Official Gazette Date: Wednesday, 15 August 2012

Official Gazette Number: 28385

REGULATION ON THE WORKING PRINCIPLES OF THE TURKISH CATASTROPHE INSURANCE POOL (THE TCIP)

Purpose and Scope, Basis and Definitions

ARTICLE 1 – (1) The purpose of this Regulation is to regulate the working principles and procedures of the Turkish Catastrophe Insurance Pool, which was established to offer compulsory earthquake insurance and other natural disaster insurance guarantees.

(2) This Regulation covers the working principles and procedures of the Institution, the Board of Directors and the Technical Operator.

Basis

ARTICLE 2 - (1) This Regulation was prepared on the basis of the Catastrophe Insurance Law numbered 6305 and dated 9 May 2012.

Definitions

ARTICLE 3 - (1) The terminology in this Regulation refers to the following;

a) Minister: The Minister, to whom the Undersecretariat of Treasury is affiliated,

b) Law: Catastrophe Insurance Law,

c) Institution: The Turkish Catastrophe Insurance Pool,

d) Undersecretariat: The Undersecretariat of the Treasury,

e) Insurance company: The insurance company, which was established in Turkey, in accordance with the Law No. 5684 and dated 3 June 2007 and the organization of the insurance company established abroad in Turkey,

f) Technical operator: The company which executes the technical affairs of and the business and operations related to the Institution

g) Board of Directors: The Board of Directors of the Turkish Catastrophe Insurance Pool,

h) Compulsory earthquake insurance: The compulsory insurance, which guarantees the material losses in the buildings directly caused by an earthquake and the material losses caused by an earthquake or by a fire, explosion, giant wave (tsunami) or landslide caused by an earthquake and which must be obtained in accordance with Article 10 of the Law.

The Board of Directors

Composition of the Board of Directors

ARTICLE 4 - (1) The Institution is managed by the Board of Directors of the Turkish Catastrophe Insurance Pool. The Board of Directors consists of at least one member from the Undersecretariat, the Ministry of Environment and Urbanization, the Disaster and Emergency Management Presidency and the Capital Markets Board, who shall be at least at the level of deputy general manager, one member each to be determined from among three candidates to be proposed by the Association of Insurance, Reinsurance and Pension Companies of Turkey and the Council of Higher Education, and a member representing the technical operator.

(2) The members of the Board of Directors are appointed by the Minister upon the recommendations of the relevant institutions and the proposal of the Undersecretariat. The members of the Board of Directors must possess the necessary knowledge and experience to carry out their duties in the fields of duty of the organizations which they represent. The relevant institutions refer the CVs of the candidates, who are proposed by them for the membership of the Board of Directors, and the documentation upholding that they meet the conditions specified in the Law, together with the candidate notification, to the Undersecretariat. The Undersecretariat shall request that the relevant institutions propose alternative candidates where the candidates do not meet the conditions specified in the law.

Distribution of Tasks

ARTICLE 5 - (1) The representative of the Undersecretariat chairs the Board of Directors. The Chairman of the Board of Directors is responsible for the regular and efficient execution of the Institution's work. The Board of Directors is represented by the Chairman.

(2) The Deputy Chairman of the Board of Directors is elected from among members who have received at least four votes. The Deputy Chairman ensures that the duties of the Chairman are carried out in the absence of the Chairman of the Board of Directors. If the Deputy Chairman of the Board of Directors leaves his or her position for any reason, a new election is held in accordance with the same procedure.

(3) The Board of Directors may establish specialized committees, including members of the board of directors, when necessary, in order to monitor the progress of work and provide assistance in the activities of the Institution.

Duties of the Board of Directors

ARTICLE 6 - (1) The Board of Directors performs the following duties;

a) To prepare the work plan regarding the work and transactions of the Institution.

b) To determine the working principles and procedures of the Technical Operator, to ensure that the tasks undertaken by the Technical Operator are fulfilled in a timely and complete manner.

c) To determine the principles and procedures regarding damage assessment and compensation payments.

d) To approve the risk sharing and reinsurance plans, to decide on issuance of hedging capital market instruments.

e) To select the insurance companies authorized to conclude insurance contracts on behalf and on account of the Institution and the principles and procedures which they must comply with by taking the views of the Undersecretariat into account.

f) To determine the principles and procedures regarding the investment of the Institution's assets.

g) To decide on the organization of public relations, promotion and training campaigns and to determine the principles and procedures to be applied in this regard.

h) To determine the principles and procedures regarding marketing.

i) To decide on the purchase of goods and services for the needs of the Institution, to determine the principles and procedures to be applied in this regard.

j) Where the Minister deems appropriate, to decide on cooperation with international organizations and similar organizations of other countries and to decide on the work to be carried out.

k) To determine the principles and procedures regarding other guarantees apart from compulsory earthquake insurance, in case of a decision taken by the Council of Ministers.

l) To determine the principles and procedures regarding the exercise of the right of succession.

m) To inform the Minister and the Undersecretariat of the Institution’s activities.

Meetings of the Board of Directors

ARTICLE 7 - (1) The Board of Directors convenes as required, and in any case not less than six times in a calendar year, upon the invitation of the Chairman of the Board of Directors, the Technical Operator or at least three members. While the meetings are normally required to be held at the headquarters of the Technical Operator, it is also possible to convene a meeting in another location to be determined within Turkey with the approval of the Board of Directors.

(2) The location, time and agenda of the meeting, as well as information and documents related to the issues to be discussed at the meeting, are sent to the Chairman of the Board of Directors for review by the Technical Operator at least seven days prior to the meeting date. The agenda, approved by the Chairman of the Board of Directors, is announced to all members at least two days prior to the meeting date.

(3) The Board of Directors convenes under the chairmanship of the Chairman of the Board of Directors or, in his or her absence, the Deputy Chairman of the Board of Directors, with the participation of at least five members. A board reporter from the Technical Operator is selected by the Board of Directors in order to carry out the secretariat activities, to record the meeting negotiations, record resolutions and prepare the minutes of the meeting.

(4) The Chairman of the Board of Directors may invite the employees of the Undersecretariat and the Technical Operator or external experts to the meetings in order to obtain information from them and their opinions, as he or she deems necessary.

Failure to Attend Meetings

ARTICLE 8- (1) It is essential that the members be present in all Board meetings. Where there is a pertinent reason for a member not to attend a Board meeting, this shall be reported to the Chairman of the Board of Directors and the Technical Operator prior to the meeting date.

Decisions of the Board of Directors Decisions and Minutes

ARTICLE 9 - (1) Matters to be discussed in the Board of Directors are discussed within the framework of the agenda. Voting is performed openly and decisions are taken with the same votes of at least four members. Members who hold opinions contrary to the decisions taken shall explain the reasons for their views during the meeting.

(2) Members may not participate in the discussion and voting of matters concerning themselves, one of their ancestors or kin, their spouses or their relatives by blood or marriage up to the third degree (including this degree).

(3) The Minutes of the Board of Directors are written in a notary-approved book with consecutive page numbers, in the order of date and number, without any gaps between lines and without tabs. Each page of the minutes is signed by the members in attendance at the meeting.

Disclosure of Decisions

ARTICLE 10 - (1) Decisions of the Board of Directors may be disclosed by the Chairman of the Board of Directors, the Technical Operator or the authorized member, when necessary and only in line with the decision taken by the Board of Directors in this regard.

Responsibility of the Members of the Board of Directors

ARTICLE 11- (1) The members of the Board of Directors are obliged to fulfill their duties with the care of a prudent manager and to protect the interests of the Institution by observing the rules of honesty.

(2) The members of the Board of Directors may not disclose information which they have garnered by virtue of their title, even if they are no longer a member, without the permission or approval of the Board of Directors.

End of Membership

ARTICLE 12 - (1) The duties of the members, who no longer hold the necessary qualifications for their appointment, resign, suffer from a chronic illness which prevents them from fulfilling their duties or act in violation of Article 11 shall end with the decision of the Minister.

Fees and Expenses

ARTICLE 13 - (1) The members of the Board of Directors are paid an amount in line with the monthly salary and other payments paid to the members of the board of directors in State Economic Enterprises.

(2) Travel, per diem and residential expenses of experts invited to the meeting from outside and related institution officials are covered by the Institution.

(3) Principles and procedures regarding travel expenses are determined by the Board of Directors.

Authorized Signatures

ARTICLE 14- (1) To validate all kinds of documents, records and contracts which will bind and commit the Institution, it is necessary to bear the signatures of two authorized persons together with the open name of the Institution. Persons authorized to sign on behalf of the Institution and their authorities and degrees are determined by the Board of Directors.

The Technical Operator and the Execution of the Institution's Work

ARTICLE 15- (1) With the decisions taken by the Board of Directors, the technical affairs of the Institution and the work and operations related to the operation are carried out by the Technical Operator selected by the Undersecretariat in accordance with Article 6 of the Law. 

(2) In the contract established by the Undersecretariat with the Technical Operator in order to execute the work and transactions of the Institution, the operating fee to be paid to the Technical Operator, the basic duties and responsibilities of the Technical Operator, the sanctions to be applied in case of breach of the contract, the termination of this contract and similar issues are included.

(3) Where the Institution is assigned to provide guarantees other than the compulsory earthquake insurance, the Technical Operator also performs the work and transactions related to these guarantees. The operating fee to be paid for this part of the work is also specified in the contract.

(4) The Technical Operator shall establish a service unit in a location separate from the places where it operates, in order to carry out the work and transactions related to the Institution, assign a sufficient number of expert personnel to the service unit on a full-time basis and provide the necessary administrative and technical infrastructure for the complete execution of the Institution's work and transactions. In this framework, other personnel (full or part-time), the location, office software programs and technical equipment, stationery and other similar needs required by the work are provided by the Technical Operator. Where the Undersecretariat deems necessary, it may request the Technical Operator to carry out remedial measures for the service unit.

(5) The principles and procedures regarding the work and transactions to be established and the contacts to be entered into by the Technical Operator on behalf of the Institution are determined by the Board of Directors. The members of the Board of Directors are informed of any contact made on behalf of the Institution by the Technical Operator. The approval of the Board of Directors is required for any transaction which will place the Institution under a financial obligation, and the Technical Operator is required to inform the Board of Directors of the transaction process. Urgent expenditures may be undertaken by the Technical Operator with the approval of the Chairman of the Board of Directors, provided that the information is provided in an electronic environment and approved by at least four members.

(6) Regardless of the procurement method, the Technical Operator shall inform the Undersecretariat of any expenditures which exceed 10 times the amount specified in sub-paragraph (4) of subparagraph (c) of the second paragraph of Article 26. The principles determined by the Undersecretariat are complied with in the execution of the work of the Institution.

(7) The Technical Operator is obliged to carry out its work with due care and attention and by observing the insurance principles. The personnel of the Technical Operator may not disclose confidential information and secrets pertaining to the Institution which they have learned during their course of their duties, even if they have left their duties, and are not permitted use such information and secrets on behalf of themselves or others.

Duties of the Technical Operator

ARTICLE 16 - (1) The Technical Operator performs the following basic tasks: 

a) To execute operational work, the collection of premiums, assessment of damages, compensation payments and to carry out similar work with authorized insurance companies and direct sales channels.

b) To prepare the hedging plans to be obtained from the capital markets to be used in risk transfer, reinsurance plans and claims payment and to implement them after obtaining the approval of the Board of Directors.

c) To direct the Institution’s funds to investment within the framework of the principles and constraints determined by the relevant legislation and the Board of Directors, to manage relations with the portfolio management companies working with the Institution and inform the Board of Directors of the activities of the portfolio management companies.

d) To carry out public relations, advertising, promotion and training campaigns and to coordinate outsourced services in these areas.

e) To inform the Board of Directors of purchases of goods and services which must be outsourced in relation to the work of the Institution, and to perform the procurement of goods and services in line with the decisions taken by the Board of Directors.

f) To table suggestions to the Board of Directors on matters which it deems necessary for the execution of the Institution's business.

g) To monitor and account for the incomes and expenses of the Institution and all accounts and transactions in special and separate records.

h) To submit the expenditure plan of the Institution to the approval of the Undersecretariat before submitting it to the Board of Directors every year.

i) To carry out a presentation to the Undersecretariat in the first week of October every year regarding the important activities and projects planned to be carried out in the following year, the status of the activities and projects carried out in the current year, and the reinsurance placement to be carried out by the Institution in the following year.

j) To carry out necessary correspondence with other persons, institutions and organizations on behalf of the Institution, to evaluate and finalize applications and complaints.

k) To prepare the annual report of the Institution by the end of the fourth month following each accounting period.

l) To carry out the secretarial services of the Board of Directors.

m) To keep the documents belonging to the Institution and other documents appropriately.

n) To prepare the reports requested by the Undersecretariat.

o) To perform other duties assigned by the Board of Directors.

Information Security

ARTICLE 17- (1) The Technical Operator is not in any way permitted to use information and documents which it holds due to this title, software source codes or technical hardware details, either during or after the contract period. It cannot share or publish them with third parties without the permission of the Undersecretariat. In this framework, a confidentiality agreement is entered into with the personnel who perform the Institution's work.

(2) The provisions in the first paragraph also cover organizations which provide services such as IT, hardware, network services, call center services and direct sales on behalf of the Institution. A confidentiality agreement is signed with the organizations providing these services.

Headquarters of the Institution

ARTICLE 18 - (1) The headquarters and work address of the Institution is the place where the headquarters of the Technical Operator is located or the place allocated for this purpose by the Technical Operator with the approval of the Undersecretariat.

Guarantees Provided

ARTICLE 19 - (1) The Compulsory earthquake insurance guarantee is provided exclusively by the Institution. Where the value of the independent sections or buildings which are insured with the compulsory earthquake insurance exceeds the insurance amount calculated under this insurance, optional earthquake insurance can be offered by insurance companies for the portion exceeding the stated insurance amount, provided that the compulsory earthquake insurance has been purchased.

(2) Where the necessary conditions are met and with the approval of the Council of Ministers in accordance with the second paragraph of Article 7 of the Law, the Institution may also provide other insurance or reinsurance guarantees for natural disasters.

Reinsurance and Other Hedges

ARTICLE 20 –  (1) The Institution provides adequate hedging from the insurance, reinsurance and capital markets as required by the insurance technique by taking into account its total liabilities arising from its insurance and resources.

(2) The Institution may share the risks it undertakes with the national or international insurance and reinsurance markets by means of retrocession.

(3) In the event that adequate hedging cannot be provided from national and international markets for the risks undertaken by the Institution at affordable rates, the State may commit an amount following a decision by the Council of Ministers, upon the proposal of the Minister, at a reasonable price.

Borrowing

ARTICLE 21 – (1) Where deemed necessary for the payment of compensations, the Institution may borrow money with the approval of the Minister, provided that the borrowing does not exceed the total amount of annual premium income.

(2) Catastrophe bonds and similar special products containing risk transfer are not included in the borrowing amount.

Damage Assessment

ARTICLE 22 – (1) The damage assessment is performed by the loss adjusters, who hold licenses in the relevant branches, assigned by the Institution.

(2) Depending on the magnitude of the damage, the Institution may employ the services of technical personnel from other public institutions and organizations and the human resources of the relevant departments of the universities, who have received the necessary technical training, in cases where there are not a sufficient number of loss adjusters or if they lack sufficient qualification.

(3) Within the scope of the Article, the Institution may develop simplified damage assessment practices by making use of technological possibilities in order to ensure that damage assessments can be made quickly.

Distribution and Sales Channels

ARTICLE 23 – (1) The compulsory earthquake insurance and other insurance guarantees provided by the Institution are offered by the Institution through direct sales practices or by the insurance companies authorized to make insurance contracts on behalf and account of the Institution and their agents of these companies.

(2) Prior to the expiry of the insurance contract, the insurance company which issued the compulsory earthquake insurance policy shall notify the holders of the contract by e-mail, text message (SMS) or through a call center to inform them that their contract is due to expire and that they are obliged to renew their policy,.

(3) The principles to be followed by the insurance companies authorized to conclude insurance contracts on behalf and account of the Institution, and by their agents, are specified in the contract to be signed with the insurance companies.

(4) In the direct sales practices to be performed by the Institution, services may be obtained from the institutions to be determined by the Board of Directors by taking the views of the Undersecretariat into account.

Checks of Compulsory Earthquake Insurance

ARTICLE 24 – (1) Buildings requiring compulsory earthquake insurance are determined by the Institution. The national address database maintained by the Ministry of Interior and the property tax and city information system records, which are kept by local administrations, are taken into account in carrying out this determination, as well as other sources.

(2) The existence and validity of the compulsory earthquake insurance shall be checked in the title deed transactions, water and electricity sub&ion transactions and housing loan transactions made regarding the buildings and independent sections within the scope of this insurance as specified in Article 11 of the Law.

(3) In the buildings covered by the compulsory earthquake insurance and for which a beneficial owners' board has been formed, the beneficial owners are reminded of their obligation to hold this insurance and to renew it every year during the meeting of the beneficial owners' board. The building management may take the decision to obtain this insurance in accordance with Article 21 of the Law 634 on Property Ownership dated 23 June 1965.

Directing the Institution’s Funds to Investment

ARTICLE 25 – (1) The principles and procedures on directing the Institution's funds to investment are determined by the Board of Directors within the framework of the following principles:

a) Investment instruments are diversified in directing the Institution’s funds to investment and the principles are primarily based on the liquidity of the assets, minimizing the risk of loss of principal and maximizing the rate of return.

b) Medium or long-term portfolios may be formed to the extent of the portion exceeding this total amount, where the Institution’s funds exceed twice the amount of the annual retention share, and exceed the liabilities with a significant amount of outstanding claims, loan and reinsurance payments. The priority order in item (a) may be altered according to the maturity of the portfolio created accordingly.

c) The Institution’s funds may be managed by the Technical Operator or portfolio management companies authorized by the Capital Markets Board. The portfolio management company or the Technical Operator must rely on objective information and documents in their investment decisions regarding the Institution funds they manage and are obliged to comply with the investment restrictions, principles and strategies determined by the Board of Directors.

d) The portfolio manager or the Technical Operator cannot trade over the Institution’s portfolio in order to gain benefits for themselves or third parties in any way. They shall observe necessary due diligence and prudence in the orders they give on behalf of the Institution’s funds.

e) Securities traded on stock exchanges are traded through the stock market. Money and capital market instruments may be purchased from first issuances, provided they are traded on the stock exchange.

f) The amount which can be invested in the capital market instruments by a single issuer cannot exceed 15% of the Institution’s funds.

g) The amount which can be invested in mutual fund participation certificates belonging to a single founder may not exceed 10% of the Institution’s funds.

h) The sum of premiums and guarantees for the derivative products purchased for the portfolio for investment or hedging purposes may not exceed 10% of the portfolio size.

i) Investment-grade foreign borrowing instruments issued by the public authorities of the countries determined by the Undersecretariat or by the companies located in these countries may be purchased for the portfolio of the Institution. The amount which may be invested in these instruments may not exceed 10% of the Institution’s funds.

j) Term or demand deposits are placed in public banks.

k) The Board of Directors shall decide on the investment of any instruments other than those specified in this paragraph.

Procurement of Goods and Services, Purchasing Principles and Procedures

ARTICLE 26 – (1)

The Board of Directors may decide to purchase goods and services to be recommended by the Technical Operator ex officio or with justification. The principles and procedures to be applied in the purchase of goods and services, the formation of the commission, its duration, its members and other matters deemed necessary are determined by the Board of Directors. The job de&ion for the goods and services to be purchased is prepared by the Technical Operator and submitted to the Board of Directors for approval. If deemed necessary by the Board of Directors, the Undersecretariat may be consulted on the job de&ion.

(2) One of the following methods is used in the purchase of goods and services:

a) Open bid: The open bid procedure is the method in which all bidders may submit bids.

b) Procurement from certain bidders: Under this method, the procurement is carried out by determining the persons and organizations qualified to bid and evaluating the bids received from them. In this method, a sufficient number of candidates with sufficient qualifications must apply to ensure competition.

c) Direct procurement: This method may be applied in one of the following situations. Under this method, goods and services may be directly procured by conducting a price search without the need to assess the economic, financial, professional and technical competence.

1) Determining that the need can only be met by a single real or legal person.

2) Only a real or legal person has a special right regarding the need.

3) The goods and services required to ensure compatibility and standardization with existing goods, equipment, technology or services must be purchased from the same real or legal person from which the initial purchase was made, with contracts to be drawn up under the main contract and whose total duration will not exceed five years.

4) The cost of the goods or services to be purchased shall be less than TL 50,000 (fifty thousand Turkish Liras), excluding Value Added Tax. This amount shall be increased each year at the announced revaluation rate.

(3) Goods and services are purchased at the most favorable terms and by first hand to the extent possible. In the purchase of goods, in addition to price, priority is placed on the purveyor’s ability to appropriately meet the needs of the Institution, the payment conditions, possession of the necessary qualifications, timely delivery and maintenance conditions. The most appropriate offer meeting these qualifications is selected. In the procurement of services, the purveyor’s technical competence and ability to meet the needs of the Institution are taken into consideration.

(4) In the open bid procedure, during the bidding period, the goods and services to be purchased are announced on the official website of the Institution and in two daily newspapers distributed nationwide and which rank in the top ten in terms of circulation. The bidding period may not be less than fifteen days from the date of announcement, except in cases where a major damage necessitates or any other force majeure situation.

(5) The documents setting out the economic, financial, professional and technical competence required for the purchase of goods and services are determined in the decision taken by the Board of Directors. However, in any case the following will be requested.

a) The bidder is requested to continue their professional activity, is authorized to bid, shall maintain their organizational structure, employs or shall employ sufficient number of personnel with the required qualifications to perform the duty and possesses experience in the announced work or similar work,

b) The balance sheet, which is required to be published in accordance with the relevant legislation, or the parts of the balance sheet that are required, the total turnover setting out the business volume and documents setting out the amount of work which has been completed and the work under commitment which is related to the announced work shall be requested.

(6) A commission is required to be established in the procurement procedures by open bid and from certain bidders. According to the nature of the goods or services to be purchased and within the framework of the decision of the Board of Directors, the commission is composed of representatives of the relevant institutions or experts, with three or five members. Expenses arising from the work of the commission are covered by the Institution. The commission meets in full and decisions are taken on a majority basis. Members of the Board of Directors may not be appointed to the commission. The Commission conducts the necessary price and other research, evaluates the proposals and submits its view to the Board of Directors.

(7) The Commission follows the working principles stated below.

a) Bidders submit their price offers which are in sealed envelopes, each of which is separate, signed by the bidder or their authorized representatives, together with the requested documents at the commission meeting, where the bids will be evaluated.

b) The Commission evaluates the bids with the participation of all bidders. Documents setting out the economic, financial, professional and technical qualifications of the bidders are examined. Where there are deficiencies in these documents, the commission shall provide additional time, not exceeding one working day, to the relevant person to correct the deficiencies. In this case, price offers are maintained without being opened with the minutes. Price bids are then opened with the participation of all bidders on the appointed day. In this case, the offers submitted by those bidders whose documentation is complete shall not be opened and will be excluded from the procurement process.

c) The price bids which are opened are read during the meeting and the interested parties are asked to submit a new bid by way of auction. This process may be repeated multiple times.

d) The report prepared as a result of the evaluation conducted by the commission is submitted to the Board of Directors. The Board of Directors is free to decide whether or not to purchase goods and services.

Prohibitions

ARTICLE 27 – (1) The individuals listed below may not participate in the purchase of goods and services, directly or indirectly or as a subcontractor, on behalf of themselves or others:

a) Those who are permanently prohibited from participating in public tenders in accordance with the provisions of the relevant laws and those convicted of crimes within the scope of the Anti-Terror Law No. 3713 and dated 12 April 1991, and those convicted of organized crimes,

b) Those who are have been declared fraudulently bankrupt,

c) The members of the Board of Directors, the Technical Operator managers and employees,

d) The commission members,

d) The spouses, blood relatives up to a third degree and relatives by marriage up to the second degree, and adopted kin or adoptive parents of the persons specified in subparagraphs (b), (c) and (d),

e) The companies which are partners, shareholders or members of the board of directors with those specified in subparagraphs (b), (c) and (d), excluding those companies in which these persons do not serve in the board of directors or in which, they hold less than 10% of the capital,

f) Real or legal persons with a direct or indirect partnership of at least 10% in the Technical Operator or by the Technical Operator, excluding purchases to be made through the direct procurement method.

(2) The bidders who do not wish to enter a contract duly even though they have previously been given the work, those identified to have given up their commitment and not fulfilled their commitments in accordance with the provisions of the contract and specifications, except in cases of force majeure, after the conclusion of the contract, may not participate in the purchase of goods and services during the period to be determined by the Board of Directors.

(3) The bidders participating in the purchase of goods and services despite these prohibitions are excluded from the procurement process and their bid bonds, if any, are recorded as revenue. If the above situation of the bidders is found after the purchase, the purchase of goods and services is cancelled and their guarantees, if any, shall be recorded as revenue. If necessary, the purchasing process shall be restarted.

Exceptional Circumstances

ARTICLE 28 – (1) The purchasing principles and procedures to be applied for the following situations are decided on by the Board of Directors:

a) Risk sharing, the purchase of capital market instruments for reinsurance and hedging purposes, and consultancy services regarding these matters.

b) Fund management and consultancy services regarding these issues.

c) The procurement of goods and services related to advertising, production, promotion, social media and public relations and all kinds of implementations, meetings and organization activities within this scope.

ç) Services for damage assessment, management and specialist training.

d) The procurement of accommodation, travel and other similar items to be made within the scope of representation and hospitality activities.

(2) The purchase of software, hardware, system and network services and maintenance services to be covered by the Institution’s resources within the scope of the contract concluded between the Undersecretariat and the Technical Operator is carried out in accordance with the method of direct procurement.

(3) In expired service purchase contracts, where the performance of the service provider is deemed to have been adequate, the Board of Directors may decide to extend the contract at a price deemed reasonable without conducting a new purchase in order to ensure business continuity.

Repealed Regulation

ARTICLE 29 – (1) The Regulation on the Working Procedures and Principles of the Board of Directors of the Turkish Catastrophe Insurance Pool published in Issue 24600 of the Official Gazette and dated 1 December 2001 was repealed.

Entry into Force

ARTICLE 30 – (1) This Regulation enters force on the date of its publication.

Execution

ARTICLE 31 – (1) The provisions of this Regulation are executed by the Minister which the Undersecretariat of Treasury is affiliated to.