The Kahramanmaraş-centered earthquake on 06 February 2023 is undoubtedly a natural disaster. But its results are neither natural nor usual. For this reason, despite our grief, we must consider the legal aspects of those extraordinary and unusual results.

In this context, the problem of slums, different construction and zoning practices in rural areas, implementation problems related to building control and urban transformation, buildings on poor soils such as riverbeds, and zoning amnesties are the factors that cause the extraordinary and unusual results, thus increase the damages that may occur because of earthquakes.

Building owners, contractors, building inspectors, municipalities, and ministries, are among the ones who contribute to the increase of damages in this respect, and we have been discussing these persons’ liabilities for the last 52 days.

Nonetheless, another dimension of the issue is compensating for the damages, and an essential actor in this dimension is compulsory earthquake insurance.

1999-2012 Period

Compulsory earthquake insurance entered our lives with the Decree-Law on Compulsory Earthquake Insurance (“Decree”) published on 27 December 1999, after the Kocaeli and Düzce centered earthquakes on 17 August 1999 and 12 November 1999.

The then Council of Ministers enacted the Decree in line with the authority granted to them by the Law of Authorization on Measures to Be Taken Against Natural Disasters and Arrangements to Be Made for Repairing Damages Caused by Natural Disasters, published on 29 August 1999. Some academics and members of the then Parliament criticized the Decree for being unconstitutional since it imposed an obligation to conclude a contract on earthquake insurance; however, the freedom of contract is one of the fundamental rights and freedoms, and only a law can limit fundamental rights and freedoms.

Considering these and similar criticisms, the then Prime Minister presented the Draft Law on Compulsory Earthquake Insurance to Parliament on 29 November 2000.

Subject of Insurance

The Decree determined the buildings that require compulsory earthquake insurance (“Relevant Buildings”) as follows:

• Floors, flats, offices, shops, stores, cellars, warehouses, and similar independent units within the scope of the Condominium Law,
• Buildings constructed as houses on immovables registered to the title deed and subject to private ownership (“Single Houses”),
• Independent units inside Single Houses used for commercial, office, or similar purposes, and
• Houses built by the State or with loans lent by the State due to natural disasters.

The compulsory earthquake insurance requirement included Relevant Buildings that existed before the Decree and the ones to be built after the Decree but excluded the following buildings:

• Buildings belonging to public institutions and organizations, and
• Buildings constructed in village settlements.

Insurer

The Decree established the Natural Disaster Insurances Institution (Turkish Catastrophe Insurance Pool (“TCIP”)) and defined it as the insurer of the compulsory earthquake insurance contract. The Decree assigned the duty of determining the insurance companies to be authorized to conclude compulsory earthquake insurance contracts on behalf of TCIP (“Authorized Insurance Companies”) to the TCIP Board of Directors.

Policy Holder

The Decree specified the persons obliged to have compulsory earthquake insurance as the title holders or usufruct right (entitles the holder to use and benefit from a property in every way, other than selling that property) holders of Relevant Buildings (“Right Holders”).

Insured Interest

As per the Decree, compulsory earthquake insurance covered the material damages that Right Holders might incur because of the destruction or damage of Relevant Buildings due to a possible earthquake. Consequently, the compulsory earthquake insurance coverage excluded damages suffered in the event of death, bodily damages, and moral damages.

The General Conditions of Compulsory Earthquake Insurance (“General Conditions”) published on 13 May 2011 regulated the insurance coverage details.

Key Provisions

The Decree envisaged some key provisions to ensure that the rules introduced did not stay on paper and that the same were enforceable. Within this framework, the Decree:

• Assigned the TCIP Board of Directors the duty of taking the necessary measures to ensure that all Relevant Buildings are insured;
• Prohibited all public institutions and organizations from making any transactions, including title deed registration procedures, for Relevant Buildings unless the persons concerned documented the existence of compulsory earthquake insurance along with paid premium;
• Envisaged that the State’s obligations to arrange housing loans and construct buildings as per the Law on Measures to Be Taken and Aids to Be Made Due to Disasters Affecting Public Life and other laws (“Legislation Related to Natural Disasters”) would cease to exist, upon, as a result of a possible earthquake, TCIP’s payment of insurance compensations to Right Holders having compulsory earthquake insurances;
• Regulated that, in a possible earthquake, Right Holders who did not have compulsory earthquake insurance could not claim any rights under the Legislation Related to Natural Disasters for the damages that compulsory earthquake insurance would have covered;
• Envisaged that Right Holders would lose their right to receive insurance compensation entirely or at the rate of increased damage if they caused a modification or weakening on Relevant Buildings in violation of the project and in a way that affected the structural system and if the damage arose or increased because of this intervention.

Questions

Considering these rules and provisions, which were in effect for nearly 12.5 years, we wonder:

• What measures did TCIP take to ensure that all Relevant Buildings are insured?
• Which public institutions and organizations made transactions related to which Relevant Buildings with missing compulsory earthquake insurance? On what grounds?
• Why did the then parliaments not enact the Draft Law on Compulsory Earthquake Insurance despite the criticisms regarding the unconstitutionality of the Decree?

2012-2023 Period

The Disaster Insurances Law (“Law”) entered into force on 18 August 2012 and repealed the Decree, and the Law is currently in force.

Subject of Insurance

The Law preserved the Decree’s framework regarding Relevant Buildings.

Unlike the Decree, the Law excluded the following buildings from the compulsory earthquake insurance requirement:

• Buildings and independent units that are subject to the Public Housing Law or used as public service buildings,
• Buildings constructed in and around the village settlements and in the fields by permanent residents of the villages, and
• Buildings that are merely used for non-residential purposes, even if they are within the scope of the Condominium Law.

The Law also prohibited TCIP from insuring Relevant Buildings if they have been modified or weakened in a way that would adversely affect the structural system. This rule could have helped the layperson distinguish between stable and unstable buildings. For instance, a prospective buyer or tenant who wanted to check this issue during a purchase or rent process could have learned from Right Holders whether they had compulsory earthquake insurance and could have gotten an idea about the stability of the building… If the Law had not also given TCIP the discretion to insure or not to insure Relevant Buildings constructed in violation of the legislation and the project!

In addition to these rules:

• The Law on the Establishment of Metropolitan Municipalities and Twenty-Seven Districts in Fourteen Provinces and Amending Some Laws and Decrees, published on 06 December 2012, changed the status of some villages as neighborhoods and stipulated that the buildings in those villages were “deemed licensed” under certain conditions;
• The amendment to the Law on Regulating Public Finance and Debt Management, published on 18 April 2013, envisaged that the immovables belonging to the asset leasing companies established under this law for the issuance of lease certificates (an interest-free financial instrument among capital market instruments) would not be subject to compulsory earthquake insurance requirement.

Insurer

The Law preserved the insurer of the compulsory earthquake insurance contract as TCIP, like in the Decree. The Natural Disaster Insurances Institution Working Principles Regulation (“Regulation”), which entered into force on 18 August 2012, assigned the duty of determining the Authorized Insurance Companies to the TCIP Board of Directors. The Regulation is currently in force.

Policy Holder

The Law, like the Decree, specified the persons obliged to have compulsory earthquake insurance as Right Holders.

Insured Interest

The compulsory earthquake insurance under the Law, similar to the Decree, covered the material damages that Right Holders might incur because of the damage to Relevant Buildings due to a possible earthquake. Again, compulsory earthquake insurance coverage excluded damages suffered in the event of death, bodily damages, and moral damages.

The General Conditions, which regulate the insurance coverage details, remained and are currently in force.

Key Provisions

The Law made significant amendments to the key provisions the Decree envisaged. In this context, the Law:

• Restructured the TCIP. While the Law preserved many duties of the TCIP Board of Directors stipulated in the Decree, neither the Law nor the Regulation stated the TCIP Board of Directors’ duty of taking the necessary measures to ensure that all Relevant Buildings are insured. The Law gave discretion to TCIP to develop control practices with the management of Relevant Buildings to ensure that compulsory earthquake insurance is made and renewed regularly for those buildings;
• Limited the institutions prohibited from making a transaction for Relevant Buildings with missing compulsory earthquake insurance to land registry directorates, water administrations, and electricity companies, while the Decree prohibited all public institutions and organizations from making any transactions for Relevant Buildings with missing compulsory earthquake insurance;
• Did not preserve the provision of the Decree envisaging that the State’s obligations to arrange housing loans and construct buildings as per the Legislation Related to Natural Disasters would cease to exist, upon, as a result of a possible earthquake, TCIP’s payment of insurance compensations to Right Holders having compulsory earthquake insurances;
• Regulated that the State’s obligations to arrange housing loans and construct buildings as per the Legislation Related to Natural Disasters would cease to exist if the Right Holders have not insured Relevant Buildings with compulsory earthquake insurance;
• The Law imposed an obligation to Right Holders to take the necessary measures against the modification or weakening of Relevant Buildings in violation of the project and in a way that would adversely affect the structural system;
• Did not preserve the rule in the Decree stating that Right Holders would lose their right to receive insurance compensation entirely or at the rate of increased damage in line with their contribution to the occurrence or increase of the damage. Instead, the Law stated that Right Holders would lose their right to receive insurance compensation if the damage occurred due to a modification in violation of the project and in a way that would adversely affect the structural system. Thus, it risked Right Holders being deprived of insurance compensation regardless of their contribution to the occurrence or increase of the damage.

Questions

Considering these rules and provisions, which have been in effect for nearly 10.5 years, we wonder:

• Why did the Law weaken the provisions of the Decree?
• Why did the Law aggravate the obligations and responsibilities of Right Holders?
• Which Relevant Buildings, constructed in violation of the legislation or the project, did the TCIP insure with compulsory earthquake insurance? On what grounds?
• Did TCIP carry out control practices with the management of Relevant Buildings to ensure that compulsory earthquake insurance is made and renewed regularly for those buildings? If it did not, why?
• Did the relevant institutions take measures for earthquake risk for buildings in the villages that gained the status of neighborhoods and were deemed licensed?

Av. Müge Önal Başer, LL.M., LL.B.

References

1. Thanks to Mehmet Başer, Architect, M.Arch., for our brief talk on technical matters.
2. Constitution of the Republic of Türkiye No. 2709 (Official Journal (“OJ”), 20 October 1982, No. 17844).
3. Repealed Turkish Civil Code No. 743 (OJ, 04 April 1926, No. 339).
4. Repealed Code of Obligations No. 818 (OJ, 08 May 1926, No. 366).
5. Repealed Turkish Commercial Code No. 6762 (OJ, 09 July 1956, No. 9353).
6. Law No. 7269 on Measures to Be Taken and Aids to Be Made Due to Disasters Affecting Public Life (OJ, 25 May 1959, No. 10213).
7. Condominium Law No. 634 (OJ, 02 July 1965, No. 12038).
8. Public Housing Law No. 2946 (OJ, 11 November 1983, No. 18218).
9. Law of Authorization No. 4452 on Measures to Be Taken Against Natural Disasters and Arrangements to Be Made for Repairing Damages Caused by Natural Disasters (OJ, 29 August 1999, No. 23801).
10. Repealed Decree-Law No. 587 on Compulsory Earthquake Insurance (OJ, 27 December 1999, No. 23919).
11. Turkish Civil Code No. 4721 (OJ, 08 December 2001, No. 24607).
12. Law No. 4749 on Regulating Public Finance and Debt Management (OJ, 09 April 2002, No. 24721).
13. Insurance Law No. 5684 (OJ, 14 June 2007, No. 26552).
14. Turkish Code of Obligations No. 6098 (OJ, 04 February 2011, No. 27836).
15. Turkish Commercial Code No. 6102 (OJ, 14 February 2011, No. 27846).
16. Disaster Insurances Law No. 6305 (OJ, 18 May 2012, No. 28296).
17. Law No. 6360 on the Establishment of Metropolitan Municipalities and Twenty-Seven Districts in Fourteen Provinces and Amending Some Laws and Decrees (OJ, 06 December 2012, No. 28489).
18. Natural Disaster Insurances Institution Working Principles Regulation (OJ, 15 August 2012, No. 28385).
19. General Conditions of Compulsory Earthquake Insurance (OJ, 13 May 2011, No. 27933).
20. Draft Law on Compulsory Earthquake Insurance and Decree-Law No. 587 on Compulsory Earthquake Insurance and Plan and Budget Commission Report (1/782, 1/609), 29 November 2000, https://www5.tbmm.gov.tr/sirasayi/donem21/yil01/ss824m.htm (last visited 28 March 2023).
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26. Dardağan Kibar, Esra G. / Kılıçoğlu, Ahmet M. / Yongalık, Aynur / İstemi, Mehmet / Günday, Metin / Sever, Dilşad Ç. / Köprülü, Timuçin / Müftüoğlu, Zeynep: “Atılım Üniversitesi Hukuk Fakültesi | Hukuksal Boyutlarıyla Deprem ve Sorumluluk”, 03 March 2023, https://www.youtube.com/watch?v=dIErD3lcepI (last visited 28 March 2023).
27. About the TCIP, https://www.dask.gov.tr/en/about-the-tcip (last visited 28 March 2023).