The regulation amending the Regulation on the Operating Principles of the Natural Catastrophe Insurance Pool (DASK), issued by SEDDK, was published in the Official Gazette and entered into force. The regulation redefined the principles governing the allocation of DASK funds to investments, procurement procedures and the monitoring of investment decisions.
Reporting schedule for expenditures
Regardless of the procurement method, reports prepared following a commission review for expenditures exceeding five times the specified amount will be submitted to SEDDK by the technical operator. Notifications will be made in January, April, July and October.
Three key principles for investment decisions
The allocation of the DASK fund to investments will be based on diversifying investment instruments, keeping assets liquid, minimizing the risk of principal loss and achieving high returns.
The principles and procedures governing investments will be determined by the Board of Directors, taking into account the Public Treasury Management Regulation and relevant legislation.
Long-term portfolios may be created
If the DASK fund exceeds twice the amount of the annual custody fee plus the total of significant liabilities such as outstanding claims, credit and reinsurance payments, a portfolio with maturities longer than one year may be created up to the amount of the excess.
The priority ranking applied to investments may be changed according to the portfolio’s maturity. In this context, liquidity, low risk of principal loss and high returns will be taken into account.
Scope of fund management expanded
The DASK fund may be managed by the technical operator or by portfolio management companies authorized by the Capital Markets Board that are either publicly owned or subsidiaries of publicly owned banks.
Investment decisions concerning the fund must be based on objective information and documents. The investment restrictions, principles and strategies determined by the Board of Directors must be followed.
The technical operator will regularly submit monthly reports on the fund’s investment allocation and return performance to the Board of Directors.
At least one-third allocated to Treasury instruments
Investments in debt securities and lease certificates issued by the Ministry of Treasury and Finance and the Ministry of Treasury and Finance Asset Leasing Company may not account for less than one-third of the institutional fund.
Except for financial assets issued by these issuers, investments in the capital market instruments of a single issuer may not exceed 10 percent of the institutional funds.
Procurement limit set at 1.2 million lira
The limit for the price of goods to be purchased and the annual cost of services was set at 1.2 million lira, excluding VAT. This amount will be increased each year by the announced revaluation rate and will apply at five times the amount throughout periods when a state of emergency is declared due to an earthquake.
Bidders will submit their signed price offers, together with the requested documents, at the commission meeting where the offers will be evaluated. Offers may be submitted electronically through the platform provided by the Insurance Information and Monitoring Center or separately in sealed envelopes.
Transition period for existing investments
Funds allocated to investments before the amendment entered into force must be brought into line with the new investment principles within six months, without prejudice to the provisions of the Public Treasury Management Regulation.
Debt instruments issued by publicly owned banks may be held until their maturity date. In addition, where the principles and procedures for procurement were determined by the Board of Directors before the amendment entered into force, the provisions in force on the date of that determination will continue to apply.
