The Regulation On Private Health Insurance
Introduction
The social security system encapsulates healthcare area in Turkey. Health expenses make up a large part of public expenditures. Therefore, the utilization of health services and treatment rights are limited. The importance of private health insurance has therefore increased accordingly[1].
The Regulation on Private Health Insurance (“Regulation”) was published in the Official Gazette dated 23.10.2013 and numbered 28800. The purpose of the Regulation is to set forth the procedures and principles of private health insurance. Within the framework of this Newsletter Article, important aspects of the Regulation shall be examined within the context of the insurance contract.
The Concept of the Insurance Contract
The sixth book of the Turkish Commercial Code No. 6102 (“TCC”) regulates insurance law. Pursuant to the Article 1401 TCC, an insurance contract is the agreement by which the insurer undertakes to compensate the damages resulting from any danger or risk harming the benefits of the person or making payment or other performances for the occurrence of certain events in the life of one or several persons in exchange for the contributions.
Regulation on Private Health Insurance
As mentioned above, the Regulation aims to regulate the procedures and principles of private health insurance. Article 17 of the Regulation shall enter into force one year after publication while the other articles shall enter into force 6 months after their publication.
The Regulation covers the issues pertaining to the information and offer, types of contracts, lifetime renewal guarantee, attendance certificate, amendment of plan and transition operations, cancellation of the contract, general dispositions with regard to the treatment having place subsequent to the termination of the insurance period, tariff for the private health insurance, obligation for employment an expert for the health related issues and actuarial report, service purchase, information on health and privacy of this information and other provisions pertaining to the work principles of private health insurances and supplementary and supportive private health products. Important provisions related to each issue are discussed below.
Information and Offer.
Pursuant to Article 5 of the Regulation, insurance companies established in Turkey or local branches of foreign established insurance companies shall inform the persons requiring private health insurance as to the subjects that may affect their decisions to conclude an insurance contract. Insurance companies shall also help the relevant persons during the negotiation and conclusion of the contract to understand the technical issues related to the insurance system; provide all information on the rights and obligations of the parties in writing or verbally; and avoid any kind of misleading conduct on a bona fide basis.
Lifetime Renewal Guarantee.
According to Article 7 of the Regulation, it is possible to renew private health insurance contracts with the same plan. Where the insurance company “provides a product with a lifetime renewal guarantee, information and conditions related to the lifetime renewal guarantee shall be determined pursuant to the conditions of the first contract concluded”. It should be noted that the information and evaluation requirements must not subsequently be amended to the detriment of the insured.
Insurance companies providing lifetime renewal guarantees for insurance contracts shall consider the medical condition of the insured during the term of the previous insurance contract while determining indemnities and contributions for the new contract.
Moreover, insurance companies shall not attenuate the scope of the indemnities due to the occurrence of diseases during the period following the entry into force of the lifetime renewal guarantee; shall not amend the special conditions and technical principles of the insurance to the detriment of the insured; and shall not apply supplementary contributions due to the occurrence of diseases.
Amendment of Plan and Transaction Operations.
Pursuant to Article 9 of the Regulation, it is possible to propose an amendment of plan to the insurance company. If the request for the amendment of plan is not approved by the insurance company, commitments under the current contract of insurance shall continue. Furthermore, the insured may request the transfer of all acquired rights and obligations to another insurance company and the continuation of the insurance contract with the latter. In such a case, the relevant transfer shall be realized upon approval pursuant to the terms and conditions of the new insurance company.
Cancellation of the Insurance Contract.
Cancellation of the contract is addressed under Article 10 of the Regulation. As per the relevant Article, “in case the insured or the insurer requests cancellation of the contract within the first thirty days from the conclusion of the contract and in case there is no payment of indemnities during the related period, paid contributions shall be returned without any deduction within five business days. If there is a request of cancellation after the first thirty days, unmerited contributions shall be returned according to the special conditions of the insurance contract.”
Conclusion
Consequently, it is worth mentioning that this Regulation signifies important progress and clarifies the rules for private health insurance. Particularly, the rules in the Regulation related to the lifetime renewal guarantee constitute a positive development for persons who seek private health insurance.
[1] EROĞLU Sevilay, Hastalık Sigortası Sözleşmesinin Kurulmasında İhbar Külfeti, May 2005, p. 1.
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