Insurance and reinsurance

Captive insurance

Summarise any captive insurance regime in your jurisdiction as applicable to aviation.

There is no captive insurance regime applicable to aviation. Turkish parties are required to place insurance with insurers established and licensed in Turkey. A foreign owner can place hull insurance outside Turkey. There is no minimum retention requirement; the risk can be reinsured in its entirety outside Turkey. The usual practice is to use a domestic insurer to issue a fronting policy and an identical reinsurance policy in which the entire risk is placed outside Turkey by facultative reinsurance.

Cut-through clauses

Are cut-through clauses under the insurance and reinsurance documentation legally effective?

Cut-through and claims control clauses are applicable and effective.


Are assignments of reinsurance (by domestic or captive insurers) legally effective? Are assignments of reinsurance typically provided on aviation leasing and finance transactions?

Assignments of reinsurance are legally binding and effective. These are typically used in aircraft finance and leasing transactions.


Can an owner, lessor or financier be liable for the operation of the aircraft or the activities of the operator?

An owner, lessor or financier cannot be held liable for the operation of the aircraft or activities of the operator. The owner may be held liable only if the operator cannot be identified and the owner cannot prove that it is not the operator.

Strict liability

Does the jurisdiction adopt a regime of strict liability for owners, lessors, financiers or others with no operational interest in the aircraft?

There is no strict liability regime for owners, lessors, financiers or others with no operational interest in the aircraft.

Third-party liability insurance

Are there minimum requirements for the amount of third-party liability cover that must be in place?

The minimum cover requirement for third-party damage varies depending on the maximum takeoff weight. The minimum requirement is 300 million special drawing rights (SDR) for typical single-aisle aircraft and 500 million SDR for typical twin-aisle aircraft.