Every participation insurance policy sold in Turkey today exists in the shape it does because of one document: the Regulation on Insurance and Private Pension Activities Within the Framework of Participation Principles, published in the Official Gazette on 19 December 2020. If you buy kasko from Neova, TARSIM through Bereket or credit life from Turkiye Katilim Hayat, this regulation defines what the company owes you structurally. Here is what it actually says, and, just as important, what it deliberately does not.
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Who regulates, and since when
The regulator is SEDDK (Sigortacilik ve Ozel Emeklilik Duzenleme ve Denetleme Kurumu), the Insurance and Private Pension Regulation and Supervision Agency established in 2019. The participation regulation took effect on publication, 19 December 2020, with transition periods for existing operators, and was operationalized through Circular 2021/3 covering committee independence, compliance units and audit requirements.
The five core requirements
- Advisory committee: every participation insurer must run a danisma komitesi of at least three members meeting fit-and-proper standards. The committee approves products, contract wordings, investment channels and operating procedures, and issues an annual conformity opinion.
- Interest-free investment: premiums and technical reserves must be invested in interest-free instruments only: participation accounts, sukuk (lease certificates), gold, and equities meeting participation criteria.
- Fund governance: the regulation frames how risk funds are managed. The dominant Turkish implementation combines a wakala (agency) fee for management with mudaraba sharing on investment returns, though operators disclose their models with varying precision.
- Window closure: the regulation ended the window model under which conventional insurers sold participation products from conventional balance sheets. The deadline was 31 December 2021: convert fully or exit. This is why today's market consists only of standalone participation companies.
- Retakaful preference: participation reinsurance is preferred where available, with conventional reinsurance permitted as a fallback under committee oversight.
Who is licensed under it in 2026
| Company | Side | Operating since | Sponsor |
|---|---|---|---|
| Neova Katilim Sigorta | Non-life | 2009 (pre-dates the regulation) | Kuveyt Turk |
| Bereket Sigorta | Non-life | 1995; participation model after 2017 | Tarim Kredi cooperatives |
| Turkiye Katilim Sigorta | Non-life | Writing since January 2023 | Turkey Wealth Fund |
| HDI Katilim Sigorta | Non-life | 1 January 2023 | Talanx group |
| Katilim Emeklilik ve Hayat | Life and pension | 2013 | Albaraka Turk and Kuveyt Turk, 50/50 |
| Bereket Emeklilik ve Hayat | Life and pension | 2012 (as Turkey's first interest-free pension company) | Tarim Kredi cooperatives |
| Turkiye Katilim Hayat | Life | Writing since January 2023 | Turkey Wealth Fund |
In January 2026 the three non-life majors wrote 7.25 billion TL of monthly production between them: Neova 37.41 percent of the participation segment, Bereket 32.00 percent, Turkiye Katilim 24.87 percent, HDI Katilim around 1 percent. Motor and property lines (kasko plus MTPL) are the volume engines. The full competitive picture is in our state of play.
What the regulation deliberately does not do
It does not mandate a fund model
Operators choose their structure and disclose it with whatever precision they like. That is how HDI Katilim can legally run supervised participation insurance with no participant-owned pool while Neova runs segregated risk-fund economics. Both are fully licensed. The license tells you governance and investment rules were met; it does not tell you which fiqh model you are buying. You have to read the company's own model disclosure, or ask.
It does not require surplus distribution
Nothing in the regulation obliges an operator to return risk-fund surplus to policyholders. Neova has done it (first in 2016); nobody else has published a refund. If surplus rights matter to you, that is a company-selection criterion, not a regulatory guarantee. Details in our surplus rights article.
It does not create a central Shariah authority
Turkey has no equivalent of Malaysia's central Shariah Advisory Council for insurance. Each company's committee is sovereign over its own products. In practice the committees converge on similar standards, but disclosure quality varies enormously: Neova prints meeting counts and decisions in its annual report, HDI Katilim publishes its icazet on the website, others state compliance and publish little. Our scholar committees guide names every committee and ranks the disclosure.
It does not exempt anyone from the state pools
DASK (earthquake), the MTPL arrangements for high-risk drivers, and TARSIM (agriculture) are mandatory state mechanisms that all licensed insurers join regardless of model. Their central investments are not participation-screened. The advisory committees accommodate them as regulatory necessity. This is the structural ceiling of the Turkish system: on mandatory lines, part of the machinery is the state's, and no operator can change that.
Why this matters when you buy
The regulation makes formal Shariah oversight universal, which means oversight existence cannot differentiate providers. What differentiates them is what the regulation leaves optional: fund model, surplus behavior, and disclosure depth. Concretely: a Turkish participation insurer is not required to tell you its wakala fee, and none currently does. When everything mandatory is equal, buy on the optional things. Ask for the model disclosure, ask for the surplus history, ask for the icazet, and price-shop across all operators because cover on regulated lines is identical by construction. Start at the takaful hub, and use the written-question script in our quote guide.
Compare providers in your region
See side-by-side comparisons of Shariah-compliant products, or let our matcher recommend the best options for your situation.
One more practical consequence of the window closure deserves emphasis. Before 2022, a Muslim buyer had to investigate whether an Islamic-labeled policy was genuinely separate from a conventional balance sheet. In Turkey today that entire category of doubt is gone: if the company holds a participation license, the whole company operates under committee governance and interest-free investment rules. Turkish windows in the pension world remain legally robust for the same reason, since segregation there is also a regulatory requirement rather than a marketing claim, but in non-life insurance the question simply does not arise anymore. That is a cleaner starting position than buyers enjoy in most of Europe, the US or even several Gulf markets.
As regulatory frameworks for Islamic insurance go, Turkey's is genuinely good: it killed the window model, mandated scholars, and forced interest-free investment. Its unfinished business is consumer-facing transparency. Until SEDDK compels fee and surplus disclosure, that job belongs to buyers who ask in writing.