COMMUNIQUE ON INSURANCE LIABILITIES IN THE PETROLEUM MARKET
COMMUNIQUE ON INSURANCE LIABILITIES IN THE PETROLEUM MARKET
PART ONE
Objective, Scope and Legal Basis
Objective
Article 1- This Communique has been prepared in order to determine the minimum insurance amount pertaining to petroleum and facilities within the scope of insurance liability and in order to set forth the matters related to the liability.
Scope
Article 2- This Communique covers the principles and procedures regarding insurance liabilities of the persons performing activities in the petroleum market and regarding calculation of the insurance amounts and maximum exemption for and the minimum coverage of the insurance.
Legal basis
Article 3- This Communique has been prepared on the basis of article 49 of the Petroleum Market Licensing Regulation.
Definitions
Article 4- The following terms, referred to in this Communique, shall have the following meanings:
- Law: Petroleum Market Law No. 5015 of 4/12/2003;
- Authority: Energy Market Regulatory Authority;
- Board: Energy Market Regulatory Board;
- President: President of the Energy Market Regulatory Board;
- Highway Motor Vehicles Compulsory Financial Liability Insurance: Financial liability insurance compulsory to be arranged under article 91 of the Law No. 2918;
- Exemption: Deductible exemption which an insurer is liable for the portion -exceeding a certain rate or amount- of the insurance amount pertaining to the damage or loss occurred;
- Risk: Risks which an insured interest that is under the coverage of an insurance contract may be faced
with;
- Insurance amount: Maximum amount of indemnity which an insurer undertakes to pay in the event that
the risk occurs within the period of insurance;
- Insured value: Market value of an insured interest at the time of damage;
- (As amended by: O.G.-10/8/2010-27668) Decision on Liability Insurances to be Arranged for Dangerous Materials: Decision on Liability Insurances to be Arranged for Dangerous Materials enclosed with the Decree No. 2010/190 of 21/1/2010, entered into force by virtue of article 13 of the Insurance Law No. 5684;
- Coverage: Sum of money which an insurer undertakes to deliver to the insured in case the risk occurs; and
- All risks insurance: Insurance by which the subject matter of insurance is secured against all risks, with
the exception of the risks expressly excluded in the insurance contract.
PART TWO
Insurance Types, and Parties That Are Obliged to Arrange Insurance
Parties that are obliged to arrange third persons financial liability insurance
Article 5- The licensees performing activities in the petroleum market are obliged to arrange the insurance(s) covering the financial liabilities, which are necessary for indemnification of bodily injuries and pecuniary damages and losses that may be caused by their activities against third parties.
Parties that are obliged to arrange all risks insurance covering their facilities and petroleum
Article 6- Refining undertaking, transmission and storage licensees are obliged to arrange the insurances covering their facilities and the petroleum-under their ownership or safe custody- against all risks.
PART THREE
Minimum Coverage, Maximum Exemption and Insurance Amounts Minimum financial liability coverage
Article 7- (As amended by: O.G.-10/8/2010-27668)
The minimum coverage limits of third persons financial liability insurances to be arranged by the licensees performing activities in the petroleum market (except for eligible consumers) shall not be less than the amounts specified by the tariff contained in the Tariff and Instructions for Compulsory Liability Insurances to be Arranged for Dangerous Materials, as determined and announced pursuant to the Decision on Liability Insurances to be Arranged for Dangerous Materials.
Minimum insurance amount for facilities
Article 8- The facilities’ insurance amount, taken as basis for the all risks insurance, shall not be less than the facility’s registered net asset value, with the exception of land acquisition expenses.
Minimum insurance amount for petroleum
Article 9- Minimum insurance amount for crude oil and liquid fuel shall be found through multiplication of the peril petroleum quantity by the unit petroleum value.
The peril petroleum quantity shall not be less than;
- For refining undertaking licensees: Forty percent of the total storage capacities of the raw material and product stocker units of the facility,
- For transmission licensees: The sum of the physical volume regarding the longest gap between two automatic valves in the transmission grid and forty percent of the capacity of the stocker unit, and
- For storage licensees: Fifty percent of the storage capacity. Insurance amount for petroleum shall not be less than;
- For crude oil: Ninety percent of the closing value of the Brent petroleum on the first stock exchange transaction day before the day when the policy is issued, and
- For liquid fuels: Final acquisition cost, provided that taxes and other legal liabilities-prior to issuance of the policy- are
Maximum exemption
Article 10- (First paragraph as amended by: O.G.-10/8/2010-27668) The rate of the exemption that may be granted in all risks insurances shall not be more than two percent of the insurance amount.
Exemption is inapplicable, in third persons financial liability insurances.