How will the mandatory earthquake "tax" be collected? - Turkish model vs Albanian model, implementation by limiting services
For the first time, Albania will apply mandatory earthquake insurance through the establishment of the Earthquake Fund as the sole joint-stock company for its management. But how will it be possible to collect taxes for the more than 1 million homes in the country?
In drafting the draft, the government referred to the Turkish model, which has proven successful for this country.
Turkey's model – DASK (Turkish Disaster Insurance Fund), operates in such a way that insurance is mandatory by law, policies are sold by private companies, and revenues are transferred to the Fund.
How is the premium collected according to this model? Essentially, it is the limitation of services as the main binding mechanism. Thus, the citizen buys the policy every year and without this policy he does not have the right to sell or buy a property; to take out a mortgage loan; to connect energy/water/gas or to register notarial contracts. Turning this mechanism into a functional obligation rather than a legal one. Through this scheme, it has resulted that over 60% of homes are insured, a level that is very high by world standards.
But where does the Albanian model differ from the Turkish one?
In Albania, almost the same mechanism is foreseen through the limitation of services. Specifically, after the entry into force of the law, citizens who do not purchase the mandatory earthquake insurance policy will not have the right to receive any cadastral services, such as the registration or change of registration of the apartment, but also others, without presenting the relevant contract. Citizens will also not be able to conclude voluntary insurance contracts with insurance companies, without first concluding a mandatory contract with the Earthquake Fund. They will not benefit from electronic services from the government portal e-Albania and will not benefit from services from the National Business Center.
So unlike the Turkish model, in Albania there are no restrictions on the conclusion of water or electricity contracts. After passing the relevant stages, the law enters into force 12 months after publication in the Official Gazette.
How is the premium for compulsory earthquake insurance collected?
Turkey's Model – DASK (Turkish Disaster Insurance Fund)
Without DASK you cannot:
• to sell or buy property
• to get a mortgage loan
• connect electricity/water/gas
• to register notarial contracts
Albania's Model (Mandatory Earthquake Insurance Fund)
Without insurance you cannot:
• to benefit from services at the Cadastre
• to conclude voluntary insurance contracts
• to benefit from services in e-Albania
• to benefit from services at the Central Library
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