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P.Tserendejid Head of Insurance Policy Planning Division , Insurance Department

Financial Regulatory Commission Coordination, control and monitoring of insurance sector of Mongolia. P.Tserendejid Head of Insurance Policy Planning Division , Insurance Department Ulaanbaatar, 16 April 2014. Contents. Present status of insurance sector Insurance coordination

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P.Tserendejid Head of Insurance Policy Planning Division , Insurance Department

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  1. Financial Regulatory Commission Coordination, control and monitoring of insurance sector of Mongolia P.Tserendejid Head of Insurance Policy Planning Division, Insurance Department Ulaanbaatar, 16 April 2014

  2. Contents • Present status of insurance sector • Insurance coordination • Insurance statistics • Future perspectives of insurance coordination • Control and monitoring of insurance

  3. Law on insurance of drivers Law on Insurance Law on professional insurance activities Provisions of other laws Insurance legal acts Chapter 43 of the Civil law 12

  4. Driver’s responsibility insurance • Law on insurance of drivers was endorsed by the Parliament on 6 October 2011. • In the reported year total of 16,2 billion tugriks of insurance fees were collected and 10,6 billions paid on reimbursement. Total number of vehicles Number of registered vehicles Number of inspected vehicles Number of vehicles paid the insurance Number of drivers insurance contracts

  5. Investment: shares • The provision 27.1.1 of the Law on insurance prohibiting the insurer to “purchase and sell shares” was abolished. • This allowed the insurance company to purchase percentage of A stand of Mongolian Stock Exchange: • 10% • 5% • 10%

  6. Protect lawful rights and interests of insurants • Improve the product of insurance-the coordination of contracts: Registration at the committee, contract requirements, reimbursement of insurance fees, group insurance, insurance warranty • Reimbursement of insurance: termination conditions, duration, payment stages, beneficiary, insurant, owner of the insurance contract, reimbursement deficit • Sector: Easy service for customers, speedy response

  7. Other coordination issues • Regulation on insurance company’s payment capability criteria • Conditions, requirements for opening representative’s offices or branches of foreign insurers in Mongolia, their professional insurance involvement and activities • Accounting Standard regulations, insurance reports • License regulation to conclude insurance contract with foreign insurers.

  8. Insurance statistics:Number of owners of special licenses and permissions on the insurance market

  9. Даатгалын салбарын тоо үзүүлэлтүүд Capital of the insurance companies Billion tugriks

  10. Insurance statistics

  11. Aircraft insurance Others

  12. Life insurance Accumulation insurance Pension insurance Health insurance

  13. Insurance statistics

  14. Loss reimbursement ratio

  15. Accumulated profit /loss/ Million Accumulated profit/loss -----linear, accumulated profit/loss

  16. Percentage of fee income in the GDP

  17. Insurance fee income per person In tugriks Insurance fee income per person in tugriks

  18. Double insurance fees Billion tugriks

  19. Future perspectives of insurance coordination Deficiencies and challenges: • Lack of knowledge about the insurance sector among the public and insurants, low reputation • High outflow of insurance fees • Shortage of professional insurance personnel • Low capacity of insurance entities to overcome challenges and risks, lack of system to immediately compensate the losses of insurants due to insurance company’s inability of payment • Poor liaison between insurance tax coordination and policy

  20. Perspectives of insurance coordination Improve the system to protect the rights and interests of insurants • Improve performance, enhance control and monitoring. • Introduce and implement international insurance standards. • Create risk protection and early warning system of the insurance market. • Improve insurance dispute solving mechanism. • In case of insurer’s bankruptcy immediately compensate insurant’s losses.

  21. Perspectives of insurance coordination • Improve insurance service to public, create new products and services, support the insurance market • Improve obligatory insurance structure, increase services • Support long term and life insurance market • Establish double insurance national company • Make amendments to the relevant laws on tax issues of insurance organizations • Introduce company governance principle in insurance sector • Micro and available insurance

  22. LAW ON CIVIL AVIATION Provision 36. Passenger’s insurance  LAW ON NOTARIAL SERVICES Provision 22. Notary responsibility insurance ANTI-CORRUPTION LAW Provision 30. LAW ON CONTROL OF EXPLOSIVES AND EXPLOSIVE EQUIPMENT Provision 19. Insurance 19.1.Any legal party using explosives and explosive equipment shall make insurance of activity risks, citizens life and health. LAW ON LEGAL STATUS OF JUDGES 24.1. Life and health insurance fees of judges will be paid from state budget. Law on insurance, provision 6.4. “Detailed coordination of formal insurance risks and conditions can be described as obligatory insurance coordination determined by relevant law” was amended as “The Financial coordination committee can endorse the regulation on detailed coordination of formal insurance risks and conditions in consultation with the relevant state central administration in charge of insurance”.

  23. Perspectives of insurance coordination • Improve insurance service to public, create new products and services, support the insurance market • Improve obligatory insurance structure, increase services • Support long term and life insurance market • Establish double insurance national company • Make amendments to the relevant laws on tax issues of insurance organizations • Introduce company governance principle in insurance sector • Micro and available insurance

  24. Perspectives of insurance coordination • Improve insurance service to public, create new products and services, support the insurance market • Improve obligatory insurance structure, increase services • Support long term and life insurance market • Establish double insurance national company • Make amendments to the relevant laws on tax issues of insurance organizations • Introduce company governance principle in insurance sector • Micro and available insurance

  25. Perspectives of insurance coordination • Improve insurance service to public, create new products and services, support the insurance market • Improve obligatory insurance structure, increase services • Support long term and life insurance market • Establish double insurance national company • Make amendments to the relevant laws on tax issues of insurance organizations • Introduce company governance principle in insurance sector • Micro and available insurance

  26. Perspectives of insurance coordination Insurance education and training • Improve professional skills of insurance personnel • Take systematic measures to enhance public education on insurance, increase insurance service level

  27. Perspectives of insurance coordination Global General General Long term Total Хөгжиж буй 1.3, 1.4, 2.7 Ерөнхий 2.8, 3.7, 6.5

  28. Insurance control and monitoring • On spot and remote control and monitoring • Acquire related data monthly and quarterly by remote control and monitoring • Payment ability criteria • Risk based control and monitoring • Improve actuary and underwriting skills

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