reinsurers are generally commercial reinsurance disputes rather than claims by policyholders or beneficiaries under the statutory Commission system. They are commonly resolved under the arbitration clause contained in the reinsurance agreement.

Does reinsurance remove the original insurer’s liability?

No. Article 1403 states that reinsurance does not remove the insurer’s obligations to the policyholder, and the policyholder does not automatically receive a direct claim against the reinsurer.

Who proves that an exclusion applies?

Article 1409 places the burden of proving that a contractual risk was excluded from coverage on the insurer.

When does insurance compensation become due?

Insurance indemnity generally becomes due after the investigation is completed and, in any event, within the statutory framework beginning after notification and delivery of relevant documents. Article 1427 generally uses a 45-day period, with a 15-day period for life insurance.

Can an injured third party claim directly from the liability insurer?

Yes. Article 1478 allows the injured person to request compensation directly from the insurer up to the policy limit within the applicable limitation period.

What happens after the insurer pays the claim?

To the extent of payment, the insurer may become subrogated to the insured’s rights against the responsible third party under Articles 1472 or 1481.

Can a subrogated insurer be bound by an arbitration clause?

Potentially. The insurer generally acquires the insured’s existing claim subject to the legal and contractual characteristics attached to that claim. The wording and governing law of the underlying arbitration agreement must be examined.

Can a foreign reinsurance award be enforced in Türkiye?

A qualifying foreign award may be recognised and enforced in Türkiye under the New York Convention or applicable Turkish private international law, subject to limited refusal grounds.

Conclusion

Insurance and reinsurance arbitration in Turkey covers several distinct dispute resolution systems.

The Turkish Insurance Arbitration Commission offers a specialised statutory mechanism for qualifying disputes between policyholders, insured persons, beneficiaries or other protected claimants and insurance organisations. It provides a document-focused procedure, preliminary review by rapporteurs and determination by independent insurance arbitrators.

Commercial insurance arbitration is different. Large corporate policies may refer coverage, indemnity and claims-handling disputes to domestic or international arbitration under institutional or ad hoc rules.

Reinsurance arbitration is primarily a contractual dispute mechanism between professional market participants. Reinsurance does not remove the original insurer’s liability to the policyholder and does not automatically give the policyholder a direct claim against the reinsurer.

The most common insurance arbitration issues include:

• Coverage;
• Exclusions;
• Disclosure;
• Notification;
• Mitigation;
• Indemnity calculation;
• Liability insurance;
• Direct claims;
• Subrogation.

The most common reinsurance issues include:

• Attachment;
• Aggregation;
• Allocation;
• Retention;
• Claims cooperation;
• Settlement authority;
• Follow-the-settlements provisions;
• Retrocession.

A successful insurance claim requires early preservation of evidence, accurate calculation of loss, compliance with notification requirements and careful selection of the appropriate forum.

For insurers, reinsurers and corporate policyholders, the arbitration clause should be coordinated with all policies, endorsements, reinsurance treaties and broker agreements. It should identify the seat, institution, language, governing law and required expertise of the tribunal.

Specialised Turkish insurance and arbitration counsel can assist with policy interpretation, Commission applications, commercial arbitration, expert evidence, subrogation proceedings and enforcement of insurance or reinsurance awards.