The Insurance Law was adopted in 2004, sets out the legal basis for insurance activities and government regulation, and regulates the relations between insurance agencies and individuals and legal entities. The legislation on Insurance shall consist of the Constitution of Mongolia, Civil Code, Company Law, this law and other legislative acts issued in conformity therewith. If an international treaty to which Mongolia is a party is inconsistent with this law, then the provisions of the international treaty shall prevail.
Foreign citizens, legal entities, and stateless persons shall enjoy the right to insurance protection of their property and non-material assets to the same extent as citizens and legal entities of Mongolia.
The State Central Administrative Organization in charge of insurance matters shall have the following competence in respect of insurance business:
- To develop proposals to improve the legislation on insurance;
- To provide policy advice to the Government;
- Other competence as may be assigned to it under law.
Insurance Coordination Committee
The Financial Coordination Committee (hereinafter referred to as the “Coordination Committee”) shall carry out the coordination and supervision of insurance business.
The Parliament of Mongolia shall adopt the business strategy and the organizational structure of the Coordination Committee and its activity shall be financed from the state budget. The Coordination Committee shall be accountable to the Parliament of Mongolia.
According to the Insurance Law, the capital of an insurance company shall consist of cash money and the minimum value shall be 500 million tugriks. It shall be prohibited to accumulate the capital through loans.
The Civil Code and the Company Law regulate the establishment, liquidation and restructuring of insurance companies unless otherwise stated in the Insurance Law. Entities engaged in other commercial activities are not allowed to operate in the insurance sector. There are no restrictions on foreign companies to operate in the Mongolian market. The Insurance Law also specifies that foreign citizens and entities have the right to establish insurance services in Mongolia on an equal basis with Mongolian citizens and entities.
Entry filed under: Insurance Law.